UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07657
---------
OPPENHEIMER DEVELOPING MARKETS FUND
-----------------------------------
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
---------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: AUGUST 31
---------
Date of reporting period: FEBRUARY 28, 2007
-----------------
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN GEOGRAPHICAL HOLDINGS
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Brazil 15.4%
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India 13.6
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Korea, Republic of South 13.0
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Taiwan 9.9
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South Africa 6.9
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Mexico 6.5
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Indonesia 5.1
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Turkey 4.1
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United States 4.1
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Russia 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2007, and are based on the total market value of investments.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, ADR 3.7%
- --------------------------------------------------------------------------------
America Movil SA de CV, Series L 2.5
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Samsung Electronics Co. 1.9
- --------------------------------------------------------------------------------
Hon Hai Precision Industry Co. Ltd. 1.8
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All America Latina Logistica 1.8
- --------------------------------------------------------------------------------
Anglo Platinum Ltd. 1.7
- --------------------------------------------------------------------------------
Orascom Telecom Holding SAE 1.4
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PT Indosat Tbk 1.4
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LUKOIL, Sponsored ADR 1.3
- --------------------------------------------------------------------------------
AngloGold Ashanti Ltd., Sponsored ADR 1.3
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2007, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
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9 | OPPENHEIMER DEVELOPING MARKETS FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
REGIONAL ALLOCATION
Asia 49.0%
Latin America 23.7
Middle East/Africa 15.8
United States/Canada 4.8
Emerging Europe 3.6
Europe 3.1
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2007, and are based on the total market value of investments.
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10 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 11/18/96. Unless
otherwise noted, Class A returns include the maximum initial sales charge of
5.75%.
CLASS B shares of the Fund were first publicly offered on 11/18/96. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the 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 11/18/96. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for 1-year period. Class C shares are subject to a 0.75% annual asset-based
sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 9/7/05. Class Y shares
are offered only to certain institutional investors under special agreements
with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER DEVELOPING MARKETS FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. 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 February 28, 2007.
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
12 | OPPENHEIMER DEVELOPING MARKETS FUND
described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(9/1/06) (2/28/07) FEBRUARY 28, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,171.10 $ 7.34
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,018.05 6.83
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,167.00 11.23
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,014.48 10.44
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,167.10 11.12
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,014.58 10.34
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,169.00 9.61
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,015.97 8.94
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,173.40 5.18
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.03 4.82
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,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended February 28, 2007 are as follows:
CLASS EXPENSE RATIOS
- -------------------------------
Class A 1.36%
- -------------------------------
Class B 2.08
- -------------------------------
Class C 2.06
- -------------------------------
Class N 1.78
- -------------------------------
Class Y 0.96
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and Transfer Agent that can be terminated at any time,
without advance notice. The "Financial Highlights" tables in the Fund's
financial statements, included in this report, also show the gross expense
ratios, without such waivers or reimbursements.
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13 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS February 28, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.9%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.9%
Amtek Auto Ltd. 1 9,513,158 $ 80,133,987
- --------------------------------------------------------------------------------
Bharat Forge Ltd. 717,597 5,331,531
- --------------------------------------------------------------------------------
Rico Auto
Industries Ltd. 1 8,990,692 11,046,723
-----------------
96,512,241
- --------------------------------------------------------------------------------
AUTOMOBILES--4.0%
Bajaj Auto Ltd. 817,893 48,372,529
- --------------------------------------------------------------------------------
China Motor Corp. 254,250 242,394
- --------------------------------------------------------------------------------
Ford Otomotiv
Sanayi AS 2,922,632 25,027,493
- --------------------------------------------------------------------------------
Hero Honda
Motors Ltd. 641,537 9,820,479
- --------------------------------------------------------------------------------
Hyundai Motor Co. 842,205 61,993,755
- --------------------------------------------------------------------------------
Hyundai Motor
Co. Ltd., Preference 359,820 14,557,866
- --------------------------------------------------------------------------------
Kia Motors Corp. 4,312,985 55,958,443
- --------------------------------------------------------------------------------
Mahindra &
Mahindra Ltd. 3,736,042 68,463,866
- --------------------------------------------------------------------------------
PT Astra
International Tbk 30,269,500 46,573,561
- --------------------------------------------------------------------------------
Ssangyong
Motor Co. 1,2 11,885,529 71,192,999
-----------------
402,203,385
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.3%
Jollibee Foods Corp. 30,392,200 31,311,183
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--4.3%
Consorcio ARA
SA de CV 3,809,100 23,917,335
- --------------------------------------------------------------------------------
Corporacion GEO
SA de CV, Series B 2 9,090,800 49,264,023
- --------------------------------------------------------------------------------
Cyrela Brazil Realty
SA Empreendimentos
e Participacoes,
GDR 3,4 380,220 69,390,150
- --------------------------------------------------------------------------------
Gafisa SA 1,776,400 25,869,008
- --------------------------------------------------------------------------------
Humax Co. Ltd. 1 2,420,209 52,791,413
- --------------------------------------------------------------------------------
Inventec
Appliances Corp. 19,319,200 47,830,039
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
LG Electronics, Inc. 2 499,020 $ 31,816,601
- --------------------------------------------------------------------------------
SARE Holding SA
de CV, Cl. B 1,2 45,037,950 66,159,902
- --------------------------------------------------------------------------------
Steinhoff
International
Holdings Ltd. 2 17,641,600 63,563,441
- --------------------------------------------------------------------------------
Techtronic
Industries Co. Ltd. 110,000 150,646
-----------------
430,752,558
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Largan Precision
Co. Ltd. 582,000 7,787,507
- --------------------------------------------------------------------------------
MEDIA--0.3%
Corporacion
Interamericana de
Entretenimiento
SA de CV 2 7,328,439 19,298,840
- --------------------------------------------------------------------------------
Television
