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 811-2849
OPPENHEIMER HIGH YIELD 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: JUNE
Date of reporting period: 06/30/2006
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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CORPORATE BONDS AND NOTES--TOP TEN INDUSTRIES
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Media 12.9%
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Hotels, Restaurants & Leisure 8.2
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Oil & Gas 7.4
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Wireless Telecommunication Services 5.0
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Health Care Providers & Services 4.4
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Automobiles 3.9
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Containers & Packaging 3.9
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Diversified Telecommunication Services 3.8
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Metals & Mining 2.8
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Energy Traders 2.5
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2006, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
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8 | OPPENHEIMER HIGH YIELD FUND
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CREDIT ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
A 1.6%
BBB 2.4
BB 23.2
B 52.8
CCC 7.3
CC 0.3
Not Rated 12.4
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2006, and are based on the total market value of investments. Average
credit quality and ratings include securities rated by a national rating
organization. As of that date, no securities held by the Fund were rated higher
than A or lower than CC. Under normal market conditions, the Fund invests at
least 80% of its assets (plus borrowings for investment purposes) in high yield,
lower rated investments, which include high yield, lower rated fixed income
securities commonly known as "junk bonds". Securities rated below investment
grade carry a greater risk of default. While the Fund has generally invested
under 25% of its assets in foreign securities, which are subject to exchange
rate and political uncertainties, it is not restricted to any amount by the
prospectus.
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9 | OPPENHEIMER HIGH YIELD 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 JUNE 30, 2006, FOLLOWED BY A
GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Oppenheimer High Yield Fund
produced modest gains and outperformed its benchmark for its fiscal year ended
June 30, 2006. We attribute the Fund's modest performance to our generally
neutral position, which prevented the Fund from participating in the continued
rally experienced in the more speculative parts of the high-yield market.
However, the Fund did receive positive contributions from a variety of higher
quality issues across multiple market sectors.
During the period, given the expectation that spreads were likely to
remain in a relatively narrow range, we maintained the Fund's neutral position,
with an underweighted exposure to the market's more speculative issues. This
position served the Fund well in the closing months of 2005 when investors
sought out higher-quality issues. However, the Fund's performance suffered
beginning in the early months of 2006 as market sentiment reversed and tended to
favor more speculative issues once again. Nevertheless, the Fund's focus on
issue selectivity enabled it to continue delivering relatively strong returns as
compared to its benchmark, the Merrill Lynch High Yield Cash Pay Index.
The Fund received positive contributions to performance from its exposure
to a variety of areas, including telecommunications, materials, consumer
discretionary and an active mergers-and-acquisitions environment crossing over
many market sectors. Top holdings included the Fund's exposure to credits issued
by Doane Pet Care Co., a holding that proved quite lucrative for the Fund as the
company was involved in two acquisitions. As a result of this activity, the
Fund's positions were tendered at very attractive premiums, which greatly aided
performance. The Fund also received contributions to performance from its
holdings in Neiman Marcus Group, Inc., which benefited from strong same store
sales. Additionally, the Fund's overweighted exposure to movie theater chain
operators aided performance, as theaters benefited from increased ticket sales.
Top contributors in this area included AMC Entertainment, Inc., and Cinemark,
Inc.
On the negative side, top detractors from Fund performance included
department store operator, Bon-Ton Stores, Inc. (The), and wholesale energy
marketer, Mirant Americas Generation LLC. The Bon-Ton Stores' bonds declined due
to weak same store sales. Mirant's bonds suffered as a result of its hostile bid
for a competitor, an action that surprised many investors who had anticipated
that the company would use its cash to deleverage. Mirant has since withdrawn
its bid but its bonds remain off because of the market's concern that the
company may take a similar type of action in the future. And lastly, although
the Fund
10 | OPPENHEIMER HIGH YIELD FUND
generally de-emphasized bonds from airlines, even a small amount of exposure to
this troubled area held back absolute returns.
The Fund was underweighted in the automobile industry, a position which
benefited performance given the volatility experienced in this area. However,
the Fund did hold bonds issued by the credit operations of Ford Motor Co. and
General Motors Corp. (GM), Ford Motor Credit Co. and General Motors Acceptance
Corp., respectively. While we remain concerned about the fundamental operations
of the parent companies, Ford Motor Co. and GM, we are confident that our
exposure to the credit side of these well-capitalized businesses is the best
way, in our view, to gain access to this well compensated area of the high-yield
bond market.
Please note that fixed income investing entails credit risks and interest
rate risks. When interest rates rise, bond prices generally fall, and the Fund's
share prices can fall. The Fund invests in debt securities below investment
grade, which may entail greater credit risks, as described in the prospectus.
Lower-grade debt securities (these are sometimes called "junk bonds") may be
subject to greater market fluctuations and greater risks of loss of income and
principal than investment grade securities. Mortgage-related securities have
greater potential for loss when interest rates rise.
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 June 30, 2006. In the case of Class A, Class B and Class C
shares, performance is measured over a ten-year period. In the case of Class N
shares, performance is measured from inception of the class on March 1, 2001. In
the case of Class Y shares, performance is measured from inception of the class
on October 15, 1997. The Fund's performance reflects the deduction of the
maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B, Class C and Class N shares, and reinvestments
of all dividends and capital gains distributions. Past performance cannot
guarantee future results.
The Fund's performance is compared to the performance of the Merrill Lynch
High Yield Cash Pay Index, an unmanaged index of below investment grade
securities of U.S. corporate debt issuers, and the Lehman Brothers Credit Index,
an index of non-convertible U.S. investment-grade corporate bonds. Index
performance reflects the reinvestment of income but does not consider the effect
of transaction costs, and none of the data in the graphs shows the effect of
taxes. The Fund's performance reflects the effects of the Fund's business and
operating expenses. While index comparisons may be useful to provide a benchmark
for the Fund's performance, it must be noted that the Fund's investments are not
limited to the investments in the index.
11 | OPPENHEIMER HIGH YIELD FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Yield Fund (Class A)
Merrill Lynch High Yield Cash Pay Index
Lehman Brothers Credit Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer High Merrill Lynch
Yield Fund High Yield Cash Lehman Brothers
Date (Class A) Pay Index Credit Index
06/30/96 9,525 10,000 10,000
09/30/96 9,947 10,390 10,200
12/31/96 10,314 10,799 10,555
03/31/97 10,307 10,912 10,449
06/30/97 10,773 11,430 10,879
09/30/97 11,326 11,877 11,305
12/31/97 11,544 12,184 11,635
03/31/98 12,048 12,523 11,813
06/30/98 12,103 12,733 12,117
09/30/98 11,207 12,278 12,557
12/31/98 11,556 12,630 12,632
03/31/99 11,991 12,767 12,543
06/30/99 12,017 12,852 12,346
09/30/99 11,860 12,692 12,831
12/31/99 12,037 12,829 12,385
03/31/00 11,879 12,597 12,562
06/30/00 12,103 12,676 12,717
09/30/00 12,165 12,848 13,107
12/31/00 11,569 12,342 13,548
03/31/01 12,072 13,109 14,127
06/30/01 11,656 12,943 14,277
09/30/01 10,852 12,420 14,825
12/31/01 11,563 13,108 14,957
03/31/02 11,557 13,365 14,918
06/30/02 11,018 12,544 15,350
09/30/02 10,564 12,148 16,038
12/31/02 11,057 12,958 16,532
03/31/03 11,726 13,852 16,928
06/30/03 12,823 15,192 17,740
09/30/03 13,170 15,576 17,715
12/31/03 13,970 16,486 17,803
03/31/04 14,218 16,854 18,386
06/30/04 14,221 16,706 17,756
09/30/04 14,678 17,481 18,502
12/31/04 15,298 18,261 18,737
03/31/05 15,087 17,999 18,539
06/30/05 15,337 18,483 19,201
09/30/05 15,534 18,651 19,008
12/31/05 15,712 18,778 19,103
03/31/06 16,115 19,314 18,881
06/30/06 16,095 19,343 18,807
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
6/30/06
1-Year -0.04% 5-Year 5.63% 10-Year 4.87%
12 | OPPENHEIMER HIGH YIELD FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Yield Fund (Class B)
Merrill Lynch High Yield Cash Pay Index
Lehman Brothers Credit Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Merrill Lynch
High Yield Fund High Yield Cash Lehman Brothers
Date (Class B) Pay Index Credit Index
06/30/96 10,000 10,000 10,000
09/30/96 10,419 10,390 10,200
12/31/96 10,785 10,799 10,555
03/31/97 10,757 10,912 10,449
06/30/97 11,218 11,430 10,879
09/30/97 11,768 11,877 11,305
12/31/97 11,973 12,184 11,635
03/31/98 12,467 12,523 11,813
06/30/98 12,508 12,733 12,117
09/30/98 11,552 12,278 12,557
12/31/98 11,892 12,630 12,632
03/31/99 12,311 12,767 12,543
06/30/99 12,323 12,852 12,346
09/30/99 12,137 12,692 12,831
12/31/99 12,287 12,829 12,385
03/31/00 12,100 12,597 12,562
06/30/00 12,307 12,676 12,717
09/30/00 12,347 12,848 13,107
12/31/00 11,725 12,342 13,548
03/31/01 12,206 13,109 14,127
06/30/01 11,770 12,943 14,277
09/30/01 10,928 12,420 14,825
12/31/01 11,619 13,108 14,957
03/31/02 11,604 13,365 14,918
06/30/02 11,037 12,544 15,350
09/30/02 10,582 12,148 16,038
12/31/02 11,075 12,958 16,532
03/31/03 11,746 13,852 16,928
06/30/03 12,845 15,192 17,740
09/30/03 13,192 15,576 17,715
12/31/03 13,994 16,486 17,803
03/31/04 14,242 16,854 18,386
06/30/04 14,244 16,706 17,756
09/30/04 14,703 17,481 18,502
12/31/04 15,323 18,261 18,737
03/31/05 15,112 17,999 18,539
06/30/05 15,363 18,483 19,201
09/30/05 15,560 18,651 19,008
12/31/05 15,739 18,778 19,103
03/31/06 16,142 19,314 18,881
06/30/06 16,122 19,343 18,807
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
6/30/06
1-Year -0.69% 5-Year 5.55% 10-Year 4.89%
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, LIFE AND 10-YEAR RETURNS FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
13 | OPPENHEIMER HIGH YIELD FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Yield Fund (Class C)
Merrill Lynch High Yield Cash Pay Index
Lehman Brothers Credit Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Merrill Lynch
High Yield Fund High Yield Cash Lehman Brothers
Date (Class C) Pay Index Credit Index
06/30/96 10,000 10,000 10,000
09/30/96 10,415 10,390 10,200
12/31/96 10,786 10,799 10,555
03/31/97 10,757 10,912 10,449
06/30/97 11,223 11,430 10,879
09/30/97 11,761 11,877 11,305
12/31/97 11,973 12,184 11,635
03/31/98 12,472 12,523 11,813
06/30/98 12,504 12,733 12,117
09/30/98 11,554 12,278 12,557
12/31/98 11,891 12,630 12,632
03/31/99 12,315 12,767 12,543
06/30/99 12,318 12,852 12,346
09/30/99 12,133 12,692 12,831
12/31/99 12,291 12,829 12,385
03/31/00 12,105 12,597 12,562
06/30/00 12,311 12,676 12,717
09/30/00 12,351 12,848 13,107
12/31/00 11,723 12,342 13,548
03/31/01 12,210 13,109 14,127
06/30/01 11,766 12,943 14,277
09/30/01 10,932 12,420 14,825
12/31/01 11,627 13,108 14,957
03/31/02 11,613 13,365 14,918
06/30/02 11,050 12,544 15,350
09/30/02 10,575 12,148 16,038
12/31/02 11,033 12,958 16,532
03/31/03 11,682 13,852 16,928
06/30/03 12,754 15,192 17,740
09/30/03 13,074 15,576 17,715
12/31/03 13,843 16,486 17,803
03/31/04 14,048 16,854 18,386
06/30/04 14,024 16,706 17,756
09/30/04 14,463 17,481 18,502
12/31/04 15,030 18,261 18,737
03/31/05 14,793 17,999 18,539
06/30/05 15,009 18,483 19,201
09/30/05 15,170 18,651 19,008
12/31/05 15,313 18,778 19,103
03/31/06 15,693 19,314 18,881
06/30/06 15,641 19,343 18,807
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
6/30/06
1-Year 3.24% 5-Year 5.86% 10-Year 4.57%
14 | OPPENHEIMER HIGH YIELD FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Yield Fund (Class N)
Merrill Lynch High Yield Cash Pay Index
Lehman Brothers Credit Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer Merrill Lynch
High Yield Fund High Yield Cash Lehman Brothers
Date (Class N) Pay Index Credit Index
03/01/01 10,000 10,000 10,000
03/31/01 9,682 9,868 10,062
06/30/01 9,357 9,743 10,169
09/30/01 8,711 9,349 10,559
12/31/01 9,278 9,867 10,653
03/31/02 9,278 10,060 10,625
06/30/02 8,840 9,442 10,932
09/30/02 8,471 9,144 11,423
12/31/02 8,864 9,754 11,775
03/31/03 9,394 10,427 12,057
06/30/03 10,262 11,436 12,635
09/30/03 10,527 11,725 12,617
12/31/03 11,157 12,410 12,680
03/31/04 11,334 12,687 13,095
06/30/04 11,336 12,575 12,647
09/30/04 11,689 13,158 13,178
12/31/04 12,170 13,745 13,345
03/31/05 11,980 13,548 13,204
06/30/05 12,166 13,913 13,675
09/30/05 12,310 14,039 13,538
12/31/05 12,453 14,135 13,606
03/31/06 12,761 14,538 13,447
06/30/06 12,733 14,560 13,395
AVERAGE ANNUAL TOTAL RETURN OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
6/30/06
1-Year 3.69% 5-Year 6.35% Since Inception (3/1/01) 4.64%
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, LIFE AND 10-YEAR RETURNS FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER HIGH YIELD FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Yield Fund (Class Y)
Merrill Lynch High Yield Cash Pay Index
Lehman Brothers Credit Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Oppenheimer High Merrill Lynch
Yield Fund High Yield Cash Lehman Brothers
Date (Class Y) Pay Index Credit Index
10/15/97 10,000 10,000 10,000
12/31/97 10,078 10,258 10,292
03/31/98 10,518 10,544 10,449
06/30/98 10,581 10,721 10,718
09/30/98 9,798 10,337 11,107
12/31/98 10,111 10,634 11,174
03/31/99 10,493 10,749 11,095
06/30/99 10,524 10,821 10,921
09/30/99 10,387 10,686 10,952
12/31/99 10,545 10,801 10,956
03/31/00 10,407 10,606 11,112
06/30/00 10,614 10,673 11,249
09/30/00 10,679 10,817 11,594
12/31/00 10,145 10,392 11,984
03/31/01 10,592 11,037 12,496
06/30/01 10,235 10,897 12,629
09/30/01 9,529 10,457 13,113
12/31/01 10,151 11,036 13,231
03/31/02 10,160 11,252 13,196
06/30/02 9,686 10,561 13,578
09/30/02 9,287 10,228 14,187
12/31/02 9,715 10,910 14,624
03/31/03 10,311 11,663 14,974
06/30/03 11,284 12,791 15,692
09/30/03 11,580 13,114 15,670
12/31/03 12,290 13,880 15,748
03/31/04 12,498 14,191 16,264
06/30/04 12,503 14,066 15,707
09/30/04 12,923 14,718 16,366
12/31/04 13,458 15,375 16,574
03/31/05 13,271 15,154 16,399
06/30/05 13,493 15,562 16,984
09/30/05 13,668 15,703 16,814
12/31/05 13,835 15,810 16,898
03/31/06 14,215 16,261 16,701
06/30/06 14,206 16,286 16,636
AVERAGE ANNUAL TOTAL RETURN OF CLASS Y SHARES OF THE FUND AT 6/30/06
1-Year 5.28% 5-Year 6.78% Since Inception (10/15/97) 4.11%
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, LIFE AND 10-YEAR RETURNS FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR
FURTHER INFORMATION.
