UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07657
OPPENHEIMER DEVELOPING MARKETS FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
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: AUGUST 31
Date of reporting period: SEPTEMBER 1, 2004 - FEBRUARY 28, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
TOP TEN GEOGRAPHICAL HOLDINGS
- --------------------------------------------------------------------------------
Brazil 16.9%
- --------------------------------------------------------------------------------
India 15.9
- --------------------------------------------------------------------------------
Korea, Republic of (South) 9.6
- --------------------------------------------------------------------------------
Mexico 8.5
- --------------------------------------------------------------------------------
Taiwan 7.9
- --------------------------------------------------------------------------------
South Africa 7.0
- --------------------------------------------------------------------------------
Indonesia 4.9
- --------------------------------------------------------------------------------
Turkey 4.6
- --------------------------------------------------------------------------------
Egypt 3.3
- --------------------------------------------------------------------------------
United Kingdom 2.7
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on total investments.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Companhia Vale do Rio Doce, Sponsored ADR 2.3%
- --------------------------------------------------------------------------------
Corporacion GEO SA de CV, Series B 2.1
- --------------------------------------------------------------------------------
Banco Bradesco SA, Preference 1.9
- --------------------------------------------------------------------------------
SK Corp. 1.8
- --------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA 1.8
- --------------------------------------------------------------------------------
Housing Development Finance Corp. Ltd. 1.7
- --------------------------------------------------------------------------------
Empresa Brasileira de Aeronautica SA, Preference 1.6
- --------------------------------------------------------------------------------
Hyundai Heavy Industries Co. Ltd. 1.6
- --------------------------------------------------------------------------------
LG Home Shopping, Inc. 1.6
- --------------------------------------------------------------------------------
SM Prime Holdings, Inc. 1.5
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on net assets.
For more current Fund holdings, please visit www.oppenheimerfunds.com.
- --------------------------------------------------------------------------------
8 | OPPENHEIMER DEVELOPING MARKETS FUND
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL]
REGIONAL ALLOCATION
Asia 46.2%
Latin America 26.9
Middle East/Africa 17.9
Europe 5.7
United States 2.7
Emerging Europe 0.6
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on total investments.
- --------------------------------------------------------------------------------
9 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 11/18/96. Unless
otherwise noted, Class A returns include the maximum initial sales charge of
5.75%.
CLASS B shares of the Fund were first publicly offered on 11/18/96. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. Class B shares are
subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/18/96. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for 1-year period. Class C shares are subject to a 0.75% annual asset-based
sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 | OPPENHEIMER DEVELOPING MARKETS FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. The following 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 February 28, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
11 | OPPENHEIMER DEVELOPING MARKETS FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
exceptions described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(9/1/04) (2/28/05) FEBRUARY 28, 2005
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,395.40 $ 8.34
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,017.85 7.03
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,389.10 13.39
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,013.64 11.30
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,390.10 12.92
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,014.03 10.89
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,392.80 10.66
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,015.92 8.99
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended February 28, 2005 are as follows:
CLASS EXPENSE RATIOS
- --------------------------
Class A 1.40%
- --------------------------
Class B 2.25
- --------------------------
Class C 2.17
- --------------------------
Class N 1.79
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
- --------------------------------------------------------------------------------
12 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS February 28, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--96.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--17.7%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.4%
Amtek Auto Ltd. 3,700,000 $ 14,578,839
- --------------------------------------------------------------------------------
Hyundai Autonet
Co. Ltd. 1 10,200,000 34,066,613
----------------
48,645,452
- --------------------------------------------------------------------------------
AUTOMOBILES--1.9%
Bajaj Auto Ltd. 528,000 12,456,284
- --------------------------------------------------------------------------------
Hero Honda
Motors Ltd. 617,693 7,699,059
- --------------------------------------------------------------------------------
PT Astra
International Tbk 34,960,000 40,754,277
- --------------------------------------------------------------------------------
Ssangyong
Motor Co. 2 796,530 6,026,720
----------------
66,936,340
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.6%
Danubius Hotel
& Spa Rt. 2 228,490 7,254,316
- --------------------------------------------------------------------------------
Hongkong &
Shanghai Hotels
Ltd. (The) 19,156,000 17,439,219
- --------------------------------------------------------------------------------
Intralot SA
Integrated Lottery 1,471,310 47,731,852
- --------------------------------------------------------------------------------
Jollibee Foods Corp. 36,994,700 19,962,386
----------------
92,387,773
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--3.2%
Corporacion GEO
SA de CV, Series B 1,2 28,915,000 72,801,276
- --------------------------------------------------------------------------------
Steinhoff
International
Holdings Ltd. 17,805,600 41,618,920
----------------
114,420,196
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--1.6%
LG Home
Shopping, Inc. 1 687,900 55,282,129
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA--4.3%
Corporacion
Interamericana
de Entretenimiento
SA de CV 2 5,300,000 $ 15,253,894
- --------------------------------------------------------------------------------
Grupo Televisa SA,
Sponsored GDR 478,100 30,813,545
