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 811-3420
OPPENHEIMER INTEGRITY FUNDS
(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: DECEMBER 31
Date of reporting period: 06/30/2007
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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CORPORATE BONDS AND NOTES--TOP TEN INDUSTRIES
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Media 5.2%
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Commercial Banks 2.8
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Oil & Gas 2.5
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Automobiles 1.7
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Insurance 1.7
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Household Durables 1.7
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Hotels, Restaurants & Leisure 1.4
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Food & Staples Retailing 1.0
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Wireless Telecommunication Services 1.0
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Electric Utilities 0.9
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2007, and are based on net assets.
CREDIT ALLOCATION
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Treasury 3.0%
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Agency 51.4
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AAA 10.9
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AA 2.1
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A 2.6
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BBB 13.1
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BB 4.4
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Not Rated 4.1
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Other Securities 8.4
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2007, and are based on the total market value of investments. Average
credit quality and ratings include securities rated by a national rating
organization. As of that date, no securities held by the Fund were rated lower
than BB.
11 | OPPENHEIMER CORE BOND 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 4/15/88. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 5/3/93. 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 7/11/95. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
12 | OPPENHEIMER CORE BOND FUND
CLASS Y shares of the Fund were first publicly offered on 4/27/98. 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.
13 | OPPENHEIMER CORE BOND FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 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), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in the
Statement of Additional Information). Therefore, the "hypothetical" 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.
14 | OPPENHEIMER CORE BOND FUND
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/07) (6/30/07) JUNE 30, 2007
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Class A Actual $ 1,000.00 $ 1,009.60 $ 4.34
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Class A Hypothetical 1,000.00 1,020.48 4.37
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Class B Actual 1,000.00 1,005.80 8.19
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Class B Hypothetical 1,000.00 1,016.66 8.23
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Class C Actual 1,000.00 1,005.80 8.19
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Class C Hypothetical 1,000.00 1,016.66 8.23
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Class N Actual 1,000.00 1,008.30 5.69
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Class N Hypothetical 1,000.00 1,019.14 5.72
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Class Y Actual 1,000.00 1,011.50 2.45