16 | OPPENHEIMER HIGH YIELD 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 7/28/78. Class A
returns include the current maximum initial sales charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 5/3/93. 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 11/1/95. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 10/15/97. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
17 | OPPENHEIMER HIGH YIELD FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to exceptions
described in the Statement of Additional Information). Therefore,
18 | OPPENHEIMER HIGH YIELD FUND
the "hypothetical" lines of the table are useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/06) (6/30/06) JUNE 30, 2006
- -----------------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,024.40 $5.28
- -----------------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,019.59 5.27
- -----------------------------------------------------------------------------------------
Class B Actual 1,000.00 1,021.30 9.21
- -----------------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.72 9.19
- -----------------------------------------------------------------------------------------
Class C Actual 1,000.00 1,021.40 9.26
- -----------------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,015.67 9.24
- -----------------------------------------------------------------------------------------
Class N Actual 1,000.00 1,022.50 7.20
- -----------------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.70 7.18
- -----------------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,026.80 3.88
- -----------------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.98 3.87
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2006 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------
Class A 1.05%
- -----------------------------------
Class B 1.83
- -----------------------------------
Class C 1.84
- -----------------------------------
Class N 1.43
- -----------------------------------
Class Y 0.77
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.
- --------------------------------------------------------------------------------
19 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS June 30, 2006
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--0.0%
- ---------------------------------------------------------------------------------------------------------------------
Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond
Obligations, Series 1A, Cl. D, 0.125%, 6/13/111,2 (Cost $1,532,264) $ 2,125,400 $ 21,254
- ---------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--86.7%
- ---------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--31.6%
- ---------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS--1.8%
Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., Series B, 2/15/10 1,500,000 1,481,250
- ---------------------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc., 9.75% Sr. Nts., 9/1/13 3 550,000 371,250
- ---------------------------------------------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 3,750,000 3,496,875
9% Sr. Unsec. Nts., 7/1/15 3,270,000 3,139,200
- ---------------------------------------------------------------------------------------------------------------------
Keystone Automotive Operations, Inc., 9.75% Sr. Unsec. Sub. Nts., 11/1/13 900,000 855,000
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 2,600,000 2,509,000
- ---------------------------------------------------------------------------------------------------------------------
Tenneco Automotive, Inc.:
8.625% Sr. Unsec. Sub. Nts., 11/15/14 650,000 651,625
10.25% Sr. Sec. Nts., Series B, 7/15/13 3,900,000 4,294,875
- ---------------------------------------------------------------------------------------------------------------------
United Components, Inc., 9.375% Sr. Sub. Nts., 6/15/13 1,300,000 1,287,000
- ---------------------------------------------------------------------------------------------------------------------
Visteon Corp.:
7% Sr. Unsec. Nts., 3/10/14 1,500,000 1,231,875
8.25% Sr. Unsec. Nts., 8/1/10 5,300,000 4,982,000
--------------
24,299,950
- ---------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--3.9%
Ford Motor Co., 7.45% Bonds, 7/16/31 1,200,000 873,000
- ---------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.625% Nts., 10/1/08 6,250,000 5,784,588
5.80% Sr. Unsec. Nts., 1/12/09 1,200,000 1,096,901
7.375% Nts., 10/28/09 14,150,000 13,091,509
9.473% Nts., 4/15/12 2 7,335,000 7,457,142
- ---------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.875% Nts., 9/15/11 9,200,000 8,787,638
7.25% Nts., 3/2/11 900,000 873,401
8% Bonds, 11/1/31 7,150,000 6,890,355
- ---------------------------------------------------------------------------------------------------------------------
General Motors Corp.:
7.20% Nts., 1/15/11 1,600,000 1,424,000
8.375% Sr. Unsec. Debs., 7/15/33 1,450,000 1,174,500
- ---------------------------------------------------------------------------------------------------------------------
Hertz Corp.:
8.875% Sr. Nts., 1/1/14 4 465,000 478,950
10.50% Sr. Sub. Nts., 1/1/16 4 5,205,000 5,543,325
--------------
53,475,309
20 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
DISTRIBUTORS--0.2%
SGS International, Inc., 12% Sr. Sub. Nts., 12/15/13 4 $ 2,405,000 $ 2,417,025
- ---------------------------------------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.1%
Education Management LLC/Education Management Corp., 10.25% Sr.
Sub. Nts., 6/1/16 4 2,110,000 2,110,000
- ---------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--8.2%
American Casino & Entertainment Properties LLC, 7.85% Sr. Sec. Nts.,
2/1/12 1,750,000 1,763,125
- ---------------------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 3,080,000 3,033,800
- ---------------------------------------------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11 1,300,000 1,368,250
- ---------------------------------------------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12 3,000,000 3,157,500
- ---------------------------------------------------------------------------------------------------------------------
CCM Merger, Inc., 8% Unsec. Nts., 8/1/13 4 3,520,000 3,344,000
- ---------------------------------------------------------------------------------------------------------------------
Domino's, Inc., 8.25% Sr. Unsec. Sub. Nts., 7/1/11 1,932,000 2,014,110
- ---------------------------------------------------------------------------------------------------------------------
French Lick Resorts & Casino LLC, 10.75% First Mtg. Nts., 4/15/14 4 3,750,000 3,609,375
- ---------------------------------------------------------------------------------------------------------------------
Gaylord Entertainment Co.:
6.75% Sr. Unsec. Unsub. Nts., 11/15/14 2,150,000 2,026,375
8% Sr. Nts., 11/15/13 1,400,000 1,405,250
- ---------------------------------------------------------------------------------------------------------------------
Greektown Holdings, Inc., 10.75% Sr. Nts., 12/1/13 4 3,525,000 3,736,500
- ---------------------------------------------------------------------------------------------------------------------
Intrawest Corp., 7.50% Sr. Unsec. Nts., 10/15/13 2,666,000 2,666,000
- ---------------------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 4,100,000 3,889,875
9% Sr. Sub. Nts., 3/15/12 2,200,000 2,307,250
- ---------------------------------------------------------------------------------------------------------------------
Kerzner International Ltd., 6.75% Sr. Unsec. Sub. Nts., 10/1/15 420,000 440,475
- ---------------------------------------------------------------------------------------------------------------------
Mandalay Resort Group, 9.375% Sr. Sub. Nts., 2/15/10 3,532,000 3,735,090
- ---------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc.:
6.625% Sr. Unsec. Nts., 7/15/15 1,600,000 1,500,000
6.75% Sr. Nts., 4/1/13 4 1,350,000 1,294,313
8.375% Sr. Unsec. Sub. Nts., 2/1/11 6,950,000 7,158,500
9.75% Sr. Unsec. Sub. Nts., 6/1/07 2,000,000 2,065,000
- ---------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 1,240,000 1,173,350
6.375% Sr. Sub. Nts., 7/15/09 2,200,000 2,153,250
6.875% Sr. Unsec. Sub. Nts., 2/15/15 1,735,000 1,643,913
7.125% Sr. Unsec. Sub. Nts., 8/15/14 900,000 875,250
8% Sr. Sub. Nts., 4/1/12 2,750,000 2,808,438
- ---------------------------------------------------------------------------------------------------------------------
NCL Corp., 10.625% Sr. Unsub. Nts., 7/15/14 2,700,000 2,666,250
- ---------------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp.:
7.875% Sr. Sub. Nts., 3/15/10 3,700,000 3,857,250
9.375% Sr. Unsec. Sub. Nts., 2/15/07 950,000 969,000
- ---------------------------------------------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts., 3/1/15 735,000 689,063
6.875% Sr. Sub. Nts., 12/1/11 900,000 884,250
21 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Pinnacle Entertainment, Inc., 8.25% Sr. Unsec. Sub. Nts., 3/15/12 $ 6,750,000 $ 6,800,625
- ---------------------------------------------------------------------------------------------------------------------
Pokagon Gaming Authority, 10.375% Sr. Nts., 6/15/14 4 1,690,000 1,755,488
- ---------------------------------------------------------------------------------------------------------------------
Six Flags, Inc.:
9.625% Sr. Nts., 6/1/14 2,397,000 2,193,255
9.75% Sr. Nts., 4/15/13 2,700,000 2,494,125
- ---------------------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc., 7.875% Sr. Nts., 5/1/12 3,550,000 3,723,063
- ---------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 7,400,000 6,919,000
6.875% Sr. Unsec. Sub. Nts., 3/1/16 1,245,000 1,167,188
- ---------------------------------------------------------------------------------------------------------------------
Trump Entertainment Resorts, Inc., 8.50% Sec. Nts., 6/1/15 7,050,000 6,812,063
- ---------------------------------------------------------------------------------------------------------------------
Universal City Development Partners Ltd., 11.75% Sr. Nts., 4/1/10 2,700,000 2,953,125
- ---------------------------------------------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub. Nts., 2/15/14 2,700,000 2,578,500
- ---------------------------------------------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 6.625% Nts., 12/1/14 6,100,000 5,779,750
--------------
111,410,984
- ---------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.5%
Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12 3,300,000 3,316,500
- ---------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10 800,000 882,387
- ---------------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.:
7.75% Sr. Unsec. Sub. Nts., 5/15/13 2,250,000 2,064,375
8.875% Sr. Sub. Nts., 4/1/12 1,500,000 1,500,000
- ---------------------------------------------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 2,750,000 2,863,443
9.50% Sr. Unsec. Sub. Nts., 2/15/11 2,000,000 2,092,500
- ---------------------------------------------------------------------------------------------------------------------
Sealy Mattress Co., 8.25% Sr. Sub. Nts., 6/15/14 1,095,000 1,100,475
- ---------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 1,200,000 1,198,500
- ---------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 1,750,000 1,820,000
- ---------------------------------------------------------------------------------------------------------------------
WCI Communities, Inc., 9.125% Sr. Sub. Nts., 5/1/12 1,400,000 1,319,500
- ---------------------------------------------------------------------------------------------------------------------
William Lyon Homes, Inc., 10.75% Sr. Nts., 4/1/13 2,500,000 2,412,500
--------------
20,570,180
- ---------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.3%
Leslie's Poolmart, Inc., 7.75% Sr. Unsec. Nts., 2/1/13 1,875,000 1,828,125
- ---------------------------------------------------------------------------------------------------------------------
Rexnord Corp., 10.125% Sr. Unsec. Sub. Nts., 12/15/12 1,900,000 2,103,946
- ---------------------------------------------------------------------------------------------------------------------
Steinway Musical Instruments, Inc., 7% Sr. Nts., 3/1/14 4 740,000 719,650
--------------
4,651,721
22 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
MEDIA--12.9%
Adelphia Communications Corp.:
8.125% Sr. Nts., Series B, 7/15/03 3 $ 1,150,000 $ 632,500
8.375% Sr. Nts., Series B, 2/1/08 3 2,700,000 1,498,500
9.875% Sr. Nts., Series B, 3/1/07 3 2,200,000 1,221,000
10.25% Sr. Unsec. Sub. Nts., 6/15/11 3 1,200,000 696,000
10.875% Sr. Unsec. Nts., 10/1/10 3 1,500,000 825,000
- ---------------------------------------------------------------------------------------------------------------------
Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12 2,100,000 2,089,500
- ---------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc.:
8% Sr. Unsec. Sub. Nts., 3/1/14 3,300,000 3,040,125
9.50% Sr. Unsec. Sub. Nts., 2/1/11 1,499,000 1,480,263
- ---------------------------------------------------------------------------------------------------------------------
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 3,450,000 3,070,500
10.25% Sr. Unsec. Sub. Nts., Series B, 5/1/09 2,750,000 2,578,125
- ---------------------------------------------------------------------------------------------------------------------
Block Communications, Inc., 8.25% Sr. Nts., 12/15/15 4 1,685,000 1,626,025
- ---------------------------------------------------------------------------------------------------------------------
Charter Communications Holdings II LLC/Charter Communications
Holdings II Capital Corp.:
10.25% Sr. Nts., 9/15/10 4 1,880,000 1,889,400
10.25% Sr. Unsec. Nts., 9/15/10 3,200,000 3,224,000
- ---------------------------------------------------------------------------------------------------------------------
Charter Communications Holdings LLC/Charter Communications
Holdings Capital Corp., 8.375% Sr. Nts., Second Lien, 4/30/14 4 11,800,000 11,873,750
- ---------------------------------------------------------------------------------------------------------------------
Cinemark USA, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/13 1,800,000 1,899,000
- ---------------------------------------------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr. Unsec. Disc. Nts., 3/15/14 5 6,800,000 5,304,000
- ---------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