- --------------------------------------------------------------------------------
Shaw Brothers Ltd. 3 6,293,000 6,616,609
- --------------------------------------------------------------------------------
Singapore Press
Holdings Ltd. 14,370,500 40,400,419
- --------------------------------------------------------------------------------
Television
Broadcasts Ltd. 4,125,000 18,564,999
- --------------------------------------------------------------------------------
Zee Telefilms Ltd. 12,479,156 40,539,752
----------------
152,189,218
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.2%
Lojas Americanas
SA, Preference 1 2,226,500,000 40,849,266
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.2%
Courts
(Singapore) Ltd. 1 11,425,000 3,838,856
- --------------------------------------------------------------------------------
JD Group Ltd. 3,447,600 38,429,839
----------------
42,268,695
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Folli-Follie SA 330,000 10,434,852
- --------------------------------------------------------------------------------
CONSUMER STAPLES--11.1%
- --------------------------------------------------------------------------------
BEVERAGES--2.7%
Coca-Cola Femsa
SA de CV,
Sponsored ADR 1,288,350 33,110,595
- --------------------------------------------------------------------------------
Companhia de
Bebidas das
Americas, ADR 1,191,000 35,872,920
- --------------------------------------------------------------------------------
Fomento
Economico
Mexicano
SA de CV,
Sponsored ADR 52,100 3,147,882
- --------------------------------------------------------------------------------
Serm Suk Public
Co. Ltd. 7,323,000 4,289,623
- --------------------------------------------------------------------------------
United Breweries
Holdings Ltd. 1,2 1,850,000 4,177,488
13 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BEVERAGES Continued
United
Breweries Ltd. 1,2 1,462,826 $ 12,695,246
----------------
93,293,754
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--3.6%
Companhia Brasileira
de Distribuicao
Grupo Pao
de Acucar,
Sponsored ADR 1,838,800 44,094,424
- --------------------------------------------------------------------------------
Dairy Farm
International
Holdings Ltd. 5,782,600 15,323,890
- --------------------------------------------------------------------------------
Jeronimo Martins
Sociedade Gestora
de Participacoes SA 2 1,615,632 23,318,841
- --------------------------------------------------------------------------------
Massmart
Holdings Ltd. 2 3,058,500 23,864,823
- --------------------------------------------------------------------------------
President Chain
Store Corp. 11,646,074 19,672,422
----------------
126,274,400
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.2%
Sadia SA, Preference 14,005,000 26,668,463
- --------------------------------------------------------------------------------
Tiger Brands Ltd. 945,000 16,497,492
----------------
43,165,955
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.2%
Trent Ltd. 637,569 8,365,857
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.2%
Amore Pacific Corp. 125,955 29,090,652
- --------------------------------------------------------------------------------
Natura
Cosmeticos SA 479,700 14,127,897
----------------
43,218,549
- --------------------------------------------------------------------------------
TOBACCO--2.2%
Eastern
Tobacco Co. 3 806,691 25,161,946
- --------------------------------------------------------------------------------
ITC Ltd. 1,223,900 36,285,349
- --------------------------------------------------------------------------------
PT Gudang Garam 8,860,000 14,727,616
----------------
76,174,911
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY--4.2%
- --------------------------------------------------------------------------------
OIL & GAS--4.2%
Bharat Petroleum
Corp. Ltd. 3,409,955 $ 33,404,517
- --------------------------------------------------------------------------------
Oil & Natural Gas
Corp. Ltd. 663,090 12,934,545
- --------------------------------------------------------------------------------
Reliance
Industries Ltd. 2,930,000 37,311,955
- --------------------------------------------------------------------------------
SK Corp. 1,025,000 64,380,298
----------------
148,031,315
- --------------------------------------------------------------------------------
FINANCIALS--26.6%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--14.0%
Banco Bradesco SA 2 69,263 2,182,981
- --------------------------------------------------------------------------------
Banco Bradesco SA,
Preference 2,105,860 66,413,082
- --------------------------------------------------------------------------------
Banco
Latinoamericano
de Exportaciones
SA, Cl. E 1,175,000 25,955,750
- --------------------------------------------------------------------------------
Bank Hapoalim Ltd. 5,185,263 18,892,414
- --------------------------------------------------------------------------------
Bank Leumi Le-Israel 6,062,600 17,914,131
- --------------------------------------------------------------------------------
Commercial
International Bank,
Sponsored GDR 1 1,589,508 13,304,182
- --------------------------------------------------------------------------------
Commercial
International Bank,
Sponsored GDR 1,4 1,800,000 15,066,000
- --------------------------------------------------------------------------------
Grupo Financiero
Banorte SA de CV 3,800,000 26,285,864
- --------------------------------------------------------------------------------
Grupo Financiero
Inbursa SA de CV 24,049,000 49,501,369
- --------------------------------------------------------------------------------
HDFC Bank Ltd. 331,195 4,451,582
- --------------------------------------------------------------------------------
HSBC Holdings plc 2,649,968 45,221,570
- --------------------------------------------------------------------------------
HSBC Holdings plc,
Sponsored ADR 142,458 11,893,818
- --------------------------------------------------------------------------------
ICICI Bank Ltd. 871,655 7,600,656
- --------------------------------------------------------------------------------
ICICI Bank Ltd.,
Sponsored ADR 1,925,000 43,601,250
- --------------------------------------------------------------------------------
PT Bank Mandiri 191,888,500 37,489,145
- --------------------------------------------------------------------------------
Taishin Financial
Holdings Co. Ltd. 7,000,000 6,621,622
14 | OPPENHEIMER DEVELOPING MARKETS FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Thai Military Bank
Public Co. Ltd. 2 110,000,000 $ 12,494,156
- --------------------------------------------------------------------------------
Uniao de Bancos
Brasileiros SA,
Sponsored GDR 998,200 37,632,140
- --------------------------------------------------------------------------------
Yapi ve Kredi
Bankasi AS 2 11,487,363 51,482,726
----------------
494,004,438
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.3%
Tisco Finance
Public Co. Ltd. 13,304,780 9,481,047
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.9%
Fubon Financial
Holding Co. Ltd. 36,147,000 38,319,652
- --------------------------------------------------------------------------------
Fubon Financial
Holding Co.
