Oppenheimer Champion Income 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 811-5281

Oppenheimer Champion Income Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)

Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
(Name and address of agent for service)

Registrant’s telephone number, including area code: (303) 768-3200

Date of fiscal year end: September 30

Date of reporting period: 9/30/2011

Item 1. Reports to Stockholders.

September 30, 2011 Oppenheimer Champion Income Fund Management Commentary and Annual Repo MANAGEMENT COMMENTARY An Interview with Your Fund’s Portfolio Manager ANNUAL REPORT Listing of Top Holdings Fund Performance Discussion Financial Statements

TOP HOLDINGS AND ALLOCATIONS


Credit Rating Breakdown	NRSRO Only Total

AAA		7.4	%
BBB		1.2
BB		10.7
B		53.5
CCC		20.9
CC		0.7
D		0.5
Unrated		5.1

Total		100.0	%

The percentages above are based on the market value of the Fund’s securities as of September 30, 2011, and are subject to change. Except for securities labeled “Unrated” and except for certain securities issued or guaranteed by a sovereign entity, all securities have been rated by at least one Nationally Recognized Statistical Rating Organization (“NRSRO”), such as Standard & Poor’s (“S&P”). For securities rated only by an NRSRO other than S&P, OppenheimerFunds, Inc. converts that rating to the equivalent S&P rating. If two or more NRSROs have assigned a rating to a security, the highest S&P equivalent rating is used. Unrated securities issued or guaranteed by a sovereign entity are assigned a credit rating equal to the highest NRSRO rating assigned to that sovereign entity. U.S. Government “Treasury” and “Agency” securities are included in the AAA category. Fund assets invested in Oppenheimer Institutional Money Market Fund are assigned that fund’s S&P rating, which is currently AAA. For the purposes of this Credit Allocation table, “investment-grade” securities are securities rated within the NRSROs’ four highest rating categories, which include AAA, AA, A and BBB. Unrated securities do not necessarily indicate low credit quality, and may or may not be the equivalent of investment-grade. Please consult the Fund’s prospectus for further information. Additional information can be found in the Fund’s Statement of Additional Information.

Portfolio Allocation

* Represents a value of less than 0.005%.

Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2011, and are based on the total market value of investments.

6 | OPPENHEIMER CHAMPION INCOME FUND

FUND PERFORMANCE DISCUSSION

How has the Fund performed? Below is a discussion of the Fund’s performance during its fiscal year ended September 30, 2011, followed by a graphical comparison of the Fund’s performance to appropriate broad-based market indices.

Management’s Discussion of Fund Performance. Oppenheimer Champion Income Fund’s Class A shares (without sales charge) returned —1.21% for the 12-month reporting period ended September 30, 2011, underperforming the JPMorgan Domestic High Yield Index (the “Index”)¹, which returned 3.68%. The Fund also underperformed the BofA Merrill Lynch High Yield Master Index and the Barclays Capital U.S. Credit Bond Index, which produced total returns of 1.36% and 4.56%, respectively.

The Fund’s disappointing performance was largely the result of a sell-off in higher-yielding fixed-income securities over the volatile second half of the reporting period, as investors flocked to traditionally defensive securities. The Fund’s overweight position in higher-yielding securities relative to the Index drove its underperformance. Against this backdrop, the two sectors of the Index that detracted most from the Fund’s relative performance were gaming, lodging and leisure and diversified media, due to weaker relative security selection. The Fund’s holdings in these sectors experienced declines as consumer spending retrenched and consumer sentiment weakened given weak economic fundamentals. The Fund also experienced underperformance due to weaker relative security selection within industrials, services and chemicals. These sectors did not perform well for the Fund amid market concerns that companies in these sectors might experience lower demand for their products and services given the gloomy economic outlook.

The Fund’s strongest performing sectors versus the Index were paper and packaging, telecommunications, retail, cable and satellite and technology. Stronger relative security selection drove the Fund’s outperformance in these sectors as a number of our holdings in these areas held up well despite the market volatility that occurred over the last quarter of the reporting period.

Our outlook for the high yield space remains positive, given the historically low rates and very wide spreads. As such, we expect to maintain meaningful allocations to higher-yielding securities. At period end, the Fund had its largest overweight positions relative to the Index, in paper and packaging, industrials and gaming, lodging and leisure. The Fund had its most substantial underweight positions in the energy, retail and cable and satellite sectors.

1. The JPMorgan Domestic High Yield Index is an index of high yield fixed income securities issued by developed countries. The index is unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of the Fund.

7 | OPPENHEIMER CHAMPION INCOME FUND

FUND PERFORMANCE DISCUSSION

Comparing the Fund’s Performance to the Market. The graphs that follow show the performance of a hypothetical $10,000 investment in each Class of shares of the Fund held until September 30, 2011. In the case of Class A, Class B, Class C and Class N shares, performance is measured over a ten-fiscal-year period. In the case of Class Y shares, performance is measured from the inception of the Class on September 1, 2006. The Fund’s performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C and Class N shares, and reinvestments of all dividends and capital gains distributions.

The Fund’s performance is compared to the performance of the BofA Merrill Lynch High Yield Master Index and the Barclays Capital U.S. Credit Bond Index. The BofA Merrill Lynch High Yield Master Index is an unmanaged index of below investment grade securities of U.S. corporate debt issuers. The Barclays Capital U.S. Credit Bond Index is an index of non-convertible U.S. investment-grade corporate bonds. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data in the graphs that follow shows the effect of taxes. The Fund’s performance reflects the effects of Fund business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the securities comprising the indices.

8 | OPPENHEIMER CHAMPION INCOME FUND

Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

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 1.800.525.7048. Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 4.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C and N shares, the contingent 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 return for Class B shares uses Class A performance for the period after conversion. There is no sales charge for Class Y shares. See page 14 for further information.

9 | OPPENHEIMER CHAMPION INCOME FUND

FUND PERFORMANCE DISCUSSION

Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

10 | OPPENHEIMER CHAMPION INCOME FUND

Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

11 | OPPENHEIMER CHAMPION INCOME FUND

FUND PERFORMANCE DISCUSSION

Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

12 | OPPENHEIMER CHAMPION INCOME FUND

Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

13 | OPPENHEIMER CHAMPION INCOME FUND

NOTES

Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns shown do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Investors should consider the Fund’s investment objectives, risks, expenses and other charges carefully before investing. The Fund’s prospectus and, if available, the Fund’s summary prospectus contain this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at oppenheimerfunds.com. Read the prospectus and, if available, the summary prospectus carefully before investing.

The Fund’s investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc.

Class A shares of the Fund were first publicly offered on 11/16/87. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 4.75%.

Class B shares of the Fund were first publicly offered on 10/2/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge.

Class C shares of the Fund were first publicly offered on 12/1/93. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge.

Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge.

Class Y shares of the Fund were first publicly offered on 9/1/06. Class Y shares are offered only to fee-based clients of dealers that have a special agreement with the Distributor, to certain institutional investors under a special agreement with the Distributor, and to present or former officers, directors, trustees or employees (and their eligible family members) of the Fund, the Manager, its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals. There is no sales charge for Class Y shares.

An explanation of the calculation of performance is in the Fund’s Statement of Additional Information.

14 | OPPENHEIMER CHAMPION INCOME 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 September 30, 2011.

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.

15 | OPPENHEIMER CHAMPION INCOME FUND

FUND EXPENSES Continued


	Beginning		Ending		Expenses
	Account		Account		Paid During
	Value		Value		6 Months Ended
	April 1, 2011		September 30, 2011		September 30, 2011

Actual
Class A	$	1,000.00	$	889.50	$	6.42
Class B		1,000.00		885.70		10.41
Class C		1,000.00		890.50		10.06
Class N		1,000.00		888.50		7.51
Class Y		1,000.00		891.50		3.47

Hypothetical (5% return before expenses)
Class A		1,000.00		1,018.30		6.85
Class B		1,000.00		1,014.09		11.12
Class C		1,000.00		1,014.49		10.71
Class N		1,000.00		1,017.15		8.02
Class Y		1,000.00		1,021.41		3.71

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended September 30, 2011 are as follows:


Class	Expense Ratios

Class A		1.35	%
Class B		2.19
Class C		2.11
Class N		1.58
Class Y		0.73

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.

16 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS September 30, 2011


	Principal
	Amount		Value

Asset-Backed Securities—0.0%
Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond Obligations, Series 1A, Cl. D, 12.54%, 6/13/11^1,7	$	6,122,584	$	—
NC Finance Trust, Collateralized Mtg. Obligation Pass-Through Certificates, Series 1999-I, Cl. ECFD, 3.405%, 1/25/29^1,7		437,665		35,013

Total Asset-Backed Securities (Cost $3,179,895)				35,013

Corporate Bonds and Notes—82.7%
Consumer Discretionary—16.2%
Auto Components—2.4%
Goodyear Tire & Rubber Co. (The), 8.25% Sr. Unsec. Unsub. Nts., 8/15/20		2,320,000		2,372,200
Tower Automotive Holdings USA LLC/TA Holdings Finance, Inc., 10.625% Sr. Sec. Nts., 9/1/17²		6,909,000		6,874,455
Visteon Corp., 6.75% Sr. Nts., 4/15/19²		2,715,000		2,457,075

				11,703,730

Hotels, Restaurants & Leisure—6.0%
Equinox Holdings, Inc., 9.50% Sr. Sec. Nts., 2/1/16²		1,965,000		1,974,825
Harrah’s Operating Co., Inc., 10% Sr. Sec. Nts., 12/15/18		11,498,000		6,898,800
HOA Restaurants Group LLC/HOA Finance Corp., 11.25% Sr. Sec. Nts., 4/1/17²		3,040,000		2,812,000
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14		855,000		781,256
7.75% Sr. Unsec. Unsub. Nts., 3/15/19		1,825,000		1,674,438
Landry’s Restaurants, Inc., 11.625% Sr. Sec. Nts., 12/1/15		1,885,000		1,903,850
MCE Finance Ltd., 10.25% Sr. Sec. Nts., 5/15/18		1,160,000		1,235,400
MGM Mirage, Inc.:
5.875% Sr. Nts., 2/27/14		2,060,000		1,890,050
6.625% Sr. Unsec. Nts., 7/15/15		3,910,000		3,333,275
Mohegan Tribal Gaming Authority, 8% Sr. Sub. Nts., 4/1/12		4,710,000		3,132,150
Penn National Gaming, Inc., 8.75% Sr. Unsec. Sub. Nts., 8/15/19		2,070,000		2,214,900
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08^1,7		3,900,000		—
Travelport LLC, 11.875% Sr. Unsec. Sub. Nts., 9/1/16		3,345,000		1,338,000

				29,188,944

Household Durables—0.7%
Beazer Homes USA, Inc.:
6.875% Sr. Unsec. Nts., 7/15/15		1,335,000		907,800
9.125% Sr. Unsec. Nts., 5/15/19		3,790,000		2,425,600