7.625% Sr. Unsec. Debs., 7/15/18 4,500,000 4,477,500
7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11 1,130,000 1,135,650
- ---------------------------------------------------------------------------------------------------------------------
Dex Media East LLC/Dex Media East Finance Co., 9.875% Sr. Unsec. Nts.,
11/15/09 3,000,000 3,187,500
- ---------------------------------------------------------------------------------------------------------------------
Dex Media West LLC/Dex Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 2,100,000 2,189,250
9.875% Sr. Sub. Nts., 8/15/13 3,516,000 3,828,027
- ---------------------------------------------------------------------------------------------------------------------
Dex Media, Inc.:
0%/9% Unsec. Disc. Nts., 11/15/13 5 4,200,000 3,559,500
8% Unsec. Nts., 11/15/13 12,825,000 12,953,250
- ---------------------------------------------------------------------------------------------------------------------
Dow Jones CDX High Yield Index, 8.625% Pass-Through Certificates,
Series 6-T1, 6/29/11 4 2,000,000 1,965,000
- ---------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 2,150,000 2,026,375
7.125% Sr. Nts., 2/1/16 4 1,900,000 1,838,250
- ---------------------------------------------------------------------------------------------------------------------
Emmis Operating Co., 6.875% Sr. Unsec. Sub. Nts., 5/15/12 2,700,000 2,659,500
- ---------------------------------------------------------------------------------------------------------------------
Entercom Radio LLC/Entercom Capital, Inc., 7.625% Sr. Unsec. Sub. Nts.,
3/1/14 1,500,000 1,503,750
- ---------------------------------------------------------------------------------------------------------------------
Granite Broadcasting Corp., 9.75% Sr. Sec. Nts., 12/1/10 1,937,000 1,782,040
- ---------------------------------------------------------------------------------------------------------------------
Gray Television, Inc., 9.25% Sr. Sub. Nts., 12/15/11 1,750,000 1,828,750
23 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
MEDIA Continued
Lamar Media Corp.:
6.625% Sr. Unsec. Sub. Nts., 8/15/15 $ 3,092,000 $ 2,875,560
7.25% Sr. Unsec. Sub. Nts., 1/1/13 1,000,000 982,500
- ---------------------------------------------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13 2,530,000 2,321,275
- ---------------------------------------------------------------------------------------------------------------------
Marquee Holdings, Inc., 0%/12% Sr. Disc. Nts., 8/15/14 5 5,700,000 4,096,875
- ---------------------------------------------------------------------------------------------------------------------
Mediacom Broadband LLC/Mediacom Broadband Corp., 8.50% Sr. Nts.,
10/15/15 645,000 622,425
- ---------------------------------------------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 2,247,000 2,247,000
- ---------------------------------------------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 4,700,000 4,136,000
6.875% Sr. Unsec. Sub. Nts., 10/1/13 700,000 640,500
- ---------------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.318% Sr. Sec. Nts., 1/15/13 2,4 3,130,000 3,153,475
- ---------------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 3,400,000 3,060,000
8.875% Sr. Unsec. Nts., 5/15/11 2,647,000 2,554,355
- ---------------------------------------------------------------------------------------------------------------------
Quebecor World Capital Corp., 8.75% Sr. Nts., 3/15/16 4 1,225,000 1,123,938
- ---------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts., 1/15/13 4 6,420,000 5,938,500
6.875% Sr. Disc. Nts., Series A-2, 1/15/13 4 11,090,000 10,258,250
6.875% Sr. Nts., 1/15/13 6,300,000 5,827,500
8.875% Sr. Nts., Series A-3, 1/15/16 4 8,295,000 8,409,056
- ---------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I, 10.875% Sr. Sub. Nts., 12/15/12 4 3,900,000 4,299,750
- ---------------------------------------------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 1,950,000 2,030,438
- ---------------------------------------------------------------------------------------------------------------------
Rainbow National Services LLC, 8.75% Sr. Nts., 9/1/12 4 2,000,000 2,110,000
- ---------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
8% Sr. Unsec. Sub. Nts., 3/15/12 9,150,000 9,333,000
8.75% Sr. Sub. Nts., 12/15/11 1,250,000 1,312,500
- ---------------------------------------------------------------------------------------------------------------------
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 3,450,000 3,527,625
10.875% Sr. Unsec. Nts., Series B, 6/15/09 1,300,000 1,287,000
- ---------------------------------------------------------------------------------------------------------------------
WMG Holdings Corp., 0%/9.50% Sr. Disc. Nts., 12/15/14 5 6,327,000 4,587,075
--------------
174,616,627
- ---------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.9%
Bon-Ton Stores, Inc. (The), 10.25% Sr. Nts., 3/15/14 4 6,600,000 6,154,500
- ---------------------------------------------------------------------------------------------------------------------
Neiman Marcus Group, Inc.:
9% Sr. Nts., 10/15/15 4 4,910,000 5,155,500
10.375% Sr. Sub. Nts., 10/15/15 4 1,205,000 1,286,338
--------------
12,596,338
24 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--0.9%
Asbury Automotive Group, Inc., 9% Sr. Sub. Nts., 6/15/12 $ 1,400,000 $ 1,393,000
- ---------------------------------------------------------------------------------------------------------------------
Atlantic Broadband Finance LLC, 9.375% Sr. Unsec. Sub. Nts., 1/15/14 1,450,000 1,370,250
- ---------------------------------------------------------------------------------------------------------------------
Boise Cascade LLC, 7.125% Sr. Unsec. Sub. Nts., 10/15/14 1,500,000 1,335,000
- ---------------------------------------------------------------------------------------------------------------------
Just For Feet, Inc., 11% Sr. Sub. Nts., 5/1/09 1,3 700,000 --
- ---------------------------------------------------------------------------------------------------------------------
Linens `N Things, Inc., 10.702% Sr. Sec. Nts., 1/15/14 2,4 3,175,000 3,024,188
- ---------------------------------------------------------------------------------------------------------------------
Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11 3,500,000 3,710,000
- ---------------------------------------------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr. Unsec. Sub. Nts., Series B, 5/1/10 1,100,000 1,100,000
--------------
11,932,438
- ---------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.9%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 4 2,300,000 2,426,500
- ---------------------------------------------------------------------------------------------------------------------
Levi Strauss & Co.:
9.74% Sr. Unsec. Unsub. Nts., 4/1/12 2 1,615,000 1,651,338
9.75% Sr. Unsec. Unsub. Nts., 1/15/15 2,556,000 2,568,780
- ---------------------------------------------------------------------------------------------------------------------
Oxford Industries, Inc., 8.875% Sr. Nts., 6/1/11 1,250,000 1,256,250
- ---------------------------------------------------------------------------------------------------------------------
Quiksilver, Inc., 6.875% Sr. Unsec. Nts., 4/15/15 2,385,000 2,229,975
- ---------------------------------------------------------------------------------------------------------------------
Russell Corp., 9.25% Sr. Nts., 5/1/10 1,500,000 1,576,875
--------------
11,709,718
- ---------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.4%
- ---------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.2%
Constellation Brands, Inc., 8.125% Sr. Sub. Nts., 1/15/12 2,000,000 2,065,000
- ---------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Jean Coutu Group (PJC), Inc. (The), 8.50% Sr. Sub. Nts., 8/1/14 6,450,000 5,966,250
- ---------------------------------------------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 2,650,000 2,676,500
9.50% Sr. Sec. Nts., 2/15/11 1,600,000 1,668,000
--------------
10,310,750
- ---------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--1.1%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts., 2/15/15 930,000 867,225
8.625% Sr. Sub. Nts., 12/15/12 3,300,000 3,415,500
- ---------------------------------------------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09 1,909,000 1,832,640
8.875% Sr. Unsec. Nts., 3/15/11 475,000 447,688
- ---------------------------------------------------------------------------------------------------------------------
Hines Nurseries, Inc., 10.25% Sr. Unsec. Sub. Nts., 10/1/11 3,100,000 2,991,500
- ---------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., Escrow Shares, 3/15/10 1 2,000,000 92,080
- ---------------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08 2,240,000 2,262,400
8% Sr. Nts., Series B, 10/15/09 400,000 406,000
- ---------------------------------------------------------------------------------------------------------------------
United Biscuits Finance plc, 10.625% Sr. Sub. Nts., 4/15/11 [EUR] 2,000,000 2,698,796
--------------
15,013,829
25 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.3%
Church & Dwight Co., Inc., 6% Sr. Unsec. Sub. Nts., 12/15/12 $ 1,800,000 $ 1,674,000
- ---------------------------------------------------------------------------------------------------------------------
Nutro Products, Inc., 10.75% Sr. Sub. Nts., 4/15/14 4 2,460,000 2,543,025
--------------
4,217,025
- ---------------------------------------------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.6%
Elizabeth Arden, Inc., 7.75% Sr. Unsec. Sub. Nts., 1/15/14 2,600,000 2,567,500
- ---------------------------------------------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 2,500,000 2,600,000
9.375% Sr. Unsec. Sub. Nts., 6/1/11 3,235,000 3,384,619
--------------
8,552,119
- ---------------------------------------------------------------------------------------------------------------------
TOBACCO--0.4%
Reynolds American, Inc., 7.25% Sr. Sec. Nts., 6/1/13 4 6,205,000 6,096,413
- ---------------------------------------------------------------------------------------------------------------------
ENERGY--8.2%
- ---------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.8%
Basic Energy Services, Inc., 7.125% Sr. Nts., 4/15/16 4 1,225,000 1,145,375
- ---------------------------------------------------------------------------------------------------------------------
Dresser, Inc., 9.875% Sr. Unsec. Sub. Nts., 4/15/11 2 1,200,000 1,221,000
- ---------------------------------------------------------------------------------------------------------------------
Hanover Compressor Co., 8.625% Sr. Unsec. Sub. Nts., 12/15/10 2,500,000 2,600,000
- ---------------------------------------------------------------------------------------------------------------------
Hanover Equipment Trust, 8.50% Sr. Sec. Nts., Series A, 9/1/08 662,000 681,860
- ---------------------------------------------------------------------------------------------------------------------
PHI, Inc., 7.125% Sr. Nts., 4/15/13 4 1,470,000 1,392,825
- ---------------------------------------------------------------------------------------------------------------------
RathGibson, Inc., 11.25% Sr. Nts., 2/15/14 4 1,230,000 1,273,050
- ---------------------------------------------------------------------------------------------------------------------
Universal Compression, Inc., 7.25% Sr. Unsec. Sub. Nts., 5/15/10 2,500,000 2,506,250
--------------
10,820,360
- ---------------------------------------------------------------------------------------------------------------------
OIL & GAS--7.4%
Arch Western Finance LLC, 6.75% Sr. Nts., 7/1/13 2,650,000 2,550,625
- ---------------------------------------------------------------------------------------------------------------------
Atlas Pipeline Partners LP, 8.125% Sr. Nts., 12/15/15 4 1,205,000 1,206,506
- ---------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Unsec. Nts., 6/15/15 1,400,000 1,305,500
6.875% Sr. Unsec. Nts., 1/15/16 6,084,000 5,779,800
- ---------------------------------------------------------------------------------------------------------------------
Clayton Williams Energy, Inc., 7.75% Sr. Unsec. Nts., 8/1/13 495,000 457,875
- ---------------------------------------------------------------------------------------------------------------------
Compton Petroleum Finance Corp., 7.625% Sr. Nts., 12/1/13 3,610,000 3,465,600
- ---------------------------------------------------------------------------------------------------------------------
Copano Energy LLC, 8.125% Sr. Nts., 3/1/16 4 740,000 740,000
- ---------------------------------------------------------------------------------------------------------------------
El Paso Corp.:
7.75% Sr. Nts., 1/15/32 3,500,000 3,425,625
7.875% Sr. Unsec. Nts., 6/15/12 6,452,000 6,597,170
- ---------------------------------------------------------------------------------------------------------------------
El Paso Energy Corp., 7.625% Nts., 7/15/11 1,600,000 1,624,000
- ---------------------------------------------------------------------------------------------------------------------
El Paso Production Holding Co., 7.75% Sr. Unsec. Nts., 6/1/13 7,450,000 7,543,125
- ---------------------------------------------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 2,000,000 2,015,000
26 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
OIL & GAS Continued
Foundation PA Coal Co., 7.25% Sr. Unsec. Nts., 8/1/14 $ 1,900,000 $ 1,862,000
- ---------------------------------------------------------------------------------------------------------------------
Frontier Oil Corp., 6.625% Sr. Unsec. Nts., 10/1/11 1,100,000 1,058,750
- ---------------------------------------------------------------------------------------------------------------------
Inergy LP/Inergy Finance Corp., 8.25% Sr. Unsec. Nts., 3/1/16 1,920,000 1,948,800
- ---------------------------------------------------------------------------------------------------------------------
Massey Energy Co.:
6.625% Sr. Nts., 11/15/10 1,750,000 1,732,500
6.875% Sr. Nts., 12/15/13 4 680,000 635,800
- ---------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co., 6.625% Sr. Unsec. Sub. Nts., 9/1/14 3,700,000 3,542,750
- ---------------------------------------------------------------------------------------------------------------------
Pacific Energy Partners LP/Pacific Energy Finance Corp., 6.25% Sr. Unsec.