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Class Y Hypothetical 1,000.00 1,022.36 2.46
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 June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
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Class A 0.87%
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Class B 1.64
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Class C 1.64
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Class N 1.14
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Class Y 0.49
The expense ratio reflects reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager 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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15 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--5.2%
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Ace Securities Corp. Home Equity Loan Trust, Asset-Backed Pass-Through
Certificates, Series 2005-HE7, Cl. A2B, 5.50%, 11/25/35 1 $ 2,030,000 $ 2,031,720
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Aesop Funding II LLC, Automobile Asset-Backed Certificates,
Series 2005-1A, Cl. A2, 5.38%, 4/20/08 1,2 960,000 960,481
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Argent Securities Trust 2004-W8, Asset-Backed Pass-Through Certificates,
Series 2004-W8, Cl. A2, 5.80%, 5/25/34 1 3,925,924 3,942,028
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Argent Securities Trust 2006-W5, Asset-Backed Pass-Through Certificates,
Series 2006-W5, Cl. A2B, 5.42%, 5/26/36 1 3,380,000 3,380,013
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Capital Auto Receivables Asset Trust 2004-2, Automobile Asset-Backed
Securities, Series 2004-2, Cl. A3, 3.58%, 1/15/09 2,814,071 2,801,680
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Centex Home Equity Loan Trust 2005-D, Asset-Backed Certificates,
Series 2005-D, Cl. AV2, 5.59%, 10/25/35 1 2,813,601 2,815,994
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Centex Home Equity Loan Trust 2006-A, Asset-Backed Certificates,
Series 2006-A, Cl. AV2, 5.42%, 5/16/36 1 4,220,000 4,222,624
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Chase Funding Trust 2003-2, Mtg. Loan Asset-Backed Certificates,
Series 2003-2, Cl. 2A2, 5.60%, 2/25/33 1 2,190,314 2,192,405
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Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 460,000 439,186
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Citigroup Mortgage Loan Trust 2005-WF2, Asset-Backed Pass-Through
Certificates, Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 1 1,036,310 1,031,882
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Citigroup Mortgage Loan Trust 2006-WFH3, Asset-Backed Pass-Through
Certificates, Series 2006-WFH3, Cl. A2, 5.42%, 10/31/36 1,3 2,300,000 2,299,680
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CWABS Asset-Backed Certificates Trust 2002-4, Asset-Backed Certificates,
Series 2002-4, Cl. A1, 6.06%, 2/25/33 1 48,808 48,297
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CWABS Asset-Backed Certificates Trust 2005-16, Asset-Backed Certificates,
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 1 4,980,000 4,955,799
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CWABS Asset-Backed Certificates Trust 2005-17, Asset-Backed Certificates:
Series 2005-17, Cl. 1AF1, 5.52%, 5/25/36 1 821,817 822,368
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36 1 970,000 965,399
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CWABS Asset-Backed Certificates Trust 2006-25, Asset-Backed Certificates,
Series 2006-25, Cl. 2A2, 5.44%, 12/25/29 1 3,020,000 3,020,967
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First Franklin Mortgage Loan Trust 2005-FF10, Mtg. Pass-Through Certificates,