				3,333,400

Media—6.6%
Affinion Group Holdings, Inc., 11.625% Sr. Unsec. Nts., 11/15/15		1,970,000		1,526,750
Affinion Group, Inc., 7.875% Sr. Unsec. Nts., 12/15/18		3,430,000		2,658,250

17 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Media Continued
Belo (A.H.) Corp.:
7.25% Sr. Unsec. Unsub. Bonds, 9/15/27	$	500,000	$	416,250
7.75% Sr. Unsec. Unsub. Debs., 6/1/27		3,079,000		2,632,545
Cengage Learning Acquisitions, Inc., 10.50% Sr. Nts., 1/15/15²		1,115,000		719,175
Cequel Communications Holdings I LLC, 8.625% Sr. Unsec. Nts., 11/15/17²		1,725,000		1,716,375
Clear Channel Communications, Inc.:
5.75% Sr. Unsec. Unsub. Nts., 1/15/13		1,330,000		1,190,350
9% Sr. Sec. Nts., 3/1/21		1,600,000		1,196,000
10.75% Sr. Unsec. Unsub. Nts., 8/1/16		565,000		295,213
Cumulus Media, Inc., 7.75% Sr. Nts., 5/1/19²		1,635,000		1,385,663
Entravision Communications Corp., 8.75% Sr. Sec. Nts., 8/1/17		1,505,000		1,418,463
Gray Television, Inc., 10.50% Sr. Sec. Nts., 6/29/15		5,660,000		5,150,600
Interactive Data Corp., 10.25% Sr. Unsec. Nts., 8/1/18⁷		145,000		152,250
Kabel BW Erste Beteiligungs GmbH/Kabel Baden-Wurttemberg GmbH & Co. KG, 7.50% Sr. Sec. Nts., 3/15/19²		1,835,000		1,793,713
Newport Television LLC/NTV Finance Corp., 13.509% Sr. Nts., 3/15/17^2,3		3,186,811		3,011,536
Nexstar Broadcasting, Inc./Mission Broadcasting, Inc., 8.875% Sec. Nts., 4/15/17		2,470,000		2,451,475
Sinclair Television Group, Inc., 8.375% Sr. Unsec. Nts., 10/15/18		3,315,000		3,281,850
Visant Corp., 10% Sr. Unsec. Nts., 10/1/17		1,515,000		1,408,950

				32,405,408

Textiles, Apparel & Luxury Goods—0.5%
Jones Group, Inc. (The)/Jones Apparel Group Holdings, Inc./ Jones Apparel Group USA, Inc./JAG Footwear, Accessories & Retail Corp., 6.875% Sr. Unsec. Unsub. Nts., 3/15/19		2,765,000		2,516,150
Consumer Staples—3.1%
Food Products—3.1%
American Seafoods Group LLC, 10.75% Sr. Sub. Nts., 5/15/16²		4,960,000		4,836,000
ASG Consolidated LLC, 15% Sr. Nts., 5/15/17^2,3		5,169,915		5,040,667
Blue Merger Sub, Inc., 7.625% Sr. Nts., 2/15/19²		2,260,000		1,921,000
Southern States Cooperative, Inc., 11.25% Sr. Nts., 5/15/15⁷		3,295,000		3,426,800

				15,224,467

Energy—11.6%
Energy Equipment & Services—3.0%
Forbes Energy Services Ltd., 9% Sr. Unsec. Nts., 6/15/19⁷		2,280,000		2,120,400
Global Geophysical Services, Inc., 10.50% Sr. Unsec. Nts., 5/1/17		2,940,000		2,866,500
Offshore Group Investments Ltd.:
11.50% Sr. Sec. Nts., 8/1/15		2,710,000		2,804,850
11.50% Sr. Sec. Nts., 8/1/15²		1,590,000		1,645,650
Precision Drilling Corp., 6.625% Sr. Unsec. Nts., 11/15/20		2,585,000		2,533,300
SESI LLC, 6.375% Sr. Nts., 5/1/19²		3,215,000		3,118,550

				15,089,250

18 | OPPENHEIMER CHAMPION INCOME FUND


	Principal
	Amount		Value

Oil, Gas & Consumable Fuels—8.6%
Antero Resources Finance Corp., 7.25% Sr. Nts., 8/1/19²	$	4,400,000	$	4,202,000
ATP Oil & Gas Corp., 11.875% Sr. Sec. Nts., 5/1/15		5,875,000		4,119,844
Breitburn Energy Partners LP/Breitburn Finance Corp., 8.625% Sr. Unsec. Nts., 10/15/20		2,975,000		2,930,375
Chaparral Energy, Inc., 9.875% Sr. Unsec. Nts., 10/1/20		2,765,000		2,778,825
James River Coal Co., 7.875% Sr. Nts., 4/1/19²		735,000		621,075
Linn Energy LLC/Linn Energy Finance Corp.:
6.50% Sr. Unsec. Nts., 5/15/19²		3,160,000		2,923,000
8.625% Sr. Unsec. Nts., 4/15/20		4,280,000		4,429,800
MEG Energy Corp., 6.50% Sr. Unsec. Nts., 3/15/21²		2,145,000		2,064,563
Murray Energy Corp., 10.25% Sr. Sec. Nts., 10/15/15²		6,840,000		6,566,400
Navios Maritime Acquisition Corp., 8.625% Sr. Sec. Nts., 11/1/17		930,000		778,875
Quicksilver Resources, Inc., 11.75% Sr. Nts., 1/1/16		2,580,000		2,799,300
Range Resources Corp., 8% Sr. Unsec. Sub. Nts., 5/15/19		1,640,000		1,804,000
SandRidge Energy, Inc.:
8.75% Sr. Unsec. Nts., 1/15/20		3,310,000		3,260,350
9.875% Sr. Unsec. Nts., 5/15/16²		1,315,000		1,361,025
Venoco, Inc., 8.875% Sr. Unsec. Nts., 2/15/19		1,600,000		1,384,000

				42,023,432

Financials—11.8%
Capital Markets—6.1%
Berry Plastics Holding Corp., 10.25% Sr. Unsec. Sub. Nts., 3/1/16		1,045,000		914,375
Edgen Murray Corp., 12.25% Sr. Sec. Nts., 1/15/15		1,655,000		1,491,569
Nationstar Mortgage/Nationstar Capital Corp., 10.875% Sr. Unsec. Nts., 4/1/15		9,335,000		9,381,675
Nuveen Investments, Inc.:
5.50% Sr. Unsec. Nts., 9/15/15		2,390,000		1,947,850
10.50% Sr. Unsec. Unsub. Nts., 11/15/15		2,945,000		2,731,488
Pinafore LLC/Pinafore, Inc., 9% Sr. Sec. Nts., 10/1/18²		3,864,000		3,979,920
Springleaf Finance Corp., 6.90% Nts., Series J, 12/15/17		3,360,000		2,436,000
Verso Paper Holdings LLC, 11.375% Sr. Unsec. Sub. Nts., Series B, 8/1/16		7,170,000		5,234,100
Verso Paper Holdings LLC/Verso Paper, Inc., 8.75% Sr. Sec. Nts., 2/1/19		2,880,000		2,001,600

				30,118,577

Consumer Finance—0.9%
Speedy Cash, Inc., 10.75% Sr. Sec. Nts., 10/15/18²		2,055,000		2,080,688
TMX Finance LLC/TitleMax Finance Corp., 13.25% Sr. Sec. Nts., 7/15/15		1,950,000		2,106,000

				4,186,688

Diversified Financial Services—0.7%
GMAC LLC, 8% Sr. Unsec. Nts., 11/1/31		1,135,000		1,001,638
ING Groep NV, 5.775% Jr. Unsec. Sub. Perpetual Bonds⁴		3,110,000		2,293,625

				3,295,263

19 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Insurance—0.7%
International Lease Finance Corp.:
8.625% Sr. Unsec. Unsub. Nts., 9/15/15	$	1,965,000	$	1,957,631
8.75% Sr. Unsec. Unsub. Nts., 3/15/17		1,570,000		1,581,775

				3,539,406

Real Estate Investment Trusts—2.1%
FelCor Escrow Holdings LLC, 6.75% Sr. Sec. Nts., 6/1/19²		8,150,000		7,335,000
OMEGA Healthcare Investors, Inc., 6.75% Sr. Unsec. Nts., 10/15/22		3,270,000		3,135,113

				10,470,113

Real Estate Management & Development—1.3%
Realogy Corp., 11.50% Sr. Unsec. Unsub. Nts., 4/15/17		5,850,000		3,919,500
Wallace Theater Holdings, Inc., 12.50% Sr. Sec. Nts., 6/15/13^2,5		2,365,000		2,323,613

				6,243,113

Health Care—5.3%
Biotechnology—0.2%
Grifols SA/Giant Funding Corp., 8.25% Sr. Nts., 2/1/18²		900,000		904,500
Health Care Equipment & Supplies—1.8%
Accellent, Inc., 10% Sr. Unsec. Sub. Nts., 11/1/17		2,525,000		2,165,188
Alere, Inc., 8.625% Sr. Unsec. Sub. Nts., 10/1/18		1,375,000		1,251,250
Biomet, Inc.:
10.375% Sr. Unsec. Nts., 10/15/17³		1,415,000		1,457,450
11.625% Sr. Unsec. Sub. Nts., 10/15/17		2,410,000		2,512,425
Inverness Medical Innovations, Inc., 7.875% Sr. Unsec. Unsub. Nts., 2/1/16		1,395,000		1,325,250

				8,711,563

Health Care Providers & Services—3.0%
Catalent Pharma Solutions, Inc., 9.50% Sr. Unsec. Nts., 4/15/15³		2,129,208		1,953,548
Gentiva Health Services, Inc., 11.50% Sr. Unsec. Unsub. Nts., 9/1/18		1,570,000		1,256,000
inVentiv Health, Inc., 10% Sr. Unsec. Nts., 8/15/18²		1,390,000		1,230,150
Kindred Healthcare, Inc., 8.25% Sr. Nts., 6/1/19²		4,140,000		3,182,625
Multiplan, Inc., 9.875% Sr. Nts., 9/1/18²		1,930,000		1,920,350
Oncure Holdings, Inc., 11.75% Sr. Sec. Nts., 5/15/17		1,515,000		1,348,350
Radiation Therapy Services, Inc., 9.875% Sr. Unsec. Sub. Nts., 4/15/17		1,610,000		1,380,575
STHI Holding Corp., 8% Sec. Nts., 3/15/18²		920,000		892,400
US Oncology, Inc., Escrow Shares (related to 9.125% Sr. Sec. Nts., 8/15/17)¹		2,010,000		25,125
Vanguard Health Holding Co. II LLC/Vanguard Holding Co. II, Inc., 8% Sr. Nts., 2/1/18		1,605,000		1,480,613