Nts., 9/15/15 490,000 477,750
- ---------------------------------------------------------------------------------------------------------------------
Peabody Energy Corp., 6.875% Sr. Unsec. Nts., Series B, 3/15/13 2,500,000 2,468,750
- ---------------------------------------------------------------------------------------------------------------------
Plains Exploration & Production Co., 7.125% Sr. Nts., 6/15/14 1,700,000 1,683,000
- ---------------------------------------------------------------------------------------------------------------------
Pogo Producing Co.:
6.875% Sr. Unsec. Sub. Nts., 10/1/17 1,000,000 931,250
7.875% Sr. Sub. Nts., 5/1/13 4 1,225,000 1,234,188
- ---------------------------------------------------------------------------------------------------------------------
Premcor Refining Group, Inc., 9.50% Sr. Nts., 2/1/13 2,000,000 2,187,456
- ---------------------------------------------------------------------------------------------------------------------
Quicksilver Resources, Inc., 7.125% Sr. Sub. Nts., 4/1/16 3,935,000 3,708,738
- ---------------------------------------------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 1,125,000 1,043,438
7.375% Sr. Sub. Nts., 7/15/13 1,500,000 1,496,250
7.50% Sr. Sub. Nts., 5/15/16 1,220,000 1,210,850
- ---------------------------------------------------------------------------------------------------------------------
Southern Natural Gas Co.:
7.35% Nts., 2/15/31 2,800,000 2,700,575
8% Sr. Unsub. Nts., 3/1/32 2,500,000 2,595,765
8.875% Sr. Nts., 3/15/10 1,800,000 1,910,255
- ---------------------------------------------------------------------------------------------------------------------
Stone Energy Corp.:
6.75% Sr. Unsec. Sub. Nts., 12/15/14 1,680,000 1,694,700
8.25% Sr. Unsec. Sub. Nts., 12/15/11 1 3,500,000 3,552,500
- ---------------------------------------------------------------------------------------------------------------------
Targa Resources, Inc., 8.50% Sr. Nts., 11/1/13 4 2,390,000 2,318,300
- ---------------------------------------------------------------------------------------------------------------------
Teekay Shipping Corp., 8.875% Sr. Nts., 7/15/11 1,775,000 1,868,188
- ---------------------------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 4,050,000 4,072,802
- ---------------------------------------------------------------------------------------------------------------------
Tesoro Corp.:
6.25% Sr. Nts., 11/1/12 4 870,000 830,850
6.625% Sr. Nts., 11/1/15 4 870,000 828,675
- ---------------------------------------------------------------------------------------------------------------------
Transcontinental Gas Pipe Line Corp.:
6.40% Sr. Nts., 4/15/16 4 1,710,000 1,645,875
8.875% Sr. Unsub. Nts., Series B, 7/15/12 1,200,000 1,329,000
- ---------------------------------------------------------------------------------------------------------------------
Whiting Petroleum Corp.:
7.25% Sr. Sub. Nts., 5/1/12 2,300,000 2,219,500
7.25% Sr. Unsec. Sub. Nts., 5/1/13 600,000 577,500
27 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
OIL & GAS Continued
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 $ 1,700,000 $ 1,708,500
8.75% Unsec. Nts., 3/15/32 5,300,000 5,790,250
- ---------------------------------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.50% Nts., 12/1/08 1 800,000 792,000
--------------
100,368,331
- ---------------------------------------------------------------------------------------------------------------------
FINANCIALS--3.7%
- ---------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--1.0%
Berry Plastics Corp., 10.75% Sr. Sub. Nts., 7/15/12 6,100,000 6,633,750
- ---------------------------------------------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 9/30/08 1 3,700,000 2,793,500
- ---------------------------------------------------------------------------------------------------------------------
E*TRADE Financial Corp.:
7.375% Sr. Unsec. Nts., 9/15/13 1,939,000 1,948,695
8% Sr. Nts., 6/15/11 2,095,000 2,147,375
--------------
13,523,320
- ---------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--0.1%
ABN Amro Bank NV (NY Branch), 5% Sec. Nts., 11/5/17 2 2,069,459 1,914,260
- ---------------------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 1 78,000 83,850
--------------
1,998,110
- ---------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.2%
Affinia Group, Inc., 9% Sr. Unsec. Sub. Nts., 11/30/14 960,000 876,000
- ---------------------------------------------------------------------------------------------------------------------
BCP Crystal US Holdings Corp., 9.625% Sr. Sub. Nts., 6/15/14 4,794,000 5,225,460
- ---------------------------------------------------------------------------------------------------------------------
Crystal US Holdings 3 LLC/Crystal US Sub 3 Corp., 0%/10.50% Sr. Unsec.
Disc. Nts., Series B, 10/1/14 5 3,100,000 2,441,250
- ---------------------------------------------------------------------------------------------------------------------
Dow Jones CDX High Yield Index, 8.125% Pass-Through Certificates,
Series 6-T3, 6/29/11 4 10,000,000 9,812,500
- ---------------------------------------------------------------------------------------------------------------------
JSG Funding plc, 7.75% Sr. Unsec. Sub. Nts., 4/1/15 2,470,000 2,247,700
- ---------------------------------------------------------------------------------------------------------------------
Nell AF Sarl, 8.375% Sr. Nts., 8/15/15 4 7,980,000 7,710,675
- ---------------------------------------------------------------------------------------------------------------------
Universal City Florida:
8.375% Sr. Unsec. Nts., 5/1/10 900,000 909,000
9.899% Sr. Unsec. Nts., 5/1/10 2 775,000 804,063
--------------
30,026,648
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE--0.4%
Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 2 2,552,000 2,717,880
- ---------------------------------------------------------------------------------------------------------------------
Host Marriott LP, 6.375% Sr. Nts., Series O, 3/15/15 2,580,000 2,438,100
--------------
5,155,980
- ---------------------------------------------------------------------------------------------------------------------
HEALTH CARE--5.0%
- ---------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Angiotech Pharmaceuticals, Inc., 7.75% Sr. Sub. Nts., 4/1/14 4 1,215,000 1,166,400
28 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.3%
Inverness Medical Innovations, Inc., 8.75% Sr. Sub. Nts., 2/15/12 $ 1,100,000 $ 1,072,500
- ---------------------------------------------------------------------------------------------------------------------
Universal Hospital Services, Inc., 10.125% Sr. Unsec. Nts., 11/1/11 2,150,000 2,246,750
--------------
3,319,250
- ---------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.4%
AmeriPath, Inc., 10.50% Sr. Unsec. Sub. Nts., 4/1/13 2,000,000 2,107,500
- ---------------------------------------------------------------------------------------------------------------------
Community Health Systems, Inc., 6.50% Sr. Unsec. Sub. Nts., 12/15/12 2,400,000 2,289,000
- ---------------------------------------------------------------------------------------------------------------------
DaVita, Inc.:
6.625% Sr. Unsec. Nts., 3/15/13 2,320,000 2,215,600
7.25% Sr. Unsec. Sub. Nts., 3/15/15 4,080,000 3,937,200
- ---------------------------------------------------------------------------------------------------------------------
Extendicare Health Services, Inc.:
6.875% Sr. Sub. Nts., 5/1/14 600,000 630,000
9.50% Sr. Unsec. Sub. Nts., 7/1/10 1,900,000 1,992,625
- ---------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 2,800,000 2,849,000
- ---------------------------------------------------------------------------------------------------------------------
Genesis HealthCare Corp., 8% Sr. Sub. Nts., 10/15/13 1,300,000 1,366,625
- ---------------------------------------------------------------------------------------------------------------------
HCA, Inc.:
6.30% Sr. Unsec. Nts., 10/1/12 3,200,000 3,025,667
6.375% Nts., 1/15/15 5,100,000 4,750,900
8.75% Sr. Nts., 9/1/10 2,000,000 2,118,530
- ---------------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 10.75% Sr. Nts., 6/15/16 4 4,880,000 4,806,800
- ---------------------------------------------------------------------------------------------------------------------
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 55,000 52,663
6.875% Sr. Sub. Nts., 12/15/15 295,000 281,725
- ---------------------------------------------------------------------------------------------------------------------
Psychiatric Solutions, Inc., 7.75% Sr. Unsec. Sub. Nts., 7/15/15 1,220,000 1,200,175
- ---------------------------------------------------------------------------------------------------------------------
Rotech Healthcare, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/12 2,400,000 2,010,000
- ---------------------------------------------------------------------------------------------------------------------
Select Medical Corp., 7.625% Sr. Unsec. Sub. Nts., 2/1/15 7,500,000 6,562,500
- ---------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 2,520,000 2,261,700
7.375% Nts., 2/1/13 147,000 134,873
9.875% Sr. Nts., 7/1/14 6,575,000 6,607,875
- ---------------------------------------------------------------------------------------------------------------------
Triad Hospitals, Inc., 7% Sr. Sub. Nts., 11/15/13 570,000 557,175
- ---------------------------------------------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 2,150,000 2,246,750
10.75% Sr. Unsec. Sub. Nts., 8/15/14 2,550,000 2,779,500
- ---------------------------------------------------------------------------------------------------------------------
Vanguard Health Holding Co. I LLC, 0%/11.25% Sr. Disc. Nts., 10/1/15 5 4,500,000 3,195,000
--------------
59,979,383
- ---------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.2%
Valeant Pharmaceuticals International, Inc., 7% Sr. Nts., 12/15/11 2,900,000 2,769,500
- ---------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--6.9%
- ---------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.3%
Alliant Techsystems, Inc., 6.75% Sr. Sub. Nts., 4/1/16 2,450,000 2,364,250
29 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
BE Aerospace, Inc.:
8.50% Sr. Unsec. Nts., 10/1/10 $ 1,100,000 $ 1,166,000
8.875% Sr. Unsec. Sub. Nts., 5/1/11 147,000 152,880
- ---------------------------------------------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 1,975,000 1,920,688
6.875% Sr. Unsec. Sub. Nts., 11/1/13 700,000 677,250
7.625% Sr. Sub. Nts., 2/1/18 865,000 865,000
- ---------------------------------------------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 900,000 843,750
6.125% Sr. Unsec. Sub. Nts., 1/15/14 1,350,000 1,289,250
6.375% Sr. Unsec. Sub. Nts., Series B, 10/15/15 3,345,000 3,211,200
7.625% Sr. Sub. Nts., 6/15/12 1,250,000 1,275,000
- ---------------------------------------------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 1,517,000 1,619,398
11% Sr. Sub. Nts., 2/15/13 1,299,000 1,425,653
--------------
16,810,319
- ---------------------------------------------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp.:
12.125% Sr. Unsec. Unsub. Nts., 6/15/10 1,3 2,000,000 90,000
13% Sr. Unsec. Nts., 2/1/09 1,3 6,720,000 302,400
--------------
392,400
- ---------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS--0.5%
Associated Materials, Inc., 9.75% Sr. Sub. Nts., 4/15/12 1,500,000 1,500,000
- ---------------------------------------------------------------------------------------------------------------------
Goodman Global Holding Co., Inc., 7.875% Sr. Unsec. Sub. Nts., 12/15/12 1,950,000 1,872,000
- ---------------------------------------------------------------------------------------------------------------------
Jacuzzi Brands, Inc., 9.625% Sr. Sec. Nts., 7/1/10 1,944,000 2,063,070
- ---------------------------------------------------------------------------------------------------------------------
Nortek, Inc., 8.50% Sr. Unsec. Unsub. Nts., 9/1/14 1,550,000 1,507,375
--------------
6,942,445
- ---------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.6%
Allied Waste North America, Inc.:
7.25% Sr. Nts., 3/15/15 150,000 144,000
7.375% Sr. Sec. Nts., Series B, 4/15/14 11,600,000 11,078,000
- ---------------------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 1,3 2,500,000 --
- ---------------------------------------------------------------------------------------------------------------------
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.:
7.576% Sr. Nts., 5/15/14 2,4 490,000 491,225
7.75% Sr. Nts., 5/15/16 4 1,230,000 1,186,950
- ---------------------------------------------------------------------------------------------------------------------
Cenveo Corp., 7.875% Sr. Sub. Nts., 12/1/13 2,900,000 2,842,000
- ---------------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 2,400,000 2,415,000
- ---------------------------------------------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 2,200,000 2,079,000
7.50% Sr. Nts., 5/1/11 1,350,000 1,366,875
--------------
21,603,050
30 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.5%
Belden & Blake Corp., 8.75% Sec. Nts., 7/15/12 $ 3,175,000 $ 3,238,500
- ---------------------------------------------------------------------------------------------------------------------
Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts., 6/15/09 1,050,000 921,375
- ---------------------------------------------------------------------------------------------------------------------
General Cable Corp., 9.50% Sr. Nts., 11/15/10 2,200,000 2,343,000
- ---------------------------------------------------------------------------------------------------------------------
UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12 700,000 742,000
--------------
7,244,875
- ---------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.3%
Covalence Specialty Materials Corp., 10.25% Sr. Sub. Nts., 3/1/16 4 1,940,000 1,872,100
- ---------------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/13 1,800,000 1,667,250
--------------
3,539,350
- ---------------------------------------------------------------------------------------------------------------------
MACHINERY--1.2%
Case New Holland, Inc., 7.125% Sr. Nts., 3/1/14 4 1,970,000 1,891,200
- ---------------------------------------------------------------------------------------------------------------------
Douglas Dynamics LLC, 7.75% Sr. Nts., 1/15/12 4 2,000,000 1,910,000
- ---------------------------------------------------------------------------------------------------------------------
Greenbrier Cos., Inc., 8.375% Sr. Unsec. Nts., 5/15/15 1,945,000 1,996,056
- ---------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc. (The):
7.125% Sr. Nts., 11/1/13 600,000 591,000
10.50% Sr. Sub. Nts., 8/1/12 2,174,000 2,369,660
- ---------------------------------------------------------------------------------------------------------------------
Milacron Escrow Corp., 11.50% Sr. Sec. Nts., 5/15/11 4,700,000 4,382,750
- ---------------------------------------------------------------------------------------------------------------------
Trinity Industries, Inc., 6.50% Sr. Nts., 3/15/14 1,950,000 1,911,000
- ---------------------------------------------------------------------------------------------------------------------
Wolverine Tube, Inc., 7.375% Sr. Nts., 8/1/08 4 2,100,000 1,711,500
--------------
16,763,166
- ---------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.5%
Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09 2,000,000 2,010,000
