UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07255
OPPENHEIMER INTERNATIONAL BOND FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
ROBERT G. ZACK, ESQ.
OPPENHEIMERFUNDS, INC.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: September 30
Date of reporting period: September 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN GEOGRAPHICAL HOLDINGS
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Japan 9.9%
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Brazil 9.3
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United States 7.9
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Turkey 6.2
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United Kingdom 5.5
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Germany 5.3
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Russia 5.2
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Peru 4.3
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Colombia 3.9
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Mexico 3.9
Portfolio holdings and allocations are subject to change. Percentages are as of
September 30, 2005, and are based on total market value of investments.
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REGIONAL ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Latin America 27.9%
Europe 24.1
Asia 16.9
Middle East/Africa 11.9
Emerging Europe 10.8
United States/Canada 7.9
Supranational 0.5
Portfolio holdings and allocations are subject to change. Percentages are as of
September 30, 2005, and are based on total market value of investments.
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9 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED SEPTEMBER 30, 2005, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. During its fiscal year ended
September 30, 2005, Oppenheimer International Bond Fund produced higher returns
than its benchmark, the Citigroup Non-U.S. Dollar World Government Bond Index.
We attribute the Fund's strong relative performance to our unhedged positions in
the emerging markets, where favorable movements in local currency exchange rates
relative to the U.S. dollar helped support returns.
Early in the reporting period, we shifted the Fund's emphasis from bonds
of developed nations to bonds issued by governments in the emerging markets. We
tended to focus on nations where we expected fiscal improvements to bolster
investor confidence and attract more investment capital. This strategy proved to
be especially successful in Brazil, Mexico and Turkey.
On the other hand, we shifted the Fund's assets away from developed
markets where we anticipated wider yield spreads between local bonds and U.S.
Treasury securities. For example, the Fund's relative performance benefited from
an underweighted position in Germany, which suffered from the weak EURO over the
reporting period. We tended to prefer bonds from the more developed markets of
Asia, where the regional economy is expected to grow more robustly than in
Europe.
The Fund also received positive contributions to performance from small
positions in a number of corporate-backed bonds from international markets that,
in our judgment, offered attractive yields and high levels of credit quality.
For example, the Fund established a position in a state-owned gas company in
Russia.
Throughout the reporting period, we tended to maintain the Fund's average
duration in a range that we consider to be in line with industry averages. This
positioning neither contributed to nor detracted from performance, as interest
rates in most overseas markets remained in a relatively tight trading range.
However, toward the end of the reporting period, we began to detect signs that
interest rates may fall in some parts of the emerging markets should central
banks ease monetary policy, and we have begun to extend the maturities of the
Fund's holdings in those areas.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until September 30, 2005. In the case of Class A, Class B and Class C
shares, performance is measured over a ten fiscal year end period. In the case
of Class N shares, performance is measured from inception of the Class on March
1, 2001. In the case of
10 | OPPENHEIMER INTERNATIONAL BOND FUND
Class Y shares, performance is measured from inception of the Class on September
27, 2004. The Fund's performance reflects the deduction of the maximum initial
sales charge on Class A shares, the applicable contingent deferred sales charge
on Class B, Class C and Class N, and reinvestments of all dividends and capital
gains distributions.
The Fund's performance is compared to the Citigroup Non-U.S. Dollar World
Government Bond Index, a subset of the Citigroup World Government Bond Index.
The Citigroup Non-U.S. Dollar World Government Bond Index is a market
capitalization weighted benchmark that tracks the performance of 13 government
bond markets including Australia, Canada, Japan and 10 European countries. Thus,
the index does not reflect the performance of the fixed income markets in either
the United States or in any emerging market countries. In addition, it is
comprised of only government bonds and does not reflect the performance of
corporate bonds. Index performance reflects the reinvestment of dividends but
does not consider the effect of capital gains or transaction costs, and none of
the data in the graphs that follow shows the effect of taxes. The Fund's
performance reflects the effects of Fund business and operating expenses. While
index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
securities in the indices.
11 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class A)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International Citigroup Non-U.S. Dollar
Date Bond Fund (Class A) World Government Bond Index
09/30/1995 9,525 10,000
12/31/1995 9,962 10,208
03/31/1996 10,330 10,035
06/30/1996 10,808 10,075
09/30/1996 11,318 10,403
12/31/1996 11,883 10,624
03/31/1997 11,970 10,010
06/30/1997 12,303 10,292
09/30/1997 12,600 10,314
12/31/1997 12,175 10,171
03/31/1998 12,345 10,213
06/30/1998 12,223 10,383
09/30/1998 11,025 11,381
12/31/1998 11,644 11,981
03/31/1999 11,620 11,401
06/30/1999 12,018 10,889
09/30/1999 12,192 11,555
12/31/1999 12,926 11,373
03/31/2000 13,459 11,241
06/30/2000 13,304 11,152
09/30/2000 13,281 10,647
12/31/2000 13,810 11,074
03/31/2001 13,454 10,531
06/30/2001 13,513 10,323
09/30/2001 13,466 11,123
12/31/2001 14,107 10,682
03/31/2002 14,410 10,482
06/30/2002 15,569 11,947
09/30/2002 15,725 12,286
12/31/2002 17,042 13,031
03/31/2003 17,552 13,517
06/30/2003 18,919 14,085
09/30/2003 19,919 14,473
12/31/2003 21,454 15,444
03/31/2004 22,552 15,686
06/30/2004 21,367 15,156
09/30/2004 22,223 15,653
12/31/2004 24,791 17,318
03/31/2005 24,093 16,782
06/30/2005 25,143 16,330
09/30/2005 25,673 16,146
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
9/30/05
1-Year 10.04% 5-Year 12.99% 10-Year 9.89%
12 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class B)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International Citigroup Non-U.S. Dollar
Date Bond Fund (Class B) World Government Bond Index
09/30/1995 10,000 10,000
12/31/1995 10,417 10,208
03/31/1996 10,782 10,035
06/30/1996 11,282 10,075
09/30/1996 11,771 10,403
12/31/1996 12,337 10,624
03/31/1997 12,404 10,010
06/30/1997 12,726 10,292
09/30/1997 13,009 10,314
12/31/1997 12,548 10,171
03/31/1998 12,700 10,213
06/30/1998 12,551 10,383
09/30/1998 11,297 11,381
12/31/1998 11,910 11,981
03/31/1999 11,864 11,401
06/30/1999 12,248 10,889
09/30/1999 12,403 11,555
12/31/1999 13,128 11,373
03/31/2000 13,647 11,241
06/30/2000 13,433 11,152
09/30/2000 13,388 10,647
12/31/2000 13,929 11,074
03/31/2001 13,542 10,531
06/30/2001 13,576 10,323
09/30/2001 13,510 11,123
12/31/2001 14,153 10,682
03/31/2002 14,457 10,482
06/30/2002 15,620 11,947
09/30/2002 15,777 12,286
12/31/2002 17,098 13,031
03/31/2003 17,610 13,517
06/30/2003 18,981 14,085
09/30/2003 19,985 14,473
12/31/2003 21,524 15,444
03/31/2004 22,626 15,686
06/30/2004 21,438 15,156
09/30/2004 22,296 15,653
12/31/2004 24,873 17,318
03/31/2005 24,172 16,782
06/30/2005 25,226 16,330
09/30/2005 25,758 16,146
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
9/30/05
1-Year 9.58% 5-Year 12.97% 10-Year 9.92%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
13 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class C)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International Citigroup Non-U.S. Dollar
Date Bond Fund (Class C) World Government Bond Index
09/30/1995 10,000 10,000
12/31/1995 10,435 10,208
03/31/1996 10,800 10,035
06/30/1996 11,280 10,075
09/30/1996 11,792 10,403
12/31/1996 12,358 10,624
03/31/1997 12,403 10,010
06/30/1997 12,749 10,292
09/30/1997 13,032 10,314
12/31/1997 12,570 10,171
03/31/1998 12,722 10,213
06/30/1998 12,574 10,383
09/30/1998 11,318 11,381
12/31/1998 11,932 11,981
03/31/1999 11,886 11,401
06/30/1999 12,271 10,889
09/30/1999 12,426 11,555
12/31/1999 13,152 11,373
03/31/2000 13,672 11,241
06/30/2000 13,460 11,152
09/30/2000 13,414 10,647
12/31/2000 13,956 11,074
03/31/2001 13,568 10,531
06/30/2001 13,602 10,323
09/30/2001 13,528 11,123
12/31/2001 14,111 10,682
03/31/2002 14,423 10,482
06/30/2002 15,556 11,947
09/30/2002 15,680 12,286
12/31/2002 16,923 13,031
03/31/2003 17,397 13,517
06/30/2003 18,721 14,085
09/30/2003 19,675 14,473
12/31/2003 21,153 15,444
03/31/2004 22,236 15,686
06/30/2004 20,989 15,156
09/30/2004 21,790 15,653
12/31/2004 24,270 17,318
03/31/2005 23,539 16,782
06/30/2005 24,522 16,330
09/30/2005 24,992 16,146
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
9/30/05
1-Year 13.70% 5-Year 13.25% 10-Year 9.59%
14 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class N)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International Citigroup Non-U.S. Dollar
Date Bond Fund (Class N) World Government Bond Index
03/01/2001 10,000 10,000
03/31/2001 9,706 9,598
06/30/2001 9,747 9,409
09/30/2001 9,712 10,139
12/31/2001 10,144 9,736
03/31/2002 10,380 9,554
06/30/2002 11,208 10,889
09/30/2002 11,287 11,198
12/31/2002 12,225 11,877
03/31/2003 12,583 12,320
06/30/2003 13,552 12,838
09/30/2003 14,257 13,192
12/31/2003 15,315 14,077
03/31/2004 16,115 14,298
06/30/2004 15,227 13,814
09/30/2004 15,824 14,268
12/31/2004 17,669 15,785
03/31/2005 17,122 15,296
06/30/2005 17,852 14,884
09/30/2005 18,240 14,716
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
9/30/05
1-Year 14.27% 5-Year N/A Since Inception (3/1/01) 14.02%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Bond Fund (Class Y)
Citigroup Non-U.S. Dollar World Government Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International Citigroup Non-U.S. Dollar
Date Bond Fund (Class Y) World Government Bond Index
09/27/2004 10,000 10,000
09/30/2004 10,092 10,000
12/31/2004 11,270 11,064
03/31/2005 10,942 10,721
06/30/2005 11,449 10,432
09/30/2005 11,702 10,315
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 9/30/05
1-Year 15.96% 5-Year N/A Since Inception (9/27/04) 16.87%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURN FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
16 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
Investors should consider the Fund's investment objectives, risks, and other
charges and expenses carefully before investing. The Fund's prospectus contains
this and other information about the Fund, and may be obtained by asking your
financial advisor, calling us at 1.800.525.7048 or visiting our website at
www.oppenheimerfunds.com. Read the prospectus carefully before investing.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the 10-year return for Class B uses
Class A performance for the period after conversion. Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 6/15/95. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
17 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES
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CLASS Y shares of the Fund were first publicly offered on 9/27/04. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor. This Class has a limited operating history.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
18 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended September 30, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
19 | OPPENHEIMER INTERNATIONAL BOND FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(4/1/05) (9/30/05) SEPTEMBER 30, 2005
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Class A Actual $ 1,000.00 $ 1,065.60 $ 5.29
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Class A Hypothetical 1,000.00 1,019.95 5.18
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Class B Actual 1,000.00 1,061.20 9.76
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Class B Hypothetical 1,000.00 1,015.64 9.54
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Class C Actual 1,000.00 1,061.80 9.14
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Class C Hypothetical 1,000.00 1,016.24 8.93
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Class N Actual 1,000.00 1,065.30 7.53
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Class N Hypothetical 1,000.00 1,017.80 7.36
- ----------------------------------------------------------------------------
Class Y Actual 1,000.00 1,069.50 3.33
- ----------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,021.86 3.25
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 183/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended September 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------
Class A 1.02%
- ---------------------------
Class B 1.88
- ---------------------------
Class C 1.76
- ---------------------------
Class N 1.45
- ---------------------------
Class Y 0.64
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
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20 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS September 30, 2005
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.2%
- -----------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Nts., 3.75%, 7/15/09 [EUR] 16,635,000 $ 20,747,517
- -----------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 3.32%, 10/6/05 1 83,355,000 83,316,854
- -----------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 3.75%, 3/31/07 2 10,000,000 9,939,070