				14,669,736

Pharmaceuticals—0.3%
Mylan, Inc., 6% Sr. Nts., 11/15/18²		910,000		889,525
Warner Chilcott Co. LLC, 7.75% Sr. Nts., 9/15/18²		655,000		628,800

				1,518,325

20 | OPPENHEIMER CHAMPION INCOME FUND


	Principal
	Amount		Value

Industrials—12.2%
Aerospace & Defense—3.6%
DynCorp International, Inc., 10.375% Sr. Unsec. Nts., 7/1/17	$	4,905,000	$	4,304,138
Hawker Beechcraft Acquisition Co. LLC:
8.50% Sr. Unsec. Nts., 4/1/15		6,490,000		2,790,700
9.75% Sr. Unsec. Sub. Nts., 4/1/17		1,105,000		364,650
Kratos Defense & Security Solutions, Inc., 10% Sr. Sec. Nts., 6/1/17		1,203,000		1,203,000
TransDigm, Inc., 7.75% Sr. Unsec. Sub. Nts., 12/15/18		5,635,000		5,761,788
Triumph Group, Inc., 8.625% Sr. Unsec. Nts., 7/15/18		2,925,000		3,129,750

				17,554,026

Air Freight & Logistics—0.5%
AMGH Merger Sub, Inc., 9.25% Sr. Sec. Nts., 11/1/18²		2,315,000		2,326,575
Building Products—1.3%
Associated Materials LLC, 9.125% Sr. Sec. Nts., 11/1/17²		1,170,000		953,550
Ply Gem Industries, Inc., 13.125% Sr. Unsec. Sub. Nts., 7/15/14		4,375,000		4,172,656
Roofing Supply Group LLC/Roofing Supply Finance, Inc., 8.625% Sr. Sec. Nts., 12/1/17²		1,240,000		1,174,900

				6,301,106

Commercial Services & Supplies—1.3%
R.R. Donnelley & Sons Co., 7.25% Sr. Nts., 5/15/18		2,700,000		2,440,800
West Corp.:
7.875% Sr. Unsec. Nts., 1/15/19		1,370,000		1,294,650
8.625% Sr. Unsec. Nts., 10/1/18		2,835,000		2,771,213

				6,506,663

Machinery—2.3%
Cleaver-Brooks, Inc., 12.25% Sr. Sec. Nts., 5/1/16⁷		3,095,000		2,986,675
Manitowoc Co., Inc. (The), 8.50% Sr. Unsec. Nts., 11/1/20		3,060,000		2,784,600
Terex Corp., 8% Sr. Unsec. Sub. Nts., 11/15/17		4,680,000		4,165,200
Thermadyne Holdings Corp., 9% Sr. Sec. Nts., 12/15/17		1,485,000		1,462,725

				11,399,200

Marine—0.9%
Marquette Transportation Co./Marquette Transportation Finance Corp., 10.875% Sec. Nts., 1/15/17		3,730,000		3,613,438
Navios Maritime Holdings, Inc./Navios Maritime Finance U.S., Inc., 8.875% Sr. Sec. Nts., 11/1/17		755,000		739,900

				4,353,338

Professional Services—0.5%
Altegrity, Inc., 10.50% Sr. Unsec. Sub. Nts., 11/1/152		1,790,000		1,673,650
TransUnion LLC/TransUnion Financing Corp., 11.375% Sr. Unsec. Nts., 6/15/18		645,000		704,663

				2,378,313

21 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Road & Rail—1.3%
Hertz Corp., 7.50% Sr. Unsec. Nts., 10/15/18	$	3,005,000	$	2,884,800
Western Express, Inc., 12.50% Sr. Sec. Nts., 4/15/15²		4,984,000		3,364,200

				6,249,000

Trading Companies & Distributors—0.5%
NES Rentals Holdings, Inc., 12.25% Sr. Sec. Nts., 4/15/15²		3,000,000		2,520,000
Information Technology—6.3%
Computers & Peripherals—1.1%
Seagate HDD Cayman:
6.875% Sr. Unsec. Nts., 5/1/20		3,690,000		3,413,250
7% Sr. Unsec. Nts., 11/1/21²		2,260,000		2,090,500

				5,503,750

Electronic Equipment & Instruments—1.0%
CDW LLC/CDW Finance Corp., 12.535% Sr. Unsec. Sub. Nts., 10/12/17		5,130,000		4,924,800
Internet Software & Services—1.5%
ITC DeltaCom, Inc., 10.50% Sr. Sec. Nts., 4/1/16		7,085,000		7,262,125
IT Services—1.5%
Ceridian Corp., 11.25% Sr. Unsec. Nts., 11/15/15		2,375,000		1,971,250
First Data Corp.:
8.875% Sr. Sec. Nts., 8/15/20²		1,580,000		1,493,100
9.875% Sr. Unsec. Nts., 9/24/15		4,785,000		4,031,363

				7,495,713

Semiconductors & Semiconductor Equipment—1.2%
Advanced Micro Devices, Inc., 7.75% Sr. Unsec. Nts., 8/1/20		2,685,000		2,644,725
Freescale Semiconductor, Inc., 10.75% Sr. Unsec. Nts., 8/1/20		3,172,000		3,187,860

				5,832,585

Materials—8.9%
Chemicals—2.6%
Ferro Corp., 7.875% Sr. Unsec. Nts., 8/15/18		2,830,000		2,844,150
Hexion U.S. Finance Corp./Hexion Nova Scotia Finance ULC:
8.875% Sr. Sec. Nts., 2/1/18		2,995,000		2,485,850
9% Sec. Nts., 11/15/20		1,785,000		1,316,438
Lyondell Chemical Co., 8% Sr. Sec. Nts., 11/1/17²		3,299,000		3,571,168
Momentive Performance Materials, Inc., 9% Sec. Nts., 1/15/21		3,850,000		2,656,500

				12,874,106

Construction Materials—0.2%
Ply Gem Industries, Inc., 8.25% Sr. Sec. Nts., 2/15/18		1,445,000		1,184,900

22 | OPPENHEIMER CHAMPION INCOME FUND


	Principal
	Amount		Value

Containers & Packaging—1.3%
Berry Plastics Corp., 9.75% Sec. Nts., 1/15/21	$	1,350,000	$	1,154,250
Polymer Group, Inc., 7.75% Sr. Sec. Nts., 2/1/19²		3,130,000		3,137,825
Solo Cup Co., 8.50% Sr. Sub. Nts., 2/15/14		2,230,000		1,951,250

				6,243,325

Metals & Mining—0.9%
Aleris International, Inc., 7.625% Sr. Nts., 2/15/18²		4,720,000		4,259,800
Paper & Forest Products—3.9%
ABI Escrow Corp., 10.25% Sr. Sec. Nts., 10/15/18²		1,855,000		1,947,750
Ainsworth Lumber Co. Ltd., 11% Sr. Unsec. Unsub. Nts., 7/29/15^2,3		5,351,653		3,505,333
Appleton Papers, Inc., 10.50% Sr. Sec. Nts., 6/15/15²		4,410,000		4,343,850
Catalyst Paper Corp., 11% Sr. Sec. Nts., 12/15/16²		5,347,000		3,502,285
Mercer International, Inc., 9.50% Sr. Unsec. Nts., 12/1/17		2,140,000		2,113,250
NewPage Corp., 11.375% Sr. Sec. Nts., 12/31/14¹		3,270,000		2,444,325
Norske Skogindustrier ASA, 6.125% Unsec. Bonds, 10/15/15²		1,735,000		1,014,975

				18,871,768

Telecommunication Services—3.4%
Diversified Telecommunication Services—2.0%
Broadview Networks Holdings, Inc., 11.375% Sr. Sec. Nts., 9/1/12		1,665,000		1,340,325
Cincinnati Bell, Inc.:
8.25% Sr. Nts., 10/15/17		1,505,000		1,467,375
8.75% Sr. Unsec. Sub. Nts., 3/15/18		2,145,000		1,914,413
Intelsat Bermuda Ltd., 11.25% Sr. Unsec. Nts., 2/4/17		2,405,000		2,092,350
Level 3 Financing, Inc.:
9.25% Sr. Unsec. Unsub. Nts., 11/1/14		345,000		342,413
9.375% Sr. Unsec. Unsub. Nts., 4/1/192		1,700,000		1,589,500
Wind Acquisition Finance SA, 7.25% Sr. Sec. Nts., 2/15/18²		1,350,000		1,155,938

				9,902,314

Wireless Telecommunication Services—1.4%
Cricket Communications, Inc., 7.75% Sr. Unsec. Nts., 10/15/20		5,520,000		4,816,200
MetroPCS Wireless, Inc., 6.625% Sr. Unsec. Nts., 11/15/20		2,125,000		1,875,313

				6,691,513

Utilities—3.9%
Electric Utilities—1.6%
Edison Mission Energy, 7% Sr. Unsec. Nts., 5/15/17		4,280,000		2,568,000
Energy Future Intermediate Holding Co. LLC, 10% Sr. Sec. Nts., 12/1/20		1,455,000		1,425,900
Texas Competitive Electric Holdings Co. LLC:
10.25% Sr. Unsec. Nts., Series A, 11/1/15		8,115,000		3,083,700
10.25% Sr. Unsec. Nts., Series B, 11/1/15		1,960,000		735,000

				7,812,600

23 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Energy Traders—2.2%
Energy Future Holdings Corp., 10% Sr. Sec. Nts., 1/15/20	$	3,225,000	$	3,144,375
First Wind Capital LLC, 10.25% Sr. Sec. Nts., 6/1/18²		360,000		343,800
Foresight Energy LLC, 9.625% Sr. Unsec. Nts., 8/15/17²		4,015,000		4,075,225
GenOn Energy, Inc., 9.875% Sr. Unsec. Nts., 10/15/20		1,970,000		1,851,800
United Maritime Group LLC, 11.75% Sr. Sec. Nts., 6/15/15		1,355,000		1,375,325
				10,790,525

Gas Utilities—0.1%
Ferrellgas LP/Ferrellgas Finance Corp., 6.50% Sr. Unsec. Nts., 5/1/21		760,000		649,800

Total Corporate Bonds and Notes (Cost $456,086,281)				405,029,910

Loan Participations—2.3%
Brock Holdings III, Inc., Sr. Sec. Credit Facilities 2nd Lien Term Loan, 10%, 2/15/18⁵		710,000		649,650
Entegra Holdings LLC, Sr. Sec. Credit Facilities 3rd Lien Term Loan, Tranche B, 4.236%, 10/19/15^3,5		10,093,270		6,283,060
Nuveen Investments, Inc., Sr. Sec. Credit Facilities 2nd Lien Term Loan, 12.50%, 7/31/15		4,186,562		4,322,625