Broadcasts Ltd. 1,664,000 10,829,950
-----------------
30,128,790
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.8%
Lojas Americanas
SA, Preference 1,341,870,000 74,987,784
- --------------------------------------------------------------------------------
PT Ramayana
Lestari Sentosa Tbk 71,763,500 6,051,349
-----------------
81,039,133
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.2%
JD Group Ltd. 1,610,192 20,222,052
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.3%
- --------------------------------------------------------------------------------
BEVERAGES--1.0%
Companhia de
Bebidas das
Americas, ADR 4 238,200 10,952,436
- --------------------------------------------------------------------------------
Fomento Economico
Mexicano SA de CV,
Sponsored ADR 4 566,000 62,429,800
- --------------------------------------------------------------------------------
United
Breweries Ltd. 4,537,190 25,680,854
-----------------
99,063,090
14 | OPPENHEIMER DEVELOPING MARKETS FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.3%
Companhia Brasileira
de Distribuicao Grupo
Pao de Acucar,
Sponsored ADR 4 2,309,681 $ 69,174,946
- --------------------------------------------------------------------------------
Jeronimo Martins
Sociedade Gestora de
Participacoes SA 935,832 22,688,037
- --------------------------------------------------------------------------------
Massmart
Holdings Ltd. 5,139,512 59,641,087
- --------------------------------------------------------------------------------
President Chain
Store Corp. 12,892,074 30,887,265
- --------------------------------------------------------------------------------
Shinsegae
Department
Store Co. 78,637 45,415,510
-----------------
227,806,845
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.6%
Bunge Ltd. 4 354,200 28,109,312
- --------------------------------------------------------------------------------
Sadia SA,
Preference 1 29,544,000 93,208,847
- --------------------------------------------------------------------------------
Tiger Brands Ltd. 907,200 21,908,315
- --------------------------------------------------------------------------------
Uni-President
Enterprises Corp. 14,130,000 13,606,180
-----------------
156,832,654
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.1%
Able C&C 1,2 412,140 2,747,810
- --------------------------------------------------------------------------------
Trent Ltd. 701,326 11,579,205
-----------------
14,327,015
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.9%
Amorepacific Corp. 80,402 47,300,316
- --------------------------------------------------------------------------------
Natura
Cosmeticos SA 2,950,500 37,470,863
- --------------------------------------------------------------------------------
Pacific Corp. 49,072 7,503,936
-----------------
92,275,115
- --------------------------------------------------------------------------------
TOBACCO--1.4%
Eastern Tobacco Co. 883,022 57,181,683
- --------------------------------------------------------------------------------
ITC Ltd. 8,619,025 33,424,881
- --------------------------------------------------------------------------------
PT Gudang
Garam Tbk 45,937,000 54,582,100
-----------------
145,188,664
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY--14.5%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.0%
China Oilfield
Services Ltd. 16,310,000 $ 10,578,374
- --------------------------------------------------------------------------------
GlobalSantaFe
Corp. 909,532 52,416,329
- --------------------------------------------------------------------------------
Hydril Co. 2 797,529 75,884,884
- --------------------------------------------------------------------------------
Technip SA 1,174,184 78,579,768
- --------------------------------------------------------------------------------
Tenaris SA, ADR 1,782,900 80,961,489
-----------------
298,420,844
- --------------------------------------------------------------------------------
OIL & GAS--11.5%
China Petroleum
& Chemical Corp. 106,884,000 85,218,040
- --------------------------------------------------------------------------------
China Shenhua
Energy Co. Ltd. 29,791,500 75,340,869
- --------------------------------------------------------------------------------
Det Norske
Oljeselskap ASA 2 18,370,344 32,380,511
- --------------------------------------------------------------------------------
LUKOIL,
Sponsored ADR 1,669,300 131,352,096
- --------------------------------------------------------------------------------
PetroChina Co. Ltd. 38,142,000 44,473,777
- --------------------------------------------------------------------------------
Petroleo Brasileiro
SA, ADR 4 4,073,700 368,262,480
- --------------------------------------------------------------------------------
Petroleo Brasileiro
SA, ADR 4 680,300 55,498,874
- --------------------------------------------------------------------------------
Reliance
Industries Ltd. 2,627,763 80,272,150
- --------------------------------------------------------------------------------
S-Oil Corp. 839,750 60,934,061
- --------------------------------------------------------------------------------
S-Oil Corp.,
Preference 215,948 11,878,631
- --------------------------------------------------------------------------------
Surgutneftegaz
OJSC, Sponsored
ADR 1,734,227 101,595,409
- --------------------------------------------------------------------------------
Tupras-Turkiye
Petrol Rafinerileri
AS 3,109,200 59,961,571
- --------------------------------------------------------------------------------
Yanzhou Coal
Mining Co. Ltd. 57,961,000 53,660,083
-----------------
1,160,828,552
- --------------------------------------------------------------------------------
FINANCIALS--18.7%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.9%
Korea Investment
Holdings Co. Ltd. 830,850 41,981,205
15 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
Mirae Asset
Securities Co. Ltd. 687,615 $ 50,031,066
-----------------
92,012,271
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--10.9%
Banco Bradesco SA,
Preference 2,304,451 84,875,088
- --------------------------------------------------------------------------------
Banco Bradesco SA,
Sponsored ADR 4 1,243,800 45,759,402
- --------------------------------------------------------------------------------
Banco Latinoamericano
de Exportaciones SA,
Cl. E 1 2,964,085 48,996,325
- --------------------------------------------------------------------------------
Banco Nossa
Caixa SA 1,360,500 25,631,679
- --------------------------------------------------------------------------------
Bangkok Bank
Public Co. Ltd. 2,577,800 8,561,099
- --------------------------------------------------------------------------------
Bank Hapoalim Ltd. 6,305,575 29,164,780
- --------------------------------------------------------------------------------
Bank Leumi
Le-Israel 7,643,100 27,410,738
- --------------------------------------------------------------------------------
Commercial
International Bank,
Sponsored GDR 1,3,4 2,675,100 25,814,715
- --------------------------------------------------------------------------------
Commercial
International Bank,
Sponsored GDR 1 4,099,223 39,557,502
- --------------------------------------------------------------------------------
Daegu Bank 1,667,800 28,624,311
- --------------------------------------------------------------------------------
Grupo Financiero
Banorte SA de CV 2,504,500 9,713,625
- --------------------------------------------------------------------------------
Grupo Financiero
Inbursa SA de CV 15,090,000 27,303,165
- --------------------------------------------------------------------------------
Hana Financial
Group, Inc. 1,439,403 76,425,773
- --------------------------------------------------------------------------------
HDFC Bank Ltd.,
ADR 4 438,200 29,083,334
- --------------------------------------------------------------------------------
ICICI Bank Ltd.,
Sponsored ADR 3,095,600 118,654,348
- --------------------------------------------------------------------------------
Israel Discount
Bank, Cl. A 2 17,280,553 39,282,927
- --------------------------------------------------------------------------------
Jeonbuk Bank 1 2,614,540 24,080,539
- --------------------------------------------------------------------------------
Kookmin Bank,
Sponsored ADR 4 635,100 56,739,834
- --------------------------------------------------------------------------------
Korea
Exchange Bank 1,498,920 21,667,647
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Krung Thai Bank
Public Co. Ltd. 13,485,500 $ 4,597,555
- --------------------------------------------------------------------------------
PT Bank Mandiri 171,832,500 43,750,814