----------------
Total U.S. Government Obligations (Cost $113,435,333) 114,003,441
- -----------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--55.1%
- -----------------------------------------------------------------------------------------------------------------------
ARGENTINA--1.8%
Argentina (Republic of) Bonds:
1.20%, 12/31/38 3 [EUR] 3,500,000 1,672,075
1.33%, 12/31/38 3 10,530,000 4,185,675
3.663%, 9/30/14 3,4 [ARP] 21,270,000 7,550,073
4.005%, 8/3/12 3 26,446,875 24,078,319
- -----------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Unsec. Unsub. Bonds, 5.83%, 12/31/33 4 [ARP] 33,513,245 11,837,598
- -----------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Bonos de Consolidacion de
Deudas, Series PBA1, 4/1/07 4,5 [ARP] 960,558 420,684
- -----------------------------------------------------------------------------------------------------------------------
Central Bank of Argentina Bonds, 2%, 2/4/18 4 [ARP] 24,766,558 12,805,811
----------------
62,550,235
- -----------------------------------------------------------------------------------------------------------------------
AUSTRALIA--2.0%
Queensland Treasury Corp. Unsec. Nts., Series 09G, 6%, 7/14/09 [AUD] 90,250,000 69,994,164
- -----------------------------------------------------------------------------------------------------------------------
AUSTRIA--0.9%
Austria (Republic of) Nts.:
3.80%, 10/20/13 6 [EUR] 6,845,000 8,673,994
5.50%, 10/20/07 6 [EUR] 2,440,000 3,111,100
Series 98-1, 5%, 1/15/08 [EUR] 9,795,000 12,436,430
- -----------------------------------------------------------------------------------------------------------------------
Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12 [EUR] 6,525,000 8,834,217
----------------
33,055,741
- -----------------------------------------------------------------------------------------------------------------------
BELGIUM--0.2%
Belgium (Kingdom of) Bonds, Series 26, 6.25%, 3/28/07 [EUR] 6,850,000 8,695,437
- -----------------------------------------------------------------------------------------------------------------------
BRAZIL--1.9%
Brazil (Federal Republic of) Bonds:
8%, 1/15/18 1,471,000 1,561,467
8.75%, 2/4/25 25,990,000 27,523,410
8.875%, 10/14/19 3,830,000 4,168,955
12.50%, 1/5/16 [BRR] 65,816,000 28,360,316
Series 15 yr., 4.313%, 4/15/09 3 14,119 14,119
- -----------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec. Bonds, 4.75%, 4/10/07 4 [JPY] 500,000,000 4,602,713
----------------
66,230,980
21 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
BULGARIA--0.1%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 $ 1,505,000 $ 1,864,319
8.25%, 1/15/15 6 1,505,000 1,864,319
----------------
3,728,638
- -----------------------------------------------------------------------------------------------------------------------
COLOMBIA--1.7%
Colombia (Republic of) Bonds, 12%, 10/22/15 [COP] 48,545,000,000 26,111,105
- -----------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) Nts.:
8.25%, 12/22/14 6,655,000 7,490,203
11.75%, 3/1/10 [COP] 35,992,780,000 18,342,179
- -----------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) Unsec. Bonds, 8.125%, 5/21/24 7,025,000 7,569,438
----------------
59,512,925
- -----------------------------------------------------------------------------------------------------------------------
DOMINICAN REPUBLIC--0.1%
Dominican Republic Unsec. Unsub. Bonds:
Series REG S, 9.04%, 1/23/18 1,588,704 1,764,256
Series REG S, 9.50%, 9/27/11 1,571,250 1,736,231
----------------
3,500,487
- -----------------------------------------------------------------------------------------------------------------------
EL SALVADOR--0.0%
El Salvador (Republic of) Bonds, 7.625%, 9/21/34 6 1,185,000 1,321,275
- -----------------------------------------------------------------------------------------------------------------------
FINLAND--1.4%
Finland (Republic of) Bonds, 5.375%, 7/4/13 [EUR] 20,985,000 29,341,749
- -----------------------------------------------------------------------------------------------------------------------
Finland (Republic of) Sr. Unsec. Unsub. Bonds:
2.75%, 7/4/06 [EUR] 3,470,000 4,187,021
5%, 7/4/07 [EUR] 12,415,000 15,585,559
----------------
49,114,329
- -----------------------------------------------------------------------------------------------------------------------
FRANCE--3.1%
France (Government of) Obligations Assimilables du Tresor Bonds,
5.50%, 10/25/10 [EUR] 80,255,000 108,984,949
- -----------------------------------------------------------------------------------------------------------------------
GERMANY--4.8%
Germany (Republic of) Bonds:
5.25%, 1/4/11 [EUR] 23,640,000 31,836,365
5.375%, 1/4/10 [EUR] 38,715,000 51,561,838
Series 02, 5%, 7/4/12 [EUR] 4,200,000 5,691,869
Series 03, 3.75% 7/4/13 7 [EUR] 64,085,000 81,010,279
----------------
170,100,351
- -----------------------------------------------------------------------------------------------------------------------
GREECE--0.8%
Greece (Republic of) Bonds, 3.70%, 7/20/15 [EUR] 17,360,000 21,440,189
- -----------------------------------------------------------------------------------------------------------------------
Greece (Republic of) Sr. Unsub. Bonds, 4.65%, 4/19/07 [EUR] 6,980,000 8,672,674
----------------
30,112,863
22 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 $ 525,000 $ 643,781
10.25%, 11/8/11 6 160,000 196,200
----------------
839,981
- -----------------------------------------------------------------------------------------------------------------------
HUNGARY--0.3%
Hungary (Government of) Bonds, Series 05/I, 8.50%, 10/12/05 [HUF] 1,918,660,000 9,240,000
- -----------------------------------------------------------------------------------------------------------------------
INDONESIA--0.0%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14 6 120,000 118,500
7.25%, 4/20/15 6 200,000 200,500
----------------
319,000
- -----------------------------------------------------------------------------------------------------------------------
IRELAND--0.9%
Ireland (Republic of) Treasury Bonds, 3.25%, 4/18/09 [EUR] 25,900,000 31,833,140
- -----------------------------------------------------------------------------------------------------------------------
ISRAEL--1.1%
Israel (State of) Bonds, Series 2682, 7.50%, 3/31/14 [ILS] 167,800,000 40,399,669
- -----------------------------------------------------------------------------------------------------------------------
ITALY--0.6%
Italy (Republic of) Treasury Bonds:
Buoni del Tesoro Poliennali, 4.50%, 3/1/07 [EUR] 14,745,000 18,258,246
Buoni del Tesoro Poliennali, 5%, 10/15/07 [EUR] 2,770,000 3,498,862
----------------
21,757,108
- -----------------------------------------------------------------------------------------------------------------------
JAPAN--9.0%
Japan (Government of) Bonds, 10 yr., Series 239, 1.40%, 6/20/12 [JPY] 35,638,000,000 320,666,655
- -----------------------------------------------------------------------------------------------------------------------
MALAYSIA--1.2%
Johor Corp. Malaysia (Government of) Bonds, Series P3, 1%, 7/31/12 3,4 [MYR] 107,980,000 30,225,232
- -----------------------------------------------------------------------------------------------------------------------
Malaysia (Government of) Bonds, Series 2/05, 4.72%, 9/30/15 [MYR] 41,730,000 11,761,128
----------------
41,986,360
- -----------------------------------------------------------------------------------------------------------------------
MEXICO--3.5%
Mexican Williams Sr. Nts., 4.24%, 11/15/08 3,4 500,000 516,875
- -----------------------------------------------------------------------------------------------------------------------
United Mexican States Bonds:
Series M10, 10.50%, 7/14/11 3 [MXN] 324,060,000 33,212,128
Series M20, 8%, 12/7/23 3 [MXN] 43,415,000 3,739,764
Series M20, 10%, 12/5/24 3 [MXN] 169,430,000 17,476,050
Series MI10, 8%, 12/19/13 [MXN] 230,788,000 20,763,540
Series MI10, 9.50%, 12/18/14 3 [MXN] 357,164,400 35,162,714
- -----------------------------------------------------------------------------------------------------------------------
United Mexican States Treasury Bills, Series BI, 10.32%, 10/13/05 8 [MXN] 130,860,000 12,043,451
- -----------------------------------------------------------------------------------------------------------------------
United Mexican States Unsec. Unsub. Nts., Series 6 BR, 6.75%, 6/6/06 [JPY] 205,000,000 1,871,943
----------------
124,786,465
23 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
NEW ZEALAND--0.9%
New Zealand (Government of) Bonds, 7%, 7/15/09 [NZD] 28,005,000 $ 20,057,571
- -----------------------------------------------------------------------------------------------------------------------
New Zealand (Government of) Treasury Bills, 6.46%, 3/22/06 8 [NZD] 19,850,000 13,313,490
----------------
33,371,061
- -----------------------------------------------------------------------------------------------------------------------
NIGERIA--0.0%
Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 1,375,000 1,378,438
- -----------------------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 548,683 516,420
----------------
1,894,858
- -----------------------------------------------------------------------------------------------------------------------
PANAMA--0.6%
Panama (Republic of) Bonds:
8.125%, 4/28/34 1 15,845,000 18,063,300
9.375%, 4/1/29 1,650,000 2,103,750
----------------
20,167,050
- -----------------------------------------------------------------------------------------------------------------------
PERU--4.1%
Peru (Republic of) Bonds:
7.34%, 8/12/16 [PEN] 17,650,000 5,327,206
7.84%, 8/12/20 [PEN] 187,560,000 57,844,559
8.375%, 5/3/16 1 1,380,000 1,621,500
9.91%, 5/5/15 [PEN] 116,525,000 41,374,566
Series 2, 9%, 1/31/12 [PEN] 18,850,000 6,345,734
Series 7, 8.60%, 8/12/17 [PEN] 40,680,000 13,294,316
Series 8-1, 12.25%, 8/10/11 [PEN] 18,633,000 7,134,382
- -----------------------------------------------------------------------------------------------------------------------
Peru (Republic of) Sr. Nts., 4.53%, 2/28/16 8 5,169,696 3,324,683
- -----------------------------------------------------------------------------------------------------------------------
Peru (Republic of) Unsec. Unsub. Bonds, 8.75%, 11/21/33 1 6,720,000 8,148,000
----------------
144,414,946
- -----------------------------------------------------------------------------------------------------------------------
PHILIPPINES--0.5%
Philippines (Republic of) Bonds:
8%, 1/15/16 1 550,000 554,813
9.50%, 2/2/30 1 4,026,000 4,307,820
Series 5-56, 12.375%, 10/28/09 [PHP] 149,350,000 2,776,245
Series 5-57, 11.50%, 1/27/10 [PHP] 507,800,000 9,233,818
- -----------------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Nts., 8.25%, 1/15/14 363,000 377,974
----------------
17,250,670
- -----------------------------------------------------------------------------------------------------------------------
POLAND--0.9%
Poland (Republic of) Bonds:
Series DS1013, 5%, 10/24/13 [PLZ] 55,940,000 17,478,838
Series WS0922, 5.75%, 9/23/22 [PLZ] 10,000,000 3,402,094
- -----------------------------------------------------------------------------------------------------------------------
Poland (Republic of) Nts., Series 0K0807, 4.19%, 8/12/07 8 [PLZ] 43,990,000 12,480,724
----------------
33,361,656
24 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
PORTUGAL--1.7%
Portugal (Republic of) Obrig Do Tes Medio Prazo Nts.:
3.25%, 7/15/08 [EUR] 8,160,000 $ 9,991,476
4.875%, 8/17/07 [EUR] 9,710,000 12,191,153
- -----------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Nts.,
5.85%, 5/20/10 [EUR] 28,945,000 39,458,326
----------------
61,640,955
- -----------------------------------------------------------------------------------------------------------------------
RUSSIA--1.6%
Aries Vermoegensverwaltungs GmbH Unsub. Nts.:
Series B, 7.75%, 10/25/09 6 [EUR] 2,500,000 3,533,442
Series C, 9.60%, 10/25/14 23,330,000 30,829,615
- -----------------------------------------------------------------------------------------------------------------------
Ministry Finance of Russia Debs., Series VII, 3%, 5/14/11 6,620,000 5,870,120
- -----------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Debs., Series V, 3%, 5/14/08 3,590,000 3,407,790
- -----------------------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Bonds, 5%, 3/31/30 1,3,6 8,570,750 9,856,363
- -----------------------------------------------------------------------------------------------------------------------
Russian Federation Unsub. Nts., 5%, 3/31/30 3 1,485,000 1,707,750
----------------
55,205,080
- -----------------------------------------------------------------------------------------------------------------------
SOUTH AFRICA--1.5%
South Africa (Republic of) Bonds:
Series R157, 13.50%, 9/15/15 [ZAR] 76,130,000 16,319,938
Series R186, 10.50%, 12/21/26 [ZAR] 136,575,000 27,422,863
Series R203, 8.25%, 9/15/17 [ZAR] 30,810,000 4,908,260
Series R204, 8%, 12/21/18 [ZAR] 34,150,000 5,337,974
----------------
53,989,035
- -----------------------------------------------------------------------------------------------------------------------
SPAIN--0.8%
Spain (Kingdom of) Bonds:
Bonos y Obligacion del Estado, 4.25%, 10/31/07 [EUR] 8,945,000 11,154,562
Bonos y Obligacion del Estado, 4.80%, 10/31/06 [EUR] 5,500,000 6,789,216
Bonos y Obligacion del Estado, 5.35%, 10/31/11 [EUR] 8,060,000 11,022,986
----------------
28,966,764
- -----------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS--0.8%
Netherlands (Kingdom of the) Bonds:
3.75%, 7/15/09 [EUR] 7,150,000 8,950,712
4.25%, 7/15/13 [EUR] 8,635,000 11,263,120
5.50%, 1/15/28 [EUR] 4,740,000 7,377,321
----------------
27,591,153
- -----------------------------------------------------------------------------------------------------------------------
TURKEY--0.6%
Turkey (Republic of) Bonds, 8%, 2/14/34 13,820,000 14,649,200
- -----------------------------------------------------------------------------------------------------------------------
Turkey (Republic of) Nts., 7.25%, 3/15/15 1 6,680,000 7,064,100
----------------
21,713,300
25 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM--4.8%