Total Loan Participations (Cost $11,190,405)				11,255,335


	Shares

Preferred Stocks—1.6%
Ally Financial, Inc., 7%, Non-Vtg.²		6,280	4,205,834
GMAC Capital Trust I, 8.125% Cum.		35,000	638,750
Greektown Superholdings, Inc., Series A-1⁶		41,630	2,953,232
Total Preferred Stocks (Cost $10,389,913)			7,797,816
Common Stocks—3.4%
AbitibiBowater, Inc.⁶		143,886	2,158,290
American Media Operations, Inc. ⁶		266,268	4,260,288
Dana Holding Corp.⁶		95,472	1,002,456
Gaylord Entertainment Co., Cl. A ⁶		102,034	1,973,338
Global Aviation Holdings, Inc. ⁶		4,500	45,000
Greektown Superholdings, Inc. ⁶		3,150	207,869
Huntsman Corp.		31,409	303,725
Kaiser Aluminum Corp.		2,291	101,445
Linn Energy LLC		16,237	579,011
LyondellBasell Industries NV, Cl. A		86,347	2,109,457
Orbcomm, Inc.⁶		12,519	31,923
Premier Holdings Ltd.⁶		288,828	—
Range Resources Corp.		9,330	545,432
Solutia, Inc.⁶		25,871	332,442
Visteon Corp.⁶		53,045	2,280,926

24 | OPPENHEIMER CHAMPION INCOME FUND


	Shares		Value

Common Stocks Continued
Walter Industries, Inc.		4,800	$	288,048
Whiting Petroleum Corp.⁶		9,656		338,732

Total Common Stocks (Cost $29,969,853)				16,558,382


	Units

Rights, Warrants and Certificates—0.0%
MediaNews Group, Inc. Wts., Strike Price $0.001, Exp. 3/19/17 ⁶
(Cost $—)		57,305	2,062

Expiration

Date

Strike Price

Contracts

Options Purchased—0.0%

U.S. Treasury Nts. Futures, 10 yr.,

12/20/11 Put⁶

(Cost $9,511)

11/28/11

129

7,500


	Shares
Investment Company—7.1%
Oppenheimer Institutional Money Market Fund,
Cl. E, 0.16%^8,9(Cost $34,936,445)		34,936,445			34,936,445
Total Investments, at Value (Cost $545,762,303)		97.1	%		475,622,463
Other Assets Net of Liabilities		2.9			14,007,894

Net Assets		100.0	%	$	489,630,357

Footnotes to Statement of Investments


1.		This security is not accruing income because the issuer has missed an interest payment on it and/or is not anticipated to make future interest and/or principal payments. The rate shown is the original contractual interest rate. See Note 1 of the accompanying Notes.

2.		Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $134,662,076 or 27.50% of the Fund’s net assets as of September 30, 2011.

Interest or dividend is paid-in-kind, when applicable.

This bond has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. Rate reported represents the current interest rate for this variable rate security.

Represents the current interest rate for a variable or increasing rate security.

6.		Non-income producing security.

7.		Restricted security. The aggregate value of restricted securities as of September 30, 2011 was $8,721,138, which represents 1.78% of the Fund’s net assets. See Note 6 of the accompanying Notes. Information concerning restricted securities is as follows:


							Unrealized
	Acquisition						Appreciation
Security	Dates		Cost		Value		(Depreciation)

Cleaver-Brooks, Inc., 12.25% Sr. Sec. Nts., 5/1/16		4/21/10	$	3,134,588	$	2,986,675	$	(147,913	)
Forbes Energy Services Ltd., 9% Sr. Unsec. Nts., 6/15/19		5/24/11		2,280,000		2,120,400		(159,600	)
Goldman Sachs Asset Management CBO Ltd.,
Sub. Collateralized Bond Obligations,
Series 1A, Cl. D, 12.54%, 6/13/11		6/8/99-8/1/07		2,746,126		—		(2,746,126	)
Interactive Data Corp., 10.25% Sr. Unsec. Nts., 8/1/18		7/20/10		145,000		152,250		7,250

25 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued


							Unrealized
	Acquisition						Appreciation
Security	Dates		Cost		Value		(Depreciation)

NC Finance Trust, Collateralized Mtg. Obligation
Pass-Through Certificates, Series 1999-I,
Cl. ECFD, 3.405%, 1/25/29		8/10/10	$	433,769	$	35,013	$	(398,756	)
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08		3/6/98		3,785,730		—		(3,785,730	)
Southern States Cooperative, Inc., 11.25% Sr. Nts., 5/15/15		4/28/10-5/4/11		3,366,591		3,426,800		60,209

			$	15,891,804	$	8,721,138	$	(7,170,666	)


8.		Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended September 30, 2011, 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

Gross

Shares

September 30, 2010

Additions

Reductions

September 30, 2011

Oppenheimer Institutional Money Market Fund, Cl. E

36,490,958

315,858,375

317,412,888

34,936,445


	Value		Income

Oppenheimer Institutional Money Market Fund, Cl. E	$	34,936,445	$	47,483

9. Rate shown is the 7-day yield as of September 30, 2011.

Valuation Inputs

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:

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

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

	3)		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 table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities as of September 30, 2011 based on valuation input level:


					Level 3 —
	Level 1 —		Level 2 —		Significant
	Unadjusted		Other Significant		Unobservable
	Quoted Prices		Observable Inputs		Inputs		Value

Assets Table
Investments, at Value:
Asset-Backed Securities	$	—	$	35,013	$	—	$	35,013
Corporate Bonds and Notes		—		405,029,910		—		405,029,910
Loan Participations		—		11,255,335		—		11,255,335
Preferred Stocks		—		4,844,584		2,953,232		7,797,816
Common Stocks		9,764,299		6,541,214		252,869		16,558,382
Rights, Warrants and Certificates		—		—		2,062		2,062
Options Purchased		7,500		—		—		7,500
Investment Company		34,936,445		—		—		34,936,445

Total Assets	$	44,708,244	$	427,706,056	$	3,208,163	$	475,622,463

26 | OPPENHEIMER CHAMPION INCOME FUND

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 following is a reconciliation of assets in which significant unobservable inputs (level 3) were used in determining fair value:


						Change in		Transfers
	Value as of					unrealized		in and/or			Value as of
	September 30,		Realized			appreciation/		out of			September 30,
	2010		gain (loss)			depreciation		Level 3			2011

Assets Table
Investments, at Value:
Corporate Bonds and Notes	$	2,069	$	(25,280,320	)	$	25,278,251	$	—		$	—
Preferred Stock		4,412,780		(11,634,686	)		10,175,138		—			2,953,232
Common Stocks		2,780,245		(1,601,001	)		1,530,088		(2,456,463	)		252,869
Rights, Warrants and Certificates		56		(42,773	)		44,779		—			2,062

Total Assets	$	7,195,150	$	(38,558,780	)	$	37,028,256	$	(2,456,463	)	$	3,208,163

See the accompanying Notes for further discussion of the methods used in determining value of the Fund’s investments, and a summary of changes to the valuation methodologies, if any, during the reporting period.

The total change in unrealized appreciation/depreciation included in the statement of operations attributable to level 3 investments still held at September 30, 2011 includes:


	Change in
	unrealized
	appreciation/
	depreciation

Preferred Stocks	$	(1,209,768	)
Common Stocks		(70,906	)
Rights, Warrants and Certificates		2,062

	$	(1,278,612	)

See accompanying Notes to Financial Statements.

27 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF ASSETS AND LIABILITIES September 30, 2011


Assets
Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $510,825,858)	$	440,686,018
Affiliated companies (cost $34,936,445)		34,936,445

		475,622,463
Cash		3,317
Receivables and other assets:
Interest, dividends and principal paydowns		13,789,377
Investments sold		980,531
Other		713,951

Total assets		491,109,639

Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed		841,884
Dividends		160,959
Shareholder communications		138,200
Transfer and shareholder servicing agent fees		126,624
Distribution and service plan fees		83,400
Trustees’ compensation		49,427
Legal, auditing and other professional fees		43,644
Other		35,144

Total liabilities		1,479,282

Net Assets	$	489,630,357


Composition of Net Assets
Par value of shares of beneficial interest	$	286,751
Additional paid-in capital		1,745,554,984
Accumulated net investment loss		(1,761,105	)
Accumulated net realized loss on investments		(1,184,310,433	)
Net unrealized depreciation on investments		(70,139,840	)


Net Assets	$	489,630,357

28 | OPPENHEIMER CHAMPION INCOME FUND


Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $301,846,436 and 176,633,090 shares of beneficial interest outstanding)	$	1.71
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price)	$	1.80
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $18,726,348 and 10,943,816 shares of beneficial interest outstanding)	$	1.71
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $61,307,282 and 35,937,232 shares of beneficial interest outstanding)	$	1.71
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $10,993,532 and 6,429,601 shares of beneficial interest outstanding)	$	1.71
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $96,756,759 and 56,807,684 shares of beneficial interest outstanding)	$	1.70

See accompanying Notes to Financial Statements.

29 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENT OF OPERATIONS For the Year Ended September 30, 2011


Investment Income
Interest	$	55,717,939
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $ 3,886)		586,013
Affiliated companies		47,483
Other income		22,339

Total investment income		56,373,774

Expenses
Management fees		4,127,082
Distribution and service plan fees:
Class A		994,653
Class B		218,056
Class C		685,729
Class N		59,740
Transfer and shareholder servicing agent fees:
Class A		2,177,311
Class B		232,628
Class C		302,436
Class N		74,012
Class Y		21,918
Shareholder communications:
Class A		183,184
Class B		28,633
Class C		29,063
Class N		4,121
Class Y		655
Legal, auditing and other professional fees		708,155
Custodian fees and expenses		51,426
Trustees’ compensation		18,708
Administration service fees		1,500
Other		30,150

Total expenses		9,949,160
Less waivers and reimbursements of expenses		(1,387,468	)

Net expenses		8,561,692

Net Investment Income		47,812,082

30 | OPPENHEIMER CHAMPION INCOME FUND


Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments from unaffiliated companies	$	(20,461,111	)
Swap contracts		62,394

Net realized loss		(20,398,717	)
Net change in unrealized appreciation/depreciation on investments		(27,625,869	)

Net Decrease in Net Assets Resulting from Operations	$	(212,504	)

See accompanying Notes to Financial Statements.