Ltd., GDR 1,639,500 16,994,260
- --------------------------------------------------------------------------------
Guoco Group Ltd. 2,584,000 25,512,152
- --------------------------------------------------------------------------------
Haci Omer Sabanci
Holding AS 6,295,132 27,231,475
- --------------------------------------------------------------------------------
Haci Omer Sabanci
Holding AS,
Sponsored ADR 12,000,000 12,900,000
- --------------------------------------------------------------------------------
Kiatnakin Finance
Public Co. Ltd. 12,500,020 12,094,685
- --------------------------------------------------------------------------------
Old Mutual plc 13,855,890 37,752,473
----------------
170,804,697
- --------------------------------------------------------------------------------
INSURANCE--2.6%
Aksigorta AS 1 8,762,905 42,687,573
- --------------------------------------------------------------------------------
Cathay Financial
Holding Co. Ltd. 3,683,000 7,465,541
- --------------------------------------------------------------------------------
Sanlam Ltd. 18,300,000 41,895,820
----------------
92,048,934
- --------------------------------------------------------------------------------
REAL ESTATE--3.1%
Brazil Realty SA
Empreendimentos
e Participacoes 1,3 394,000 742,650
- --------------------------------------------------------------------------------
Brazil Realty
SA, GDR 1,3 435,720 7,701,351
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE Continued
Hang Lung
Development Co. 4,669,000 $ 8,501,119
- --------------------------------------------------------------------------------
IRSA Inversiones
y Representaciones
SA, Sponsored GDR 2 163,300 2,681,386
- --------------------------------------------------------------------------------
Medinet Nasr
for Housing &
Development Co. 1,3 1,316,496 15,885,321
- --------------------------------------------------------------------------------
SM Prime
Holdings, Inc. 346,977,812 54,582,206
- --------------------------------------------------------------------------------
Solidere, GDR 2 53,075 490,944
- --------------------------------------------------------------------------------
Solidere, GDR 2,4 2,129,378 19,696,747
----------------
110,281,724
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.7%
Housing
Development
Finance Corp. Ltd. 3,420,407 60,903,846
- --------------------------------------------------------------------------------
HEALTH CARE--3.6%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.3%
Diagnosticos da
America 2 871,900 10,776,671
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.3%
Divi's Laboratories
Ltd. 1 954,666 22,975,169
- --------------------------------------------------------------------------------
Pliva d.d., GDR 4 1,000,000 14,900,000
- --------------------------------------------------------------------------------
Sun Pharmaceutical
Industries Ltd. 2,884,238 31,590,217
- --------------------------------------------------------------------------------
Teva Pharmaceutical
Industries Ltd.,
Sponsored ADR 1,575,600 47,441,316
----------------
116,906,702
- --------------------------------------------------------------------------------
INDUSTRIALS--6.1%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.6%
Empresa Brasileira
de Aeronautica SA 112,400 718,509
- --------------------------------------------------------------------------------
Empresa Brasileira
de Aeronautica SA,
Preference 6,790,800 57,180,162
----------------
57,898,671
15 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.8%
Sinotrans Ltd. 87,603,000 $ 29,652,643
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.2%
Kyeryong
Construction
Industrial Co. Ltd. 330,260 6,772,878
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.4%
Bharat Heavy
Electricals Ltd. 749,926 14,742,619
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.4%
Bidvest Group Ltd. 536,900 6,961,631
- --------------------------------------------------------------------------------
Murray & Roberts
Holdings Ltd. 2,181,943 5,706,260
----------------
12,667,891
- --------------------------------------------------------------------------------
MACHINERY--2.3%
Hyundai Heavy
Industries Co. Ltd. 1,110,000 55,472,374
- --------------------------------------------------------------------------------
Larsen &
Toubro Ltd. 949,250 23,603,531
----------------
79,075,905
- --------------------------------------------------------------------------------
ROAD & RAIL--0.4%
All America Latina
Logistica, Preference 420,400 13,647,980
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.0%
LG International
Corp. 137,160 1,467,865
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--7.3%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--4.3%
Benq Corp. 31,934,850 35,654,417
- --------------------------------------------------------------------------------
High Tech
Computer Corp. 6,609,000 39,762,307
- --------------------------------------------------------------------------------
Lite-On
Technology Corp. 34,440,270 37,343,536
- --------------------------------------------------------------------------------
Quanta Computer,
Inc. 21,553,000 38,487,500
----------------
151,247,760
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.0%
Synnex Technology
International Corp. 23,302,800 34,864,228
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES--1.5%