United Kingdom Treasury Nts., 4%, 3/7/09 [GBP] 96,885,000 $ 169,723,053
- -----------------------------------------------------------------------------------------------------------------------
VENEZUELA--0.9%
Venezuela (Republic of) Bonds:
7%, 12/1/18 195,000 191,831
9.25%, 9/15/27 1 12,035,000 14,267,493
- -----------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Nts.:
7%, 3/16/15 [EUR] 5,070,000 6,600,658
8.50%, 10/8/14 8,954,000 9,961,325
----------------
31,021,307
----------------
Total Foreign Government Obligations (Cost $1,929,259,339) 1,959,041,640
- -----------------------------------------------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.2%
- -----------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Loan Participation Nts.:
0.878%, 3/4/10 3,4 [JPY] 159,446,686 1,397,546
4.809%, 9/4/06 3,4 328,572 327,751
4.809%, 3/4/10 3,4 609,750 605,177
- -----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indonesia (Republic of) Rupiah Loan
Participation Nts., 3.813%, 1/25/06 3 3,155,000 3,173,299
----------------
Total Loan Participations (Cost $5,334,889) 5,503,773
- -----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--4.9%
- -----------------------------------------------------------------------------------------------------------------------
Alrosa Finance SA:
8.875% Nts., 11/17/14 2,400,000 2,850,000
8.875% Nts., 11/17/14 6 4,675,000 5,551,563
- -----------------------------------------------------------------------------------------------------------------------
Argentine Beverages Financial Trust, 7.375% Bonds, 3/22/12 4 1,445,000 1,499,188
- -----------------------------------------------------------------------------------------------------------------------
CITGO Trustees Cayman Ltd., 8.50% Nts., 12/21/14 4 1,330,000 1,356,600
- -----------------------------------------------------------------------------------------------------------------------
Dresdner Bank AG (Ukreximbank), 8.75% Bonds, 2/10/10 2,580,000 2,705,772
- -----------------------------------------------------------------------------------------------------------------------
Eletropaulo Metropolitana SA, 19.125% Nts., 6/28/10 4 [BRR] 13,295,000 6,393,547
- -----------------------------------------------------------------------------------------------------------------------
Gazprom International SA, 7.201% Sr. Unsec. Bonds, 2/1/20 7,850,000 8,594,730
- -----------------------------------------------------------------------------------------------------------------------
HSBC Bank plc:
9.75% Sr. Unsec. Nts., 7/8/09 8 30,220,000 21,033,120
11.60% Sr. Unsec. Nts., 1/12/10 8 42,800,000 25,829,800
12.28% Sr. Unsec. Nts., 3/9/09 8 30,220,000 19,763,880
- -----------------------------------------------------------------------------------------------------------------------
Iansa Overseas, 7.25% Sr. Unsec. Nts., 7/28/12 6 4,000,000 3,990,000
- -----------------------------------------------------------------------------------------------------------------------
Inter-American Development Bank:
6.26% Nts., 12/8/09 3 [BRR] 11,200,000 4,721,758
8.81% Nts., 1/25/12 3 [COP] 15,694,714,310 6,896,027
- -----------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction & Development (The),
15% Nts., 1/7/10 4 [TRY] 3,000,000 2,439,658
- -----------------------------------------------------------------------------------------------------------------------
Kuznetski Capital SA, Bank of Moscow, 7.375% Nts., 11/26/10 4 5,560,000 5,879,700
- -----------------------------------------------------------------------------------------------------------------------
Nak Naftogaz Ukraine, 8.125% Bonds, 9/30/09 3,900,000 4,147,845
26 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES Continued
- -----------------------------------------------------------------------------------------------------------------------
Nordic Investment Bank, 12.50% Sr. Unsec. Nts., 2/15/09 4 [TRY] 5,000,000 $ 3,722,614
- -----------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10 4,5 550,000 --
- -----------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 9.125% Unsec. Unsub. Nts., 10/13/10 1 4,570,000 5,358,325
- -----------------------------------------------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV, 5.265% Sr. Nts., Cl. A3, 6/15/11 6 13,380,000 13,341,586
- -----------------------------------------------------------------------------------------------------------------------
Tengizchevroil LLP, 6.124% Nts., 11/15/14 1,6 5,840,000 6,000,600
- -----------------------------------------------------------------------------------------------------------------------
Titan Petrochemicals Group Ltd., 8.50% Sr. Unsec. Nts., 3/18/12 6 2,381,000 2,303,618
- -----------------------------------------------------------------------------------------------------------------------
UBS Luxembourg SA, 6.23% Sub. Nts., 2/11/15 3 8,020,000 8,220,019
- -----------------------------------------------------------------------------------------------------------------------
VTB Capital SA, 6.25% Bonds, 7/2/35 6 9,490,000 9,905,188
----------------
Total Corporate Bonds and Notes (Cost $170,103,770) 172,505,138
SHARES
- -----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--2.0%
- -----------------------------------------------------------------------------------------------------------------------
Amada Co., Ltd. 171,000 1,368,998
- -----------------------------------------------------------------------------------------------------------------------
Arcelor 60,280 1,409,830
- -----------------------------------------------------------------------------------------------------------------------
BAE Systems plc 225,040 1,363,434
- -----------------------------------------------------------------------------------------------------------------------
BNP Paribas SA 18,200 1,383,511
- -----------------------------------------------------------------------------------------------------------------------
BPB plc 100,570 1,305,551
- -----------------------------------------------------------------------------------------------------------------------
Daido Steel Co. Ltd. 264,000 1,715,379
- -----------------------------------------------------------------------------------------------------------------------
DaimlerChrysler AG 25,867 1,372,547
- -----------------------------------------------------------------------------------------------------------------------
Deutsche Telekom AG 70,200 1,277,361
- -----------------------------------------------------------------------------------------------------------------------
Douglas Holding AG 34,102 1,297,192
- -----------------------------------------------------------------------------------------------------------------------
E.ON AG 13,907 1,280,303
- -----------------------------------------------------------------------------------------------------------------------
Exel plc 62,730 1,357,586
- -----------------------------------------------------------------------------------------------------------------------
First Choice Holidays plc 360,890 1,347,863
- -----------------------------------------------------------------------------------------------------------------------
Gecina SA 11,120 1,309,729
- -----------------------------------------------------------------------------------------------------------------------
GKN plc 252,400 1,312,172
- -----------------------------------------------------------------------------------------------------------------------
Hanson plc 127,130 1,319,599
- -----------------------------------------------------------------------------------------------------------------------
Hochtief AG 32,609 1,450,465
- -----------------------------------------------------------------------------------------------------------------------
IVG Immobilien AG 62,845 1,298,366
- -----------------------------------------------------------------------------------------------------------------------
Keisei Electric Railway Co. Ltd. 256,000 1,404,933
- -----------------------------------------------------------------------------------------------------------------------
Kelda Group plc 108,690 1,346,739
- -----------------------------------------------------------------------------------------------------------------------
Klepierre 13,441 1,348,865
- -----------------------------------------------------------------------------------------------------------------------
Kubota Corp. 213,000 1,483,451
- -----------------------------------------------------------------------------------------------------------------------
Lloyds TSB Group plc 162,041 1,334,718
- -----------------------------------------------------------------------------------------------------------------------
MAN AG 26,424 1,354,466
- -----------------------------------------------------------------------------------------------------------------------
Matsui Securities Co. Ltd. 125,400 1,540,826
- -----------------------------------------------------------------------------------------------------------------------
Nikon Corp. 113,000 1,425,440
- -----------------------------------------------------------------------------------------------------------------------
Nippon Mining Holdings, Inc. 195,500 1,549,947
27 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS Continued
- ----------------------------------------------------------------------------------------------------------------------
Nippon Steel Corp. 454,000 $ 1,703,700
- ----------------------------------------------------------------------------------------------------------------------
OKI Electric Industry Co. 412,000 1,411,584
- ----------------------------------------------------------------------------------------------------------------------
PagesJaunes Groupe SA 51,320 1,400,113
- ----------------------------------------------------------------------------------------------------------------------
Pilkington plc 557,670 1,367,224
- ----------------------------------------------------------------------------------------------------------------------
Resolution plc 117,850 1,282,515
- ----------------------------------------------------------------------------------------------------------------------
Royal Dutch Shell plc, B Shares 39,280 1,356,537
- ----------------------------------------------------------------------------------------------------------------------
RWE AG 19,848 1,311,988
- ----------------------------------------------------------------------------------------------------------------------
Scottish & Newcastle plc 159,770 1,306,853
- ----------------------------------------------------------------------------------------------------------------------
Scottish & Southern Energy plc 74,940 1,360,118
- ----------------------------------------------------------------------------------------------------------------------
ScottishPower plc 146,730 1,479,050
- ----------------------------------------------------------------------------------------------------------------------
Shionogi & Co. Ltd. 102,000 1,392,650
- ----------------------------------------------------------------------------------------------------------------------
Societe Generale, Cl. A 12,265 1,399,630
- ----------------------------------------------------------------------------------------------------------------------
Suez SA 45,674 1,320,185
- ----------------------------------------------------------------------------------------------------------------------
Sumitomo Metal Industries 577,000 2,047,333
- ----------------------------------------------------------------------------------------------------------------------
ThyssenKrupp AG 69,567 1,454,799
- ----------------------------------------------------------------------------------------------------------------------
Tokyo Electron Ltd. 23,400 1,248,978
- ----------------------------------------------------------------------------------------------------------------------
Tokyo Steel Manufacturing Co. Ltd. 91,800 1,438,132
- ----------------------------------------------------------------------------------------------------------------------
TonenGeneral Sekiyu K.K. 121,000 1,406,977
- ----------------------------------------------------------------------------------------------------------------------
Tosoh Corp. 329,000 1,407,235
- ----------------------------------------------------------------------------------------------------------------------
TUI AG 56,146 1,195,730
- ----------------------------------------------------------------------------------------------------------------------
Unibail 9,300 1,350,207
- ----------------------------------------------------------------------------------------------------------------------
United Utilities plc 115,550 1,334,931
- ----------------------------------------------------------------------------------------------------------------------
Veolia Environnement SA 32,556 1,373,765
- ----------------------------------------------------------------------------------------------------------------------
Vinci SA 15,000 1,291,689
----------------
Total Common Stocks (Cost $62,499,483) 69,601,194
UNITS
- ----------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07 4,9 50 --
- ----------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/15/20 4,9 500 15,000
----------------
Total Rights, Warrants and Certificates (Cost $481) 15,000
28 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--28.0%
- ----------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Holdings, Inc.:
Brazil (Federal Republic of) Credit Linked Nts., 17.37%, 7/3/07 [BRR] 55,270,000 $ 18,737,576
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 38,356,000 14,603,726
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 59,878,000 22,798,048
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 10%, 1/5/10 [BRR] 100,000,000 38,074,164
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 18.41%, 10/4/05 [BRR] 34,700,000 15,559,143
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 18.80%, 1/3/08 [BRR] 24,719,335 7,793,097
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 19.85%, 1/2/09 [BRR] 28,074,132 7,670,097
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 20.40%, 1/5/10 [BRR] 32,035,902 7,673,275