- ---------------------------------------------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 375,000 346,875
7.50% Sr. Unsec. Nts., 11/1/13 2,693,000 2,625,675
9.625% Sr. Nts., 12/1/12 2,000,000 2,135,000
--------------
7,117,550
- ---------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.9%
Interline Brands, Inc., 8.125% Sr. Sub. Nts., 6/15/14 490,000 491,225
- ---------------------------------------------------------------------------------------------------------------------
United Rentals, Inc., 7% Sr. Sub. Nts., 2/15/14 12,400,000 11,392,500
--------------
11,883,725
- ---------------------------------------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Horizon Lines LLC, 9% Nts., 11/1/12 1,813,000 1,849,260
- ---------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--3.2%
- ---------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.7%
Loral Skynet Corp., 14% Sr. Sec. Nts., 11/21/15 6 916,000 1,057,980
- ---------------------------------------------------------------------------------------------------------------------
Lucent Technologies, Inc., 6.45% Unsec. Debs., 3/15/29 8,700,000 7,438,500
31 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Nortel Networks Ltd., 9.73% Sr. Nts., 7/15/11 2,4 $ 1,195,000 $ 1,221,888
- ---------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 12.50% Sr. Unsub. Disc. Nts., 1/15/07 3 5,310,000 53
--------------
9,718,421
- ---------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.1%
Seagate Technology Hdd Holdings, 8% Sr. Nts., 5/15/09 1,700,000 1,751,000
- ---------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.5%
Flextronics International Ltd., 6.25% Sr. Sub. Nts., 11/15/14 2,650,000 2,494,313
- ---------------------------------------------------------------------------------------------------------------------
Sanmina-SCI Corp.:
6.75% Unsec. Sub. Nts., 3/1/13 2,275,000 2,132,813
8.125% Sr. Sub. Nts., 3/1/16 875,000 857,500
- ---------------------------------------------------------------------------------------------------------------------
Solectron Corp., 8% Sr. Sub. Nts., 3/15/16 4 425,000 420,750
--------------
5,905,376
- ---------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/091,3 [EUR] 4,232,751 --
- ---------------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 1,3 1,040,900 --
- ---------------------------------------------------------------------------------------------------------------------
PSINet, Inc., 10.50% Sr. Unsec. Nts., 12/1/061,3 [EUR] 1,000,000 --
--------------
--
- ---------------------------------------------------------------------------------------------------------------------
IT SERVICES--1.3%
DI Finance/DynCorp International LLC, 9.50% Sr. Unsec. Sub. Nts.,
Series B, 2/15/13 4,257,000 4,448,565
- ---------------------------------------------------------------------------------------------------------------------
iPayment Holdings, Inc., 9.75% Sr. Sub. Nts., 5/15/14 4 2,150,000 2,150,000
- ---------------------------------------------------------------------------------------------------------------------
Iron Mountain, Inc., 8.625% Sr. Unsec. Sub. Nts., 4/1/13 2,400,000 2,412,000
- ---------------------------------------------------------------------------------------------------------------------
SunGard Data Systems, Inc.:
9.125% Sr. Unsec. Nts., 8/15/13 4 1,370,000 1,428,225
10.25% Sr. Sub. Nts., 8/15/15 4 6,650,000 6,907,688
--------------
17,346,478
- ---------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.6%
Advanced Micro Devices, Inc., 7.75% Sr. Unsec. Nts., 11/1/12 3,538,000 3,617,605
- ---------------------------------------------------------------------------------------------------------------------
Amkor Technology, Inc., 7.75% Sr. Nts., 5/15/13 5,100,000 4,634,625
--------------
8,252,230
- ---------------------------------------------------------------------------------------------------------------------
MATERIALS--10.7%
- ---------------------------------------------------------------------------------------------------------------------
CHEMICALS--2.4%
Chemtura Corp., 6.875% Sr. Nts., 6/1/16 639,000 620,629
- ---------------------------------------------------------------------------------------------------------------------
Crompton Corp., 9.875% Sr. Nts., 8/1/12 2,800,000 3,164,000
- ---------------------------------------------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar Funding Corp.:
10.125% Sr. Unsec. Nts., 9/1/08 147,000 155,453
10.625% Sr. Unsec. Nts., 5/1/11 4,400,000 4,746,500
- ---------------------------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc, 10.125% Sr. Unsec. Sub. Nts., 7/1/09 2,312,000 2,358,240
32 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
CHEMICALS Continued
Huntsman International LLC, 7.875% Sr. Sub. Nts., 1/1/15 2,4 $ 870,000 $ 819,975
- ---------------------------------------------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 2 2,535,000 2,845,538
11.625% Sr. Unsec. Nts., 10/15/10 95,000 105,450
- ---------------------------------------------------------------------------------------------------------------------
IMC Global, Inc.:
10.875% Sr. Unsec. Nts., 8/1/13 147,000 164,273
10.875% Sr. Unsec. Nts., Series B, 6/1/08 46,000 49,220
- ---------------------------------------------------------------------------------------------------------------------
Ineos Group Holdings plc, 8.50% Nts., 2/15/16 4 4,275,000 4,023,844
- ---------------------------------------------------------------------------------------------------------------------
Innophos, Inc., 8.875% Sr. Unsec. Sub. Nts., 8/15/14 2,350,000 2,326,500
- ---------------------------------------------------------------------------------------------------------------------
KI Holdings, Inc., 0%/9.875% Sr. Unsec. Sub. Disc. Nts., 11/15/14 5 2,850,000 2,052,000
- ---------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 86,000 88,795
9.50% Sr. Sec. Nts., 12/15/08 412,000 425,390
9.625% Sr. Sec. Nts., Series A, 5/1/07 2,500,000 2,550,000
10.50% Sr. Sec. Nts., 6/1/13 1,250,000 1,381,250
11.125% Sr. Sec. Nts., 7/15/12 700,000 763,000
- ---------------------------------------------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.:
7.50% Sr. Sub. Nts., 11/15/14 1,000,000 985,000
10.625% Sr. Unsec. Sub. Nts., 5/15/11 693,000 744,109
- ---------------------------------------------------------------------------------------------------------------------
Tronox Worldwide LLC/Tronox Finance Corp., 9.50% Sr. Nts., 12/1/12 4 2,350,000 2,432,250
--------------
32,801,416
- ---------------------------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.3%
NTK Holdings, Inc., 0%/10.75% Sr. Disc. Nts., 3/1/14 5 6,090,000 4,438,088
- ---------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING--3.9%
Ball Corp., 6.625% Sr. Nts., 3/15/18 2,450,000 2,290,750
- ---------------------------------------------------------------------------------------------------------------------
Crown Americas, Inc., 7.75% Sr. Nts., 11/15/15 4 2,390,000 2,366,100
- ---------------------------------------------------------------------------------------------------------------------
Graham Packaging Co., Inc.:
8.50% Sr. Unsec. Nts., 10/15/12 450,000 443,250
9.875% Sr. Unsec. Sub. Nts., 10/15/14 4,400,000 4,378,000
- ---------------------------------------------------------------------------------------------------------------------
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11 3,300,000 3,308,250
9.50% Sr. Sub. Nts., 8/15/13 400,000 398,000
- ---------------------------------------------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
7.50% Sr. Unsec. Unsub. Nts., 6/1/13 650,000 585,000
8.25% Sr. Unsec. Nts., 10/1/12 5,531,000 5,212,968
- ---------------------------------------------------------------------------------------------------------------------
MDP Acquisitions plc, 9.625% Sr. Nts., 10/1/12 2,500,000 2,587,500
- ---------------------------------------------------------------------------------------------------------------------
Owens-Brockway Glass Container, Inc.:
8.25% Sr. Unsec. Nts., 5/15/13 2,447,000 2,465,353
8.75% Sr. Sec. Nts., 11/15/12 5,400,000 5,649,750
8.875% Sr. Sec. Nts., 2/15/09 3,000,000 3,105,000
- ---------------------------------------------------------------------------------------------------------------------
Pliant Corp., 11.625% Sr. Sec. Nts., 6/15/09 3,6 1,485,737 1,615,739
- ---------------------------------------------------------------------------------------------------------------------
Solo Cup Co., 8.50% Sr. Sub. Nts., 2/15/14 6,500,000 5,655,000
33 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING Continued
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12 $ 1,500,000 $ 1,425,000
9.75% Sr. Unsec. Nts., 2/1/11 3,437,000 3,548,702
- ---------------------------------------------------------------------------------------------------------------------
Stone Container Finance Co. of Canada II, 7.375% Sr. Unsec. Nts., 7/15/14 1,300,000 1,157,000
- ---------------------------------------------------------------------------------------------------------------------
Tekni-Plex, Inc., 10.875% Sr. Sec. Nts., 8/15/12 4 735,000 815,850
- ---------------------------------------------------------------------------------------------------------------------
TriMas Corp., 9.875% Sr. Unsec. Sub. Nts., 6/15/12 6,100,000 5,612,000
--------------
52,619,212
- ---------------------------------------------------------------------------------------------------------------------
METALS & MINING--2.8%
AK Steel Corp.:
7.75% Sr. Unsec. Nts., 6/15/12 1,997,000 1,967,045
7.875% Sr. Unsec. Nts., 2/15/09 900,000 900,000
- ---------------------------------------------------------------------------------------------------------------------
Century Aluminum Co., 7.50% Sr. Unsec. Nts., 8/15/14 2,800,000 2,814,000
- ---------------------------------------------------------------------------------------------------------------------
Gibraltar Industries, Inc., 8% Sr. Sub. Nts., 12/1/15 4 2,510,000 2,510,000
- ---------------------------------------------------------------------------------------------------------------------
IMCO Recycling, Inc., 10.375% Sr. Sec. Nts., 10/15/10 2,200,000 2,387,000
- ---------------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 13% Unsec. Sub. Nts., 2/1/08 1,3 814,000 --
- ---------------------------------------------------------------------------------------------------------------------
IPSCO, Inc., 8.75% Sr. Nts., 6/1/13 850,000 915,875
- ---------------------------------------------------------------------------------------------------------------------
Ispat Inland ULC, 9.75% Sr. Sec. Nts., 4/1/14 4,543,000 5,015,558
- ---------------------------------------------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 9.75% Sr. Sec. Nts., 6/1/12 2,500,000 2,675,000
- ---------------------------------------------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875% Sr. Sec. Nts., 10/15/13 1,908,000 2,055,870
- ---------------------------------------------------------------------------------------------------------------------
Northwest Pipeline Corp., 8.125% Sr. Nts., 3/1/10 850,000 888,250
- ---------------------------------------------------------------------------------------------------------------------
Novelis, Inc., 7.75% Sr. Nts., 2/15/15 2,4 5,200,000 5,018,000
- ---------------------------------------------------------------------------------------------------------------------
Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09 5,750,000 6,037,500
- ---------------------------------------------------------------------------------------------------------------------
Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09 1,500,000 1,546,875
- ---------------------------------------------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts., 5/15/10 1,514,000 1,619,980
10.75% Sr. Nts., 8/1/08 1,493,000 1,612,440
--------------
37,963,393
- ---------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--1.3%
Abitibi-Consolidated Co. of Canada, 8.375% Sr. Unsec. Sub. Nts., 4/1/15 2,150,000 1,972,625
- ---------------------------------------------------------------------------------------------------------------------
Abitibi-Consolidated, Inc.:
8.55% Nts., 8/1/10 1,250,000 1,190,625
8.85% Unsec. Bonds, 8/1/30 1,100,000 935,000
- ---------------------------------------------------------------------------------------------------------------------
Appleton Papers, Inc., 8.125% Sr. Nts., 6/15/11 1,435,000 1,456,525
- ---------------------------------------------------------------------------------------------------------------------
Buckeye Technologies, Inc., 8.50% Sr. Nts., 10/1/13 1,000,000 955,000
- ---------------------------------------------------------------------------------------------------------------------
Domtar, Inc., 7.125% Nts., 8/15/15 1,950,000 1,706,250
- ---------------------------------------------------------------------------------------------------------------------
Inland Fiber Group LLC, 9.625% Sr. Unsec. Nts., 11/15/07 1,3 5,400,000 3,510,000
- ---------------------------------------------------------------------------------------------------------------------
JSG Holding plc, 11.50% Sr. Nts., 10/1/154,6 [EUR] 866,473 1,137,355
- ---------------------------------------------------------------------------------------------------------------------
Mercer International, Inc., 9.25% Sr. Nts., 2/15/13 2,290,000 2,049,550
- ---------------------------------------------------------------------------------------------------------------------
Norske Skog Canada Ltd., 7.375% Sr. Unsec. Nts., 3/1/14 1 2,200,000 1,980,000
34 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS Continued
Tembec Industries, Inc., 7.75% Sr. Nts., 3/15/12 $ 1,160,000 $ 597,400
--------------
17,490,330
- ---------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--8.8%
- ---------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.8%
AT&T Corp., 9.05% Sr. Unsec. Nts., 11/15/11 2 259,000 275,242
- ---------------------------------------------------------------------------------------------------------------------
Citizens Communications Co., 6.25% Sr. Nts., 1/15/13 4 9,300,000 8,835,000
- ---------------------------------------------------------------------------------------------------------------------
Intelsat Bermuda Ltd., 11.25% Sr. Nts., 6/15/16 4,7 4,105,000 4,228,150
- ---------------------------------------------------------------------------------------------------------------------
Intelsat Subsidiary Holding Co. Ltd.:
8.25% Sr. Nts., 1/15/13 2 3,950,000 3,940,125
8.625% Sr. Nts., 1/15/15 2 180,000 181,350
- ---------------------------------------------------------------------------------------------------------------------
Nordic Telephone Co. Holdings ApS, 8.875% Sr. Nts., 5/1/16 4 1,225,000 1,264,813
- ---------------------------------------------------------------------------------------------------------------------
PanAmSat Corp.:
9% Sr. Nts., 6/15/16 4,7 3,860,000 3,937,200
9% Sr. Unsec. Nts., 8/15/14 3,770,000 3,845,400
- ---------------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05 1,3 4,000,000 80,000
- ---------------------------------------------------------------------------------------------------------------------
Qwest Capital Funding, Inc.:
7.25% Unsec. Unsub. Nts., 2/15/11 3,400,000 3,323,500
7.90% Unsec. Nts., 8/15/10 2,572,000 2,572,000
- ---------------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 7.25% Sr. Unsec. Sub. Nts.,
2/15/11 2 1,500,000 1,462,500
- ---------------------------------------------------------------------------------------------------------------------
Qwest Corp., 8.875% Unsec. Unsub. Nts., 3/15/12 2 7,200,000 7,632,000