Series 2005-FF10, Cl. A3, 5.53%, 11/25/35 1 5,840,000 5,844,511
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First Franklin Mortgage Loan Trust 2006-FF10, Mtg. Pass-Through Certificates,
Series 2006-FF10, Cl. A3, 5.41%, 7/25/36 1 3,550,000 3,551,229
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First Franklin Mortgage Loan Trust 2006-FF5, Mtg. Pass-Through Certificates,
Series 2006-FF5, Cl. 2A1, 5.37%, 5/15/36 1 1,132,551 1,133,340
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First Franklin Mortgage Loan Trust 2006-FF9, Mtg. Pass-Through Certificates,
Series 2006-FF9, Cl. 2A2, 5.43%, 7/7/36 1 1,820,000 1,820,924
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Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates,
Series 2005-A, Cl. A3, 3.48%, 11/17/08 752,033 750,473
16 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
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Household Home Equity Loan Trust, Home Equity Loan
Pass-Through Certificates:
Series 2005-3, Cl. A1, 5.58%, 1/20/35 1 $ 1,568,583 $ 1,569,890
Series 2006-4, Cl. A2V, 5.43%, 3/20/36 1,3 1,120,000 1,120,374
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Lehman XS Trust, Mtg. Pass-Through Certificates:
Series 2005-10, Cl. 2A3B, 5.55%, 1/25/36 1,726,744 1,716,234
Series 2005-2, Cl. 2A1B, 5.18%, 8/25/35 1 1,309,253 1,307,887
Series 2005-4, Cl. 2A1B, 5.17%, 10/25/35 1,249,562 1,246,121
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Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 3 1,364,085 1,392,471
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MBNA Credit Card Master Note Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 6.67%, 3/15/16 1 4,380,000 4,607,306
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Morgan Stanley ABS Capital I, Mtg. Pass-Through Certificates,
Series 2005-WMC6, Cl. A2B, 5.58%, 7/25/35 1 1,058,569 1,059,709
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NC Finance Trust, CMO Pass-Through Certificates,
Series 1999-I, Cl. ECFD, 0.274%, 1/25/29 3 1,750,658 367,638
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Option One Mortgage Loan Trust, Asset-Backed Certificates,
Series 2006-2, Cl. 2A2, 5.42%, 7/1/36 1 5,940,000 5,942,965
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Popular ABS Mortgage Pass-Through Trust 2005-2, Mtg. Pass-Through
Certificates, Series 2005-2, Cl. AF2, 4.415%, 4/25/35 1 474,666 473,010
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Popular ABS Mortgage Pass-Through Trust 2005-6, Mtg. Pass-Through
Certificates, Series 2005-6, Cl. A3, 5.68%, 1/25/36 1 1,520,000 1,515,596
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RAMP Series 2004-RS7 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2004-RS7, Cl. AI32, 4.45%, 7/25/28 730,920 727,355
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RAMP Series 2006-RS4 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-RS4, Cl. A1, 5.40%, 7/25/36 1 1,301,314 1,302,186
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Specialty Underwriting & Residential Finance Trust, Home Equity
Asset-Backed Obligations, Series 2005-BC3, Cl. A2B, 5.57%, 6/25/36 1 6,513,989 6,521,459
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Structured Asset Investment Loan Trust, Mtg. Pass-Through Certificates,
Series 2006-2, Cl. A1, 5.38%, 4/25/36 1 2,605,978 2,607,159
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Structured Asset Securities Corp., Mtg. Pass-Through Certificates:
Series 2002-AL1, Cl. B2, 3.45%, 2/25/32 2,431,794 2,138,012
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 1,175,509 1,176,039
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Tobacco Settlement Authority, Asset-Backed Securities,