Colombia (Republic of) Credit Linked Bonds, 11%, 7/24/20 [COP] 12,570,000,000 6,732,082
Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12 [COP] 6,942,469,928 4,272,320
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 31,110,000,000 19,144,751
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 12,430,000,000 7,649,285
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12 [COP] 11,705,100,000 7,203,190
Colombia (Republic of) Credit Linked Nts., Series V, 13.50%, 9/15/14 [COP] 28,015,000,000 16,260,666
Dominican Republic Credit Linked Nts., 14.11%, 7/10/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 274,400,000 7,996,573
Dominican Republic Credit Linked Nts., 15.64%, 5/2/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 305,780,000 9,171,430
Dominican Republic Credit Linked Nts., 17%, 3/12/07 [DOP] 256,400,000 8,304,718
Dominican Republic Credit Linked Nts., 19.69%, 3/31/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 249,890,000 7,576,053
Dominican Republic Credit Linked Nts., 22.41%, 3/10/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 319,516,460 9,777,615
Dominican Republic Unsec. Credit Linked Nts., 14.67%, 5/15/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 165,940,000 4,949,715
Dominican Republic Unsec. Credit Linked Nts., 16.18%, 4/24/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 102,260,000 3,075,507
Dominican Republic Unsec. Credit Linked Nts., 23.07%, 3/3/06
(linked to Dominican Republic Treasury Bills) 8 [DOP] 493,299,200 15,140,870
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.01%,
10/28/05 (linked to Egyptian Treasury Bills) 8 [EGP] 50,120,000 8,646,918
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.21%,
9/19/06 (linked to Egyptian Treasury Bills) 8 [EGP] 41,300,000 6,594,520
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.407%,
2/9/06 (linked to Egyptian Treasury Bills) [EGP] 75,466,000 12,701,347
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%,
1/12/06 (linked to Egyptian Treasury Bills) [EGP] 57,210,000 9,692,625
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 8.90%,
12/29/05 (linked to Egyptian Treasury Bills) [EGP] 17,390,000 2,956,028
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 9.65%,
11/29/05 (linked to Egyptian Treasury Bills) 8 [EGP] 67,600,000 11,645,743
OAO Gazprom Russian Local Market Unsec. Credit Linked Nts.,
15.208%, 11/8/05 4,406,270 5,032,445
Ukraine Hryvnia Unsec. Credit Linked Nts., 11.94%, 1/4/10 [UAH] 13,799,000 3,224,321
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (Cayman), Turkey (Republic of)
Credit Linked Nts., Series EMG 7, 15%, 2/10/10 [TRY] 37,857,000 30,195,632
29 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston International:
Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/17/09 [RUR] 321,528,000 $ 11,806,414
Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09 [RUR] 280,840,000 11,406,737
Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10 [RUR] 277,800,000 11,437,353
OAO Gazprom Credit Linked Nts., 8.11%, 1/21/07 [RUR] 289,282,000 10,562,470
South African Rand Interest Bearing Linked Nts., Series FBi 43, 3.52%, 5/23/22 2,100,000 2,081,940
Ukraine (Republic of) Credit Linked Nts., Series EMG 13, 11.94%,
12/30/09 [UAH] 30,400,000 7,098,129
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.:
(Nassau Branch), Turkey (Republic of) Credit Linked Nts., 20%, 10/18/07 4,238,000 4,937,779
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EM 872, 22.88%, 10/20/05 3 19,769,000 20,687,197
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EM 880, 20%, 10/18/07 12,320,000 15,890,459
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EMG 4, 18.70%, 7/6/06 [TRY] 24,930,576 16,621,557
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series EMG 19, 16.90%, 7/5/06 8 [TRY] 20,350,000 13,567,624
(Nassau Branch), Turkey (Republic of) Credit Linked Nts.,
Series NAS 316, 22.66%, 2/23/06 8 7,266,000 9,430,251
(Nassau Branch), Ukraine (Republic of) Credit Linked Nts.,
Series EMG 11, 11.94%, 12/30/09 [UAH] 9,163,000 2,139,479
(Nassau Branch), Ukraine (Republic of) Credit Linked Nts.,
Series NPC 12, 11.94%, 12/30/09 [UAH] 65,490,000 15,291,331
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Argentina (Republic of) Credit Linked Nts., 4%, 12/21/11 10 [ARP] 35,580,000 29,155,111
Brazil Real Credit Linked Nts., 13.88%, 3/3/10 8 [BRR] 61,128,560 17,246,027
Campania Total Return Linked Nts., 2.88%, 7/30/10 3 [EUR] 34,900,000 42,141,734
Egypt (The Arab Republic of) Total Return Linked Nts., 8.52%,
1/17/06 (linked to Egyptian Treasury Bills) 8 [EGP] 50,610,000 8,571,190
Egypt (The Arab Republic of) Total Return Linked Nts., 9.63%,
3/9/06 (linked to Egyptian Treasury Bills) 8 [EGP] 36,390,000 6,080,794
European Investment Bank, Russian Federation Credit Linked Nts.,
5.65%, 1/19/10 8,475,000 6,729,998
Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15 10,300,162 7,800,313
Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/15/13 12,412,800 12,476,105
Moscow (City of) Credit Linked Nts., 10%, 3/30/10 [RUR] 304,373,000 12,027,042
OAO Gazprom I Credit Nts., 6.201%, 10/20/07 1,435,000 1,570,854
OAO Gazprom II Credit Nts., 5.951%, 4/20/07 1,435,000 1,544,270
Philippines (Republic of) Credit Linked Nts., 12%, 1/20/09 [PHP] 319,400,000 6,001,406
Philippines (Republic of) Credit Linked Nts., 12.375%, 11/1/09 [PHP] 596,990,000 11,188,106
Philippines (Republic of) Credit Linked Nts., 12.375%, 3/1/15 [PHP] 109,790,000 2,012,713
Romania (The State of) 3 yr. Linked Nts., 12.25%, 10/15/07 [RON] 22,740,000 9,095,078
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 3,320,000 1,209,648
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 5,640,000 2,054,945
Romania (The State of) 3 yr. Linked Nts., 12.89%, 9/24/07 [RON] 10,000,000 3,643,520
Romania (The State of) Credit Linked Nts., 11.49%, 12/7/06 [RON] 9,118,650 3,449,626
Russian Federation Credit Linked Nts., 12/2/09 8 [RUR] 233,573,000 8,629,178
30 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Ukraine (Republic of) 5 yr. Credit Linked Nts., 4.05%, 8/25/10 4,10 $ 1,345,000 $ 1,347,556
Ukraine (Republic of) 5.5 yr. Credit Linked Nts., 4.05%, 2/25/11 4,10 1,345,000 1,347,556
Ukraine (Republic of) 6 yr. Credit Linked Nts., 4.05%, 8/25/11 4,10 1,345,000 1,347,556
Ukraine (Republic of) 6.5 yr. Credit Linked Nts., 4.05%, 2/27/12 4,10 1,345,000 1,347,556
Ukraine (Republic of) 7 yr. Credit Linked Nts., 4.05%, 8/28/12 4,10 1,345,000 1,347,556
Ukraine (Republic of) Credit Linked Nts., 5.592%, 5/16/07 [UAH] 27,990,000 5,572,476
Ukraine (Republic of) Credit Linked Nts., 9.60%, 7/1/09 4 [UAH] 13,256,000 2,323,081
Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/1/09 4 [UAH] 46,272,000 8,109,053
Ukraine (Republic of) Credit Linked Nts., 11.70%, 5/31/06 [UAH] 20,689,000 4,274,204
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 3,228,000 753,869
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09 [UAH] 11,438,000 2,671,237
Ukraine (Republic of) Credit Linked Nts., Series A, 5.592%, 5/16/07 [UAH] 27,980,000 5,570,486
Videocon International Ltd. Credit Linked Nts., 5.73%, 12/29/09 7,300,000 7,312,410
- ----------------------------------------------------------------------------------------------------------------------
ING Bank NV, Ukraine (Republic of) Credit Linked Nts., Series 725,
11.89%, 12/30/09 4 [UAH] 64,285,000 14,949,696
- ----------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Brazil (Federal Republic of) Credit Linked Nts., 12.08%, 1/2/15 8 [BRR] 51,226,300 6,947,340
Brazil (Federal Republic of) Credit Linked Nts., 12.68%, 6/1/13 8 [BRR] 75,340,000 12,124,548
Brazil (Federal Republic of) Credit Linked Nts., 13.85%, 4/1/10 8 [BRR] 129,150,391 31,045,433
Brazil (Federal Republic of) Credit Linked Nts., 15.33%, 1/2/15 8 [BRR] 138,200,796 18,742,871
Brazil (Federal Republic of) Credit Linked Nts., Series II, 13.55%, 1/2/15 8 114,770,000 15,565,173
[BRR]
Colombia (Republic of) Credit Linked Bonds, 13.50%, 8/3/20 [COP] 132,560,000,000 16,118,383
Peru (Republic of) Credit Linked Nts., 8.12%, 9/2/15 8 [PEN] 40,860,000 5,245,920
Swaziland (Kingdom of) Credit Linked Nts., 7.25%, 6/20/10 3,850,000 3,858,201
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers International:
Romania (The State of) Total Return Linked Nts., 7.90%, 2/8/10
(linked to Romanian Treasury Bills) [RON] 10,726,400 3,891,150
Turkey (Republic of) Total Return Linked Nts., 20%, 10/17/07
(linked to Turkey Treasury Bills) 13,040,000 16,631,216
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
Romania (The State of) Total Return Linked Nts., 6.50%, 3/8/10
(linked to Romanian Treasury Bills) [RON] 30,904,100 10,531,163
Romania (The State of) Total Return Linked Nts., 6.75%, 3/10/08
(linked to Romanian Treasury Bills) [RON] 36,650,000 12,565,671
Romania (The State of) Total Return Linked Nts., 7.25%, 4/18/10
(linked to Romanian Treasury Bills) [RON] 3,105,000 1,082,689
Romania (The State of) Total Return Linked Nts., 7.50%, 3/5/07
(linked to Romanian Treasury Bills) [RON] 5,155,000 1,803,043
Romania (The State of) Total Return Linked Nts., 7.75%, 4/18/08
(linked to Romanian Treasury Bills) [RON] 3,101,000 1,083,570
Romania (The State of) Total Return Linked Nts., 7.75%, 4/18/08
(linked to Romanian Treasury Bills) [RON] 7,453,000 2,604,273
Romania (The State of) Total Return Linked Nts., 7.90%, 2/11/08
(linked to Romanian Treasury Bills) [RON] 24,895,500 8,846,125
31 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Brazil (Federal Republic of) Sr. Sub. Linked Nts., 15.45%, 1/2/14 [BRR] 40,700,000 $ 17,681,925
Philippines (Republic of) Credit Linked Nts., 8.652%, 9/20/15 3 30,000,000 30,000,000
Venezuela (Republic of) Credit Linked Nts., 7.382%, 5/20/10 3,850,000 4,192,650
- ----------------------------------------------------------------------------------------------------------------------
UBS AG:
Israel (State of) Credit Linked Nts., 7.50%, 4/5/14 [ILS] 56,205,300 13,923,883
OAO Gazprom III Credit Nts., 5.88%, 7/5/06 3,590,000 3,719,113
----------------
Total Structured Notes (Cost $936,281,074) 992,918,490
STRIKE NOTIONAL
DATE PRICE AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
SWAPTIONS PURCHASED--0.1%
- ----------------------------------------------------------------------------------------------------------------------
Australian Dollar Call 9 2/9/06 5.67AUD $ 81,810,000 146,494
- ----------------------------------------------------------------------------------------------------------------------
Brazilian Real Call 9 10/3/05 16.50BRR 55,510,000 262
- ----------------------------------------------------------------------------------------------------------------------
Mexican Neuvo Peso Call 9 10/11/05 9.40MXN 560,400,000 593,333
- ----------------------------------------------------------------------------------------------------------------------
Mexican Neuvo Peso Call 9 11/10/05 9.02MXN 478,300,000 336,422
- ----------------------------------------------------------------------------------------------------------------------
Mexican Neuvo Peso Call 9 12/2/05 9.42MXN 1,117,400,000 2,016,925
- ----------------------------------------------------------------------------------------------------------------------
Mexican Neuvo Peso Call 9 12/8/05 9.23MXN 480,400,000 558,033
- ----------------------------------------------------------------------------------------------------------------------
Mexican Neuvo Peso Call 9 12/27/05 9.32MXN 485,160,000 697,441
---------
Total Swaptions Purchased (Cost $4,061,677) 4,348,910
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.4%
- ----------------------------------------------------------------------------------------------------------------------
Undivided interest of 30.56% in joint repurchase agreement (Principal
Amount/Value $400,132,000, with a maturity value of $400,240,369) with Cantor
Fitzgerald & Co./Cantor Fitzgerald Securities, 3.25%, dated 9/30/05, to be
repurchased at $122,333,123 on 10/3/05, collateralized by U.S. Treasury Bonds,
7.50%--8.875%, 11/15/16--11/15/21, with a value of $408,618,137
(Cost $122,300,000) $ 122,300,000 122,300,000
- ----------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased with
Cash Collateral from Securities Loaned) (Cost $3,343,276,046) 3,440,237,586
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--1.0%
- ----------------------------------------------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTE--0.0%
Whitehawk CDO Funding Corp., 3.94%, 12/15/05 11 2,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.0%
Undivided interest of 0.46% in joint repurchase agreement (Principal
Amount/Value $3,300,000,000, with a maturity value of $3,301,064,250) with
Nomura Securities, 3.87%, dated 9/30/05, to be repurchased at $15,038,089 on
10/3/05, collateralized by U.S. Agency Mortgages, 5%--5.50%, 9/1/20--8/1/35,
with a value of $3,366,000,000 11 15,033,241 15,033,241
32 | OPPENHEIMER INTERNATIONAL BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 4.35% in joint repurchase agreement (Principal
Amount/Value $460,000,000 with a maturity value of $460,149,500) with BNP
Paribas Securities Corp., 3.90%, dated 9/30/05, to be repurchased at $20,006,500
on 10/3/05, collateralized by U.S. Agency Mortgages, 3.33%--7.50%,
9/1/08--9/1/44, with a value of $469,200,000 11 $ 20,000,000 $ 20,000,000
----------------
Total Investments Purchased with Cash Collateral from Securities
Loaned (Cost $37,033,241) 37,033,241
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $3,380,309,287) 97.9% 3,477,270,827
- ----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.1 74,967,503
-----------------------------------
NET ASSETS 100.0% $ 3,552,238,330
===================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP Argentine Peso
AUD Australian Dollar
BRR Brazilian Real
COP Colombian Peso
DOP Dominican Republic Peso
EGP Egyptian Pounds
EUR Euro
GBP British Pound Sterling
HUF Hungarian Forint
ILS Israeli Shekel
JPY Japanese Yen
MXN Mexican Nuevo Peso
MYR Malaysian Ringgit
NZD New Zealand Dollar
PEN Peruvian New Sol
PHP Philippines Peso
PLZ Polish Zloty
RON Romanian Leu
RUR Russian Ruble
TRY New Turkish Lira
UAH Ukraine Hryvnia
ZAR South African Rand
1. Partial or fully-loaned security. See Note 14 of Notes to Financial
Statements.
2. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $9,939,070. See Note 6 of Notes to Financial
Statements.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of September 30, 2005 was $123,715,377, which
represents 3.48% of the Fund's net assets, none of which is considered
restricted. In addition, the Fund held restricted currency with a value of
$1,284,296, which represents 0.04% of the Fund's net assets. See Note 13 of
Notes to Financial Statements.
5. Issue is in default. Non-income producing. See Note 1 of Notes to Financial
Statements.
6. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $69,968,248 or 1.97% of the Fund's net
assets as of September 30, 2005.
7. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
8. Zero coupon bond reflects effective yield on the date of purchase.
9. Non-income producing security.
10. When-issued security or forward commitment to be delivered and settled after
September 30, 2005. See Note 1 of Notes to Financial Statements.
11. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 14 of Notes to Financial
Statements.
33 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS (UNAUDITED) VALUE PERCENT
- ------------------------------------------------------------------------------
Japan $ 343,212,218 9.9%
Brazil 324,887,232 9.3
United States 273,336,682 7.9
Turkey 216,301,815 6.2
United Kingdom 189,897,943 5.5
Germany 183,393,568 5.3
Russia 180,672,154 5.2
Peru 149,660,866 4.3
Colombia 136,893,602 3.9
Mexico 134,346,944 3.9
France 121,162,643 3.5
Argentina 93,204,534 2.7
Ukraine 85,568,759 2.5
Egypt 80,230,751 2.3
Australia 70,140,658 2.0
Dominican Republic 69,492,968 2.0
Philippines 66,452,895 1.9
Italy 63,898,842 1.8
Romania 61,860,501 1.8
Portugal 61,640,955 1.8
South Africa 56,070,975 1.6
Israel 54,323,552 1.6
Finland 49,114,329 1.4
Malaysia 41,986,360 1.2
Venezuela 35,228,957 1.0
New Zealand 33,371,061 0.9
Poland 33,361,656 0.9
Austria 33,055,741 0.9
Ireland 31,833,140 0.9
Greece 30,112,863 0.9
Spain 28,966,764 0.8
The Netherlands 27,591,153 0.8
Indonesia 23,768,717 0.7
Panama 20,167,050 0.6
Supranational 17,780,057 0.5
Hungary 9,240,000 0.3
Belgium 8,695,437 0.2
Luxembourg 7,410,430 0.2
India 7,312,410 0.2
Chile 3,990,000 0.1
Swaziland 3,858,201 0.1
Bulgaria 3,728,638 0.1
Algeria 2,330,474 0.1
China 2,303,618 0.1
Guatemala 2,196,581 0.1
Nigeria 1,894,858 0.1
El Salvador 1,321,275 0.0
----------------------------
Total $ 3,477,270,827 100.0%
============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES September 30, 2005
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $119,714,105)
(cost $3,380,309,287)--see accompanying statement of investments $ 3,477,270,827
- -----------------------------------------------------------------------------------------
Cash 11,180,383
- -----------------------------------------------------------------------------------------
Cash--foreign currencies (cost $1,301,399) 1,284,296
- -----------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 48,877,902
- -----------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 34,046,740
- -----------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 39,251,330
Shares of beneficial interest sold 29,264,614
Investments sold on a when-issued basis or forward commitment 21,115,788
Futures margins 158,689
Other 24,566
---------------
Total assets 3,662,475,135
- -----------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $251,576) 333,827
- -----------------------------------------------------------------------------------------
Return of collateral for securities loaned 37,033,241
- -----------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 10,355,465
- -----------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 4,334,370
- -----------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $30,601,442 purchased on a when-issued
basis or forward commitment) 43,322,342
Shares of beneficial interest redeemed 9,349,327
Distribution and service plan fees 2,010,853
Dividends 1,998,576
Transfer and shareholder servicing agent fees 474,427
Closed foreign currency contracts 409,319
Shareholder communications 154,783
Trustees' compensation 30,810
Other 429,465
---------------
Total liabilities 110,236,805
- -----------------------------------------------------------------------------------------
NET ASSETS $ 3,552,238,330
===============
35 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 591,294
- -----------------------------------------------------------------------------------------
Additional paid-in capital 3,310,789,486
- -----------------------------------------------------------------------------------------
Accumulated net investment income 63,991,108
- -----------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency
transactions 14,591,260
- -----------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies 162,275,182
---------------
NET ASSETS $ 3,552,238,330
===============
- -----------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,683,900,318 and 446,413,842 shares of beneficial interest
outstanding) $ 6.01
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $ 6.31
- -----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $224,381,020 and 37,445,175 shares of beneficial interest
outstanding) $ 5.99
- -----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $560,137,785 and 93,472,720 shares of beneficial interest
outstanding) $ 5.99
- -----------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $46,533,080 and 7,758,366 shares of beneficial interest
outstanding) $ 6.00
- -----------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $37,286,127 and 6,204,011 shares of beneficial
interest outstanding) $ 6.01
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS For the Year Ended September 30, 2005
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $575,418) $ 124,369,306
- ------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $135,741) 1,513,177
- ------------------------------------------------------------------------------------------
Portfolio lending fees 58,192
- ------------------------------------------------------------------------------------------
Other income 13,172
----------------
Total investment income 125,953,847
- ------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------
Management fees 14,728,663
- ------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 4,743,046
Class B 2,010,229
Class C 3,999,630
Class N 152,875
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,940,595
Class B 488,057
Class C 590,173
Class N 102,667
Class Y 10,366
- ------------------------------------------------------------------------------------------
Shareholder communications:
Class A 279,418
Class B 65,458
Class C 59,116
Class N 5,577
Class Y 2,694
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 802,893
- ------------------------------------------------------------------------------------------
Trustees' compensation 42,887
- ------------------------------------------------------------------------------------------
Other 309,533
----------------
Total expenses 31,333,877
Less reduction to custodian expenses (101,076)
Less waivers and reimbursements of expenses (1,201)
----------------
Net expenses 31,231,600
- ------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 94,722,247
37 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments $ 84,303,182
Closing and expiration of option contracts written 1,131,468
Closing and expiration of swaption contracts (3,179,824)
Closing of futures contracts (6,784,387)
Foreign currency transactions 45,434,906
Swap contracts (19,435,525)
----------------
Net realized gain 101,469,820
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 92,879,718
Translation of assets and liabilities denominated in foreign 2,312,874
currencies
Futures contracts (2,059,151)
Swaption contracts 172,239
Swap contracts 32,164,086
----------------
Net change in unrealized appreciation 125,469,766
- ------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 321,661,833
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER INTERNATIONAL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2005 2004
- ------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------
Net investment income $ 94,722,247 $ 22,611,481
- ------------------------------------------------------------------------------------------------
Net realized gain 101,469,820 77,848,408
- ------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 125,469,766 (2,233,848)
-----------------------------------
Net increase in net assets resulting from operations 321,661,833 98,226,041
- ------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (119,863,500) (35,086,382)
Class B (11,853,673) (6,602,563)
Class C (21,678,102) (6,093,022)
Class N (1,754,272) (397,275)
Class Y (1,726,774) (2,820)
- ------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (15,265,136) --
Class B (1,931,153) --
Class C (3,155,872) --
Class N (225,580) --
Class Y (218,918) --
- ------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial
interest transactions:
Class A 1,399,327,451 713,652,173
Class B 44,672,998 25,122,862
Class C 305,107,070 136,111,001
Class N 26,099,719 13,528,377
Class Y 21,571,837 14,179,799
- ------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------
Total increase 1,940,767,928 952,638,191
- ------------------------------------------------------------------------------------------------
Beginning of period 1,611,470,402 658,832,211
-----------------------------------
End of period (including accumulated net investment income
of $63,991,108 and $44,819,377, respectively) $ 3,552,238,330 $ 1,611,470,402
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.63 $ 5.33 $ 4.38 $ 3.95 $ 4.19
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 1 .13 .20 .24 .30
Net realized and unrealized gain (loss) .62 .47 .95 .41 (.24)
-------------------------------------------------------------------------------
Total from investment operations .85 .60 1.15 .65 .06
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.41) (.30) (.20) (.19) --
Distributions from net realized gain (.06) -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.30)
-------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.47) (.30) (.20) (.22) (.30)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.01 $ 5.63 $ 5.33 $ 4.38 $ 3.95
===============================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.53% 11.56% 26.67% 16.78% 1.40%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,683,900 $ 1,177,628 $ 429,283 $ 181,456 $ 118,733
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,925,344 $ 811,608 $ 285,391 $ 134,912 $ 117,000
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.85% 2.19% 3.94% 5.16% 7.10%
Total expenses 1.03% 1.13% 1.22% 1.37% 1.38%
Expenses after payments and waivers
and reduction to custodian expenses 1.02% 1.13% 1.22% 1.37% 1.38%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS B YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .17 1 .08 .16 .21 .26
Net realized and unrealized gain (loss) .63 .47 .94 .40 (.22)
--------------------------------------------------------------------------------
Total from investment operations .80 .55 1.10 .61 .04
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.36) (.25) (.16) (.15) --
Distributions from net realized gain (.06) -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.27)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.42) (.25) (.16) (.18) (.27)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.58% 10.66% 25.48% 15.90% 0.85%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 224,381 $ 167,621 $ 134,661 $ 100,049 $ 84,427
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 201,541 $ 153,117 $ 119,232 $ 85,244 $ 93,455
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.95% 1.40% 3.20% 4.41% 6.40%
Total expenses 1.89% 4 1.98% 4,5 2.03% 4 2.14% 4 2.14% 4
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.31 $ 4.37 $ 3.94 $ 4.17
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .18 1 .09 .16 .21 .26
Net realized and unrealized gain (loss) .63 .46 .94 .40 (.22)
--------------------------------------------------------------------------------
Total from investment operations .81 .55 1.10 .61 .04
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.37) (.25) (.16) (.15) --
Distributions from net realized gain (.06) -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.27)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.43) (.25) (.16) (.18) (.27)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.99 $ 5.61 $ 5.31 $ 4.37 $ 3.94
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.70% 10.75% 25.48% 15.90% 0.85%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 560,138 $ 233,311 $ 90,248 $ 38,865 $ 25,221
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 401,401 $ 170,796 $ 63,198 $ 28,635 $ 27,125
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 3.10% 1.46% 3.15% 4.37% 6.39%
Total expenses 1.77% 4 1.88% 4,5 2.02% 4 2.14% 4 2.14% 4
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 133% 341% 372% 377%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42 | OPPENHEIMER INTERNATIONAL BOND FUND
CLASS N YEAR ENDED SEPTEMBER 30, 2005 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.61 $ 5.32 $ 4.37 $ 3.95 $ 4.23
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 2 .12 .18 .21 .16
Net realized and unrealized gain (loss) .64 .45 .95 .42 (.28)
--------------------------------------------------------------------------------
Total from investment operations .84 .57 1.13 .63 (.12)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.39) (.28) (.18) (.18) --
Distributions from realized gain (.06) -- -- -- --
Tax return of capital distribution -- -- -- (.03) (.16)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.45) (.28) (.18) (.21) (.16)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.00 $ 5.61 $ 5.32 $ 4.37 $ 3.95
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 15.27% 11.00% 26.31% 16.23% (2.88)%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 46,533 $ 18,641 $ 4,640 $ 1,280 $ 109
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 30,696 $ 10,769 $ 2,653 $ 297 $ 34
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.45% 1.83% 3.56% 4.87% 6.56%
Total expenses 1.47% 1.49% 1.57% 1.57% 1.39%
Expenses after payments and waivers and
reduction to custodian expenses 1.46% 1.49% 1.57% 1.57% 1.39%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 133% 341% 372% 377%
1. For the period from March 1, 2001 (inception of offering) to September 30,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43 | OPPENHEIMER INTERNATIONAL BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED SEPTEMBER 30, 2005 2004 1
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.63 $ 5.58
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 2 -- 3
Net realized and unrealized gain .63 .05
-----------------------------------
Total from investment operations .88 .05
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.44) --
Distributions from net realized gain (.06) --
Tax return of capital distribution -- --
-----------------------------------
Total dividends and/or distributions to shareholders (.50) --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.01 $ 5.63
===================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 15.96% 0.92%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 37,286 $ 14,268
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 25,559 $ 7,086
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 4.23% 4.84%
Total expenses 0.67% 1.17%
Expenses after payments and waivers and reduction to custodian expenses 0.66% 1.17%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 133%
1. For the period from September 27, 2004 (inception of offering) to September
30, 2004.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Bond Fund (the Fund) is a registered investment
company organized as a Massachusetts Business Trust. The Fund is registered as a
non-diversified, open-end management investment company under the Investment
Company Act of 1940, as amended. The Fund's primary investment objective is to
seek total return. As a secondary objective, the Fund seeks income when
consistent with total return. The Fund's investment advisor is OppenheimerFunds,
Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, in the country that is identified by the portfolio
pricing service, prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the official closing price on the
principal exchange. Corporate, government and municipal debt instruments having
a remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices.
45 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Futures contracts traded on a commodities or futures exchange will be valued at
the final settlement price or official closing price on the principal exchange
as reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are valued. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures. As of September 30, 2005, the market
value of these securities comprised 28.0% of the Fund's net assets and resulted
in unrealized cumulative gains of $56,637,416.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of September 30, 2005, the Fund had purchased
$30,601,442 of securities issued on a when-issued basis or forward commitment
and sold $21,115,788 of securities issued on a when-issued basis or forward
commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities.