- --------------------------------------------------------------------------------
Pusan Bank 1,895,970 26,444,372
- --------------------------------------------------------------------------------
Shinhan Financial
Group Co. Ltd. 672,490 38,160,213
- --------------------------------------------------------------------------------
Siam Commercial
Bank Public Co. Ltd. 1,325,500 2,571,139
- --------------------------------------------------------------------------------
TMB Bank
Public Co. Ltd. 1,2 833,118,889 46,277,581
- --------------------------------------------------------------------------------
Turkiye Is Bankasi,
Cl. C 7,580,019 36,071,626
- --------------------------------------------------------------------------------
Turkiye Vakiflar
Bankasi TAO 2 14,168,181 30,682,685
- --------------------------------------------------------------------------------
Turkiye Vakiflar
Bankasi TAO, Cl. D 14,841,200 36,457,833
- --------------------------------------------------------------------------------
Woori Finance
Holdings Co. Ltd. 2,380,110 60,717,396
-----------------
1,093,078,045
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
Kiatnakin Bank
Public Co. Ltd. 21,707,820 19,139,885
- --------------------------------------------------------------------------------
Tisco Bank Public
Co. Ltd. 1 32,890,880 20,767,684
-----------------
39,907,569
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.7%
Fubon Financial
Holding Co. Ltd. 56,423,000 52,056,425
- --------------------------------------------------------------------------------
Haci Omer Sabanci
Holding AS 17,465,376 70,454,808
- --------------------------------------------------------------------------------
Haci Omer Sabanci
Holding AS,
Sponsored ADR 4 17,834,250 19,171,819
- --------------------------------------------------------------------------------
Reliance
Capital Ltd. 2,309,200 32,516,561
-----------------
174,199,613
- --------------------------------------------------------------------------------
INSURANCE--1.8%
Aksigorta AS 12,983,810 53,295,186
- --------------------------------------------------------------------------------
Anadolu Anonim
Turk Sigorta Sirketi 1,691,866 3,029,314
16 | OPPENHEIMER DEVELOPING MARKETS FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Cathay Financial
Holding Co. Ltd. 43,506,643 $ 93,222,364
- --------------------------------------------------------------------------------
Liberty Group Ltd. 2,228,783 24,531,441
- --------------------------------------------------------------------------------
Shin Kong Financial
Holding Co. Ltd. 9,336,411 9,224,299
-----------------
183,302,604
- --------------------------------------------------------------------------------
REAL ESTATE--0.3%
Solidere, GDR 3,4 1,546,845 24,130,782
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--1.5%
Medinet Nasr for
Housing &
Development Co. 1 1,532,459 37,701,990
- --------------------------------------------------------------------------------
Sistema Hals,
GDR 2,4,5 1,291,000 16,072,950
- --------------------------------------------------------------------------------
SM Prime
Holdings, Inc. 443,971,755 100,954,535
-----------------
154,729,475
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.2%
Housing Development
Finance Corp. Ltd. 3,645,700 124,110,250
- --------------------------------------------------------------------------------
HEALTH CARE--1.5%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.4%
Diagnosticos
da America 2 2,053,900 44,652,106
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.1%
Aspen Pharmacare
Holdings Ltd. 2 3,257,346 15,867,735
- --------------------------------------------------------------------------------
Divi's
Laboratories Ltd. 478,190 31,413,114
- --------------------------------------------------------------------------------
Teva Pharmaceutical
Industries Ltd.,
Sponsored ADR 4 1,757,000 62,478,920
-----------------
109,759,769
- --------------------------------------------------------------------------------
INDUSTRIALS--11.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.2%
Bharat
Electronics Ltd. 1,852,028 63,667,515
- --------------------------------------------------------------------------------
Elbit Systems Ltd. 157,177 5,383,387
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
Empresa Brasileira
de Aeronautica SA 4,787,100 $ 53,909,902
-----------------
122,960,804
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.1%
Iguatemi Empresa
de Shopping
Centers SA 2 342,000 5,161,047
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--4.4%
Aveng Ltd. 2,274,805 12,428,049
- --------------------------------------------------------------------------------
Camargo Correa
Desenvolvimento
Imobiliario SA 2 723,400 4,059,637
- --------------------------------------------------------------------------------
Continental
Engineering Corp. 14,736,210 12,220,486
- --------------------------------------------------------------------------------
Empresas ICA
SA de CV 2 14,452,483 51,781,527
- --------------------------------------------------------------------------------
FLSmidth & Co. AS 920,150 59,069,732
- --------------------------------------------------------------------------------
GS Engineering &
Construction Corp. 324,560 29,968,151
- --------------------------------------------------------------------------------
Hyundai
Development Co. 556,520 33,863,129
- --------------------------------------------------------------------------------
Hyundai Engineering
& Construction
Co. Ltd. 2 1,069,542 58,825,123
- --------------------------------------------------------------------------------
Impulsora del
Desarrollo y el
Empleo en America
Latina SA de CV 2 32,277,200 36,688,493
- --------------------------------------------------------------------------------
Kyeryong
Construction
Industrial Co. Ltd. 1 585,682 23,944,735
- --------------------------------------------------------------------------------
Larsen &
Toubro Ltd. 3,755,062 126,357,518
-----------------
449,206,580
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.7%
Bharat Heavy
Electricals Ltd. 946,531 46,643,508
- --------------------------------------------------------------------------------
Motech
Industries, Inc. 1,052,975 15,431,252
- --------------------------------------------------------------------------------
Ormat
Industries Ltd. 589,662 7,004,334
-----------------
69,079,094
17 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.6%
Empresas Copec SA 412,827 $ 5,319,640
- --------------------------------------------------------------------------------
Far Eastern
Textile Ltd. 17,434,880 14,646,973
- --------------------------------------------------------------------------------
Keppel Corp. Ltd. 4,566,000 54,047,871
- --------------------------------------------------------------------------------
Koc Holding AS 2 19,152,936 83,629,133
- --------------------------------------------------------------------------------
LG Corp. 609,490 20,240,675
- --------------------------------------------------------------------------------
Murray & Roberts
Holdings Ltd. 8,101,300 60,059,430
- --------------------------------------------------------------------------------
Siemens India Ltd. 973,000 24,183,802
-----------------
262,127,524
- --------------------------------------------------------------------------------
MACHINERY--0.9%
Daewoo Shipbuilding
& Marine Engineering
Co. Ltd. 2 633,500 22,492,282
- --------------------------------------------------------------------------------
Lupatech SA 2 231,200 3,554,407
- --------------------------------------------------------------------------------
Samsung Heavy
Industries Co. Ltd. 1,040,000 25,511,309
- --------------------------------------------------------------------------------
SembCorp
Marine Ltd. 16,305,000 36,864,953
-----------------
88,422,951
- --------------------------------------------------------------------------------
ROAD & RAIL--1.9%
All America
Latina Logistica 1 15,875,900 182,305,195
- --------------------------------------------------------------------------------
All America Latina
Logistica, GDR 1,5 1,189,000 13,732,950
-----------------
196,038,145
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Gateway
Distriparks Ltd. 1,723,866 6,434,079
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.1%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.1%
High Tech
Computer Corp. 313,280 4,535,900
- --------------------------------------------------------------------------------
Inventec Co. Ltd. 53,229,160 41,477,024
- --------------------------------------------------------------------------------
Lite-On
Technology Corp. 42,137,208 60,592,755
- --------------------------------------------------------------------------------
Mitac International
Corp. 30,230,211 33,299,610