HCL Technologies
Ltd. 4,118,600 $ 31,848,054
- --------------------------------------------------------------------------------
Hughes Software
Systems Ltd. 1,259,205 14,821,216
- --------------------------------------------------------------------------------
NIIT Ltd. 470,303 2,121,830
- --------------------------------------------------------------------------------
NIIT Technologies
Ltd. 2 1,276,324 3,902,193
----------------
52,693,293
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.1%
Telechips, Inc. 226,052 3,920,651
- --------------------------------------------------------------------------------
SOFTWARE--0.4%
Mphasis BFL Ltd. 2,281,432 12,824,401
- --------------------------------------------------------------------------------
MATERIALS--9.0%
- --------------------------------------------------------------------------------
CHEMICALS--0.6%
Asian Paints Ltd. 2,622,800 21,401,664
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--1.2%
Cemex SA de CV,
Sponsored ADR 1,022,294 40,861,091
- --------------------------------------------------------------------------------
Ultra Tech
Cement Ltd. 240,547 2,050,696
----------------
42,911,787
- --------------------------------------------------------------------------------
METALS & MINING--7.2%
Anglo American
Platinum Corp. Ltd. 1,130,000 44,570,204
- --------------------------------------------------------------------------------
Anglo American
Platinum Corp. Ltd. 35,873 739,453
- --------------------------------------------------------------------------------
Companhia de
Minas Buenaventura
SA, Sponsored ADR,
B Shares 965,000 22,349,400
- --------------------------------------------------------------------------------
Companhia
Siderurgica
Nacional SA,
Sponsored ADR 1,568,400 40,433,352
- --------------------------------------------------------------------------------
Companhia Vale
do Rio Doce,
Sponsored ADR 2,810,000 80,899,900
- --------------------------------------------------------------------------------
Impala Platinum
Holdings Ltd. 279,000 24,449,132
- --------------------------------------------------------------------------------
PT Aneka
Tambang Tbk 1 174,425,000 40,478,574
----------------
253,920,015
16 | OPPENHEIMER DEVELOPING MARKETS FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--8.5%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.4%
Portugal
Telecom SA 1,675,000 $ 20,338,652
- --------------------------------------------------------------------------------
PT Telekomunikasi
Indonesia Tbk 79,000,000 37,732,743
- --------------------------------------------------------------------------------
Tele Norte Leste
Participacoes SA 3,150,000 62,415,991
----------------
120,487,386
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--5.1%
America Movil SA
de CV, Series L 440,000 25,828,000
- --------------------------------------------------------------------------------
Orascom Telecom
Holding SAE 2 330,000 23,124,034
- --------------------------------------------------------------------------------
SK Telecom Co. Ltd. 158,750 28,605,027
- --------------------------------------------------------------------------------
SK Telecom Co.
Ltd., ADR 2,341,300 49,869,690
- --------------------------------------------------------------------------------
Turkcell Iletisim
Hizmetleri AS, ADR 1,490,700 27,205,275
- --------------------------------------------------------------------------------
Vodafone Egypt
Telecommunications
Co. SAE 1,603,094 23,151,427
----------------
177,783,453
- --------------------------------------------------------------------------------
UTILITIES--2.3%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.7%
Companhia
Energetica de
Minas Gerais,
Preference 1,936,121,000 50,291,285
- --------------------------------------------------------------------------------
National Thermal
Power Corp. Ltd. 2 3,615,800 7,701,120
----------------
57,992,405
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
GAS UTILITIES--0.6%
Gail India Ltd. 3,237,690 $ 17,869,765
- --------------------------------------------------------------------------------
Transportadora de
Gas del Sur SA,
Cl. B 2,3 3,474,612 4,197,319
----------------
22,067,084
----------------
Total Common Stocks
(Cost $2,277,293,911) 3,395,187,300
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.4%
- --------------------------------------------------------------------------------
United Breweries
Ltd., Cv. 2
(Cost $3,831,273) 1,755,392 13,995,755
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.6%
- --------------------------------------------------------------------------------
Undivided interest of 23.27% in joint repurchase
agreement (Principal Amount/Value $400,128,000,
with a maturity value of $400,156,676) with
Cantor Fitzgerald & Co./Cantor Fitzgerald
Securities, 2.58%, dated 2/28/05, to be
repurchased at $93,101,672 on 3/1/05,
collateralized by U.S. Treasury Bonds,
1.625%--8.875%, 4/30/05--8/15/19, with
a value of $408,693,720
(Cost $93,095,000) $93,095,000 93,095,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $2,374,220,184) 99.4% 3,502,278,055
- --------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 0.6 21,260,438
---------------------------------
NET ASSETS 100.0% $3,523,538,493
=================================
17 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended February 28, 2005.