46 | OPPENHEIMER INTERNATIONAL BOND FUND
Forward roll transactions require the sale of securities for delivery in the
current month, and a simultaneous agreement with the same counterparty to
repurchase similar (same type, coupon and maturity) but not identical securities
on a specified future date. The Fund records the incremental difference between
the forward purchase and sale of each forward roll as realized gain (loss) on
investments or as fee income in the case of such transactions that have an
associated fee in lieu of a difference in the forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of September 30, 2005, securities with an
aggregate market value of $420,684, representing 0.01% of the Fund's net assets,
were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily
47 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
basis. These balances are invested in one or more repurchase agreements.
Securities pledged as collateral for repurchase agreements are held by a
custodian bank until the agreements mature. Each agreement requires that the
market value of the collateral be sufficient to cover payments of interest and
principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES
-------------------------------------------------------------------
$ 117,018,359 $ 14,903,297 $ -- $ 110,769,517
1. During the fiscal year ended September 30, 2005, the Fund did not utilize any
capital loss carryforward.
2. During the fiscal year ended September 30, 2004, the Fund utilized $3,556,158
of capital loss carryforward to offset capital gains realized in that fiscal
year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for September 30, 2005. Net assets of
the Fund were unaffected by the reclassifications.
48 | OPPENHEIMER INTERNATIONAL BOND FUND
REDUCTION TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
INCREASE TO NET INVESTMENT REALIZED GAIN
PAID-IN CAPITAL LOSS ON INVESTMENTS 3
--------------------------------------------------
$ 1,622,965 $ 81,325,805 $ 82,948,770
3. $1,585,470, all of which was long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the years ended September 30,
2005 and September 30, 2004 was as follows:
YEAR ENDED YEAR ENDED
SEPT. 30, 2005 SEPT. 30, 2004
--------------------------------------------------------
Distributions paid from:
Ordinary income $ 177,672,980 $ 48,182,062
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of September 30, 2005 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $3,373,356,518
Federal tax cost of other investments (59,627,677)
---------------
Total federal tax cost $3,313,728,841
===============
Gross unrealized appreciation $ 163,461,133
Gross unrealized depreciation (52,691,616)
---------------
Net unrealized appreciation $ 110,769,517
===============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually.
49 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
YEAR ENDED SEPTEMBER 30, 2005 YEAR ENDED SEPTEMBER 30, 2004 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS A
Sold 290,795,021 $ 1,714,084,347 172,839,291 $ 957,396,128
Dividends and/or
distributions reinvested 17,749,603 105,430,621 5,072,488 27,463,043
Redeemed (71,447,967) (420,187,517) (49,156,351) (271,206,998)
---------------------------------------------------------------
Net increase 237,096,657 $ 1,399,327,451 128,755,428 $ 713,652,173
===============================================================
- -----------------------------------------------------------------------------------------
CLASS B
Sold 15,275,934 $ 89,714,849 14,676,405 $ 80,808,899
Dividends and/or
distributions reinvested 1,842,516 10,920,892 944,780 5,057,584
Redeemed (9,559,054) (55,962,743) (11,077,428) (60,743,621)
---------------------------------------------------------------
Net increase 7,559,396 $ 44,672,998 4,543,757 $ 25,122,862
===============================================================
50 | OPPENHEIMER INTERNATIONAL BOND FUND
YEAR ENDED SEPTEMBER 30, 2005 YEAR ENDED SEPTEMBER 30, 2004 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS C
Sold 59,355,223 $ 348,932,998 30,576,433 $ 168,801,488
Dividends and/or
distributions reinvested 2,925,804 17,330,636 830,062 4,457,967
Redeemed (10,417,683) (61,156,564) (6,789,922) (37,148,454)
---------------------------------------------------------------
Net increase 51,863,344 $ 305,107,070 24,616,573 $ 136,111,001
===============================================================
- -----------------------------------------------------------------------------------------
CLASS N
Sold 5,802,889 $ 34,052,865 2,975,732 $ 16,429,938
Dividends and/or
distributions reinvested 310,916 1,843,537 66,020 357,127
Redeemed (1,676,293) (9,796,683) (593,448) (3,258,688)
---------------------------------------------------------------
Net increase 4,437,512 $ 26,099,719 2,448,304 $ 13,528,377
===============================================================
- -----------------------------------------------------------------------------------------
CLASS Y
Sold 4,755,499 $ 27,879,481 2,536,075 $ 14,176,984
Dividends and/or
distributions reinvested 328,793 1,945,692 500 2,815
Redeemed (1,416,856) (8,253,336) -- --
---------------------------------------------------------------
Net increase 3,667,436 $ 21,571,837 2,536,575 $ 14,179,799
===============================================================
1. For the year ended September 30, 2004, for Class A, B, C and N shares and for
the period from September 27, 2004 (inception of offering) to September 30, 2004
for Class Y shares.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended September 30, 2005, were as
follows:
PURCHASES SALES
- ----------------------------------------------------------------
Investment securities $ 3,106,697,823 $ 1,739,262,495
U.S. government and government
agency obligations 259,866,893 228,548,343
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, 0.60% of the next $200 million and 0.50% of average
annual net assets in excess of $1 billion.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
51 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended September 30, 2005, the Fund paid
$3,901,101 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 0.25% per year under each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor's aggregate
uncompensated expenses under the plan at September 30, 2005 for Class B, Class C
and Class N shares were $8,934,389, $7,425,451 and $329,175, respectively. Fees
incurred by the Fund under the plans are detailed in the Statement of
Operations.
52 | OPPENHEIMER INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------
September 30, 2005 $ 1,626,798 $ 54,701 $ 368,223 $ 143,287 $ 73,709
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended September 30, 2005,
OFS waived $1,201 for Class N shares. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
53 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
As of September 30, 2005, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT VALUATION
EXPIRATION AMOUNT AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) SEPT.30, 2005 APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso [ARP] 10/6/05-2/2/06 102,704ARP $ 35,274,494 $ 174,389 $ 343,715
Brazilian Real [BRR] 10/26/05-9/25/06 424,820BRR 219,299,375 35,528,555 --
Canadian Dollar [CAD] 10/21/05 38,280CAD 32,948,282 130,446 --
Chilean Peso [CLP] 10/6/05-12/22/05 12,345,000CLP 23,289,559 305,907 --
Indian Rupee [INR] 10/26/05-12/20/05 1,960,440INR 44,557,240 260,759 --
Indonesian Rupiah [IDR] 1/4/06 77,030,000IDR 7,478,641 191,034 --
Mexican Nuevo
Peso [MXN] 10/25/05-10/26/05 661,630MXN 61,247,499 89,681 112,992
Norwegian Krone [NOK] 10/24/05 192,390NOK 29,399,253 -- 731,409
Philippines Peso [PHP] 10/26/05 1,873,300PHP 33,318,135 191,699 --
Russian Ruble [RUR] 10/27/05 302,480RUR 10,628,649 266,196 --
Slovakia Koruna [SKK] 11/14/05-12/21/05 1,524,670SKK 47,237,935 -- 1,136,863
Swiss Franc [CHF] 10/21/05 166,350CHF 128,741,309 -- 1,864,494
Turkish Lira [TRY] 10/26/05-11/7/05 115,426TRY 102,285,820 2,783,629 260,124
--------------------------
39,922,295 4,449,597
--------------------------
CONTRACTS TO SELL
Argentine Peso [ARP] 10/6/05 61,421ARP 21,114,699 248,970 --
Australian Dollar [AUD] 12/5/05 60,640AUD 46,109,730 43,381 911,147
British Pound
Sterling [GBP] 10/17/05-3/8/06 35,860GBP 63,214,315 1,535,464 --
Chinese Renminbi [CNY] 10/26/05 269,500CNY 33,331,275 53,673 --
Czech Koruna [CZK] 10/26/05 807,100CZK 32,792,647 683,090 --
Euro [EUR] 10/17/05-3/8/06 228,315EUR 274,947,927 3,269,932 --
Japanese Yen [JPY] 10/26/05-3/8/06 19,428,000JPY 172,912,802 2,232,261 --
South African
Rand [ZAR] 10/11/05-11/15/05 222,795ZAR 34,942,780 -- 2,772,308
Swedish Krone [SEK] 10/26/05 255,200SEK 32,966,434 367,117 --
Swiss Franc [CHF] 10/26/05 42,260CHF 32,720,368 521,719 --
Turkish Lira [TRY] 11/1/05-2/8/06 87,322TRY 63,270,214 -- 2,222,413
--------------------------
8,955,607 5,905,868
--------------------------
Total unrealized appreciation and depreciation $ 48,877,902 $ 10,355,465
==========================
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
54 | OPPENHEIMER INTERNATIONAL BOND FUND
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of September 30, 2005, the Fund had outstanding futures contracts as follows:
VALUATION AS OF UNREALIZED
EXPIRATION NUMBER OF SEPTEMBER 30, APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS 2005 (DEPRECIATION)
- --------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Amsterdam Exchange Index 10/21/05 58 $ 5,626,080 $ 94,959
CAC-40 10 Index 10/21/05 315 17,418,605 315,607
Standard & Poor's ASX 200 Index 12/15/05 67 5,923,111 145,427
Standard & Poor's/MIB Index, 10 yr. 12/16/05 27 5,647,269 71,339
---------------
627,332
---------------
CONTRACTS TO SELL
CAC-40 10 Index 10/21/05 256 14,156,072 (343,440)
DAX Index 12/16/05 181 27,553,527 (830,300)
FTSE 100 Index 12/16/05 190 18,379,692 (401,726)
Nikkei 225 Index 12/8/05 161 19,231,501 (1,333,163)
Standard & Poor's 500 Index 12/15/05 18 5,554,350 17,708
---------------
(2,890,921)
---------------
$ (2,263,589)
===============
55 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the year ended September 30, 2005 was as follows:
CALL OPTIONS PUT OPTIONS
----------------------------- -------------------------
PRINCIPAL/ PRINCIPAL/
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------------
Options outstanding as of
September 30, 2004 14,995,007,110 $ 1,096,886 -- $ --
Options written 14,160 25,557 28,100,000 64,863
Options closed or expired (14,995,021,270) (1,122,443) (28,100,000) (64,863)
--------------------------------------------------------
Options outstanding as of
September 30, 2005 -- $ -- -- $ --
========================================================
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or
56 | OPPENHEIMER INTERNATIONAL BOND FUND
decrease to unrealized gain (loss), in the amount due to or owed by the Fund at
termination or settlement. Total return swaps are subject to risks (if the
counterparty fails to meet its obligations).
As of September 30, 2005, the Fund had entered into the following total return
swap agreements:
RECEIVED
PAID BY THE RATES BY THE RATES
FUND AT AS OF FUND AT AS OF
SWAP NOTIONAL SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, TERMINATION UNREALIZED
COUNTERPARTY AMOUNT 2005 2005 2005 2005 DATES APPRECIATION
- --------------------------------------------------------------------------------------------------------
Deutsche Six-Month
Bank AG $16,760,000 BBA LIBOR 4.23063% UDIS 3.586687% 5/13/15 $ 1,805,649
- --------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month
11,580,000 BBA LIBOR 4.23063 UDIS 3.586687 1/14/15 1,155,553
Six-Month
11,580,000 BBA LIBOR 4.23063 UDIS 3.586687 1/20/15 1,177,464
------------
$ 4,138,666
============
Index abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
UDIS Mexican Indice Nacional de Precios al Consumidor
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS
The Fund may enter into an interest rate swap transaction to maintain a total
return or yield spread on a particular investment, or portion of its portfolio,
or for other non-speculative purposes. Interest rate swaps involve the exchange
of commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The coupon payments are based on an agreed
upon principal amount and a specified index. Because the principal amount is not
exchanged, it represents neither an asset nor a liability to either
counterparty, and is referred to as notional. The Fund records an increase or
decrease to unrealized gain (loss), in the amount due to or owed by the Fund at
termination or settlement.
Interest rate swaps are subject to credit risk (if the counterparty fails
to meet its obligations) and interest rate risk. The Fund could be obligated to
pay more under its swap agreements than it receives under them, as a result of
interest rate changes.