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS Continued
Quanta
Computer, Inc. 44,834,762 $ 75,417,253
-----------------
215,322,542
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.9%
Chi Mei
Optoelectronics
Corp. 31,437,000 31,219,610
- --------------------------------------------------------------------------------
Hon Hai Precision
Industry Co. Ltd. 27,287,200 186,142,107
- --------------------------------------------------------------------------------
LG Philips LCD
Co. Ltd. 2 542,696 17,695,533
- --------------------------------------------------------------------------------
Synnex Technology
International Corp. 32,491,088 36,341,701
- --------------------------------------------------------------------------------
Varitronix
International Ltd. 1 28,515,000 15,401,677
-----------------
286,800,628
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
NHN Corp. 22,122 3,021,217
- --------------------------------------------------------------------------------
IT SERVICES--2.7%
HCL
Technologies Ltd. 3,204,593 43,637,045
- --------------------------------------------------------------------------------
Infosys
Technologies Ltd. 2,680,900 126,594,870
- --------------------------------------------------------------------------------
Tata Consultancy
Services Ltd. 3,584,230 96,610,279
-----------------
266,842,194
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.4%
MediaTek, Inc. 3,930,000 43,042,022
- --------------------------------------------------------------------------------
Powerchip
Semiconductor
Corp. 3,018,797 1,937,281
- --------------------------------------------------------------------------------
Samsung
Electronics Co. 310,863 188,323,829
- --------------------------------------------------------------------------------
Sunplus Technology
Co. Ltd. 1 53,455,983 62,165,861
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing
Co. Ltd. 17,205,000 34,400,196
- --------------------------------------------------------------------------------
Telechips, Inc. 1 478,287 8,329,518
18 | OPPENHEIMER DEVELOPING MARKETS FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Continued
United Microelectronics Corp. 181,412,798 $ 108,296,509
-----------------
446,495,216
- --------------------------------------------------------------------------------
MATERIALS--11.1%
- --------------------------------------------------------------------------------
CHEMICALS--0.4%
Finetec Corp. 1 1,676,105 26,603,268
- --------------------------------------------------------------------------------
Makhteshim-Agan
Industries Ltd. 646,004 3,865,911
- --------------------------------------------------------------------------------
Taiwan Fertilizer
Co. Ltd. 3,098,000 5,613,283
-----------------
36,082,462
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.8%
Cemex SAB,
Sponsored ADR 2 2,310,364 78,506,169
- --------------------------------------------------------------------------------
METALS & MINING--9.6%
Anglo Platinum Ltd. 1,189,161 169,410,212
- --------------------------------------------------------------------------------
AngloGold Ashanti
Ltd., Sponsored ADR 4 2,931,700 129,170,702
- --------------------------------------------------------------------------------
Companhia Vale do
Rio Doce, ADR 4 3,096,200 105,642,344
- --------------------------------------------------------------------------------
Companhia Vale do
Rio Doce,
Sponsored ADR 4 2,941,400 86,918,370
- --------------------------------------------------------------------------------
Harmony Gold
Mining Co. Ltd.,
Sponsored ADR 2,4 2,645,800 36,591,414
- --------------------------------------------------------------------------------
Highland Gold
Mining Ltd. 1,2 11,733,766 38,487,988
- --------------------------------------------------------------------------------
Impala Platinum
Holdings Ltd. 3,676,080 104,740,315
- --------------------------------------------------------------------------------
OAO TMK, GDR 2,3 2,591,500 85,519,500
- --------------------------------------------------------------------------------
Polymetal, GDR 2,5 4,804,100 35,069,930
- --------------------------------------------------------------------------------
PT Aneka
Tambang Tbk 1 112,550,900 112,162,645
- --------------------------------------------------------------------------------
Yamana Gold, Inc. 4 4,717,265 69,107,932
-----------------
972,821,352
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Aracruz Celulose
SA, Sponsored
ADR 4 570,500 $ 30,613,030
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--10.5%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.4%
PT Indosat Tbk 214,274,000 138,861,695
- --------------------------------------------------------------------------------
PT Telekomunikasi
Indonesia Tbk 124,978,000 124,317,154
- --------------------------------------------------------------------------------
Tele Norte Leste
Participacoes SA 2,429,585 62,443,944
- --------------------------------------------------------------------------------
Tele Norte Leste
Participacoes SA,
Preference 864,100 11,246,951
- --------------------------------------------------------------------------------
True Corp.
Public Co. Ltd. 2 28,225,200 5,200,400
-----------------
342,070,144
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--7.1%
Advanced Info
Service Public
Co. Ltd. 14,472,000 31,687,406
- --------------------------------------------------------------------------------
America Movil
SA de CV, Series L 5,705,600 249,905,280
- --------------------------------------------------------------------------------
Bharti Airtel Ltd. 2 7,820,593 127,577,317
- --------------------------------------------------------------------------------
China Mobile
Hong Kong Ltd.,
ADR 4 2,633,800 122,287,334
- --------------------------------------------------------------------------------
Hutchison
Telecommunications
International Ltd. 2 17,286,000 36,063,202
- --------------------------------------------------------------------------------
Orascom Telecom
Holding SAE 1,982,299 143,136,259
- --------------------------------------------------------------------------------
Turkcell Iletisim
Hizmetleri AS 1,293,856 6,547,113
-----------------
717,203,911
- --------------------------------------------------------------------------------
UTILITIES--0.7%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.4%
Eletropaulo
Metropolitana SA,
Cl. B, Preference 2 665,396,900 32,822,691
- --------------------------------------------------------------------------------
GAS UTILITIES--0.3%
Gail India Ltd. 4,457,275 28,480,251
19 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
GAS UTILITIES Continued
Reliance Natural
Resources 2 5,010,963 $ 2,654,028
-----------------
31,134,279
-----------------
Total Common Stocks
(Cost $7,123,095,967) 9,993,748,171
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.0%
- --------------------------------------------------------------------------------
Trent Ltd., 2% Sec. Debs.,
7/7/10 [INR]
(Cost $743,908) 32,425,500 658,835
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Jeonbuk Bank Rts.,
Exp. 3/16/07 1,2 394,647 1,003,029
- --------------------------------------------------------------------------------
Trent Ltd. Wts.,
Exp. 1/7/10 2 63,757 347,045
-----------------
Total Rights, Warrants
and Certificates
(Cost $0) 1,350,074
- --------------------------------------------------------------------------------
Total Investments,
at Value (excluding
Investments Purchased
with Cash Collateral
from Securities Loaned)
(Cost $7,123,839,875) 9,995,757,080
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--3.4% 6
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.4%
Undivided interest of 12.26% in joint
repurchase agreement (Principal
Amount/Value $1,060,000,000
with a maturity value of
$1,060,157,601) with
Barclays Capital, 5.3525%,
dated 2/28/07, to be
repurchased at
$130,019,328 on 3/1/07,
collateralized by AAA
Asset-Backed Securities,
0.00%, 2/15/14-11/25/46,
with a value of
$1,091,800,000 $ 130,000,000 130,000,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 13.33% in joint
repurchase agreement (Principal Amount/Value
$750,000,000 with a maturity value of
$750,111,510) with Barclays Capital,
5.3525%, dated 2/28/07, to be
repurchased at $100,014,868
on 3/1/07, collateralized by
Private Label CMOs,
0.00%-4.84%,
2/1/11-7/25/46,
with a value of
$772,500,000 $ 100,000,000 $ 100,000,000
- --------------------------------------------------------------------------------
Undivided interest of 2.98% in joint
repurchase agreement (Principal Amount/Value
$500,000,000, with a maturity value
of $500,074,028) with Nomura
Securities, 5.33%, dated 2/28/07,
to be repurchased at $14,906,531
on 3/1/07, collateralized by U.S.