31 | OPPENHEIMER CHAMPION INCOME FUND

STATEMENTS OF CHANGES IN NET ASSETS


Year Ended September 30,	2011			2010

Operations
Net investment income	$	47,812,082		$	51,778,974
Net realized gain (loss)		(20,398,717	)		25,753,943
Net change in unrealized appreciation/depreciation		(27,625,869	)		(4,006,239	)

Net increase (decrease) in net assets resulting from operations		(212,504	)		73,526,678

Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A		(31,624,132	)		(27,896,347	)
Class B		(1,484,203	)		(1,420,277	)
Class C		(4,733,950	)		(4,431,944	)
Class N		(901,972	)		(732,337	)
Class Y		(9,067,825	)		(11,621,935	)

		(47,812,082	)		(46,102,840	)
Tax return of capital distribution:
Class A		—			(3,434,569	)
Class B		—			(174,863	)
Class C		—			(545,656	)
Class N		—			(90,165	)
Class Y		—			(1,430,881	)

		—			(5,676,134	)

Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A		(73,942,606	)		32,365,695
Class B		(1,886,520	)		1,896,862
Class C		(959,154	)		2,557,635
Class N		660,214			1,659,460
Class Y		2,160,283			(31,037,581	)

		(73,967,783	)		7,442,071

Net Assets
Total increase (decrease)		(121,992,369	)		29,189,775
Beginning of period		611,622,726			582,432,951


End of period (including accumulated net investment loss of $1,761,105 and $4,048,406, respectively)	$	489,630,357		$	611,622,726

See accompanying Notes to Financial Statements.

32 | OPPENHEIMER CHAMPION INCOME FUND

FINANCIAL HIGHLIGHTS


Class A Year Ended September 30,	2011			2010			2009			2008			2007

Per Share Operating Data
Net asset value, beginning of period	$	1.87		$	1.80		$	6.26		$	9.36		$	9.32

Income (loss) from investment operations:
Net investment income¹		.15			.15			.25			.63			.65
Net realized and unrealized gain (loss)		(.16	)		.07			(4.45	)		(3.10	)		.04

Total from investment operations		(.01	)		.22			(4.20	)		(2.47	)		.69

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.15	)		(.13	)		—			—²			(.65	)
Tax return of capital distribution		—			(.02	)		(.26	)		(.63	)		—

Total dividends and/or distributions to shareholders		(.15	)		(.15	)		(.26	)		(.63	)		(.65	)

Net asset value, end of period	$	1.71		$	1.87		$	1.80		$	6.26		$	9.36

Total Return, at Net Asset Value³		(1.21	)%		12.90	%		(67.12	)%		(27.70	)%		7.51	%


Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	301,846		$	406,244		$	361,169		$	1,035,629		$	1,772,880

Average net assets (in thousands)	$	412,774		$	374,702		$	354,862		$	1,471,385		$	1,851,296

Ratios to average net assets:⁴
Net investment income		7.66	%		8.36	%		12.80	%		7.60	%		6.86	%
Total expenses⁵		1.60	%		1.72	%		1.72	%		1.04	%		1.00	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.36	%		1.25	%		1.21	%		1.04	%		0.99	%

Portfolio turnover rate		69	%		144	%		67	%⁶		73	%⁶		49	%⁶


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

2.		Less than $0.005 per share.

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 September 30, 2011	1.60	%
Year Ended September 30, 2010	1.73	%
Year Ended September 30, 2009	1.74	%
Year Ended September 30, 2008	1.04	%
Year Ended September 30, 2007	1.01	%


6.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2009	$	29,081,972	$	39,133,713
Year Ended September 30, 2008	$	154,007,750	$	136,228,947
Year Ended September 30, 2007	$	132,979,285	$	140,757,346

See accompanying Notes to Financial Statements.

33 | OPPENHEIMER CHAMPION INCOME FUND

FINANCIAL HIGHLIGHTS Continued


Class B Year Ended September 30,	2011			2010			2009			2008			2007

Per Share Operating Data
Net asset value, beginning of period	$	1.88		$	1.80		$	6.25		$	9.34		$	9.31

Income (loss) from investment operations:
Net investment income¹		.13			.14			.25			.56			.58
Net realized and unrealized gain (loss)		(.17	)		.08			(4.46	)		(3.09	)		.02

Total from investment operations		(.04	)		.22			(4.21	)		(2.53	)		.60

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.13	)		(.12	)		—			—²			(.57	)
Tax return of capital distribution		—			(.02	)		(.24	)		(.56	)		—

Total dividends and/or distributions to shareholders		(.13	)		(.14	)		(.24	)		(.56	)		(.57	)

Net asset value, end of period	$	1.71		$	1.88		$	1.80		$	6.25		$	9.34


Total Return, at Net Asset Value³		(2.58	)%		12.59	%		(67.35	)%		(28.28	)%		6.57	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,726		$	22,343		$	19,661		$	93,848		$	239,673

Average net assets (in thousands)	$	21,796		$	21,119		$	25,683		$	160,611		$	298,233

Ratios to average net assets:⁴
Net investment income		6.81	%		7.55	%		12.45	%		6.70	%		6.08	%
Total expenses⁵		2.99	%		3.45	%		3.38	%		1.87	%		1.79	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.21	%		2.09	%		2.07	%		1.87	%		1.78	%

Portfolio turnover rate		69	%		144	%		67	%⁶		73	%⁶		49	%⁶


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

2.		Less than $0.005 per share.

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 September 30, 2011	2.99	%
Year Ended September 30, 2010	3.46	%
Year Ended September 30, 2009	3.40	%
Year Ended September 30, 2008	1.87	%
Year Ended September 30, 2007	1.80	%


6.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions
Year Ended September 30, 2009	$	29,081,972	$	39,133,713
Year Ended September 30, 2008	$	154,007,750	$	136,228,947
Year Ended September 30, 2007	$	132,979,285	$	140,757,346

See accompanying Notes to Financial Statements.

34 | OPPENHEIMER CHAMPION INCOME FUND


Class C Year Ended September 30,	2011			2010			2009			2008			2007

Per Share Operating Data
Net asset value, beginning of period	$	1.87		$	1.79		$	6.25		$	9.35		$	9.31

Income (loss) from investment operations:
Net investment income¹		.13			.14			.23			.57			.57
Net realized and unrealized gain (loss)		(.16	)		.08			(4.45	)		(3.10	)		.04

Total from investment operations		(.03	)		.22			(4.22	)		(2.53	)		.61

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.13	)		(.12	)		—			—²			(.57	)
Tax return of capital distribution		—			(.02	)		(.24	)		(.57	)		—

Total dividends and/or distributions to shareholders		(.13	)		(.14	)		(.24	)		(.57	)		(.57	)

Net asset value, end of period	$	1.71		$	1.87		$	1.79		$	6.25		$	9.35


Total Return, at Net Asset Value³		(1.97	)%		12.71	%		(67.51	)%		(28.32	)%		6.69	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	61,307		$	67,813		$	62,635		$	160,353		$	275,373

Average net assets (in thousands)	$	68,555		$	65,224		$	58,009		$	227,183		$	295,414

Ratios to average net assets:⁴
Net investment income		6.91	%		7.63	%		11.90	%		6.81	%		6.08	%
Total expenses⁵		2.27	%		2.47	%		2.59	%		1.83	%		1.78	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.12	%		2.00	%		1.97	%		1.83	%		1.77	%

Portfolio turnover rate		69	%		144	%		67	%⁶		73	%⁶		49	%⁶


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

2.		Less than $0.005 per share.

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 September 30, 2011	2.27	%
Year Ended September 30, 2010	2.48	%
Year Ended September 30, 2009	2.61	%
Year Ended September 30, 2008	1.83	%
Year Ended September 30, 2007	1.79	%


6.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions
Year Ended September 30, 2009	$	29,081,972	$	39,133,713
Year Ended September 30, 2008	$	154,007,750	$	136,228,947
Year Ended September 30, 2007	$	132,979,285	$	140,757,346

See accompanying Notes to Financial Statements.

35 | OPPENHEIMER CHAMPION INCOME FUND

FINANCIAL HIGHLIGHTS Continued


Class N Year Ended September 30,	2011			2010			2009			2008			2007

Per Share Operating Data
Net asset value, beginning of period	$	1.87		$	1.80		$	6.26		$	9.36		$	9.32
Income (loss) from investment operations:
Net investment income¹		.14			.15			.24			.60			.61
Net realized and unrealized gain (loss)		(.16	)		.07			(4.45	)		(3.10	)		.04

Total from investment operations		(.02	)		.22			(4.21	)		(2.50	)		.65

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.14	)		(.13	)		—			—²			(.61	)
Tax return of capital distribution		—			(.02	)		(.25	)		(.60	)		—

Total dividends and/or distributions to shareholders		(.14	)		(.15	)		(.25	)		(.60	)		(.61	)

Net asset value, end of period	$	1.71		$	1.87		$	1.80		$	6.26		$	9.36


Total Return, at Net Asset Value³		(1.45	)%		12.66	%		(67.20	)%		(28.00	)%		7.05	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,994		$	11,413		$	9,360		$	26,709		$	48,347

Average net assets (in thousands)	$	12,152		$	10,098		$	10,099		$	38,585		$	49,180

Ratios to average net assets:⁴
Net investment income		7.42	%		8.14	%		12.54	%		7.19	%		6.42	%
Total expenses⁵		1.92	%		2.28	%		2.59	%		1.54	%		1.45	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.60	%		1.49	%		1.45	%		1.45	%		1.42	%

Portfolio turnover rate		69	%		144	%		67	%⁶		73	%⁶		49	%⁶


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

2.		Less than $0.005 per share.

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 September 30, 2011	1.92	%
Year Ended September 30, 2010	2.29	%
Year Ended September 30, 2009	2.61	%
Year Ended September 30, 2008	1.54	%
Year Ended September 30, 2007	1.46	%


6.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2009	$	29,081,972	$	39,133,713
Year Ended September 30, 2008	$	154,007,750	$	136,228,947
Year Ended September 30, 2007	$	132,979,285	$	140,757,346

See accompanying Notes to Financial Statements.

36 | OPPENHEIMER CHAMPION INCOME FUND


Class Y Year Ended September 30,	2011			2010			2009			2008			2007

Per Share Operating Data
Net asset value, beginning of period	$	1.87		$	1.79		$	6.26		$	9.36		$	9.32

Income (loss) from investment operations:
Net investment income¹		.16			.17			.26			.67			.68
Net realized and unrealized gain (loss)		(.17	)		.07			(4.46	)		(3.10	)		.04

Total from investment operations		(.01	)		.24			(4.20	)		(2.43	)		.72

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.16	)		(.14	)		—			—²			(.68	)
Tax return of capital distribution		—			(.02	)		(.27	)		(.67	)		—
Total dividends and/or distributions to shareholders		(.16	)		(.16	)		(.27	)		(.67	)		(.68	)

Net asset value, end of period	$	1.70		$	1.87		$	1.79		$	6.26		$	9.36


Total Return, at Net Asset Value³		(1.19	)%		14.26	%		(67.09	)%		(27.39	)%		7.90	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	96,757		$	103,810		$	129,608		$	266,752		$	217,011

Average net assets (in thousands)	$	109,741		$	144,860		$	145,168		$	308,019		$	171,898

Ratios to average net assets:⁴
Net investment income		8.26	%		9.01	%		13.95	%		8.10	%		7.21	%
Total expenses⁵		0.81	%		0.91	%		0.75	%		0.61	%		0.63	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.75	%		0.64	%		0.61	%		0.61	%		0.62	%

Portfolio turnover rate		69	%		144	%		67	%⁶		73	%⁶		49	%⁶


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

2.		Less than $0.005 per share.

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 September 30, 2011	0.81	%
Year Ended September 30, 2010	0.92	%
Year Ended September 30, 2009	0.77	%
Year Ended September 30, 2008	0.61	%
Year Ended September 30, 2007	0.64	%


6.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2009	$	29,081,972	$	39,133,713
Year Ended September 30, 2008	$	154,007,750	$	136,228,947
Year Ended September 30, 2007	$	132,979,285	$	140,757,346

See accompanying Notes to Financial Statements.