The aggregate fair value of securities of affiliated companies held by the Fund
as of February 28, 2005 amounts to $382,551,694. Transactions during the period
in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
AUGUST 31, 2004 ADDITIONS REDUCTIONS FEB. 28, 2005
- ----------------------------------------------------------------------------------------------------------------
Aksigorta AS 8,762,905,700 -- 8,754,142,795* 8,762,905
Brazil Realty SA Empreendimentos e Participacoes 394,000 -- -- 394,000
Brazil Realty SA, GDR 435,720 -- -- 435,720
Commercial International Bank, Sponsored GDR 1,100,000 489,508 -- 1,589,508
Commercial International Bank, Sponsored GDR 1,800,000 -- -- 1,800,000
Corporacion GEO SA de CV, Series B 28,530,000 385,000 -- 28,915,000
Courts (Singapore) Ltd. 10,700,000 725,000 -- 11,425,000
Divi's Laboratories Ltd. 381,652 573,014 -- 954,666
Hyundai Autonet Co. Ltd. 10,200,000 -- -- 10,200,000
LG Home Shopping, Inc. 687,900 -- -- 687,900
Lojas Americanas SA, Preference 2,226,500,000 -- -- 2,226,500,000
Medinet Nasr for Housing & Development Co. 1,060,000 256,496 -- 1,316,496
PT Aneka Tambang Tbk 135,094,900 39,330,100 -- 174,425,000
PT Hero Supermarket Tbk 20,000,000 -- 20,000,000 --
United Breweries Holdings Ltd. 1,850,000 -- -- 1,850,000
United Breweries Ltd. 1,462,826 -- -- 1,462,826
UNREALIZED
APPRECIATION DIVIDEND REALIZED
(DEPRECIATION) INCOME GAIN
- ----------------------------------------------------------------------------------------------------------------
Aksigorta AS $ 23,490,729 $ -- $ --
Brazil Realty SA Empreendimentos e Participacoes 336,262 34,596 --
Brazil Realty SA, GDR 1,637,632 373,455 --
Commercial International Bank, Sponsored GDR 6,123,335 -- --
Commercial International Bank, Sponsored GDR 7,752,754 -- --
Corporacion GEO SA de CV, Series B 59,785,440 -- --
Courts (Singapore) Ltd. (199,192) 30,600 --
Divi's Laboratories Ltd. (3,141,109) -- --
Hyundai Autonet Co. Ltd. 8,271,654 262,439 --
LG Home Shopping, Inc. 19,914,971 -- --
Lojas Americanas SA, Preference 34,619,765 1,076,545 --
Medinet Nasr for Housing & Development Co. 7,919,335 472,762 --
PT Aneka Tambang Tbk 22,724,893 306,515 --
PT Hero Supermarket Tbk* -- -- 3,986,401
United Breweries Holdings Ltd. 1,387,100 -- --
United Breweries Ltd. 9,535,588 -- --
---------------------------------------------
$ 200,159,157 $2,556,912 $3,986,401
=============================================
*Due to share revaluation.
18 | OPPENHEIMER DEVELOPING MARKETS FUND
2. Non-income producing security.
3. Illiquid security. The aggregate value of illiquid securities as of February
28, 2005 was $60,305,196, which represents 1.71% of the Fund's net assets. See
Note 6 of Notes to Financial Statements.
4. 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 $49,662,747 or 1.41% of the Fund's net
assets as of February 28, 2005.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
Brazil $ 592,649,024 16.9%
India 558,454,455 15.9
Korea, Republic of South 334,954,897 9.6
Mexico 297,603,516 8.5
Taiwan 275,185,485 7.9
South Africa 244,733,574 7.0
Indonesia 171,182,355 4.9
Turkey 161,507,049 4.6
Egypt 115,692,910 3.3
United Kingdom 94,867,861 2.7
United States 93,095,000 2.7
Israel 84,247,861 2.4
Hong Kong 76,634,098 2.2
Philippines 74,544,592 2.1
Singapore 59,563,165 1.7
Greece 58,166,704 1.7
Portugal 43,657,493 1.3
Thailand 38,359,511 1.1
China 29,652,643 0.8
Panama 25,955,750 0.7
Peru 22,349,400 0.6
Lebanon 20,187,691 0.6
Croatia 14,900,000 0.4
Hungary 7,254,316 0.2
Argentina 6,878,705 0.2
------------------------------
Total $3,502,278,055 100.0%
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 28, 2005
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,191,827,647) $ 3,119,726,361
Affiliated companies (cost $182,392,537) 382,551,694
----------------
3,502,278,055
- -------------------------------------------------------------------------------------------------------
Cash 5,945,567
- -------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $2,528,287) 2,687,118
- -------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 21,423
- -------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 48,442,750
Interest and dividends 7,166,049
Investments sold 752,049
Other 37,321
----------------
Total assets 3,567,330,332
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 1,462
- -------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 31,199,152
Shares of beneficial interest redeemed 6,666,505
Foreign capital gains tax 3,568,298
Distribution and service plan fees 1,107,968
Transfer and shareholder servicing agent fees 502,395
Shareholder communications 220,578
Trustees' compensation 93,579
Other 431,902
----------------
Total liabilities 43,791,839
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 3,523,538,493
================
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Paid-in capital $ 2,402,370,236
- -------------------------------------------------------------------------------------------------------
Accumulated net investment loss (31,561,479)
- -------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 26,835,691
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 1,125,894,045
----------------
NET ASSETS $ 3,523,538,493
================
20 | OPPENHEIMER DEVELOPING MARKETS FUND
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $2,966,646,833
and 102,792,904 shares of beneficial interest outstanding) $28.86
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $30.62
- --------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $184,008,139 and 6,417,135 shares
of beneficial interest outstanding) $28.67
- --------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $311,085,565 and 10,956,974 shares
of beneficial interest outstanding) $28.39
- --------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $61,797,956 and 2,167,961 shares
of beneficial interest outstanding) $28.51
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2005
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $3,130,996) $ 26,066,920
Affiliated companies (net of foreign withholding taxes of $132,583) 2,556,912
- ---------------------------------------------------------------------------------------
Interest 856,162
-------------
Total investment income 29,479,994
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 11,138,071
- ---------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,283,018
Class B 718,144
Class C 1,125,876
Class N 98,179
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,286,320
Class B 189,877
Class C 227,592
Class N 78,494
- ---------------------------------------------------------------------------------------
Shareholder communications:
Class A 105,261
Class B 23,555
Class C 18,408
Class N 1,520
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 897,215
- ---------------------------------------------------------------------------------------