57 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
As of September 30, 2005, the Fund had entered into the following interest rate
swap agreements:
RATE RATE
PAID BY RECEIVED BY
THE FUND AT THE FUND AT UNREALIZED
SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION
COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------
Citigroup
Global Markets
Holdings, Inc.:
90-Day
333,000,000TWD 2.0200% 1.2820% CPTW 3/4/09 $ (68,339)
Six-Month
16,830,000PLZ 4.3500 5.5200 WIBO 3/24/10 338,051
Six-Month
26,928,000PLZ 4.3500 5.5500 WIBO 3/24/10 550,869
Three-Month
18,776,000,000KRW 3.9300 4.3400 KWCDC 2/17/10 (121,890)
5,900,000,000KRW 3.4900 4.5750 KWCDC 8/26/10 604
90-Day
333,000,000TWD 2.0200 1.2860 CPTW 3/23/09 (52,864)
- -----------------------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston, Six-Month
Inc. (Nassau Branch) 46,785,000PLZ 4.9100 4.4800 WIBO 7/1/10 (100,547)
- -----------------------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston 28-Day
International 112,580,000MXN 10.0300 10.0000 MXN TIIE 7/9/15 556,221
- -----------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG:
Three-Month
32,500,000 4.8160 3.8338 BBA LIBOR 3/8/15 (262,200)
Three-Month
23,710,000EUR 2.1340 3.8300 EURIBOR 3/8/15 2,006,899
Six-Month
11,050,000 3.6600 5.2500 LIBOR 6/23/15 787,415
Six-Month
500,000,000INR 4.8700 5.1083 MIFOR 3/22/09 412,763
454,000,000INR 4.8300 5.0079 IRS 1/14/09 342,797
90-Day
187,000,000TWD 2.5850 1.3600 CPTW 8/19/09 (148,281)
58 | OPPENHEIMER INTERNATIONAL BOND FUND
RATE RATE
PAID BY RECEIVED BY
THE FUND AT THE FUND AT UNREALIZED
SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION
COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------
Goldman
Sachs Capital
Markets LP:
94,500,000MXN 9.7350% 10.2900% MXN TIIE 6/14/15 $ 612,533
21,965,083BRR 18.2500 17.7200 BZDI 1/2/07 (91,495)
120,050,000MXN 9.6100 10.2200 MXN TIIE 1/30/15 720,776
187,935,994BRR 19.7300 17.1800 BZDI 1/2/08 130,741
38,987,000BRR 19.2000 18.1600 BZDI 1/2/08 389,742
55,700,000MXN 9.4900 10.0000 MXN TIIE 6/24/15 260,650
93,375,000MXN 9.4800 10.4300 MXN TIIE 5/29/15 682,310
93,375,000MXN 9.4800 10.3000 MXN TIIE 6/1/15 607,671
- -----------------------------------------------------------------------------------------------------------------------
Goldman
Sachs Group,
Inc. (The):
48,030,000MXN 9.6250 9.4100 MXN TIIE 8/31/20 (4,455)
144,630,000MXN 9.6750 9.7400 MXN TIIE 1/5/10 409,671
61,200,000MXN 9.4950 10.8500 MXN TIIE 3/5/15 599,880
46,968,000BRR 18.6300 18.0000 BZDI 1/2/07 (77,250)
17,037,427BRR 18.2500 17.1700 BZDI 1/2/08 (41,721)
20,823,527BRR 18.2500 17.1700 BZDI 1/2/08 (50,992)
109,710,000MXN 9.7200 10.7000 MXN TIIE 5/8/15 986,593
100,000,000MXN 9.7200 10.7500 MXN TIIE 5/8/15 929,999
144,000,000MXN 9.6250 9.5100 MXN TIIE 8/26/25 3,397
96,930,000MXN 9.6750 9.5000 MXN TIIE 8/28/25 (6,060)
289,270,000MXN 9.6250 9.8400 MXN TIIE 12/31/09 917,796
- -----------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank:
Six-Month
1,080,000,000HUF 6.6300 7.0000 LIBOR flat 7/14/08 104,501
Six-Month
94,000,000EUR 2.1940 4.1060 LIBOR 10/8/14 11,472,730
28-Day
161,780,000MXN 9.6500 10.8800 MXN TIIE 11/16/14 1,618,262
Three-Month
66,000,000ZAR 6.9430 9.7800 LIBOR flat 2/20/11 823,353
Three-Month
66,000,000ZAR 6.9430 9.6800 LIBOR flat 2/18/11 779,396
114,500,000MXN 9.5100 9.7600 MXN TIIE 8/17/15 394,554
59 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
RATE RATE
PAID BY RECEIVED BY
THE FUND AT THE FUND AT UNREALIZED
SWAP NOTIONAL SEPT. 30, SEPT. 30, FLOATING TERMINATION APPRECIATION
COUNTERPARTY AMOUNT 2005 2005 RATE INDEX DATES (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.:
Six-Month
55,540,000PLZ 4.7400% 4.5300% WIBO 7/5/10 $ (84,275)
28-Day
111,440,000MXN 9.6250 9.9900 MXN TIIE 7/19/15 524,055
Six-Month
28,640,000GBP 4.5152 4.5200 BBA LIBOR 2/17/08 66,395
Six-Month
6,840,000GBP 4.5980 4.5152 BBA LIBOR 2/17/16 (19,917)
- -----------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.:
24,054,685BRR 18.6800 16.8800 BZDI 1/2/08 (137,270)
Three-Month
150,000,000ZAR 6.9500 7.8100 JIBA 2/4/10 (35,336)
Three-Month
50,970,000ZAR 7.0000 8.1400 JIBA 5/18/10 79,356
41,775,000BRR 19.7200 17.5900 BZDI 1/2/07 (89,773)
---------------
$ 26,717,315
===============
Notional amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
BRR Brazilian Real
EUR Euro
GBP British Pound Sterling
HUF Hungarian Forint
KRW South Korean Won
INR Indian Rupee
MXN Mexican Nuevo Peso
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
60 | OPPENHEIMER INTERNATIONAL BOND FUND
Index abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
BZDI Brazil Cetip Interbank Deposit Rate
CPTW Bloomberg Taiwan Secondary Commercial Papers
EURIBOR Euro Interbank Offered Rate
IRS India Swap Composites
JIBA South Africa Johannesburg Interbank Agreed Rate
KWCDC South Korean Won
LIBOR London-Interbank Offered Rate
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
MIFOR Mumbai Interbank Forward Offer Rate
WIBO Poland Warsaw Interbank Offer Bid Rate
- --------------------------------------------------------------------------------
10. CREDIT SWAP CONTRACTS
The Fund may enter into a credit default swap contract to seek to maintain a
total return on a particular investment or portion of its portfolio, or for
other non-speculative purposes. Credit default swap contracts are subject to
credit risks (for example if the counterparty fails to meet its obligations).
As a purchaser of a credit default swap contract, the Fund pays a periodic
interest fee on the notional amount to the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized loss upon payment. Upon occurrence of a specific credit
event with respect to the underlying referenced debt obligation, the Fund is
obligated to deliver that security to the counter-party in exchange for receipt
of the notional amount from the counterparty. The difference between the value
of the security delivered and the notional amount received is recorded as
realized gain. Information regarding such credit swaps as of September 30, 2005
is as follows:
NOTIONAL
AMOUNT ANNUAL
RECEIVED BY THE INTEREST
FUND UPON RATE PAID UNREALIZED
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND DEPRECIATION
- ----------------------------------------------------------------------------------------------------------
Citigroup Global
Markets Limited Russian Federation
London, UK 5% Step-up Bond $ 33,430,000 1.09% $ 926,255
- ----------------------------------------------------------------------------------------------------------
JPMorgan Chase
New York, NY:
Kingdom of Jordan
6% Step-up Bond 390,000 2.00 3,819
Russian Federation
2.50% Step-up Bond 550,000 2.40 66,400
- ----------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
Brazil 12.25% Global Bond 5,120,000 6.15 766,749
Republic of Turkey 11.875% Bond 1,660,000 3.15 105,298
61 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. CREDIT SWAP CONTRACTS Continued
NOTIONAL
AMOUNT ANNUAL
RECEIVED BY THE INTEREST
FUND UPON RATE PAID UNREALIZED
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND DEPRECIATION
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
Republic of Columbia
10.375% Bond $ 1,980,000 3.70% $ 125,563
Turkey Government
11.875% International Bond 7,010,000 3.22 234,167
Ukrainian Government Bond 5,630,000 1.65 8,725
- -----------------------------------------------------------------------------------------------------------
UBS AG, Federal Republic of Brazil
London Branch 12.25% Bond 4,780,000 4.50 514,601
-------------
$ 2,751,577
=============
As a seller of a credit default swap contract, the Fund receives a periodic
interest fee on the notional amount from the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized gain upon receipt. Upon occurrence of a specific credit
event with respect to the underlying referenced debt obligation, the Fund
receives that security from the counterparty in exchange for payment of the
notional amount to the counterparty. The difference between the value of the
security received and the notional amount paid is recorded as realized loss.
Information regarding such credit swaps as of September 30, 2005 is as follows:
NOTIONAL ANNUAL
AMOUNT INTEREST
PAID BY THE RATE UNREALIZED
FUND UPON RECEIVED BY APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
Citigroup Global
Markets Limited Russian Federation
London, UK 5% Step-up Bond $ 58,500,000 0.70% $ 483,267
- ------------------------------------------------------------------------------------------------------------
Lehman Brothers Republic of Turkey
Special Financing, Inc. 11.875% Bond 3,645,000 1.87 80,723
- ------------------------------------------------------------------------------------------------------------
UBS AG, Federal Republic of Brazil
London Branch 12.25% Bond 15,600,000 3.80 1,234,104
--------------
$ 1,798,094
==============
- --------------------------------------------------------------------------------
11. FOREIGN EXCHANGE VOLATILITY SWAP CONTRACTS
The Fund may enter into a foreign exchange volatility swap transaction to hedge
the direction of volatility in a particular currency, or for other
non-speculative purposes. In foreign exchange volatility swaps, counterparties
agree to buy or sell volatility at a specific volatility level over a fixed
period. Payment is normally made on the basis of a currency amount per
percentage point above or below the volatility strike level at
62 | OPPENHEIMER INTERNATIONAL BOND FUND
maturity. Because the principal amount is not exchanged, it represents neither
an asset nor a liability to either counterparty, and is referred to as a
notional principal amount. The Fund records a daily increase or decrease to
unrealized gain (loss) based on changes in the amount due to or owed by the Fund
at the expiration date of the swap. Foreign exchange volatility swaps are
subject to credit risks (if the counterparty fails to meet its obligations).
As of September 30, 2005, the Fund had entered into the following foreign
exchange volatility swap agreements:
NOTIONAL
PRINCIPAL EXPIRATION UNREALIZED
SWAP COUNTERPARTY CURRENCY AMOUNT DATE PRICE DEPRECIATION
- -----------------------------------------------------------------------------------------
Goldman Sachs Mexican Nuevo
Group, Inc. (The) Peso [MXN] $ 30,880,000 10/12/05 11.449MXN $190,128
- --------------------------------------------------------------------------------
12. SWAPTION TRANSACTIONS
The Fund may enter into a swaption transaction, whereby a contract that grants
the holder, in return for payment of the purchase price (the "premium") of the
option, the right, but not the obligation, to enter into an interest rate swap
at a preset rate within a specified period of time, with the writer of the
contract. The writer receives premiums and bears the risk of unfavorable changes
in the preset rate on the underlying interest rate swap. Swaption contracts
written by the Fund do not give rise to counterparty credit risk as they
obligate the Fund, not its counterparty, to perform. Swaptions written are
reported as a liability in the Statement of Assets and Liabilities.
Written swaption activity for the year ended September 30, 2005 was as follows:
CALL SWAPTIONS PUT SWAPTIONS
--------------------------- ---------------------------
NOTIONAL AMOUNT OF NOTIONAL AMOUNT OF
AMOUNT PREMIUMS AMOUNT PREMIUMS
- -----------------------------------------------------------------------------------------
Swaptions outstanding as of
September 30, 2004 $ 50,550,000 $ 500,195 $ 62,395,000 $ 291,178
Swaptions written 324,545,000 2,047,112 62,395,000 215,509
Swaptions closed or expired (313,735,000) (2,295,731) (124,790,000) (506,687)
----------------------------------------------------------
Swaptions outstanding as of
September 30, 2005 $ 61,360,000 $ 251,576 $ -- $ --
==========================================================
As of September 30, 2005, the Fund had entered into the following swaption
contracts:
NOTIONAL EXPIRATION STRIKE PREMIUM VALUE
SWAPTIONS AMOUNT DATE PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------
U.S. Dollar $ 61,360,000 2/9/06 $ 4.74 $ 251,576 $ 333,827
63 | OPPENHEIMER INTERNATIONAL BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of September 30, 2005, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund will not invest more than 10% of
its net assets (determined at the time of purchase and reviewed periodically) in
illiquid or restricted securities. Certain restricted securities, eligible for
resale to qualified institutional investors, are not subject to that limitation.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning currency is as
follows:
VALUATION AS OF
ACQUISITION SEPTEMBER 30, UNREALIZED
CURRENCY DATES COST 2005 DEPRECIATION
- --------------------------------------------------------------------------------
Argentine Peso [ARP] 7/14/05-9/15/05 $ 1,301,399 $ 1,284,296 $ 17,103
- --------------------------------------------------------------------------------
14. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower. As of September 30,
2005, the Fund had on loan securities valued at $119,714,105. Collateral of
$121,771,638 was received for the loans, of which $37,033,241 was received in
cash and subsequently invested in approved instruments.
- --------------------------------------------------------------------------------
15. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 2005,
consolidates into a single action and amends six individual previously-
64 | OPPENHEIMER INTERNATIONAL BOND FUND
filed putative derivative and class action complaints. Like those prior
complaints, the complaint alleges that the Manager charged excessive fees for
distribution and other costs, improperly used assets of the funds in the form of
directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of
the funds, and failed to properly disclose the use of assets of the funds to
make those payments in violation of the Investment Company Act of 1940 and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in those
actions, the Directors/Trustees and the Officers breached their fiduciary duties
to shareholders of the funds under the Investment Company Act of 1940 and at
common law. The complaint seeks unspecified compensatory and punitive damages,
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The defendants believe that it is premature to
render any opinion as to the likelihood of an outcome unfavorable to them and
that no estimate can yet be made with any degree of certainty as to the amount
or range of any potential loss.