Series 2001-A, 6.79%, 6/1/10 1,045,000 1,062,347
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Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust,
Home Equity Asset-Backed Certificates,
Series 2006-2, Cl. A2, 5.42%, 7/25/36 1 3,530,000 3,531,183
----------------
Total Asset-Backed Securities (Cost $91,656,113) 90,415,941
17 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS--71.2%
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GOVERNMENT AGENCY--62.9%
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FHLMC/FNMA/SPONSORED--62.8%
Fannie Mae Whole Loan, CMO Pass-Through Certificates,
Trust 2004-W9, Cl. 2A2, 7%, 2/25/44 $ 1,615,980 $ 1,653,738
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Federal Home Loan Mortgage Corp.:
4.50%, 5/1/19 24,616,308 23,455,208
5%, 6/1/33-8/1/33 12,303,215 11,594,432
6%, 5/1/18-10/1/29 6,146,977 6,151,798
6.50%, 4/1/18-4/1/34 8,238,239 8,425,071
7%, 7/1/21-3/1/35 14,634,486 15,097,228
8%, 4/1/16 590,668 622,183
9%, 3/1/17-5/1/25 170,451 182,337
12.50%, 4/1/14 932 1,037
13.50%, 11/1/10 1,806 1,991
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Federal Home Loan Mortgage Corp., CMO Gtd. Multiclass Mtg.
Participation Certificates:
Series 2046, Cl. G, 6.50%, 4/15/28 3,857,821 3,926,250
Series 2410, Cl. PF, 6.30%, 2/15/32 1 5,300,099 5,460,968
Series 2423, Cl. MC, 7%, 3/15/32 3,785,373 3,894,934
Series 2453, Cl. BD, 6%, 5/15/17 1,441,119 1,453,838
Series 3094, Cl. HS, 4.877%, 6/15/34 1 1,741,473 1,598,964
Series 3138, Cl. PA, 5.50%, 2/15/27 22,430,504 22,411,353
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Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass Pass-Through Certificates:
Series 1590, Cl. IA, 6.425%, 10/15/23 1 5,343,541 5,515,367
Series 2006-11, Cl. PS, 5.06%, 3/25/36 1 2,898,253 2,683,345
Series 2034, Cl. Z, 6.50%, 2/15/28 44,617 45,296
Series 2043, Cl. ZP, 6.50%, 4/15/28 3,803,223 3,780,124
Series 2053, Cl. Z, 6.50%, 4/15/28 48,284 49,080
Series 2055, Cl. ZM, 6.50%, 5/15/28 56,310 57,090
Series 2063, Cl. PG, 6.50%, 6/15/28 3,149,434 3,197,424
Series 2075, Cl. D, 6.50%, 8/15/28 600,676 610,599
Series 2080, Cl. Z, 6.50%, 8/15/28 1,635,400 1,662,326
Series 2145, Cl. MZ, 6.50%, 4/15/29 1,105,406 1,124,798
Series 2148, Cl. ZA, 6%, 4/15/29 1,170,803 1,162,605
Series 2195, Cl. LH, 6.50%, 10/15/29 2,560,708 2,594,652
Series 2326, Cl. ZP, 6.50%, 6/15/31 951,140 968,066
Series 2387, Cl. PD, 6%, 4/15/30 7,575 7,569
Series 2399, Cl. PG, 6%, 1/15/17 1,520,508 1,537,819
Series 2426, Cl. BG, 6%, 3/15/17 9,087,905 9,170,050
Series 2427, Cl. ZM, 6.50%, 3/15/32 5,001,515 5,093,192
Series 2461, Cl. PZ, 6.50%, 6/15/32 4,600,633 4,713,563
Series 2500, Cl. FD, 5.82%, 3/15/32 1 390,606 395,962
Series 2526, Cl. FE, 5.72%, 6/15/29 1 598,604 604,514
Series 2551, Cl. FD, 5.72%, 1/15/33 1 466,736 471,501
Series 2676, Cl. KY, 5%, 9/15/23 4,548,000 4,245,048
Series 3025, Cl. SJ, 5.243%, 8/15/35 1 1,189,519 1,106,222
18 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., CMO Pass-Through Participation
Certificates, Series 151, Cl. F, 9%, 5/15/21 $ 32,568 $ 32,512
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Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 14.576%, 6/1/26 4 738,460 186,859
Series 183, Cl. IO, 12.08%, 4/1/27 4 2,424,906 645,984
Series 184, Cl. IO, 17.79%, 12/1/26 4 1,237,292 317,337
Series 192, Cl. IO, 15.066%, 2/1/28 4 305,490 76,868
Series 200, Cl. IO, 13.688%, 1/1/29 4 363,342 99,382
Series 2003-118, Cl. S, 10.504%, 12/25/33 4 9,220,517 1,091,307
Series 2003-26, Cl. IK, 7.053%, 4/25/33 4 3,521,613 930,571
Series 2005-87, Cl. SE, 6.787%, 10/25/35 4 23,573,102 585,287
Series 2005-87, Cl. SG, 12.236%, 10/25/35 4 18,536,937 855,826