Trustees' compensation 40,426
- ---------------------------------------------------------------------------------------
Other 121,248
-------------
Total expenses 19,353,204
Less reduction to custodian expenses (14,545)
Less payments and waivers of expenses (10,008)
-------------
Net expenses 19,328,651
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 10,151,343
22 | OPPENHEIMER DEVELOPING MARKETS FUND
- --------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------------
Net realized gain on:
Investments:
Unaffiliated companies $ 24,553,724
Affiliated companies 3,986,401
Foreign currency transactions 12,259,750
------------
Net realized gain 40,799,875
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (net of foreign capital gains tax of $3,568,298) 684,380,726
Translation of assets and liabilities denominated in foreign currencies 106,308,646
------------
Net change in unrealized appreciation 790,689,372
- --------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $841,640,590
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
(UNAUDITED) 2004
- -----------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 10,151,343 $ 20,907,438
- -----------------------------------------------------------------------------------------------------------------
Net realized gain 40,799,875 44,208,693
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 790,689,372 202,119,765
-----------------------------------
Net increase in net assets resulting from operations 841,640,590 267,235,896
- -----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (31,307,052) (27,952,368)
Class B (879,161) (2,748,497)
Class C (1,898,968) (3,209,280)
Class N (545,739) (455,621)
- -----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (10,889,327) --
Class B (742,518) --
Class C (1,173,948) --
Class N (216,966) --
- -----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 752,895,907 774,658,690
Class B 18,251,948 13,494,351
Class C 64,622,340 76,067,428
Class N 23,042,648 14,703,179
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
Total increase 1,652,799,754 1,111,793,778
- -----------------------------------------------------------------------------------------------------------------
Beginning of period 1,870,738,739 758,944,961
-----------------------------------
End of period (including accumulated net investment loss
of $31,561,479 and $7,081,902, respectively) $ 3,523,538,493 $ 1,870,738,739
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS A (UNAUDITED) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.09 $ 16.92 $ 13.43 $ 12.93 $ 16.85 $ 11.40
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .11 1 .48 .19 .25 .21 .20
Net realized and unrealized gain (loss) 8.16 4.31 3.50 .45 (3.54) 5.37
-------------------------------------------------------------------------------
Total from investment operations 8.27 4.79 3.69 .70 (3.33) 5.57
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.37) (.62) (.20) (.20) (.20) (.12)
Distributions from net realized gain (.13) -- -- -- (.39) --
-------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.50) (.62) (.20) (.20) (.59) (.12)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.86 $ 21.09 $ 16.92 $ 13.43 $ 12.93 $ 16.85
===============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 39.54% 28.61% 27.93% 5.44% (20.08)% 49.12%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,966,647 $ 1,549,854 $ 588,450 $ 337,405 $ 167,178 $ 114,137
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,137,592 $ 1,145,452 $ 374,841 $ 257,746 $ 153,027 $ 77,848
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.92% 1.64% 1.42% 1.91% 1.76% 1.56%
Total expenses 1.40% 1.52% 1.81% 1.81% 1.69% 1.96%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4 1.76% 1.77% N/A 4 N/A 4
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS B (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.87 $ 16.79 $ 13.32 $ 12.82 $ 16.70 $ 11.30
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01 1 .12 .09 .15 .12 .11
Net realized and unrealized gain (loss) 8.07 4.46 3.47 .44 (3.53) 5.33
--------------------------------------------------------------------------------------
Total from investment operations 8.08 4.58 3.56 .59 (3.41) 5.44
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.15) (.50) (.09) (.09) (.08) (.04)
Distributions from net realized gain (.13) -- -- -- (.39) --
--------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.28) (.50) (.09) (.09) (.47) (.04)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.67 $ 20.87 $ 16.79 $ 13.32 $ 12.82 $ 16.70
======================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 38.91% 27.50% 26.98% 4.61% (20.67)% 48.20%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 184,008 $ 119,749 $ 84,705 $ 63,005 $ 45,393 $ 48,146
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 145,721 $ 117,271 $ 62,676 $ 54,744 $ 48,135 $ 37,333
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.10% 0.61% 0.66% 1.14% 0.92% 0.78%
Total expenses 2.25% 2.41% 2.67% 2.58% 2.46% 2.72%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4,5 N/A 4,5 2.52% 2.54% N/A 4 N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Voluntary waiver of transfer agent fees less than 0.01%.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS C (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.70 $ 16.67 $ 13.25 $ 12.78 $ 16.68 $ 11.31
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 1 .31 .10 .17 .12 .09
Net realized and unrealized gain (loss) 8.01 4.25 3.44 .41 (3.52) 5.32
--------------------------------------------------------------------------------------
Total from investment operations 8.03 4.56 3.54 .58 (3.40) 5.41
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.21) (.53) (.12) (.11) (.11) (.04)
Distributions from net realized gain (.13) -- -- -- (.39) --
--------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.34) (.53) (.12) (.11) (.50) (.04)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.39 $ 20.70 $ 16.67 $ 13.25 $ 12.78 $ 16.68
======================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 39.01% 27.60% 27.05% 4.54% (20.68)% 47.93%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 311,086 $ 175,025 $ 77,081 $ 46,722 $ 20,864 $ 16,363
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 228,407 $ 145,460 $ 52,236 $ 33,334 $ 19,646 $ 10,230
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.16% 0.83% 0.66% 1.15% 0.94% 0.82%
Total expenses 2.17% 2.31% 2.57% 2.57% 2.46% 2.71%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4 2.52% 2.53% N/A 4 N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 15% 6% 10% 16% 22%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS N (UNAUDITED) 2004 2003 2002 2001 1
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.84 $ 16.77 $ 13.36 $ 12.91 $ 15.26
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 2 .45 .22 .32 .05