Agency Mortgages, 5.50%-6%,
1/1/36-6/1/36, with
a value of
$510,000,000 14,904,324 14,904,324
- --------------------------------------------------------------------------------
Undivided interest of 28.17% in joint
repurchase agreement (Principal Amount/Value
$355,000,000, with a maturity value
of $355,052,954) with Countrywide
Securities, 5.37%, dated 2/28/07, to
be repurchased at $100,014,917 on
3/1/07, collateralized by AAA
Asset-Backed Securities, 0.00%,
11/12/16-3/25/37, with
a value of
$372,750,000 100,000,000 100,000,000
-----------------
Total Investments Purchased
with Cash Collateral from
Securities Loaned
(Cost $344,904,324) 344,904,324
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $7,468,744,199) 102.6% 10,340,661,404
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (2.6) (265,968,521)
--------------------------------
NET ASSETS 100.0% $ 10,074,692,883
================================
20 | OPPENHEIMER DEVELOPING MARKETS FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
PRINCIPAL AMOUNT IS REPORTED IN U.S. DOLLARS, EXCEPT FOR THOSE DENOTED IN THE
FOLLOWING CURRENCY:
INR Indian Rupee
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended February 28, 2007 by virtue of the Fund owning at
least 5% of the voting securities of the issuer or as a result of the Fund and
the issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES SHARES
AUGUST 31, GROSS GROSS FEBRUARY 28,
2006 ADDITIONS REDUCTIONS 2007
- -----------------------------------------------------------------------------------------------------------
Able C&C 589,454 -- 177,314 412,140
All America Latina Logistica 1,331,820 14,885,080 a 341,000 15,875,900
All America Latina Logistica, GDR 118,900 1,070,100 a -- 1,189,000
Amtek Auto Ltd. 9,513,158 -- -- 9,513,158
Banco Latinoamericano de Exportaciones SA, Cl. E 3,299,385 -- 335,300 2,964,085
Commerical International Bank, Sponsored GDR 2,675,100 -- -- 2,675,100
Commerical International Bank, Sponsored GDR 4,228,723 -- 129,500 4,099,223
Diagnosticos da America b 3,273,900 -- 1,220,000 2,053,900
Divi's Laboratories Ltd. b 788,816 -- 310,626 478,190
Finetec Corp. 1,676,105 -- -- 1,676,105
Highland Gold Mining Ltd. 8,931,119 2,802,647 -- 11,733,766
Humax Co. Ltd. 3,550,683 -- 1,130,474 2,420,209
Inventec Appliances Corp. b 22,053,200 -- 2,734,000 19,319,200
Jeonbuk Bank 2,466,548 147,992 a -- 2,614,540
Jeonbuk Bank Rts., Exp. 3/16/07 -- 394,647 a -- 394,647
Kyeryong Construction Industrial Co. Ltd. 585,682 -- -- 585,682
Medinet Nasr for Housing & Development Co. 1,532,459 -- -- 1,532,459
Merry Electronics Co. Ltd. 12,873,090 -- 12,873,090 --
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.25% -- 589,309,761 589,309,761 --
PT Aneka Tambang Tbk 141,942,900 -- 29,392,000 112,550,900
Rico Auto Industries Ltd. 8,990,692 -- -- 8,990,692
Sadia SA, Preference 33,135,000 -- 3,591,000 29,544,000
SARE Holding SA de CV, Cl. B 45,037,950 -- -- 45,037,950
Ssangyong Motor Co. 12,552,839 -- 667,310 11,885,529
Sunplus Technology Co. Ltd. 53,455,983 -- -- 53,455,983
TMB Bank Public Co. Ltd. 582,693,189 250,425,700 -- 833,118,889
Telechips, Inc. 655,280 -- 176,993 478,287
Tisco Bank Public Co. Ltd. 24,094,980 8,795,900 -- 32,890,880
United Breweries Holdings Ltd. 2,606,594 -- 2,606,594 --
United Breweries Ltd. b 7,133,890 -- 2,596,700 4,537,190
Varitronix International Ltd. 25,033,000 3,482,000 -- 28,515,000
Yedang Entertainment Co. Ltd. 1,887,737 -- 1,887,737 --
21 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME GAIN (LOSS)
- -----------------------------------------------------------------------------------------------
Able C&C $ 2,747,810 $ -- $ (7,676,951)
All America Latina Logistica 182,305,195 141,781 --
All America Latina Logistica, GDR 13,732,950 9,935 --
Amtek Auto Ltd. 80,133,987 425,454 --
Banco Latinoamericano de Exportaciones SA, Cl. E 48,996,325 1,190,826 (1,434,178)
Commerical International Bank, Sponsored GDR 25,814,715 -- --
Commerical International Bank, Sponsored GDR 39,557,502 -- 182,217
Diagnosticos da America b -- -- 5,044,501
Divi's Laboratories Ltd. b -- -- 8,519,308
Finetec Corp. 26,603,268 224,574 --
Highland Gold Mining Ltd. 38,487,988 -- --
Humax Co. Ltd. 52,791,413 398,774 3,351,666
Inventec Appliances Corp. b -- 118,917 (5,875,297)
Jeonbuk Bank 24,080,539 221,340 --
Jeonbuk Bank Rts., Exp. 3/16/07 1,003,029 -- --
Kyeryong Construction Industrial Co. Ltd. 23,944,735 441,517 --
Medinet Nasr for Housing & Development Co. 37,701,990 869,765 --
Merry Electronics Co. Ltd. -- 2,271 (2,613,731)
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.25% -- 1,199,662 --
PT Aneka Tambang Tbk 112,162,645 -- 22,813,233
Rico Auto Industries Ltd. 11,046,723 196,046 --
Sadia SA, Preference 93,208,847 1,249,141 891,324
SARE Holding SA de CV, Cl. B 66,159,902 -- --
Ssangyong Motor Co. 71,192,999 -- (2,282,768)
Sunplus Technology Co. Ltd. 62,165,861 -- --
TMB Bank Public Co. Ltd. 46,277,581 -- --
Telechips, Inc. 8,329,518 64,084 85,386
Tisco Bank Public Co. Ltd. 20,767,684 -- --
United Breweries Holdings Ltd. -- -- 14,976,160
United Breweries Ltd. b -- 27,023 7,104,432
Varitronix International Ltd. 15,401,677 289,345 --
Yedang Entertainment Co. Ltd. -- -- (12,931,406)
--------------------------------------------
$1,104,614,883 $ 7,070,455 $ 30,153,896
============================================
A. All or a portion is the result of a corporate action.
B. No longer an affiliate as of February 28, 2007. The value of the security has
therefore been excluded from this table.
22 | OPPENHEIMER DEVELOPING MARKETS FUND
2. Non-income producing security.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $204,855,147 or 2.03% of the Fund's net
assets as of February 28, 2007.
4. Partial or fully-loaned security. See Note 7 of accompanying Notes.
5. Illiquid or restricted security. The aggregate value of illiquid securities
as of February 28, 2007 was $64,875,830, which represents 0.64% of the Fund's
net assets. In addition, the Fund has restricted currency of $6,810,069, which
represents 0.07% of the Fund's net assets. See Note 6 of accompanying Notes.