- ---------------------------------------------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 1,3 2,300,000 --
- ---------------------------------------------------------------------------------------------------------------------
Time Warner Telecom Holdings, Inc., 9.25% Sr. Unsec. Unsub. Nts., 2/15/14 5,275,000 5,433,250
- ---------------------------------------------------------------------------------------------------------------------
Valor Telecommunications Enterprises LLC, 7.75% Sr. Unsec. Sub. Nts.,
2/15/15 1,370,000 1,421,375
- ---------------------------------------------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Nts., 8/1/13 4,7 1,795,000 1,839,875
8.625% Sr. Nts., 8/1/16 4,7 1,795,000 1,844,363
--------------
52,116,143
- ---------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--5.0%
Alamosa Delaware, Inc.:
8.50% Sr. Nts., 1/31/12 2,150,000 2,289,750
11% Sr. Unsec. Nts., 7/31/10 147,000 161,700
- ---------------------------------------------------------------------------------------------------------------------
American Cellular Corp., 10% Sr. Nts., Series B, 8/1/11 4,820,000 5,097,150
- ---------------------------------------------------------------------------------------------------------------------
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 1,500,000 1,503,750
7.50% Sr. Nts., 5/1/12 6,450,000 6,546,750
- ---------------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., Sr. Unsec. Disc. Nts., 10/1/07 1,3 9,220,000 --
- ---------------------------------------------------------------------------------------------------------------------
Centennial Cellular Operating Co. LLC/Centennial Communications Corp.,
10.125% Sr. Nts., 6/15/13 7,350,000 7,772,625
- ---------------------------------------------------------------------------------------------------------------------
Dobson Cellular Systems, Inc., 8.375% Sr. Sec. Nts., 11/1/11 1,660,000 1,713,950
35 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13 $ 3,671,000 $ 3,625,113
9.318% Sr. Unsec. Nts., 10/15/12 2 740,000 749,250
- ---------------------------------------------------------------------------------------------------------------------
IWO Holdings, Inc., 8.818% Sr. Sec. Nts., 1/15/12 2 570,000 592,800
- ---------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 7.375% Sr. Nts., Series D, 8/1/15 11,460,000 11,672,778
- ---------------------------------------------------------------------------------------------------------------------
Nextel Partners, Inc., 8.125% Sr. Nts., 7/1/11 1 3,300,000 3,469,125
- ---------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc.:
7.50% Sec. Nts., 3/15/15 2,700,000 2,740,500
8% Sr. Sub. Nts., 12/15/12 1,700,000 1,746,750
- ---------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp.:
9.75% Sr. Sub. Nts., 1/15/10 7,447,000 7,456,309
9.875% Sr. Nts., 2/1/10 4,000,000 4,135,000
- ---------------------------------------------------------------------------------------------------------------------
UbiquiTel Operating Co., 9.875% Sr. Nts., 3/1/11 4,200,000 4,588,500
- ---------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., 10% Sr. Sec. Nts., 6/15/12 1,625,000 1,811,875
--------------
67,673,675
- ---------------------------------------------------------------------------------------------------------------------
UTILITIES--5.2%
- ---------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.3%
AES Corp. (The), 8.375% Sr. Unsec. Unsub. Nts., 3/1/111 [GBP] 2,500,000 4,669,268
- ---------------------------------------------------------------------------------------------------------------------
Edison Mission Energy:
7.50% Sr. Nts., 6/15/13 4 1,220,000 1,201,700
7.75% Sr. Nts., 6/15/16 4 460,000 454,250
- ---------------------------------------------------------------------------------------------------------------------
Midwest Generation LLC, 8.75% Sr. Sec. Nts., 5/1/34 10,000,000 10,650,000
- ---------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW Energy Finance Co. II, Inc., 7.375%
Sr. Sec. Nts., Series B, 9/1/10 3,350,000 3,366,750
- ---------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW Energy Finance Co., Inc., 8.50%
Sr. Sec. Nts., 9/1/10 1,300,000 1,345,500
- ---------------------------------------------------------------------------------------------------------------------
Reliant Energy, Inc., 6.75% Sr. Sec. Nts., 12/15/14 1,900,000 1,757,500
- ---------------------------------------------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 797,000 800,985
9.50% Sr. Sec. Nts., 7/15/13 4,260,000 4,302,600
- ---------------------------------------------------------------------------------------------------------------------
Sierra Pacific Resources, 6.75% Sr. Unsec. Nts., 8/15/17 3,195,000 3,034,678
--------------
31,583,231
- ---------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS--2.5%
AES Corp. (The), 8.75% Sr. Sec. Nts., 5/15/13 4 3,800,000 4,085,000
- ---------------------------------------------------------------------------------------------------------------------
AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19 2,458,880 2,606,413
- ---------------------------------------------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 3,986,000 3,786,700
8.375% Sr. Unsec. Nts., 5/1/16 4 350,000 346,500
8.75% Sr. Nts., 2/15/12 1,159,000 1,182,180
- ---------------------------------------------------------------------------------------------------------------------
Mirant Americas Generation LLC:
8.30% Sr. Unsec. Nts., 5/1/11 9,850,000 9,776,103
36 | OPPENHEIMER HIGH YIELD FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS Continued
Mirant Americas Generation LLC: Continued
8.50% Sr. Unsec. Nts., 10/1/21 $ 1,000,000 $ 942,500
9.125% Sr. Unsec. Nts., 5/1/31 2,400,000 2,340,000
- ---------------------------------------------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC, 8.625% Sec. Pass-Through Certificates,
Series A, 6/30/12 2,342,980 2,485,023
- ---------------------------------------------------------------------------------------------------------------------
NRG Energy, Inc., 7.375% Sr. Nts., 2/1/16 7,100,000 6,940,250
--------------
34,490,669
- ---------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.1%
SEMCO Energy, Inc., 7.125% Sr. Nts., 5/15/08 1,100,000 1,097,648
- ---------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.3%
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 1,147,000 1,167,073
7.75% Sr. Nts., 8/1/10 1,400,000 1,428,000
- ---------------------------------------------------------------------------------------------------------------------
NorthWestern Corp., 5.875% Sr. Sec. Nts., 11/1/14 1,000,000 984,717
--------------
3,579,790
--------------
Total Corporate Bonds and Notes (Cost $1,204,213,203) 1,178,145,948
SHARES
- ---------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--1.2%
- ---------------------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg. 1,6 110,146 --
- ---------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 6% Cv., Series F (converts into Dobson
Communications Corp., Cl. A common stock), Non-Vtg. 4 3,100 543,275
- ---------------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg. 1,6 3,738 374
- ---------------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg. 1,8 28,000 --
- ---------------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg. 1,8 1 --
- ---------------------------------------------------------------------------------------------------------------------
ION Media Networks, Inc., 14.25% Cum., Non-Vtg. 8 1,016 8,736,038
- ---------------------------------------------------------------------------------------------------------------------
Loral Skynet Corp., 12% Cum., Series A, Non-Vtg. 1,8 7,549 1,502,251
- ---------------------------------------------------------------------------------------------------------------------
PTV, Inc., 10% Cum., Series A, Non-Vtg. 8 192 576
- ---------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum., Series B, Non-Vtg. 8 1,243 1,507,138
- ---------------------------------------------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A 4 26,250 3,615,938
--------------
Total Preferred Stocks (Cost $20,593,126) 15,905,590
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.2%
- ---------------------------------------------------------------------------------------------------------------------
American Tower Corp. 8 60,609 1,886,152
- ---------------------------------------------------------------------------------------------------------------------
ATA Holdings Corp. 1,8 20,488 307,320
- ---------------------------------------------------------------------------------------------------------------------
Cebridge Connections Holding LLC 1,8 6,613 --
- ---------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp. 40,000 1,210,000
- ---------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. 2,479 119,587
- ---------------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc. 8 132,227 265,776
- ---------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A 8 157,019 1,213,757
37 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
COMMON STOCKS Continued
- ---------------------------------------------------------------------------------------------------------------------
Dow Chemical Co. (The) 35,000 $ 1,366,050
- ---------------------------------------------------------------------------------------------------------------------
Globix Corp. 8 80,275 398,967
- ---------------------------------------------------------------------------------------------------------------------
Horizon Natural Resources Co. 1,8 93,333 --
- ---------------------------------------------------------------------------------------------------------------------
Huntsman Corp. 1,8 54,796 901,613
- ---------------------------------------------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd. 8 168,429 791,616
- ---------------------------------------------------------------------------------------------------------------------
iPCS, Inc. 8 39,304 1,898,383
- ---------------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc. 8 17,168 814,622
- ---------------------------------------------------------------------------------------------------------------------
Liberty Global, Inc., Series A 27,373 588,520
- ---------------------------------------------------------------------------------------------------------------------
Liberty Global, Inc., Series C 8 27,760 571,023
- ---------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. 8 57,218 1,622,702
- ---------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 7,544 335,708
- ---------------------------------------------------------------------------------------------------------------------
Orbital Sciences Corp. 8 14,063 226,977
- ---------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., Cl. A 8 8,124 206,918
- ---------------------------------------------------------------------------------------------------------------------
Prandium, Inc. 1,8,9 459,132 4,591
- ---------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. 8 4,014 59,809
- ---------------------------------------------------------------------------------------------------------------------
TVMAX Holdings, Inc. 1,8 30,000 30,000
- ---------------------------------------------------------------------------------------------------------------------
Verizon Communications, Inc. 14,036 470,066
- ---------------------------------------------------------------------------------------------------------------------
Viatel Holding (Bermuda) Ltd. 1,8 13,172 132
- ---------------------------------------------------------------------------------------------------------------------
Western Forest Products, Inc. 8 467,777 817,133
- ---------------------------------------------------------------------------------------------------------------------
WRC Media Corp. 1,8 9,471 95
- ---------------------------------------------------------------------------------------------------------------------
XO Holdings, Inc. 8 22,405 98,582
--------------
Total Common Stocks (Cost $30,092,403) 16,206,099
UNITS
- ---------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ---------------------------------------------------------------------------------------------------------------------
COLO.com, Inc. Wts., Exp. 3/15/10 1,8 2,000 --
- ---------------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07 1,8 3,330 --
- ---------------------------------------------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 1,8 4,000 --
- ---------------------------------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/1/08 1,8 7,500 --
- ---------------------------------------------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09 1,8 1,445 --
- ---------------------------------------------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd. Wts., Exp. 8/1/06 1,8 63 --
- ---------------------------------------------------------------------------------------------------------------------
iPCS, Inc. Wts., Exp. 6/15/10 1,8 3,750 --
- ---------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 1,8 2,800 --
- ---------------------------------------------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10 1,8 5,000 --
- ---------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 8 100,000 34,000
- ---------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts., Exp. 12/19/08 8 6,519 41
- ---------------------------------------------------------------------------------------------------------------------
XO Communications, Inc.:
Series A Wts., Exp. 1/16/10 8 44,823 38,548
Series B Wts., Exp. 1/16/10 8 33,615 16,135
38 | OPPENHEIMER HIGH YIELD FUND
VALUE
UNITS SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES Continued
- ---------------------------------------------------------------------------------------------------------------------
XO Communications, Inc.: Continued
Series C Wts., Exp. 1/16/10 8 33,615 $ 11,765
- ---------------------------------------------------------------------------------------------------------------------
Ziff Davis Holdings, Inc. Wts., Exp. 8/12/12 1,8 30,800 308
--------------
Total Rights, Warrants and Certificates (Cost $468,489) 100,797
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--0.3%
- ---------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., High Yield Targeted Return Index
Securities, Series 2006-1, 7.548%, 5/1/16 1,10 (Cost $3,826,754) $ 3,800,000 3,791,032
- ---------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--9.6%
- ---------------------------------------------------------------------------------------------------------------------
Undivided interest of 5.36% in joint repurchase agreement (Principal
Amount/Value $2,439,041,000, with a maturity value of
$2,440,006,454) with UBS Warburg LLC, 4.75%, dated
6/30/06, to be repurchased at $130,695,713 on 7/3/06,
collateralized by Federal National Mortgage Assn.,
5%-6%, 10/1/35-3/1/36, with a value of
$2,494,907,407 (Cost $130,644,000) 130,644,000 130,644,000
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $1,391,370,239) 99.0% 1,344,814,720
- ---------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.0 13,178,193
-------------------------------
NET ASSETS 100.0% $1,357,992,913
===============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
EUR Euro
GBP British Pound Sterling
1. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2006 was $27,973,693, which represents
2.06% of the Fund's net assets, of which $906,204 is considered restricted. See
Note 7 of accompanying Notes.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Issue is in default. Non-income producing. See Note 1 of accompanying Notes.
4. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $215,439,267 or 15.86% of the Fund's net
assets as of June 30, 2006.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Interest or dividend is paid-in-kind.
7. When-issued security or forward commitment to be delivered and settled after
June 30, 2006. See Note 1 of accompanying Notes.
8. Non-income producing security.
39 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
9. Represents ownership of at least 5% of the voting securities of the issuer,
and is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2006. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES VALUE DIVIDEND
JUNE 30, 2005 ADDITIONS REDUCTIONS JUNE 30, 2006 SEE NOTE 1 INCOME
- -----------------------------------------------------------------------------------------------------------
Prandium, Inc. 459,132 -- -- 459,132 $4,591 $--
10. Interest rate represents a weighted average rate comprised of the interest
rates of the underlying securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES June 30, 2006
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $1,385,970,239) $1,344,810,129
Affiliated companies (cost $5,400,000) 4,591
---------------
1,344,814,720
- ----------------------------------------------------------------------------------------------------
Cash 2,146,970
- ----------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 25,693,000
Investments sold 5,589,616
Shares of beneficial interest sold 1,279,281
Other 43,840
---------------
Total assets 1,379,567,427
- ----------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $11,510,969 purchased on a when-issued basis or
forward commitment) 14,476,961
Shares of beneficial interest redeemed 3,716,289
Dividends 2,104,561
Distribution and service plan fees 817,041
Transfer and shareholder servicing agent fees 188,531
Shareholder communications 160,774
Trustees' compensation 37,439
Other 72,918
---------------
Total liabilities 21,574,514
- ----------------------------------------------------------------------------------------------------
NET ASSETS $1,357,992,913
===============
- ----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 147,479
- ----------------------------------------------------------------------------------------------------
Additional paid-in capital 2,007,739,675
- ----------------------------------------------------------------------------------------------------
Accumulated net investment loss (4,341,276)
- ----------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (599,001,645)
- ----------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (46,551,320)
---------------
NET ASSETS $1,357,992,913
===============
41 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$965,984,834 and 104,621,166 shares of beneficial interest outstanding) $9.23
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $9.69
- --------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $167,165,401
and 18,389,443 shares of beneficial interest outstanding) $9.09
- --------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $115,354,323
and 12,527,402 shares of beneficial interest outstanding) $9.21
- --------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $14,444,567
and 1,561,603 shares of beneficial interest outstanding) $9.25
- --------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $95,043,788 and 10,379,379 shares of beneficial interest outstanding) $9.16
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF OPERATIONS For the Year Ended June 30, 2006
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $89) $119,689,844
- ---------------------------------------------------------------------------------------
Dividends 2,117,888
- ---------------------------------------------------------------------------------------
Other income 30,090
-------------
Total investment income 121,837,822
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 9,161,234
- ---------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,537,010
Class B 2,007,280
Class C 1,265,093
Class N 80,392
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,648,466
Class B 358,564
Class C 245,161
Class N 45,324
Class Y 124,193
- ---------------------------------------------------------------------------------------
Shareholder communications:
Class A 204,201
Class B 48,053
Class C 28,326
Class N 3,493
- ---------------------------------------------------------------------------------------
Trustees' compensation 27,486
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 11,732
- ---------------------------------------------------------------------------------------
Administration service fees 1,500
- ---------------------------------------------------------------------------------------
Other 120,944
-------------
Total expenses 17,918,452
Less reduction to custodian expenses (10,799)
Less waivers and reimbursements of expenses (23,958)
-------------
Net expenses 17,883,695
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 103,954,127
43 | OPPENHEIMER HIGH YIELD FUND
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments $10,345,494
Closing and expiration of futures contracts (560,838)
Foreign currency transactions 377,640
------------
Net realized gain 10,162,296
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (45,385,948)
Translation of assets and liabilities denominated in foreign currencies 642,111
------------
Net change in unrealized depreciation (44,743,837)
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $69,372,586
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44 | OPPENHEIMER HIGH YIELD FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 2006 2005
- -------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 103,954,127 $ 110,861,112
- -------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 10,162,296 (36,880,337)
- -------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (44,743,837) 45,951,518
----------------------------------
Net increase in net assets resulting from operations 69,372,586 119,932,293
- -------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (76,878,315) (79,104,021)
Class B (13,013,722) (17,461,746)
Class C (8,196,826) (9,342,456)
Class N (1,115,107) (915,301)
Class Y (4,681,074) (3,700,700)
- -------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A (101,440,188) 12,882,345
Class B (60,353,255) (73,579,012)
Class C (16,188,859) (15,884,269)
Class N (1,156,419) 7,103,476
Class Y 56,046,774 (16,599,862)
- -------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------
Total decrease (157,604,405) (76,669,253)
- -------------------------------------------------------------------------------------------------------------
Beginning of period 1,515,597,318 1,592,266,571
----------------------------------
End of period (including accumulated net investment loss of $4,341,276
and $4,807,789, respectively)
$1,357,992,913 $1,515,597,318
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45 | OPPENHEIMER HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.46 $ 9.41 $ 9.15 $ 8.62 $ 10.20
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .68 1 .67 1 .73 .84 .92
Net realized and unrealized gain (loss) (.22) .05 .24 .47 (1.44)
-----------------------------------------------------------------------------------
Total from investment operations .46 .72 .97 1.31 (.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.69) (.67) (.71) (.69) (1.01)
Tax return of capital distribution -- -- -- (.09) (.05)
-----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.69) (.67) (.71) (.78) (1.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.23 $ 9.46 $ 9.41 $ 9.15 $ 8.62
===================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.94% 7.85% 10.90% 16.38% (5.47)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 965,985 $1,092,260 $1,073,708 $1,150,055 $ 858,834
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,057,919 $1,125,060 $1,146,751 $ 934,227 $ 948,097
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 7.27% 7.05% 7.80% 9.54% 9.68%
Total expenses 1.05% 4 1.03% 4,5 1.03% 4,5 1.07% 4 1.10% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 52% 55% 68% 47%
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 less than one 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.
46 | OPPENHEIMER HIGH YIELD FUND
CLASS B YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 9.31 $ 9.26 $ 9.03 $ 8.51 $ 10.09
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .60 1 .59 1 .63 .74 .84
Net realized and unrealized gain (loss) (.22) .05 .24 .49 (1.43)
-------------------------------------------------------------------------
Total from investment operations .38 .64 .87 1.23 (.59)
- --------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.60) (.59) (.64) (.62) (.94)
Tax return of capital distribution -- -- -- (.09) (.05)
- --------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.60) (.59) (.64) (.71) (.99)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.09 $ 9.31 $ 9.26 $ 9.03 $ 8.51
=========================================================================
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.20% 7.05% 9.86% 15.60% (6.23)%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $167,165 $232,046 $303,184 $372,947 $338,654
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $200,772 $279,146 $347,319 $321,200 $366,869
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.49% 6.27% 7.03% 8.81% 8.93%
Total expenses 1.84% 4 1.80% 4,5 1.80% 4,5 1.84% 4 1.86% 4
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 52% 55% 68% 47%
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 less than one 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.
47 | OPPENHEIMER HIGH YIELD FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.43 $ 9.38 $ 9.13 $ 8.60 $ 10.18
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .61 1 .60 1 .66 .78 .86
Net realized and unrealized gain (loss) (.22) .05 .23 .46 (1.45)
---------------------------------------------------------------------------
Total from investment operations .39 .65 .89 1.24 (.59)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.61) (.60) (.64) (.62) (.94)
Tax return of capital distribution -- -- -- (.09) (.05)
---------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.61) (.60) (.64) (.71) (.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.21 $ 9.43 $ 9.38 $ 9.13 $ 8.60
===========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.21% 7.02% 9.96% 15.55% (6.08)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $115,354 $134,453 $149,505 $160,713 $106,884
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $126,648 $149,487 $166,367 $120,997 $104,882
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.48% 6.27% 7.03% 8.78% 8.75%
Total expenses 1.85% 4 1.81% 4,5 1.79% 4,5 1.83% 4 1.86% 4
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 52% 55% 68% 47%
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 less than one 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.
48 | OPPENHEIMER HIGH YIELD FUND
CLASS N YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.47 $ 9.43 $ 9.17 $ 8.63 $ 10.20
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .65 1 .64 1 .70 .80 .96
Net realized and unrealized gain (loss) (.22) .04 .24 .49 (1.48)
----------------------------------------------------------------------
Total from investment operations .43 .68 .94 1.29 (.52)
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.65) (.64) (.68) (.66) (1.00)
Tax return of capital distribution -- -- -- (.09) (.05)
----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.65) (.64) (.68) (.75) (1.05)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.25 $ 9.47 $ 9.43 $ 9.17 $ 8.63
======================================================================
TOTAL RETURN, AT NET ASSET VALUE 2 4.66% 7.32% 10.47% 16.08% (5.53)%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $14,445 $15,973 $ 8,894 $ 8,324 $ 2,396
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,218 $13,788 $10,501 $ 4,827 $ 799
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.88% 6.66% 7.41% 9.14% 8.41%
Total expenses 1.43% 4 1.42% 4,5 1.38% 4,5 1.41% 4 1.35% 4
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 52% 55% 68% 47%
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 less than one 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.
49 | OPPENHEIMER HIGH YIELD FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED JUNE 30, 2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.38 $ 9.33 $ 9.09 $ 8.56 $ 10.14
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .70 1 .67 1 .73 .86 .90
Net realized and unrealized gain (loss) (.22) .05 .23 .45 (1.41)
-------------------------------------------------------------
Total from investment operations .48 .72 .96 1.31 (.51)
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.70) (.67) (.72) (.69) (1.02)
Tax return of capital distribution -- -- -- (.09) (.05)
-------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.70) (.67) (.72) (.78) (1.07)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.16 $ 9.38 $ 9.33 $ 9.09 $ 8.56
=============================================================
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 5.28% 7.92% 10.80% 16.51% (5.37)%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $95,044 $40,865 $56,976 $54,102 $38,500
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $62,263 $52,400 $56,276 $43,178 $44,583
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 7.52% 7.08% 7.85% 9.63% 9.88%
Total expenses 0.84% 1.07% 1.14% 1.34% 1.01%
Expenses after payments and waivers and
reduction to custodian expenses 0.80% 0.97% 0.98% 0.98% 0.98%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 58% 52% 55% 68% 47%
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 less than one 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.
50 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer High Yield Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's primary investment objective is to seek a high level of current
income by investing in a diversified portfolio of high-yield, lower-rated
fixed-income securities the Fund's investment Manager, OppenheimerFunds, Inc.
(the Manager), believes do not involve undue risk. The Fund's secondary
objective is to seek capital growth when consistent with its primary objective.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors 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 Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities 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, as 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
51 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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. 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 June 30, 2006, the market value
of these securities comprised 0.3% of the Fund's net assets and resulted in
unrealized cumulative losses of $35,722.
- --------------------------------------------------------------------------------
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 June 30, 2006, the Fund had purchased $11,510,969
of securities issued on a when-issued basis or forward commitment.
52 | OPPENHEIMER HIGH YIELD FUND
- --------------------------------------------------------------------------------
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 June 30, 2006, securities with an aggregate
market value of $10,842,442, representing 0.80% 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 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.