37 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Oppenheimer Champion Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s primary investment objective is to seek a high level of current income by investing mainly in a diversified portfolio of high-yield, lower-grade, fixed-income securities that the Fund’s investment manager, OppenheimerFunds, Inc. (the “Manager”), believes does not involve undue risk. The Fund’s secondary objective is to seek capital growth when that is consistent with its primary objective.

The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors 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 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 Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.

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

Securities Valuation. The Fund calculates the net asset value of its shares as of the close of the New York Stock Exchange (the “Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading.

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. Unadjusted quoted prices in active markets for identical securities are classified as “Level 1,” observable market inputs other than unadjusted quoted prices are classified as “Level 2” and significant unobservable inputs, including the Manager’s judgment about the assumptions that a market participant would use in pricing an asset or liability, are classified as “Level 3.” The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. A table summarizing the Fund’s investments under these levels of classification is included following the Statement of Investments.

Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by portfolio pricing services approved by the Board of Trustees or dealers.

Securities traded on a registered U.S. securities exchange 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. Securities whose principal exchange is NASDAQ^® are

38 | OPPENHEIMER CHAMPION INCOME FUND

valued based on the official closing prices reported by NASDAQ prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the current day’s closing “bid” and “asked” prices, and if not, at the current day’s closing bid price. A foreign security traded on a foreign exchange is valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service used by the Manager, prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the most recent official closing price on the principal exchange on which it is traded.

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.

U.S. domestic and international debt instruments (including corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and “money market-type” debt instruments with a remaining maturity in excess of sixty days are valued at the mean between the “bid” and “asked” prices utilizing price quotations obtained from independent pricing services or broker-dealers. Such prices are typically determined based upon information obtained from market participants including reported trade data, broker-dealer price quotations and inputs such as benchmark yields and issuer spreads from identical or similar securities.

“Money market-type” debt instruments with remaining maturities 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.

In the absence of a current price quotation obtained from an independent pricing service or broker-dealer, including for securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund’s assets are valued but after the close of the securities’ respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that asset using consistently applied procedures under the supervision of the Board of Trustees (which reviews those fair valuations by the Manager). Those procedures include certain standardized methodologies to fair value securities. Such methodologies include, but are not limited to, pricing securities 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 adjusted for any discounts related to 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. As of September 30, 2011, the Manager determined the fair value of certain common stock at the last traded price. For certain common stock and related preferred stock, both of which do not trade, the Manager has determined the fair value of these securities using internal models that utilize quarterly financial statements and Manager assumptions using comparable security inputs. For certain warrants received through a bankruptcy distribution, the Manager has determined the fair value of the warrants as the residual value of the original bonds. Such investments have been classified as Level 3 instruments.

39 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

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

Credit Risk. The Fund invests in high-yield, non-investment-grade bonds, which may be subject to a greater degree of credit risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. The Fund may acquire securities that have missed an interest payment, and is not obligated to dispose of securities whose issuers or underlying obligors subsequently miss an interest payment. Information concerning securities not accruing interest as of September 30, 2011 is as follows:


Cost	$	10,026,224
Market Value	$	2,504,463
Market Value as a % of Net Assets		0.51	%

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 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.

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 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.

40 | OPPENHEIMER CHAMPION INCOME FUND

Net Unrealized

Depreciation

Based on Cost of

Securities and

Undistributed

Accumulated

Other Investments

Net Investment

Long-Term

Loss

for Federal Income

Income

Gain

Carryforward^1,2,3,4,5

Tax Purposes

—

1,168,824,893

87,186,941


1.		As of September 30, 2011, the Fund had $1,158,493,295 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of September 30, 2011, details of the capital loss carryforwards were as follows:


Expiring

2012	$	101,699,709
2014		7,796,993
2017		158,795,001
2018		890,201,592

Total	$	1,158,493,295


2.		As of September 30, 2011, the Fund had $10,331,598 of post-October losses available to offset future realized capital gains, if any. Such losses, if unutilized, will expire in 2020.

3.		During the fiscal year ended September 30, 2011, the Fund utilized $3,785,383 of capital loss carryforward to offset capital gains realized in that fiscal year.

4.		During the fiscal year ended September 30, 2010, the Fund did not utilize any capital loss carryforward.

5.		During the fiscal year ended September 30, 2011, $352,853,324 of unused capital loss carryforward expired.

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.

Accordingly, the following amounts have been reclassified for September 30, 2011. Net assets of the Fund were unaffected by the reclassifications.


			Reduction to
	Reduction to		Accumulated
Reduction to	Accumulated Net		Net Realized Loss
Paid-in Capital	Investment Loss		on Investments

$354,669,229	$	2,287,301	$	352,381,928

The tax character of distributions paid during the years ended September 30, 2011 and September 30, 2010 was as follows:


	Year Ended		Year Ended
	September 30,		September 30,
	2011		2010

Distributions paid from:
Ordinary income	$	47,812,082	$	46,102,840
Return of capital		—		5,676,134

Total	$	47,812,082	$	51,778,974

41 | OPPENHEIMER CHAMPION INCOME FUND

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 September 30, 2011 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	$	562,811,415
Federal tax cost of other investments		(2,011	)

Total federal tax cost	$	562,809,404


Gross unrealized appreciation	$	2,677,643
Gross unrealized depreciation		(89,864,584	)

Net unrealized depreciation	$	(87,186,941	)

The Regulated Investment Company Modernization Act of 2010 (the “Act”) was signed into law on December 22, 2010. The Act makes changes to a number of tax rules impacting the Fund. Although the Act provides a number of benefits, including the unlimited carryover of future capital losses, there may be a greater likelihood that all or a portion of a fund’s prior year capital loss carryovers will expire unused. In general, the provisions of the Act will be effective for the Fund’s fiscal year ending 2012. Specific information regarding the impact of the Act on the Fund will be contained within the “Federal Taxes” section of the financial statement notes for the fiscal year ending 2012.

Trustees’ Compensation. 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 differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually.

Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend

42 | OPPENHEIMER CHAMPION INCOME FUND

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. Shares of Beneficial Interest

The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:


	Year Ended September 30, 2011						Year Ended September 30, 2010
	Shares			Amount			Shares			Amount

Class A
Sold		66,427,242		$	130,085,193			116,116,661		$	215,048,010
Dividends and/or
distributions reinvested		13,683,198			26,483,340			10,995,462			20,245,464
Redeemed		(120,401,450	)		(230,511,139	)		(111,290,109	)		(202,927,779	)

Net increase (decrease)		(40,291,010	)	$	(73,942,606	)		15,822,014		$	32,365,695

43 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

2. Shares of Beneficial Interest Continued


	Year Ended September 30, 2011						Year Ended September 30, 2010
	Shares			Amount			Shares			Amount

Class B
Sold		3,682,989		$	7,185,137			6,680,535		$	12,373,232
Dividends and/or distributions reinvested		688,298			1,330,012			725,926			1,338,254
Redeemed		(5,343,326	)		(10,401,669	)		(6,429,170	)		(11,814,624	)

Net increase (decrease)		(972,039	)	$	(1,886,520	)		977,291		$	1,896,862


Class C
Sold		11,383,325		$	21,821,986			9,850,395		$	18,146,104
Dividends and/or
distributions reinvested		2,135,924			4,111,433			2,234,769			4,104,786
Redeemed		(13,863,191	)		(26,892,573	)		(10,754,193	)		(19,693,255	)

Net increase (decrease)		(343,942	)	$	(959,154	)		1,330,971		$	2,557,635


Class N
Sold		1,915,537		$	3,733,157			2,366,694		$	4,381,815
Dividends and/or
distributions reinvested		442,661			854,025			417,782			769,279
Redeemed		(2,019,601	)		(3,926,968	)		(1,904,966	)		(3,491,634	)

Net increase		338,597		$	660,214			879,510		$	1,659,460


Class Y
Sold		12,425,581		$	24,207,245			43,787,088		$	79,635,483
Dividends and/or
distributions reinvested		4,666,579			8,977,390			7,103,239			13,034,050
Redeemed		(15,908,200	)		(31,024,352	)		(67,712,443	)		(123,707,114	)

Net increase (decrease)		1,183,960		$	2,160,283			(16,822,116	)	$	(31,037,581	)

3. 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 September 30, 2011, were as follows:


	Purchases		Sales

Investment securities	$	375,657,391	$	418,668,462

4. 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:

44 | OPPENHEIMER CHAMPION INCOME FUND


Fee Schedule

Up to $250 million	0.70	%
Next $250 million	0.65
Next $500 million	0.60
Next $500 million	0.55
Over $1.5 billion	0.50

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 September 30, 2011, the Fund paid $1,849,445 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.

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

45 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

4. Fees and Other Transactions with Affiliates Continued

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 September 30, 2011 were as follows:


Class B	$	39,605,882
Class C		17,892,570
Class N		1,075,091

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.

Class A

Class B

Class C

Class N

Class A

Contingent

Front-End

Deferred

Sales Charges

Retained by

Year Ended

Distributor

September 30, 2011

168,551

1,179

41,427

5,662

883

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 September 30, 2011, the Manager waived fees and/or reimbursed the Fund $24,974 for IMMF management fees.

The Manager has voluntarily agreed to reimburse the Fund for a portion of the legal costs and fees incurred in connection with the pending litigation matters discussed in the “Pending Litigation” note which appears later in this report. During the year ended September 30, 2011, the Manager reimbursed the Fund $385,977 for legal costs and fees.

OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class.

During the year ended September 30, 2011, OFS waived transfer and shareholder servicing agent fees as follows:


Class A	$	728,035
Class B		155,472
Class C		61,241
Class N		31,769

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.

46 | OPPENHEIMER CHAMPION INCOME FUND

5. 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 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.

47 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

5. Risk Exposures and the Use of Derivative Instruments Continued

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.

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

48 | OPPENHEIMER CHAMPION INCOME FUND

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 September 30, 2011 are as follows:


	Asset Derivatives
Derivatives Not Accounted	Statement of Assets and
for as Hedging Instruments	Liabilities Location	Value

Interest rate contracts	Investments, at value	$	7,500	*


*		Amounts relate to purchased options.