6. The security/securities have been segregated to satisfy the forward
commitment to return the cash collateral received in securities lending
transactions upon the borrower's return of the securities loaned. See Note 7 of
accompanying Notes.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- -----------------------------------------------------------------------------
Brazil $ 1,598,144,131 15.4%
India 1,403,749,904 13.6
Korea, Republic of South 1,348,785,495 13.0
Taiwan 1,021,636,296 9.9
South Africa 718,134,193 6.9
Mexico 674,968,159 6.5
Indonesia 526,299,318 5.1
Turkey 424,328,581 4.1
United States 420,789,208 4.1
Russia 369,609,885 3.6
China 347,084,700 3.4
Egypt 303,392,149 2.9
Israel 174,590,997 1.7
Thailand 138,802,749 1.3
Philippines 132,265,718 1.3
Singapore 90,912,824 0.9
Cayman Islands 88,479,531 0.8
Luxembourg 80,961,489 0.8
France 78,579,768 0.8
Canada 69,107,932 0.7
Denmark 59,069,732 0.6
Hong Kong 55,454,373 0.5
Panama 48,996,325 0.5
Bermuda 43,510,989 0.4
Jersey, Channel Islands 38,487,988 0.4
Norway 32,380,511 0.3
Lebanon 24,130,782 0.2
Portugal 22,688,037 0.2
Chile 5,319,640 0.1
--------------------------
Total $10,340,661,404 100.0%
==========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 28, 2007
- -------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $6,697,349,118) $ 9,236,046,521
Affiliated companies (cost $771,395,081) 1,104,614,883
----------------
10,340,661,404
- -------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $123,295,893) 122,946,380
- -------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 1,987
- -------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 145,992,299
Shares of beneficial interest sold 15,839,908
Interest and dividends 15,578,801
Other 249,579
----------------
Total assets 10,641,270,358
- -------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------
Bank overdraft 114,613,772
- -------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 353,022,996
- -------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 78,761,746
Investments purchased 8,949,813
Distribution and service plan fees 4,015,600
Foreign capital gains tax 2,841,497
Transfer and shareholder servicing agent fees 1,307,425
Trustees' compensation 974,588
Shareholder communications 610,614
Dividends 44
Other 1,479,380
----------------
Total liabilities 566,577,475
- -------------------------------------------------------------------------------------------------
NET ASSETS $10,074,692,883
================
- -------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------
Paid-in capital $ 7,094,274,817
- -------------------------------------------------------------------------------------------------
Accumulated net investment loss (96,766,356)
- -------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 208,604,756
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies 2,868,579,666
----------------
NET ASSETS $10,074,692,883
================
24 | OPPENHEIMER DEVELOPING MARKETS FUND
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$7,997,480,122 and 197,132,625 shares of beneficial interest outstanding) $40.57
Maximum offering price per share (net asset value plus sales charge of 5.75%
of offering price) $43.05
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $320,418,071 and 7,970,037 shares
of beneficial interest outstanding) $40.20
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $1,043,631,507 and 26,321,047 shares
of beneficial interest outstanding) $39.65
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $292,503,324 and 7,336,559 shares
of beneficial interest outstanding) $39.87
- ---------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $420,659,859 and 10,375,771 shares of beneficial interest outstanding) $40.54
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2007
- -----------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $6,936,955) $ 50,796,330
Affiliated companies (net of foreign withholding taxes of $512,238) 7,070,455
- -----------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $4,586) 541,792
- -----------------------------------------------------------------------------------------
Portfolio lending fees 303,312
- -----------------------------------------------------------------------------------------
Other income 9,829
---------------
Total investment income 58,721,718
- -----------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------
Management fees 40,718,181
- -----------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 9,489,881
Class B 1,594,719
Class C 5,080,127
Class N 673,436
- -----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 6,383,283
Class B 241,562
Class C 590,629
Class N 488,356
Class Y 41,588
- -----------------------------------------------------------------------------------------
Shareholder communications:
Class A 291,042
Class C 44,491
Class Y 1,097
- -----------------------------------------------------------------------------------------
Custodian fees and expenses 3,556,051
- -----------------------------------------------------------------------------------------
Trustees' compensation 503,663
- -----------------------------------------------------------------------------------------
Other 362,201
---------------
Total expenses 70,060,307
Less reduction to custodian expenses (18,777)
Less waivers and reimbursements of expenses (43,241)
---------------
Net expenses 69,998,289
- -----------------------------------------------------------------------------------------
NET INVESTMENT LOSS (11,276,571)
26 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENT OF OPERATIONS Unaudited
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- -----------------------------------------------------------------------------------------
Net realized gain on:
Investments:
Unaffiliated companies $ 293,719,627
Affiliated companies 30,153,896
Foreign currency transactions 11,186,024
---------------
Net realized gain 335,059,547
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (net of foreign capital gains tax of $3,653,897) 1,083,035,555
Translation of assets and liabilities denominated in foreign currencies 88,830,055
---------------
Net change in unrealized appreciation 1,171,865,610
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,495,648,586
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER DEVELOPING MARKETS FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
(UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (11,276,571) $ 81,419,892
- ------------------------------------------------------------------------------------------------------------------
Net realized gain 335,059,547 946,940,389
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 1,171,865,610 409,032,376
-------------------------------------
Net increase in net assets resulting from operations 1,495,648,586 1,437,392,657
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (91,729,588) (68,674,628)
Class B (1,271,886) (1,912,990)
Class C (5,634,515) (5,631,498)
Class N (2,431,388) (1,612,601)
Class Y (5,754,891) (1,210,164)
-------------------------------------
(106,822,268) (79,041,881)
- ------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (662,866,888) (168,966,879)
Class B (27,901,983) (8,946,174)
Class C (90,277,898) (20,858,379)
Class N (23,518,435) (4,578,511)
Class Y (31,274,753) (2,421,023)
-------------------------------------
(835,839,957) (205,770,966)
- ------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 486,449,695 2,007,139,730
Class B (8,813,908) 32,982,481
Class C 38,621,248 385,516,073
Class N 37,354,228 119,755,258
Class Y 105,680,769 288,912,376
-------------------------------------
659,292,032 2,834,305,918
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total increase 1,212,278,393 3,986,885,728
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 8,862,414,490 4,875,528,762
-------------------------------------
End of period (including accumulated net investment income (loss)
of $(96,766,356) and $21,332,483, respectively) $ 10,074,692,883 $ 8,862,414,490
=====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
CLASS A (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 38.23 $ 31.11 $ 21.09 $ 16.92 $ 13.43 $ 12.93
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) 1 .42 1 .55 1 .48 .19 .25
Net realized and unrealized gain 6.52 8.26 9.97 4.31 3.50 .45
-----------------------------------------------------------------------------------------
Total from investment operations 6.49 8.68 10.52 4.79 3.69 .70
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.50) (.45) (.37) (.62) (.20) (.20)
Distributions from net realized gain (3.65) (1.11) (.13) -- -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (4.15) (1.56) (.50) (.62) (.20) (.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 40.57 $ 38.23 $ 31.11 $ 21.09 $ 16.92 $ 13.43
=========================================================================================
====================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE 2 17.11% 28.41% 50.42% 28.61% 27.93% 5.44%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 7,997,480 $ 7,069,819 $ 4,104,558 $ 1,549,854 $ 588,450 $ 337,405
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,748,747 $ 6,540,507 $ 2,739,224 $ 1,145,452 $ 374,841 $ 257,746
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.14)% 1.11% 2.01% 1.64% 1.42% 1.91%
Total expenses 1.36% 4 1.37% 1.43% 1.52% 1.81% 1.81%
Expenses after payments and waivers and
reduction to custodian expenses 1.36% 1.37% 1.43% 1.52% 1.76% 1.77%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 17% 65% 28% 15% 6% 10%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods of less than one full year.
4. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended February 28, 2007 1.36%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
CLASS B (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 37.75 $ 30.78 $ 20.87 $ 16.79 $ 13.32 $ 12.82
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.17) 1 .11 1 .31 1 .12 .09 .15
Net realized and unrealized gain 6.44 8.21 9.88 4.46 3.47 .44
-----------------------------------------------------------------------------------------
Total from investment operations 6.27 8.32 10.19 4.58 3.56 .59
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.17) (.24) (.15) (.50) (.09) (.09)
Distributions from net realized gain (3.65) (1.11) (.13) -- -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (3.82) (1.35) (.28) (.50) (.09) (.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 40.20 $ 37.75 $ 30.78 $ 20.87 $ 16.79 $ 13.32
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 16.70% 27.44% 49.14% 27.50% 26.98% 4.61%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 320,418 $ 308,973 $ 222,723 $ 119,749 $ 84,705 $ 63,005
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 322,360 $ 313,463 $ 169,763 $ 117,271 $ 62,676 $ 54,744
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.85)% 0.30% 1.15% 0.61% 0.66% 1.14%
Total expenses 2.08% 4 2.14% 2.24% 2.41% 2.67% 2.58%
Expenses after payments and waivers and
reduction to custodian expenses 2.08% 2.14% 2.24% 2.41% 2.52% 2.54%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 17% 65% 28% 15% 6% 10%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods of less than one full year.
4. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended February 28, 2007 2.08%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
CLASS C (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 37.33 $ 30.49 $ 20.70 $ 16.67 $ 13.25 $ 12.78
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.17) 1 .15 1 .34 1 .31 .10 .17
Net realized and unrealized gain 6.37 8.10 9.79 4.25 3.44 .41
-----------------------------------------------------------------------------------------
Total from investment operations 6.20 8.25 10.13 4.56 3.54 .58
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.23) (.30) (.21) (.53) (.12) (.11)
Distributions from net realized gain (3.65) (1.11) (.13) -- -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (3.88) (1.41) (.34) (.53) (.12) (.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 39.65 $ 37.33 $ 30.49 $ 20.70 $ 16.67 $ 13.25
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 16.71% 27.50% 49.29% 27.60% 27.05% 4.54%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,043,632 $ 945,369 $ 450,012 $ 175,025 $ 77,081 $ 46,722
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,025,745 $ 832,650 $ 294,791 $ 145,460 $ 52,236 $ 33,334
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.84)% 0.42% 1.28% 0.83% 0.66% 1.15%
Total expenses 2.06% 4 2.09% 2.17% 2.31% 2.57% 2.57%
Expenses after payments and waivers and
reduction to custodian expenses 2.06% 2.09% 2.17% 2.31% 2.52% 2.53%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 17% 65% 28% 15% 6% 10%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods of less than one full year.
4. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended February 28, 2007 2.06%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER DEVELOPING MARKETS FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
CLASS N (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 37.59 $ 30.67 $ 20.84 $ 16.77 $ 13.36 $ 12.91
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.11) 1 .30 1 .45 1 .45 .22 .32
Net realized and unrealized gain 6.42 8.12 9.83 4.22 3.41 .34
-----------------------------------------------------------------------------------------
Total from investment operations 6.31 8.42 10.28 4.67 3.63 .66
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.38) (.39) (.32) (.60) (.22) (.21)
Distributions from net realized gain (3.65) (1.11) (.13) -- -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (4.03) (1.50) (.45) (.60) (.22) (.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 39.87 $ 37.59 $ 30.67 $ 20.84 $ 16.77 $ 13.36
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 16.90% 27.93% 49.84% 28.16% 27.73% 5.13%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 292,503 $ 240,673 $ 98,236 $ 26,110 $ 8,709 $ 1,741
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 271,018 $ 194,085 $ 57,727 $ 18,770 $ 4,196 $ 686
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.56)% 0.81% 1.67% 1.31% 1.27% 1.68%
Total expenses 1.80% 4 1.75% 1.82% 1.99% 2.08% 2.04%
Expenses after payments and waivers and
reduction to custodian expenses 1.78% 1.73% 1.80% 1.88% 1.99% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 17% 65% 28% 15% 6% 10%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods of less than one full year.
4. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended February 28, 2007 1.80%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS PERIOD
ENDED ENDED
FEBRUARY 28, 2007 AUGUST 31,
CLASS Y (UNAUDITED) 2006 1
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 38.28 $ 32.15
- -------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .05 .65
Net realized and unrealized gain 6.53 7.15
------------------------------------------
Total from investment operations 6.58 7.80
- -------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.67) (.56)
Distributions from net realized gain (3.65) (1.11)
------------------------------------------
Total dividends and/or distributions to shareholders (4.32) (1.67)
- -------------------------------------------------------------------------------------------------
Net asset value, end of period $ 40.54 $ 38.28
==========================================
- -------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 17.34% 24.78%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 420,660 $ 297,580
- -------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 363,690 $ 159,042
- -------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.25% 1.76%
Total expenses 0.96% 5,6 0.97% 5
- -------------------------------------------------------------------------------------------------
Portfolio turnover rate 17% 65%
1. For the period from September 7, 2005 (inception of offering) to August 31,
2006.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Expenses including indirect expenses from affiliated fund were as follows:
Six Months Ended February 28, 2007 0.96%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Developing Markets Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund's investment objective is to aggressively seek capital
appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager).
The Fund offers Class A, Class B, Class C, 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(R) 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
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
34 | OPPENHEIMER DEVELOPING MARKETS FUND
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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at amortized cost
(which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's
35 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Class E expenses, including its management fee. The Manager will waive fees
and/or reimburse Fund expenses in an amount equal to the indirect management
fees incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of February 28, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. This estimated capital
loss carryforward represents carryforward as of the end of the last fiscal year,
increased for losses deferred under tax accounting rules to the current fiscal
year and is increased or decreased by capital losses or gains realized in the
first six months of the current fiscal year. As of February 28, 2007, it is
estimated that the Fund will utilize $9,897,244 of capital loss carryforward to
offset realized capital gains. During the year ended August 31, 2006, the Fund
did not utilize any capital loss carryforward to offset capital gains realized
in that fiscal year.
As of August 31, 2006, the Fund had available for federal income tax
purposes post-October foreign currency losses of $9,879,244.
Certain foreign countries impose a tax on capital gains which is accrued
by the Fund based on unrealized appreciation, if any, on affected securities.
The tax is paid when the gain is realized.
36 | OPPENHEIMER DEVELOPING MARKETS FUND
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the six months ended February 28, 2007,
the Fund's projected benefit obligations were increased by $403,972 and payments
of $151,814 were made to retired trustees, resulting in an accumulated liability
of $715,660 as of February 28, 2007.
The Board of Trustees has adopted a compensation deferral plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
37 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED FEBRUARY 28, 2007 YEAR ENDED AUGUST 31, 2006 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS A
Sold 25,477,051 $ 1,035,182,857 116,245,460 $ 4,343,069,164
Dividends and/or
distributions reinvested 16,292,684 653,173,572 5,748,226 200,498,088
Redeemed (29,580,537) (1,201,906,734) 2 (68,996,408) (2,536,427,522) 3
--------------------------------------------------------------------
Net increase 12,189,198 $ 486,449,695 52,997,278 $ 2,007,139,730
====================================================================
- -----------------------------------------------------------------------------------------------------
CLASS B
Sold 356,732 $ 14,359,612 3,502,775 $ 127,972,810
Dividends and/or
distributions reinvested 643,670 25,611,623 273,758 9,482,971
Redeemed (1,214,999) (48,785,143) 2 (2,826,769) (104,473,300) 3
--------------------------------------------------------------------
Net increase (decrease) (214,597) $ (8,813,908) 949,764 $ 32,982,481
====================================================================
- -----------------------------------------------------------------------------------------------------
CLASS C
Sold 2,070,244 $ 82,321,532 15,529,886 $ 567,774,372
Dividends and/or
distributions reinvested 1,810,985 71,063,055 599,503 20,526,987
Redeemed (2,886,564) (114,763,339) 2 (5,562,089) (202,785,286) 3
--------------------------------------------------------------------
Net increase 994,665 $ 38,621,248 10,567,300 $ 385,516,073
====================================================================
38 | OPPENHEIMER DEVELOPING MARKETS FUND
SIX MONTHS ENDED FEBRUARY 28, 2007 YEAR ENDED AUGUST 31, 2006 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS N
Sold 1,565,414 $ 62,883,402 5,347,732 $ 199,082,912
Dividends and/or
distributions reinvested 626,895 24,724,750 172,439 5,930,182
Redeemed (1,257,539) (50,253,924) 2 (2,321,584) (85,257,836) 3
-------------------------------------------------------------------
Net increase 934,770 $ 37,354,228 3,198,587 $ 119,755,258
===================================================================
- -----------------------------------------------------------------------------------------------------
CLASS Y
Sold 2,801,508 $ 114,188,298 9,611,236 $ 359,268,212
Dividends and/or
distributions reinvested 753,234 30,151,953 53,371 1,858,372
Redeemed (953,613) (38,659,482) 2 (1,889,965) (72,214,208) 3
-------------------------------------------------------------------
Net increase 2,601,129 $ 105,680,769 7,774,642 $ 288,912,376
===================================================================
1. For the year ended August 31, 2006, for Class A, Class B, Class C and Class N
shares and for the period from September 7, 2005 (inception of offering) to
August 31, 2006, for Class Y shares.