65 | OPPENHEIMER INTERNATIONAL BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER INTERNATIONAL BOND
FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer International Bond Fund, including the statement of investments, as
of September 30, 2005, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the periods presented. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit includes consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2005, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer International Bond Fund as of September 30, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
November 18, 2005
66 | OPPENHEIMER INTERNATIONAL BOND FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2006, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2005. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends and distributions of $0.1912, $0.1866, $0.1870, $0.1889 and
$0.1938 per share were paid to Class A, Class B, Class C, Class N and Class Y
shareholders, respectively, on December 30, 2004, of which $0.0597 was
designated as a "capital gain distribution" for federal income tax purposes.
Whether received in stock or in cash, the capital gain distribution should be
treated by shareholders as a gain from the sale of the capital assets held for
more than one year (long-term capital gains).
None of the dividends paid by the Fund during the fiscal year ended
September 30, 2005 are eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended September 30, 2005 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $1,281,949 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2006, shareholders of record
will receive information regarding the percentage of distributions that are
eligible for lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
67 | OPPENHEIMER INTERNATIONAL BOND FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
68 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER
THE FUND, LENGTH OF SERVICE, TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX
AGE CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY,
TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM,
UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek
Chairman (since 2003) Mortgage Company (since 1991), Centennial State Mortgage Company (since
and Trustee (since 1999) 1994), and The El Paso Mortgage Company (since 1993); Chairman of the
Age: 68 following private companies: Ambassador Media Corporation (since 1984) and
Broadway Ventures (since 1984); Director of the following: Helmerich &
Payne, Inc. (oil and gas drilling/production company) (since 1992), Campus
Crusade for Christ (since 1991) and The Lynde and Harry Bradley
Foundation, Inc. (non-profit organization) (since 2002); former Chairman
of the following: Transland Financial Services, Inc. (private mortgage
banking company) (1997-2003), Great Frontier Insurance (insurance agency)
(1995-2000), Frontier Real Estate, Inc. (residential real estate
brokerage) (1994-2000) and Frontier Title (title insurance agency)
(1995-2000); former Director of the following: UNUMProvident (insurance
company) (1991-2004), Storage Technology Corporation (computer equipment
company) (1991-2003) and International Family Entertainment (television
channel) (1992-1997); U.S. Senator (January 1979-January 1991). Oversees
38 portfolios in the OppenheimerFunds complex.
ROBERT G. AVIS, Director and President of A.G. Edwards Capital, Inc. (General Partner of
Trustee (since 1995) private equity funds) (until February 2001); Chairman, President and Chief
Age: 74 Executive Officer of A.G. Edwards Capital, Inc. (until March 2000);
Director of A.G. Edwards & Sons, Inc. (brokerage company) (until 2000) and
A.G. Edwards Trust Company (investment adviser) (until 2000); Vice
Chairman and Director of A.G. Edwards, Inc. (until March 1999); Vice
Chairman of A.G. Edwards & Sons, Inc. (until March 1999); Chairman of A.G.
Edwards Trust Company (until March 1999) and A.G.E. Asset Management
(investment adviser) (until March 1999). Oversees 38 portfolios in the
OppenheimerFunds complex.
GEORGE C. BOWEN, Assistant Secretary and Director of Centennial Asset Management
Trustee (since 1998) Corporation (December 1991-April 1999); President, Treasurer and Director
Age: 69 of Centennial Capital Corporation (June 1989-April 1999); Chief Executive
Officer and Director of MultiSource Services, Inc. (March 1996-April
1999); Mr. Bowen held several positions with the Manager and with
subsidiary or affiliated companies of the Manager (September 1987-April
1999). Oversees 38 portfolios in the OppenheimerFunds complex.
EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical
Trustee (since 1999) site) (since June 2000); Director of Genetic ID, Inc. (biotech company)
Age: 67 (March 2001-May 2002); Partner at PricewaterhouseCoopers LLP (accounting
firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global
Investment Management Industry Services Group (July 1994-June 1998).
Oversees 38 portfolios in the OppenheimerFunds complex.
JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director
Trustee (since 1995) of Northwestern Energy Corp. (public utility corporation) (since November
Age: 63 2004); Director of P.R. Pharmaceuticals (October 1999-October 2003);
Director of Rocky Mountain Elk Foundation (non-profit organization)
(February 1998-February 2003); Chairman and Director (until October 1996)
and President and Chief Executive Officer (until October 1995) of the
Manager; President, Chief Executive Officer and Director of the following:
Oppenheimer Acquisition Corp.
69 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JON S. FOSSEL, ("OAC") (parent holding company of the Manager), Shareholder Services,
Continued Inc. and Shareholder Financial Services, Inc. (until October 1995).
Oversees 38 portfolios in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado Uplift (charitable organization) (since September
Trustee (since 1996) 1984). Mr. Freedman held several positions with the Manager and with
Age: 65 subsidiary or affiliated companies of the Manager (until October 1994).
Oversees 38 portfolios in the OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational
Trustee (since 2002) organization) (since February 2000); Director of The California Endowment
Age: 59 (philanthropic organization) (since April 2002); Director of Community
Hospital of Monterey Peninsula (since February 2002); Director American
Funds' Emerging Markets Growth Fund, Inc. (mutual fund) (since October
1991); President of ARCO Investment Management Company (February
1991-April 2000); Member of the investment committees of The Rockefeller
Foundation and The University of Michigan; Advisor at Credit Suisse First
Boston's Sprout venture capital unit (venture capital fund) (1994-January
2005); Trustee of MassMutual Institutional Funds (investment company)
(1996-June 2004); Trustee of MML Series Investment Fund (investment
company) (April 1989-June 2004); Member of the investment committee of
Hartford Hospital (2000-2003); and Advisor to Unilever (Holland) pension
fund (2000-2003). Oversees 38 portfolios in the OppenheimerFunds complex.
ROBERT J. MALONE, Director of Jones International University (educational organization)
Trustee (since 2002) (since August 2005); Chairman, Chief Executive Officer and Director of
Age: 61 Steele Street State Bank (commercial banking) (since August 2003);
Director of Colorado UpLIFT (charitable organization) (since 1986);
Trustee of the Gallagher Family Foundation (non-profit organization)
(since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S.
Bancorp and formerly Colorado National Bank) (July 1996-April 1999);
Director of Commercial Assets, Inc. (real estate investment trust)
(1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004); and
Director of U.S. Exploration, Inc. (oil and gas exploration) (1997-
February 2004). Oversees 38 portfolios in the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional
Trustee (since 2000) Funds) (investment company) (since 1996) and MML Series Investment Fund
Age: 63 (investment company) (since 1996), the Springfield Library and Museum
Association (museums) (since 1995) and the Community Music School of
Springfield (music school) (since 1996); Chairman and Trustee (since 2003)
and Chairman of the Investment Committee (since 1994) of the Worcester
Polytech Institute (private university); President and Treasurer of the
SIS Funds (private charitable fund) (since January 1999); Chairman of SIS
& Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January
1999-July 1999); Member of the Investment Committee of the Community
Foundation of Western Massachusetts (1998-2003); and Executive Vice
President of Peoples Heritage Financial Group, Inc. (commercial bank)
(January 1999-July 1999). Oversees 40 portfolios in the OppenheimerFunds
complex.
70 | OPPENHEIMER INTERNATIONAL BOND FUND
- ------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY
AND OFFICER STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A
TRUSTEE FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR
UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN
INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND
ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and
President and President (since September 2000) of the Manager; President and Director or
Principle Executive Officer Trustee of other Oppenheimer funds; President and Director of OAC and of
(since 2001) Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the
and Trustee Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc.
(since 2001) (subsidiary of the Manager) (since November 2001); Chairman and Director
Age: 56 of Shareholder Services, Inc. and of Shareholder Financial Services,
Inc. (transfer agent subsidiaries of the Manager) (since July 2001);
President and Director of OppenheimerFunds Legacy Program (charitable
trust program established by the Manager) (since July 2001); Director of
the following investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital
Management, Inc. (since November 2001), HarbourView Asset Management
Corporation and OFI Private Investments, Inc. (since July 2001); President
(since November 2001) and Director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; Executive Vice President of Massachusetts Mutual
Life Insurance Company (OAC's parent company) (since February 1997);
Director of DLB Acquisition Corporation (holding company parent of Babson
Capital Management LLC) (since June 1995); Member of the Investment
Company Institute's Board of Governors (since October 3, 2003); Chief
Operating Officer of the Manager (September 2000-June 2001); President and
Trustee of MML Series Investment Fund and MassMutual Select Funds
(open-end investment companies) (November 1999-November 2001); Director of
C.M. Life Insurance Company (September 1999-August 2000); President, Chief
Executive Officer and Director of MML Bay State Life Insurance Company
(September 1999-August 2000); Director of Emerald Isle Bancorp and
Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp)
(June 1989-June 1998). Oversees 77 portfolios as a Trustee or Director and
10 additional portfolios as an officer in the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------
OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR
OF THE FUND MESSRS. STEINMETZ AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY
STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND
WIXTED 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES
FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR
REMOVAL.
ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView
Vice President Asset Management Corporation (since March 2000); an officer of 4
(since 2004) portfolios in the OppenheimerFunds complex.
Age: 47
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since
Vice President and March 2004); Vice President of OppenheimerFunds Distributor, Inc.,
Chief Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc.
(since 2004) (since June 1983); Vice President and Director of Internal Audit of the
Age: 55 Manager (1997-February 2004). An officer of 87 portfolios in the
OppenheimerFunds complex.
71 | OPPENHEIMER INTERNATIONAL BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999);
Treasurer and Treasurer of the following: HarbourView Asset Management Corporation,
Principal Financial and Shareholder Financial Services, Inc., Shareholder Services, Inc.,
Accounting Officer Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership
(since 1999) Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since
Age: 46 March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc
(since May 2000), OFI Institutional Asset Management, Inc. (since November
2000), and OppenheimerFunds Legacy Program (since June 2003); Treasurer
and Chief Financial Officer of OFI Trust Company (trust company subsidiary
of the Manager) (since May 2000); Assistant Treasurer of the following:
OAC (since March 1999), Centennial Asset Management Corporation (March
1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June
2003); Principal and Chief Operating Officer of Bankers Trust
Company-Mutual Fund Services Division (March 1995-March 1999). An officer
of 87 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Vice President and Secretary March 2002) of the Manager; General Counsel and Director of the
(since 2001) Distributor (since December 2001); General Counsel of Centennial Asset
Age: 57 Management Corporation (since December 2001); Senior Vice President and
General Counsel of HarbourView Asset Management Corporation (since
December 2001); Secretary and General Counsel of OAC (since November
2001); Assistant Secretary (since September 1997) and Director (since
November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds
plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc.
(since December 2002); Director of Oppenheimer Real Asset Management, Inc.
(since November 2001); Senior Vice President, General Counsel and Director
of Shareholder Financial Services, Inc. and Shareholder Services, Inc.
(since December 2001); Senior Vice President, General Counsel and Director
of OFI Private Investments, Inc. and OFI Trust Company (since November
2001); Vice President of OppenheimerFunds Legacy Program (since June
2003); Senior Vice President and General Counsel of OFI Institutional
Asset Management, Inc. (since November 2001); Director of OppenheimerFunds
(Asia) Limited (since December 2003); Senior Vice President (May
1985-December 2003), Acting General Counsel (November 2001-February 2002)
and Associate General Counsel (May 1981-October 2001) of the Manager;
Assistant Secretary of the following: Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001), and OppenheimerFunds International Ltd. (September
1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds
complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, BY CALLING 1.800.525.7048.
72 | OPPENHEIMER INTERNATIONAL BOND FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that Edward L. Cameron,
the Chairman of the Board's Audit Committee, and George C. Bowen, a member of
the Board's Audit Committee, possess the technical attributes identified in
Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee
financial experts," and has designated Messrs. Cameron and
Bowen as the Audit Committee's financial experts. Messrs. Cameron and Bowen are
"independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $27,000 in fiscal 2005 and $28,000 in fiscal 2004.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $15,000 in fiscal 2005 and no such fees in fiscal 2004 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services: seed money audits.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed to the registrant $6,667 in fiscal 2005 and no such fees in
fiscal 2004.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services: audit of the tax provision for certain structured instruments.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed to the registrant no such fees during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $21,167 in fiscal 2005 and no such fees in
fiscal 2004 to the registrant and the registrant's investment adviser or
any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has considered
whether the provision of non-audit services that were rendered to the
registrant's investment adviser, and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where
required, to shareholders. Recommendations for trustee nominees should, at
a minimum, be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of September 30, 2005, the registrant's principal executive
officer and principal financial officer found the registrant's disclosure
controls and procedures to provide reasonable assurances that information
required to be disclosed by the registrant in the reports that it files under
the Securities Exchange Act of 1934 (a) is accumulated and communicated to
registrant's management, including its principal executive officer and principal
financial officer, to allow timely decisions regarding required disclosure, and
(b) is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms adopted by the U.S. Securities and Exchange
Commission.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer International Bond Fund
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: November 16, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: November 16, 2005
By: /s/ Brian W. Wixted
-------------------
Brian W. Wixted
Principal Financial Officer
Date: November 16, 2005