53 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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
DEPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
----------------------------------------------------------------------------
$1,418,544 $-- $594,882,769 $50,633,847
1. As of June 30, 2006, the Fund had $594,882,769 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of June 30, 2006, details
of the capital loss carryforwards were as follows:
EXPIRING
---------------------------------
2007 $ 22,425,181
2008 35,734,504
2009 57,513,604
2010 101,344,550
2011 284,056,063
2012 55,694,998
2013 38,113,869
------------
Total $594,882,769
============
2. During the fiscal year ended June 30, 2006, the Fund utilized $8,224,116 of
capital loss carryforward to offset capital gains realized in that fiscal year.
3. During the fiscal year ended June 30, 2005, the Fund did not utilize any
capital loss carryforward.
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 June 30, 2006. Net assets of the
Fund were unaffected by the reclassifications.
54 | OPPENHEIMER HIGH YIELD FUND
INCREASE TO
REDUCTION TO ACCUMULATED NET
ACCUMULATED NET REALIZED LOSS
INVESTMENT LOSS ON INVESTMENTS
------------------------------------------
$397,430 $397,430
The tax character of distributions paid during the years ended June 30, 2006 and
June 30, 2005 was as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
------------------------------------------------------------------
Distributions paid from:
Ordinary income $103,885,044 $110,524,224
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 June 30, 2006 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 $1,395,452,766
===============
Gross unrealized appreciation $ 30,784,058
Gross unrealized depreciation (81,417,905)
---------------
Net unrealized depreciation $ (50,633,847)
===============
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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
55 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. At June 30, 2006, the Fund had $1,321 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with 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 JUNE 30, 2006 YEAR ENDED JUNE 30, 2005
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
CLASS A
Sold 27,665,007 $ 259,572,324 38,389,735 $ 366,629,436
Dividends and/or
distributions reinvested 5,505,493 51,674,814 5,558,232 53,115,827
Redeemed (44,061,232) (412,687,326) 1 (42,566,938) (406,862,918) 2
----------------------------------------------------------------------
Net increase (decrease) (10,890,732) $(101,440,188) 1,381,029 $ 12,882,345
======================================================================
56 | OPPENHEIMER HIGH YIELD FUND
YEAR ENDED JUNE 30, 2006 YEAR ENDED JUNE 30, 2005
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
CLASS B
Sold 3,362,592 $ 31,120,303 5,983,222 $ 56,234,386
Dividends and/or
distributions reinvested 799,813 7,392,848 1,018,189 9,579,810
Redeemed (10,699,068) (98,866,406) 1 (14,803,057) (139,393,208) 2
----------------------------------------------------------------------
Net decrease (6,536,663) $ (60,353,255) (7,801,646) $ (73,579,012)
======================================================================
- ------------------------------------------------------------------------------------------------------
CLASS C
Sold 2,798,352 $ 26,178,488 4,405,322 $ 42,084,078
Dividends and/or
distributions reinvested 627,445 5,872,988 673,504 6,418,231
Redeemed (5,156,073) (48,240,335) 1 (6,754,941) (64,386,578) 2
----------------------------------------------------------------------
Net decrease (1,730,276) $ (16,188,859) (1,676,115) $ (15,884,269)
======================================================================
- ------------------------------------------------------------------------------------------------------
CLASS N
Sold 973,723 $ 9,153,510 1,306,473 $ 12,488,035
Dividends and/or
distributions reinvested 109,561 1,030,125 86,918 832,537
Redeemed (1,207,656) (11,340,054) 1 (650,988) (6,217,096) 2
----------------------------------------------------------------------
Net increase (decrease) (124,372) $ (1,156,419) 742,403 $ 7,103,476
======================================================================
- ------------------------------------------------------------------------------------------------------
CLASS Y
Sold 7,272,553 $ 67,716,809 3,233,381 $ 30,626,176
Dividends and/or
distributions reinvested 507,589 4,681,074 390,120 3,698,863
Redeemed (1,757,939) (16,351,109) 1 (5,371,495) (50,924,901) 2
----------------------------------------------------------------------
Net increase (decrease) 6,022,203 $ 56,046,774 (1,747,994) $ (16,599,862)
======================================================================
1. Net of redemption fees of $27,999, $5,314, $3,352, $429 and $1,648 for Class
A, Class B, Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $28,208, $6,999, $3,748, $346 and $1,314 for Class
A, Class B, Class C, Class N and Class Y, respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended June 30, 2006, were as follows:
PURCHASES SALES
------------------------------------------------------------
Investment securities $749,796,116 $893,910,720
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
57 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
FEE SCHEDULE
------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $200 million of net assets 0.60
Over $1 billion of net assets 0.50
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended June 30, 2006, the Fund paid
$2,423,911 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
periodically 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 periodically 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
periods. Fees incurred by the Fund under the plan are detailed in the Statement
of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans 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
58 | OPPENHEIMER HIGH YIELD FUND
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 June 30, 2006 for Class B, Class C and Class N shares
were $12,726,658, $4,146,973 and $264,704, respectively. Fees incurred by the
Fund under the plans are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table 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
- -----------------------------------------------------------------------------------------------------
June 30, 2006 $427,091 $1,032 $549,162 $11,246 $5,003
- --------------------------------------------------------------------------------
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 June 30, 2006, OFS
waived $23,958 for Class Y 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.
As of June 30, 2006, the Fund had no outstanding foreign currency
contracts.
59 | OPPENHEIMER HIGH YIELD FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
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 June 30, 2006, the Fund had no outstanding futures contracts.
- --------------------------------------------------------------------------------
7. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2006, 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 restricted
securities is as follows:
60 | OPPENHEIMER HIGH YIELD FUND
UNREALIZED
ACQUISITION VALUATION AS OF APPRECIATION
SECURITY DATES COST JUNE 30, 2006 (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
Huntsman Corp. 7/15/04 $ 370,299 $901,613 $ 531,314
Prandium, Inc. 3/18/99-3/22/99 5,400,000 4,591 (5,395,409)
---------------------------------------------------
$5,770,299 $906,204 $(4,864,095)
===================================================
- --------------------------------------------------------------------------------
8. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss.
- --------------------------------------------------------------------------------
9. FUND REORGANIZATION
The Board of Trustees of the Fund approved a proposal to reorganize the Fund
with and into Oppenheimer Champion Income Fund (Champion Income Fund). In a
special meeting to be held in October 2006, shareholders of the Fund will be
asked to approve an Agreement and Plan of Reorganization between the Fund and
Champion Income Fund, and the transactions contemplated thereby, including (a)
the transfer of substantially all the assets of the Fund to Champion Income Fund
in exchange for Class A, Class B, Class C, Class N and Class Y shares of
Champion Income Fund, (b) the distribution of Class A, Class B, Class C, Class N
and Class Y shares of Champion Income Fund to the Class A, Class B, Class C,
Class N and Class Y shareholders of the Fund in complete liquidation of the Fund
and (c) the cancellation of the outstanding shares of the Fund.
61 | OPPENHEIMER HIGH YIELD FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER HIGH YIELD FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer High Yield Fund, including the statement of investments, as of June
30, 2006, 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 June 30, 2006, 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 High Yield Fund as of June 30, 2006, 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
August 8, 2006
62 | OPPENHEIMER HIGH YIELD FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2007, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2006. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended June 30,
2006 which are not designated as capital gain distributions should be multiplied
by 1.71% to arrive at the amount eligible for the corporate dividend-received
deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended June 30, 2006 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.
$1,794,800 of the Fund's fiscal year taxable income may be eligible for the
lower individual income tax rates. In early 2007, shareholders of record will
receive information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate
distributions not designated as capital gain distributions, as either interest
related dividends or short-term capital gain dividends, both of which are exempt
from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal
year ended June 30, 2006, $95,478,651 or 91.91% of the ordinary distributions
paid by the Fund qualifies as an interest related dividend.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
63 | OPPENHEIMER HIGH YIELD FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30, no later than August 31 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.
64 | OPPENHEIMER HIGH YIELD FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek
Chairman of the Board of Mortgage Company (since 1991), Centennial State Mortgage Company (since
Trustees (since 2003), 1994), and The El Paso Mortgage Company (since 1993); Chairman of the
Trustee (since 1999) following private companies: Ambassador Media Corporation (since 1984) and
Age: 69 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 com-
pany) (1991-2004), Storage Technology Corporation (computer equipment
company) (1991-2003) and International Family Entertainment (television chan-
nel) (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 private
Trustee (since 1990) equity funds) (until February 2001); Chairman, President and Chief Executive
Age: 75 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 portfo-
lios in the OppenheimerFunds complex.
GEORGE C. BOWEN, Assistant Secretary and Director of Centennial Asset Management Corporation
Trustee (since 1998) (December 1991-April 1999); President, Treasurer and Director of Centennial
Age: 69 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 2000) site) (since June 2000); Director of Genetic ID, Inc. (biotech company) (March
Age: 67 2001-May 2002); Partner at PricewaterhouseCoopers LLP (accounting firm) (July
1974-June 1999); Chairman of Price Waterhouse LLP Global Investment
Management Industry Services Group (accounting firm) (July 1994-June 1998).
Oversees 38 portfolios in the OppenheimerFunds complex.
65 | OPPENHEIMER HIGH YIELD FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director of
Trustee (since 1990) Northwestern Energy Corp. (public utility corporation) (since November 2004);
Age: 64 Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky
Mountain Elk Foundation (non-profit organization) (February 1998-February 2003
and since February 2005); Chairman and Director (until October 1996) and
President and Chief Executive Officer (until October 1995) of the Manager;
President, Chief Executive Officer and Director of the following: Oppenheimer
Acquisition Corp. ("OAC") (parent holding company of the Manager), Shareholders
Services, Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees
38 portfolios in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado Uplift (charitable organization) (since September 1984).
Trustee (since 1996) Mr. Freedman held several positions with the Manager and with subsidiary or
Age: 65 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 organization)
Trustee (since 2002) (since February 2000); Board Member of Middlebury College (educational orga-
Age: 59 nization) (since December 2005); Director of The California Endowment
(philanthropic organization) (since April 2002); Director (February 2002-2005)
and Chairman of Trustees (since 2006) of the Community Hospital of Monterey
Peninsula; Director (October 1991-2005) and Vice Chairman (since 2006) of
American Funds' Emerging Markets Growth Fund, Inc. (mutual fund); President
of ARCO Investment Management Company (February 1991-April 2000);
Member of the investment committees of The Rockefeller Foundation (since
2001) and The University of Michigan (since 2000); Advisor at Credit Suisse First
Boston's Sprout venture capital unit (venture capital fund) (1994-January 2005);
Trustee of MassMutual Institutional Funds (investment company) (1996-June
2004); Trustee of MML Series Investment Fund (investment company) (April
1989-June 2004); Member of the investment committee of Hartford Hospital
(2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003).
Oversees 38 portfolios in the OppenheimerFunds complex.
ROBERT J. MALONE, Director of Jones International University (educational organization) (since
Trustee (since 2002) August 2005); Chairman, Chief Executive Officer and Director of Steele Street
Age: 61 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 Funds)
Trustee (since 2000) (investment company) (since 1996) and MML Series Investment Fund (invest-
Age: 64 ment company) (since 1996); Trustee (since 1987) and Chairman (1994-2005)
of the Investment Committee of the Worcester Polytech Institute (private uni-
versity); President and Treasurer of the SIS Funds (private charitable fund) (since
January 1999); Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank) (com-
mercial bank) (January 1999-July 1999); and Executive Vice President of Peoples
Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999).
Oversees 40 portfolios in the OppenheimerFunds complex.
66 | OPPENHEIMER HIGH YIELD FUND
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR,
AND OFFICER NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM,
OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE
TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. 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
Trustee, President and (since September 2000) of the Manager; President and director or trustee of
Principal Executive Officer other Oppenheimer funds; President and Director of OAC and of Oppenheimer
(since 2001) Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since
Age: 57 July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the
Manager) (since November 2001); Chairman and Director 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 86 portfolios in the
OppenheimerFunds complex.
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OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. KOURKOULAKOS
OF THE FUND AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-
1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO
80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT DEATH OR REMOVAL.
DIMITRIOS KOURKOULAKOS, Vice President of the Manager since December 2001; High Yield Analyst
Vice President and Portfolio (1998-2001) and a Securities Analyst (1995-1998) of the Manager. An officer
Manager (since 2002) of 3 portfolios in the OppenheimerFunds complex.
Age: 38
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., Centennial
Chief Compliance Officer Asset Management Corporation and Shareholder Services, Inc. (since June 1983);
(since 2004) Vice President and Director of Internal Audit of the Manager (1997-February
Age: 55 2004). An officer of 86 portfolios in the OppenheimerFunds complex.
67 | OPPENHEIMER HIGH YIELD FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999);
Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation,
Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real
Officer (since 1999) Asset Management Corporation, and Oppenheimer Partnership Holdings,
Age: 46 Inc. (since March 1999), OFI Private Investments, Inc. (since 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 86 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March
Vice President and Secretary 2002) of the Manager; General Counsel and Director of the Distributor (since
(since 2001) December 2001); General Counsel of Centennial Asset Management
Age: 58 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 86 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.
68 | OPPENHEIMER HIGH YIELD 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, are audit committee financial experts and that
Messrs. Cameron and Bowen are "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $25,000 in fiscal 2006 and $24,000 in fiscal 2005.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees for 2006 or 2005.
The principal accountant for the audit of the registrant's annual financial
statements billed $21,500 for 2006 to the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant.
Such services include: Merger related consents and financial statement reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees 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.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $5,840 in fiscal 2006 and no such fees in fiscal 2005to 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 $27,340 in fiscal 2006 and no such fees for
fiscal 2005 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 06/30/2006, 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 High Yield Fund
By: /s/ John V. Murphy
----------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2006
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: 08/08/2006
By: /s/ Brian W. Wixted
----------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2006