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	Swap Contracts

Credit contracts	$	62,394


Amount of Change in Unrealized Gain or (Loss) Recognized on Derivatives
Derivatives Not Accounted
for as Hedging Instruments	Investments*

Interest rate contracts	$	2,011


*		Includes purchased option contracts and purchased swaption contracts, if any.

Option Activity

The Fund may buy and sell put and call options, or write put and call options. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option.

Options are valued daily based upon the last sale price on the principal exchange on which the option is traded. The difference between the premium received or paid, and market value of the option, is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported in the Statement of Operations. When an option is exercised, the cost of the security purchased or the proceeds of the security sale are adjusted by the amount of premium received or paid. Upon the expiration or closing of the option transaction, a gain or loss is reported in the Statement of Operations.

The Fund has purchased put options on treasury futures to decrease exposure to interest rate risk. A purchased put option becomes more valuable as the price of the underlying financial instrument depreciates relative to the strike price.

During the year ended September 30, 2011, the Fund had an ending monthly average market value of $577 on purchased put options.

Options written, if any, are reported in a schedule following the Statement of Investments and as a liability in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover potential obligations with respect to outstanding written options are noted in the Statement of Investments.

49 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

5. Risk Exposures and the Use of Derivative Instruments Continued

The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk that there may be an illiquid market where the Fund is unable to close the contract.

As of September 30, 2011, the Fund had no outstanding written options.

Swap Contracts

The Fund may enter into swap contract agreements with a counterparty to exchange a series of cash flows based on either specified reference rates, or the occurrence of a credit event, over a specified period. Such contracts may include interest rate, equity, debt, index, total return, credit and currency swaps.

Swaps are marked to market daily using primarily quotations from pricing services, counterparties and brokers. Swap contracts are reported on a schedule following the Statement of Investments. The values of swap contracts are aggregated by positive and negative values and disclosed separately on the Statement of Assets and Liabilities by contracts in unrealized appreciation and depreciation positions. Upfront payments paid or received, if any, affect the value of the respective swap. Therefore, to determine the unrealized appreciation (depreciation) on swaps, upfront payments paid should be subtracted from, while upfront payments received should be added to, the value of contracts reported as an asset on the Statement of Assets and Liabilities. Conversely, upfront payments paid should be added to, while upfront payments received should be subtracted from the value of contracts reported as a liability. The unrealized appreciation (depreciation) related to the change in the valuation of the notional amount of the swap is combined with the accrued interest due to (owed by) the Fund at termination or settlement. The net change in this amount during the period is included on the Statement of Operations. The Fund also records any periodic payments received from (paid to) the counterparty, including at termination, under such contracts as realized gain (loss) on the Statement of Operations.

Swap contract agreements are exposed to the market risk factor of the specific underlying reference asset. Swap contracts are typically more attractively priced compared to similar investments in related cash securities because they isolate the risk to one market risk factor and eliminate the other market risk factors. Investments in cash securities (for instance bonds) have exposure to multiple risk factors (credit and interest rate risk). Because swaps require little or no initial cash investment, they can expose the Fund to substantial risk in the isolated market risk factor.

Credit Default Swap Contracts. A credit default swap is a bilateral contract that enables an investor to buy or sell protection on a debt security against a defined-issuer credit event, such as the issuer’s failure to make timely payments of interest or principal on the debt security, bankruptcy or restructuring. The Fund may enter into credit

50 | OPPENHEIMER CHAMPION INCOME FUND

default swaps either by buying or selling protection on a single security or a basket of securities (the “reference asset”).

The buyer of protection pays a periodic fee to the seller of protection based on the notional amount of debt securities underlying the swap contract. The seller of protection agrees to compensate the buyer of protection for future potential losses as a result of a credit event on the reference asset. The contract effectively transfers the credit event risk of the reference asset from the buyer of protection to the seller of protection.

The ongoing value of the contract will fluctuate throughout the term of the contract based primarily on the credit risk of the reference asset. If the credit quality of the reference asset improves relative to the credit quality at contract initiation, the buyer of protection may have an unrealized loss greater than the anticipated periodic fee owed. This unrealized loss would be the result of current credit protection being cheaper than the cost of credit protection at contract initiation. If the buyer elects to terminate the contract prior to its maturity, and there has been no credit event, this unrealized loss will become realized. If the contract is held to maturity, and there has been no credit event, the realized loss will be equal to the periodic fee paid over the life of the contract.

If there is a credit event, the buyer of protection can exercise its rights under the contract and receive a payment from the seller of protection equal to the notional amount of the reference asset less the market value of the reference asset. Upon exercise of the contract the difference between the value of the underlying reference asset and the notional amount is recorded as realized gain (loss) and is included on the Statement of Operations.

The Fund has purchased credit protection through credit default swaps to decrease exposure to the credit risk of individual securities and/or, indexes.

For the year ended September 30, 2011, the Fund had ending monthly average notional amounts of $146,923 on credit default swaps to buy protection.

Additional associated risks to the Fund include counterparty credit risk and liquidity risk.

As of September 30, 2011, the Fund had no such credit default swaps outstanding.

6. Restricted Securities

As of September 30, 2011, investments in securities included issues that are restricted. A restricted security may have a contractual restriction on its resale and is valued under methods approved by the Board of Trustees as reflecting fair value. Securities that are restricted are marked with an applicable footnote on the Statement of Investments. Restricted securities are reported on a schedule following the Statement of Investments.

7. Pending Litigation

Since 2009, a number of class action, derivative and individual lawsuits have been pending in federal and state 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—including the Fund—advised by the

51 | OPPENHEIMER CHAMPION INCOME FUND

NOTES TO FINANCIAL STATEMENTS Continued

7. Pending Litigation Continued

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 laws and various states’ securities, consumer protection and common 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. On June 1, 2011, the U.S. District Court for the District of Colorado gave preliminary approval to stipulations and agreements of settlement in certain putative class action lawsuits involving the Fund and Oppenheimer Core Bond Fund. On September 30, 2011, the court entered orders and final judgments approving the settlements as fair, reasonable and adequate. Those orders are not subject to further appeal. These settlements do not resolve other outstanding lawsuits relating to the Fund or Oppenheimer Core Bond Fund, nor do the settlements affect certain other putative class action lawsuits pending in federal court against the Manager, the Distributor, and other Defendant Funds and their independent trustees.

In 2009, what are claimed to be derivative lawsuits were filed in New Mexico state court against the Manager and a subsidiary (but not against the Fund) on behalf of the New Mexico Education Plan Trust challenging a settlement reached in 2010 between the Manager, its subsidiary and the Distributor and the board of the New Mexico section 529 college savings plan. These lawsuits allege breach of contract, breach of fiduciary duty, negligence and violation of state securities laws, and seek compensatory damages, equitable relief and an award of attorneys’ fees and litigation expenses. On September 9, 2011, the court denied plaintiffs’ request for a hearing to determine the fairness of the settlement, finding that plaintiffs lacked standing to pursue derivative claims on behalf of the Trust. On October 27, 2011, the parties to these actions filed a joint motion to dismiss the lawsuits with prejudice, which the court granted on October 28, 2011.

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

52 | OPPENHEIMER CHAMPION INCOME FUND

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 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. 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. 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. 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.

53 | OPPENHEIMER CHAMPION INCOME FUND

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders of Oppenheimer Champion Income Fund:

We have audited the accompanying statement of assets and liabilities of Oppenheimer Champion Income Fund, including the statement of investments, as of September 30, 2011, 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 in the three-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. The accompanying financial highlights of Oppenheimer Champion Income Fund for the years ended prior to October 1, 2008 were audited by other auditors whose report dated November 18, 2008 expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2011, by correspondence with the custodian and transfer agent. 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 Champion Income Fund as of September 30, 2011, the results of its operations for the year then ended, and 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 in the three-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG llp

Denver, Colorado
November 18, 2011

54 | OPPENHEIMER CHAMPION INCOME FUND

FEDERAL INCOME TAX INFORMATION Unaudited

In early 2011, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2010. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service.

Dividends, if any, paid by the Fund during the fiscal year ended September 30, 2011 which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 1.16% 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 September 30, 2011 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 $558,606 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2011, 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 September 30, 2011, the maximum amount allowable but not less than $41,626,409 or 87.06% of the ordinary distributions paid by the Fund qualifies as an interest related dividend.

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.

55 | OPPENHEIMER CHAMPION INCOME FUND

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT Unaudited

Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to renew the Fund’s investment advisory agreement (the “Agreement”). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.

The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager’s services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager.

Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.

Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Manager’s key personnel who provide such services. The Manager’s duties include providing the Fund with the services of the portfolio manager and the Manager’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; securities trading services; oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund’s shares. The Manager also provides the Fund with office space, facilities and equipment.

56 | OPPENHEIMER CHAMPION INCOME FUND

The Board also considered the quality of the services provided and the quality of the Manager’s resources that are available to the Fund. The Board took account of the fact that the Manager has had over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager’s advisory, administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager’s key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Joseph Welsh, the portfolio manager for the Fund, and the Manager’s investment team and analysts. The Board members also considered the totality of their experiences with the Manager as directors or trustees of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which its members have become knowledgeable about in connection with the renewal of the Fund’s service agreements. The Board concluded, in light of the Manager’s experience, reputation, personnel, operations and resources, that the Fund benefits from the services provided under the Agreement.

Investment Performance of the Manager and the Fund. Throughout the year, the Manager provided information on the investment performance of the Fund and the Manager, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund’s historical performance to relevant market indices and to the performance of other retail front-end load and no-load high current yield funds. The Board considered that the Fund underperformed its performance universe median for the one-, three-, five-, and ten-year periods. The Board also noted the appointment of a new portfolio manager on April 1, 2009 as well as the recent changes and repositioning in the portfolio. The Board noted the Fund’s recent improved performance, which had ranked in the first quintile of its performance universe for the year to date ended April 30, 2011.

Costs of Services by the Manager. The Board reviewed the fees paid to the Manager and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load high current yield funds with comparable asset levels and distribution features. The Board considered that the Fund’s actual management fees were lower than its expense group median, but the Fund’s total expenses were higher than the median.

57 | OPPENHEIMER CHAMPION INCOME FUND

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued

Economies of Scale and Profits Realized by the Manager. The Board considered information regarding the Manager’s costs in serving as the Fund’s investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager’s profitability from its relationship with the Fund. The Board reviewed whether the Manager may realize economies of scale in managing and supporting the Fund. The Board noted that the Fund currently has management fee breakpoints, which are intended to share with Fund shareholders economies of scale that may exist as the Fund’s assets grow.

Other Benefits to the Manager. In addition to considering the profits realized by the Manager, the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager’s affiliates. The Board also considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund.

Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules.

Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreement through August 31, 2012. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreement, including the management fee, in light of all of the surrounding circumstances.