Net realized and unrealized gain (loss) 8.06 4.22 3.41 .34 (2.40)
------------------------------------------------------------------------
Total from investment operations 8.12 4.67 3.63 .66 (2.35)
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) (.60) (.22) (.21) --
Distributions from net realized gain (.13) -- -- -- --
------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.45) (.60) (.22) (.21) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.51 $ 20.84 $ 16.77 $ 13.36 $ 12.91
========================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 39.28% 28.16% 27.73% 5.13% (15.40)%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 61,798 $ 26,110 $ 8,709 $ 1,741 $ 77
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 41,239 $ 18,770 $ 4,196 $ 686 $ 35
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.52% 1.31% 1.27% 1.68% 1.63%
Total expenses 1.83% 1.99% 2.08% 2.04% 1.96%
Expenses after payments and waivers and
reduction to custodian expenses 1.79% 1.88% 1.99% 2.00% N/A 5
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 15% 6% 10% 16%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Developing Markets Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund's investment objective is to aggressively seek capital
appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager).
The Fund offers Class A, Class B, Class C and Class N shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. All classes of
shares have identical rights and voting privileges with respect to the Fund in
general and exclusive voting rights on matters that affect that class alone.
Earnings, net assets and net asset value per share may differ due to each class
having its own expenses, such as transfer and shareholder servicing agent fees
and shareholder communications, directly attributable to that class. Class A, B,
C and N have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The Fund assesses a 2% fee on the proceeds of fund shares that are redeemed
(either by selling or exchanging to another Oppenheimer fund) within 30 days of
their purchase. The fee, which is retained by the Fund, is accounted for as an
addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Trustees. Short-term "money
market type" debt securities
29 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
with remaining maturities of sixty days or less are valued at amortized cost
(which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
30 | OPPENHEIMER DEVELOPING MARKETS FUND
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.
As of February 28, 2005, it is estimated that the Fund will not utilize
any capital loss carryforward to offset realized capital gains. During the year
ended August 31, 2004, the Fund utilized $19,295,605 of capital loss
carryforward to offset realized capital gains.
Certain foreign countries impose a tax on capital gains which is accrued
by the Fund based on unrealized appreciation, if any, on affected securities.
The tax is paid when the gain is realized.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the six months ended
February 28, 2005, the Fund's projected benefit obligations were increased by
$12,467 and payments of $3,518 were made to retired trustees, resulting in an
accumulated liability of $62,716 as of February 28, 2005.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
31 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
CLASS A
Sold 41,722,364 $1,064,306,938 63,139,029 $ 1,266,479,821
Dividends and/or
distributions reinvested 1,371,496 34,602,850 1,184,139 23,007,783
Redeemed (13,773,154) (346,013,881) 1 (25,627,852) (514,828,914)
-----------------------------------------------------------------------
Net increase 29,320,706 $ 752,895,907 38,695,316 $ 774,658,690
=======================================================================
- --------------------------------------------------------------------------------------------------
CLASS B
Sold 1,204,155 $ 31,183,381 2,655,996 $ 52,882,450
Dividends and/or
distributions reinvested 57,206 1,437,023 126,635 2,449,139
Redeemed (582,180) (14,368,456) 1 (2,090,223) (41,837,238)
-----------------------------------------------------------------------
Net increase 679,181 $ 18,251,948 692,408 $ 13,494,351
=======================================================================
- --------------------------------------------------------------------------------------------------
CLASS C
Sold 3,249,457 $ 83,156,410 5,461,597 $ 108,717,047
Dividends and/or
distributions reinvested 103,489 2,573,784 143,023 2,741,763
Redeemed (849,565) (21,107,854) 1 (1,775,168) (35,391,382)
-----------------------------------------------------------------------
Net increase 2,503,381 $ 64,622,340 3,829,452 $ 76,067,428
=======================================================================
32 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
CLASS N
Sold 1,127,645 $ 28,471,252 1,134,305 $ 22,542,746
Dividends and/or
distributions reinvested 30,019 748,977 23,641 454,865
Redeemed (242,522) (6,177,581) 1 (424,467) (8,294,432)
-----------------------------------------------------------------------
Net increase 915,142 $ 23,042,648 733,479 $ 14,703,179
=======================================================================
1. Net of Redemption Fees of $33,429, $2,279, $3,572 and $645 for Class A, Class
B, Class C and Class N, respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended February 28, 2005, were
$1,038,911,364 and $236,602,495, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the first $250 million of average annual net assets of
the Fund, 0.95% of the next $250 million, 0.90% of the next $500 million and
0.85% of average annual net assets over $1 billion.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended February 28, 2005, the Fund paid
$2,683,874 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those
33 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
shares and servicing accounts. Under the plans, the Fund pays the Distributor an
annual asset-based sales charge of 0.75% per year on Class B and Class C shares
and 0.25% per year on Class N shares. The Distributor also receives a service
fee of up to 0.25% per year under each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor's aggregate
uncompensated expenses under the plan at February 28, 2005 for Class B, Class C
and Class N shares were $1,656,413, $1,892,561 and $384,411, respectively. Fees
incurred by the Fund under the plans are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- --------------------------------------------------------------------------------------------------------
February 28, 2005 $ 565,060 $ 20,732 $ 108,199 $ 40,611 $ 14,015
- --------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended February 28,
2005, OFS waived $1,089 and $8,919 for Class B and Class N shares, respectively.