2. Net of redemption fees of $25,632, $1,066, $3,393, $896 and $1,203 for Class
A, Class B, Class C, Class N and Class Y, respectively.
3. Net of redemption fees of $151,090, $7,241, $19,235, $4,484 and $3,674 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 six months ended February 28, 2007, were as
follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $1,601,707,249 $1,854,365,992
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
-----------------------------------------------
Up to $250 million 1.00%
Next $250 million 0.95
Next $500 million 0.90
Next $6 billion 0.85
Next $3 billion 0.80
Over $10 billion 0.75
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS or the Transfer Agent), a
division of the Manager, acts as the transfer and shareholder servicing agent
for the Fund. The Fund pays OFS a per account fee. For the six months ended
February 28, 2007, the Fund paid $7,736,786 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.
39 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor determines its
uncompensated expenses under the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at December 31,
2006 for Class B, Class C and Class N shares were $2,754,302, $8,013,853 and
$1,627,072, 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
SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- --------------------------------------------------------------------------------------------------
February 28, 2007 $ 470,688 $ 89,711 $ 230,310 $ 172,053 $ 11,677
40 | OPPENHEIMER DEVELOPING MARKETS FUND
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended February 28,
2007, OFS waived $21,820 for Class N shares. This undertaking may be amended or
withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended February 28, 2007, the Manager waived $21,421
for IMMF management fees.
- --------------------------------------------------------------------------------
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 February 28, 2007, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE (000S) FEBRUARY 28, 2007 APPRECIATION
- -------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Indonesia Rupiah (IDR) 3/1/07 8,974,564IDR $ 982,814 $ 1,987
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of February 28, 2007, 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
41 | OPPENHEIMER DEVELOPING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY Continued
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
currency is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST FEBRUARY 28, 2007 DEPRECIATION
- -----------------------------------------------------------------------------------------
CURRENCY
Argentine Peso (ARP) 1/13/06-11/17/06 $ 6,901,674 $ 6,810,069 $ 91,605
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of
securities, letters of credit or cash, against the loaned securities and
maintains collateral in an amount not less than 100% of the market value of the
loaned securities during the period of the loan. The market value of the loaned
securities is determined at the close of business each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. If the borrower defaults on its obligation
to return the securities loaned because of insolvency or other reasons, the Fund
could experience delays and cost in recovering the securities loaned or in
gaining access to the collateral. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of February 28, 2007, the Fund
had on loan securities valued at $343,495,156, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Receivable for Investments sold." Collateral of $353,022,996 was
received for the loans, all of which was received in cash and subsequently
invested in approved investments or held as cash.
- --------------------------------------------------------------------------------
8. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
February 28,
42 | OPPENHEIMER DEVELOPING MARKETS FUND
2007, the Manager has evaluated the implications of FIN 48 and does not
currently anticipate a material impact to the Fund's financial statements. The
Manager will continue to monitor the Fund's tax positions prospectively for
potential future impacts.
In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of February 28, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
43 | OPPENHEIMER DEVELOPING MARKETS FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
44 | OPPENHEIMER DEVELOPING MARKETS FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services by the Manager and its affiliates,
(v) the extent to which economies of scale are realized as the Fund grows and
whether fee levels reflect these economies of scale for Fund investors and (vi)
other benefits to the Manager from its relationship with the Fund. The Board was
aware that there are alternatives to retaining the Manager.
NATURE AND EXTENT OF SERVICES. The Board considered information about the
nature and extent of the services provided to the Fund and information regarding
the Manager's key personnel who provide such services. The Manager's duties
include providing the Fund with the services of the portfolio manager and the
Manager's investment team, who provide research, analysis and other advisory
services in regard to the Fund's investments; securities trading services;
oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing and supervising
all administrative and clerical personnel who are necessary in order to provide
effective corporate administration for the Fund; compiling and maintaining
records with respect to the Fund's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Fund for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Fund's shares.
The Manager also provides the Fund with office space, facilities and equipment.
45 | OPPENHEIMER DEVELOPING MARKETS FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board took account of the fact that the Manager has had over forty
years of experience as an investment adviser and that its assets under
management rank it among the top mutual fund managers in the United States. The
Board evaluated the Manager's administrative, accounting, legal and compliance
services, and information the Board has received regarding the experience and
professional qualifications of the Manager's personnel and the size and
functions of its staff. In its evaluation of the quality of the portfolio
management services provided, the Board considered the experience of Mark Madden
and the Manager's Global Equity investment team and analysts. The Board members
also considered their experiences with the Manager and its officers and other
personnel through their service on the boards of the Fund and other funds
advised by the Manager. The Board considered information regarding the quality
of services provided by affiliates of the Manager, which its members have become
knowledgeable about in connection with the renewal of the Fund's service
agreements. In light of the foregoing, the Board concluded that the Fund
benefits from the services provided under the Agreement and from the Manager's
experience, reputation, personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each Board meeting, including comparative performance information.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of all other retail front-end load and
no-load emerging markets funds advised by the Manager and by other investment
advisers. The Board noted that the Fund's three-year and five-year performance
were better than its peer group median. However its one-year performance was
below its peer group median.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the
Manager and its affiliates and the other expenses borne by the Fund. The Board
also evaluated the comparability of the fees charged and the services provided
to the Fund to the fees and services for other clients or accounts advised by
the Manager. The independent consultant provided comparative data in regard to
the fees and expenses of the Fund, other emerging markets funds and other funds
with comparable asset levels and distribution features. The Board noted that the
Fund's contractual and actual management fees and total expenses are lower than
its peer group median.
46 | OPPENHEIMER DEVELOPING MARKETS FUND
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund, the extent to
which those economies of scale benefit the Fund's shareholders and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board also noted the Fund's breakpoints, which are intended
to share economies of scale that may exist as the Fund grows with its
shareholders.
BENEFITS TO THE MANAGER. The Board considered information regarding the
Manager's costs in serving as the Fund's investment adviser, including the costs
associated with the personnel and systems necessary to manage the Fund, and
information regarding the Manager's profitability from its relationship with the
Fund. The Board considered that the Manager must be able to pay and retain
experienced professional personnel at competitive rates to provide services to
the Fund and that maintaining the financial viability of the Manager is
important in order for the Manager to continue to provide significant services
to the Fund and its shareholders. In addition to considering the profits
realized by the Manager, the Board considered information regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates for services
provided and research provided to the Manager in connection with permissible
brokerage arrangements (soft dollar arrangements).
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and the independent Trustees. Fund counsel is independent of the
Manager within the meaning and intent of the Securities and Exchange Commission
Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the Agreement for
another year. In arriving at this decision, the Board did not single out any
factor or factors as being more important than others, but considered all of the
factors together. The Board judged the terms and conditions of the Agreement,
including the management fee, in light of all of the surrounding circumstances.
47 | OPPENHEIMER DEVELOPING MARKETS FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. 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 February 28, 2007, 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) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Developing Markets Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: April 10, 2007
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: April 10, 2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: April 10, 2007