58 | OPPENHEIMER CHAMPION INCOME FUND

PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited

The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund’s website at oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at 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.

59 | OPPENHEIMER CHAMPION INCOME FUND

TRUSTEES AND OFFICERS Unaudited


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 TRUSTEE		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.

William L. Armstrong, Chairman of the Board of Trustees (since 2003), Trustee (since 2000) Age: 74		President, Colorado Christian University (since 2006); Chairman, Cherry Creek Mortgage Company (since 1991), Chairman, Centennial State Mortgage Company (since 1994), Chairman, The El Paso Mortgage Company (since 1993); Chairman, Ambassador Media Corporation (since 1984); Chairman, Broadway Ventures (since 1984); Director of Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992), former Director of Campus Crusade for Christ (non-profit) (1991-2008); former Director, The Lynde and Harry Bradley Foundation, Inc. (non-profit organization) (2002-2006); former Chairman of: Transland Financial Services, Inc. (private mortgage banking company) (1997-2003), Great Frontier Insurance (1995-2000), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-2000) and Frontier Title (title insurance agency) (1995-2000); former Director of the following: UNUMProvident (insurance company) (1991-2004), Storage Technology Corporation (computer equipment company) (1991-2003) and International Family Entertainment (television channel) (1992-1997); U.S. Senator (January 1979-January 1991). Oversees 36 portfolios in the OppenheimerFunds complex. Mr. Armstrong has served on the Boards of certain Oppenheimer funds since 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.

Edward L. Cameron, Trustee (since 2000) Age: 73		Member of The Life Guard of Mount Vernon (George Washington historical site) (June 2000 — June 2006); Partner of PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global Investment Management Industry Services Group (accounting firm) (July 1994-June 1998). Oversees 36 portfolios in the OppenheimerFunds complex. Mr. Cameron has served on the Boards of certain Oppenheimer funds since 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.

Jon S. Fossel, Trustee (since 1990) Age: 69		Chairman of the Board (since 2006) and Director (since June 2002) of UNUMProvident (insurance company); Director of Northwestern Energy Corp. (public utility corporation) (since November 2004); Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky Mountain Elk Foundation (non-profit organization) (February 1998-February 2003 and February 2005- February 2007); Chairman and Director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and Director of the following: Oppenheimer Acquisition Corp. (“OAC”) (parent holding company of the Manager), Shareholders Services, Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 36 portfolios in the OppenheimerFunds complex. Mr. Fossel has served on the Boards of certain Oppenheimer funds since 1990, 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.

60 | OPPENHEIMER CHAMPION INCOME FUND


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

Sam Freedman, Trustee (since 1996) Age: 70		Director of Colorado UpLIFT (charitable organization) (since September 1984). Mr. Freedman held several positions with the Manager and with subsidiary or affiliated companies of the Manager (until October 1994). Oversees 36 portfolios in the OppenheimerFunds complex. Mr. Freedman has served on the Boards of certain Oppenheimer funds since 1996, 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.

Beverly L. Hamilton, Trustee (since 2002) Age: 64		Trustee of Monterey Institute for International Studies (educational organization) (since February 2000); Board Member of Middlebury College (educational organization) (since December 2005); Chairman (since 2010) of American Funds’ Emerging Markets Growth Fund, Inc. (mutual fund); Director of The California Endowment (philanthropic organization) (April 2002-April 2008); Director (February 2002-2005) and Chairman of Trustees (2006-2007) of the Community Hospital of Monterey Peninsula; Director (October 1991—2005); Vice Chairman (2006-2009) of American Funds’ Emerging Markets Growth Fund, Inc. (mutual fund); President of ARCO Investment Management Company (February 1991- April 2000); Member of the investment committees of The Rockefeller Foundation (2001-2006) and The University of Michigan (since 2000); Advisor at Credit Suisse First Boston’s Sprout venture capital unit (venture capital fund) (1994-January 2005); Trustee of MassMutual Institutional Funds (investment company) (1996-June 2004); Trustee of MML Series Investment Fund (investment company) (April 1989-June 2004); Member of the investment committee of Hartford Hospital (2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 36 portfolios in the OppenheimerFunds complex. Ms. Hamilton has served on the Boards of certain Oppenheimer funds since 2002, 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.

Robert J. Malone, Trustee (since 2002) Age: 67		Board of Directors of Opera Colorado Foundation (non-profit organization) (since March 2008); Director of Jones Knowledge, Inc. (since 2006); Director of Jones International University (educational organization) (since August 2005); Chairman, Chief Executive Officer and Director of Steele Street Bank & Trust (commercial banking) (since August 2003); Director of Colorado UpLIFT (charitable organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp and formerly Colorado National Bank) (July 1996-April 1999); Director of Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 36 portfolios in the OppenheimerFunds complex. Mr. Malone has served on the Boards of certain Oppenheimer funds since 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.

F. William Marshall, Jr., Trustee (since 2000) Age: 69		Trustee Emeritus of Worcester Polytech Institute (WPI) (private university) (since 2009); Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds) (investment company) (since 1996) and MML Series Investment Fund (investment company) (since 1996); President and Treasurer of the SIS Funds (private charitable fund) (January 1999 — March 2011); Former Trustee of WPI (1985-2008); Former Chairman of the Board (2004-2006) and Former Chairman of the Investment Committee of WPI (1994-2008); Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July 1999); Executive Vice President of Peoples Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999); and Former President and Chief Executive Officer of SIS Bancorp. (1993-1999).

61 | OPPENHEIMER CHAMPION INCOME FUND

TRUSTEES AND OFFICERS Unaudited / Continued


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

F. William Marshall, Jr., Continued		Oversees 38 portfolios in the OppenheimerFunds complex. Mr. Marshall has served on the Boards of certain Oppenheimer funds since 2000, 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.

INTERESTED TRUSTEE AND OFFICER		The address of Mr. Glavin is Two World Financial Center, 225 Liberty Street, 11^thFloor, New York, New York 10281-1008. Mr. Glavin serves as a Trustee for an indefinite term, or until his resignation, retirement, death or removal and as an Officer for an indefinite term, or until his resignation, retirement, death or removal. Mr. Glavin is an Interested Trustee due to his positions with OppenheimerFunds, Inc. and its affiliates.

William F. Glavin, Jr., Trustee, President and Principal Executive Officer (since 2009) Age: 53		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 66 portfolios as a Trustee/Director and 96 portfolios as an officer in the OppenheimerFunds complex.

OTHER OFFICERS OF THE FUND		The addresses of the Officers in the chart below are as follows: for Messrs. Gabinet, Zack and Ms. Nasta Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Welsh, Vandehey and Wixted, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resig- nation, retirement, death or removal.

Joseph Welsh, Vice President (since 2009) Age: 47		Head of the Manager’s High Yield Corporate Debt Team (since April 2009); Senior Vice President of the Manager (since May 2009); Vice President of the Manager (December 2000-April 2009); Assistant Vice President of the Manager (December 1996-November 2000); a high yield bond analyst of the Manager (January 1995- December 1996); a CFA. A portfolio manager and officer of 6 portfolios in the OppenheimerFunds complex.

62 | OPPENHEIMER CHAMPION INCOME FUND


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

Arthur S. Gabinet, Secretary (since 2011) Age: 53		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 (since January 2011); 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 96 portfolios in the OppenheimerFunds complex.

Christina M. Nasta, Vice President and Chief Business Officer (since 2011) Age: 38		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 96 portfolios in the OppenheimerFunds complex.

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 96 portfolios in the OppenheimerFunds complex.

Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer (since 1999) Age: 51		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) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company sub-sidiary of the Manager) (since May 2000); Assistant Treasurer of OAC (March 1999- June 2008). An officer of 96 portfolios in the OppenheimerFunds complex.

Robert G. Zack, Vice President (since 2001) Age: 63		Vice President, Secretary and General Counsel of OAC (since November 2001); Executive Vice President (since January 2004) and General Counsel (March 2002- December 2010) of the Manager; Executive Vice President, General Counsel and Director of OFI Trust Company (since November 2001); General Counsel of the Distributor (December 2001-December 2010); General Counsel of Centennial Asset Management Corporation (December 2001-December 2010); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (December 2001-December 2010); Assistant Secretary (September 1997-December 2010) and Director (November 2001-December 2010) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc.

63 | OPPENHEIMER CHAMPION INCOME FUND

TRUSTEES AND OFFICERS Unaudited / Continued


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

Robert G. Zack, Continued		(December 2002-December 2010); Director of Oppenheimer Real Asset Management, Inc. (November 2001-December 2010); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (December 2001-December 2010); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. (November 2001-December 2010); Vice President of OppenheimerFunds Legacy Program (June 2003-December 2010); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (November 2001-December 2010). An officer of 96 portfolios in the OppenheimerFunds complex.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers and is available without charge, upon request, by calling 1.800.525.7048.

64 | OPPENHEIMER CHAMPION INCOME FUND

OPPENHEIMER CHAMPION INCOME FUND


Manager		OppenheimerFunds, Inc.

Distributor		OppenheimerFunds Distributor, Inc.

Transfer and Shareholder Servicing Agent		OppenheimerFunds Services

Independent Registered Public Accounting Firm		KPMG llp

Counsel		K&L Gates LLP

65 | OPPENHEIMER CHAMPION INCOME 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.

66 | OPPENHEIMER CHAMPION INCOME FUND

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.

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 1.800.525.7048.

67 | OPPENHEIMER CHAMPION INCOME FUND

Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Item 3. Audit Committee Financial Expert.

The Board of Trustees of the registrant has determined that F. William Marshall, Jr., the Chairman of the Board’s Audit Committee, is the audit committee financial expert and that Mr. Marshall 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 $58,400 in fiscal 2011 and $58,400 in fiscal 2010.

(b) Audit-Related Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years.

The principal accountant for the audit of the registrant’s annual financial statements billed $153,900 in fiscal 2011 and $400,900 in fiscal 2010 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, professional services for FIN 45 and capital accumulation plan.

The principal accountant for the audit of the registrant’s annual financial statements billed $6,700 in fiscal 2011 and $6,933 in fiscal 2010.

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

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 during the last two fiscal years.

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

(e)

(1) During its regularly scheduled periodic meetings, the registrant’s audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant.

The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting.

Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.

(2)100%

(f)

Not applicable as less than 50%.

(g)

The principal accountant for the audit of the registrant’s annual financial statements billed $162,100 in fiscal 2011 and $407,833 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 9/30/2011, 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 Champion Income Fund



	By:	/s/ William F. Glavin, Jr.
		William F. Glavin, Jr.
		Principal Executive Officer

Date: 11/9/2011

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: 11/9/2011



	By:	/s/ Brian W. Wixted
		Brian W. Wixted
		Principal Financial Officer

Date: 11/9/2011

Oppenheimer Champion Income Fund (OCHBX) Inactive N-CSRCertified annual shareholder report (management investment company)