This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and
34 | OPPENHEIMER DEVELOPING MARKETS FUND
Liabilities as a receivable or payable and in the Statement of Operations with
the change in unrealized appreciation or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of February 28, 2005, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) FEB. 28, 2005 APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Hungary Forints [HUF] 3/2/05 39,446HUF $ 215,928 $ 55 $ --
Indian Rupee [INR] 3/1/05 69,617INR 1,594,337 -- 1,462
Singapore Dollar [SGD] 3/1/05-3/2/05 2,095SGD 1,291,538 6,982 --
Thailand Baht [THB] 3/1/05 117,417THB 3,070,517 14,386 --
---------------------------
Total unrealized appreciation and depreciation $ 21,423 $ 1,462
===========================
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of February 28, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 10% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities.
- --------------------------------------------------------------------------------
7. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor (collectively, the
"Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal
Defendants") including the Fund, 30 present and former Directors or Trustees and
8 present and former officers of the funds. This complaint, initially filed in
the U.S. District Court for the Southern District of New York on January 10,
2005 and amended on March 4, 2005, consolidates into a single action and amends
six individual previously-filed putative derivative and class action complaints.
Like those prior complaints, the complaint alleges that the Manager charged
excessive fees for distribution and other costs, improperly used assets of the
funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the funds, and failed to properly disclose the use
of assets of the funds to make those payments in violation of the Investment
Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those
prior complaints, the complaint further alleges that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers breached
their fiduciary duties to shareholders of the funds under the Investment Company
Act of 1940 and at common law. The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory
35 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. LITIGATION Continued
agreements, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the funds named as Nominal
Defendants, and the Directors/Trustees of those funds have meritorious defenses
against the claims asserted. The Oppenheimer defendants intend to defend these
lawsuits vigorously and to contest any claimed liability. The Oppenheimer
defendants believe that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to them and that no estimate can yet be
made with any degree of certainty as to the amount or range of any potential
loss.
36 | OPPENHEIMER DEVELOPING MARKETS FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
37 | OPPENHEIMER DEVELOPING MARKETS FUND
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
Not applicable.
ITEM 9. PURCHASE 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
At a meeting of the Board of Trustees of the registrant held on February
18, 2004, the Board adopted (1) a policy that, should the Board determine that a
vacancy exists or is likely to exist on the Board, the Governance Committee of
the Board, which is comprised entirely of independent trustees, shall consider
any candidates for Board membership recommended by the registrant's security
holders and (2) a policy that security holders wishing to submit a nominee for
election to the Board may do so by mailing their submission to the offices of
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th
Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance
Committee. Prior to February 18, 2004, the Board did not have a formalized
policy with respect to consideration of security holder nominees or a procedure
by which security holders may make their submissions. In addition to security
holder nominees, the Governance Committee may also consider nominees recommended
by independent Board members or recommended by any other Board members and is
authorized under its Charter, upon Board approval, to retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the
Governance Committee may also obtain legal, financial, or other external counsel
that may be necessary or desirable in the screening process.
ITEM 11. CONTROLS AND PROCEDURES
(a) Based on their evaluation of 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 February 28, 2005,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and communicated
to registrant's management, including its principal executive
officer and principal financial officer, to allow timely decisions
regarding required disclosure, and (b) is recorded, processed,
summarized and reported, within the time periods specified in the
rules and forms adopted by the U.S. Securities and Exchange
Commission.
(b) There have been no changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Developing Markets Fund
By: _____________________________
John V. Murphy
Chief Executive Officer
Date: April 11, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: _____________________________
John V. Murphy
Chief Executive Officer
Date: April 11, 2005
By: _____________________________
Brian W. Wixted
Chief Financial Officer
Date: April 11, 2005