Series 206, Cl. IO, (5.735)%, 12/1/29 4 396,786 105,605
Series 2130, Cl. SC, (0.801)%, 3/15/29 4 797,862 54,544
Series 2134, Cl. SB, 3.503%, 3/15/29 4 862,918 58,110
Series 216, Cl. IO, 13.611%, 12/1/31 4 1,438,263 370,701
Series 224, Cl. IO, 10.643%, 3/1/33 4 6,508,520 1,683,657
Series 2422, Cl. SJ, 16.786%, 1/15/32 4 3,814,879 283,807
Series 243, Cl. 6, 8.611%, 12/15/32 4 2,587,675 668,315
Series 2493, Cl. S, 12.335%, 9/15/29 4 224,519 18,756
Series 2796, Cl. SD, 2.892%, 7/15/26 4 1,296,690 89,802
Series 2802, Cl. AS, 4.498%, 4/15/33 4 4,450,837 214,785
Series 2920, Cl. S, (1.204)%, 1/15/35 4 5,224,145 206,472
Series 3000, Cl. SE, (2.419)%, 7/15/25 4 7,765,886 191,801
Series 3110, Cl. SL, 6.09%, 2/15/26 4 2,311,535 59,917
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Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. PO, 4.262%, 6/1/26 5 315,608 243,197
Series 192, Cl. PO, 5.708%, 2/1/28 5 305,490 235,262
Series 224, Cl. PO, 4.438%, 3/1/33 5 2,325,764 1,705,088
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Federal National Mortgage Assn.:
4.50%, 5/1/18-8/1/20 84,214,282 80,231,903
5%, 12/1/17-3/1/34 174,898,815 167,193,536
5%, 7/1/22 6 4,784,000 4,623,286
5.50%, 3/1/33-1/1/34 40,862,835 39,598,118
5.50%, 7/1/22-8/1/37 6 238,261,000 230,109,004
6%, 5/1/20-11/1/33 55,225,442 54,942,893
6%, 7/1/22-7/1/37 6 80,900,000 80,774,277
6.50%, 6/1/17-11/1/31 38,982,074 39,799,499
7%, 1/1/09-4/1/34 16,408,062 16,976,904
7%, 7/1/37 6 634,000 651,039
7.50%, 2/1/08-8/1/33 12,929,797 13,538,742
8%, 8/1/17 2,839 2,872
8.50%, 7/1/32 50,995 54,828
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Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1,
Cl. A2, 7%, 11/25/31 1,868,321 1,910,681
19 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates:
Trust 1992-34, Cl. G, 8%, 3/25/22 $ 24,518 $ 24,804
Trust 1993-104, Cl. ZB, 6.50%, 7/25/23 1,145,693 1,153,557
Trust 1993-215, Cl. ZQ, 6.50%, 11/25/23 4,338,418 4,402,453
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 457,474 466,457
Trust 1996-35, Cl. Z, 7%, 7/25/26 168,931 173,280
Trust 1998-58, Cl. PC, 6.50%, 10/25/28 1,789,202 1,823,944
Trust 1998-61, Cl. PL, 6%, 11/25/28 2,258,941 2,256,598
Trust 1999-54, Cl. LH, 6.50%, 11/25/29 3,196,917 3,257,445
Trust 1999-60, Cl. PG, 7.50%, 12/25/29 11,677,754 11,992,994
Trust 2001-50, Cl. NE, 6%, 8/25/30 6,159 6,146
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 2,827,989 2,879,089
Trust 2001-70, Cl. LR, 6%, 9/25/30 284,528 284,774
Trust 2001-74, Cl. PD, 6%, 5/25/30 2,261 2,256
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32 1,977,107 2,015,584
Trust 2002-16, Cl. PG, 6%, 4/25/17 2,224,000 2,243,585
Trust 2002-56, Cl. FN, 6.32%, 7/25/32 1 2,101,719 2,169,774
Trust 2002-9, Cl. PC, 6%, 3/25/17 8,750,190 8,816,945
Trust 2003-17, Cl. EQ, 5.50%, 3/25/23 6,305,000 5,968,913
Trust 2003-21, Cl. FK, 5.72%, 3/25/33 1 39,168 39,571
Trust 2003-23, Cl. EQ, 5.50%, 4/25/23 8,316,000 7,867,319
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,492,000 1,428,158
Trust 2003-84, Cl. GC, 4.50%, 5/25/15 11,330,000 11,110,284
Trust 2003-84, Cl. PW, 3%, 6/25/22 2,711,332 2,673,240
Trust 2004-101, Cl. BG, 5%, 1/25/20 2,603,000 2,511,451
Trust 2005-100, Cl. BQ, 5.50%, 11/25/25 2,450,000 2,331,906
Trust 2005-104, Cl. MC, 5.50%, 12/25/25 12,330,000 11,684,099
Trust 2005-109, Cl. AH, 5.50%, 12/25/25 10,000,000 9,420,520
Trust 2005-31, Cl. PB, 5.50%, 4/25/35 2,480,000 2,378,706
Trust 2005-71, Cl. DB, 4.50%, 8/25/25 1,260,000 1,132,964
Trust 2006-44, Cl. OA, 5.50%, 12/25/26 9,008,235 8,989,613
Trust 2006-46, Cl. SW, 4.693%, 6/25/36 1 2,748,390 2,455,656
Trust 2006-50, Cl. KS, 4.693%, 6/25/36 1 3,896,867 3,367,817
Trust 2006-50, Cl. SA, 4.693%, 6/25/36 1 3,636,395 3,141,140
Trust 2006-50, Cl. SK, 4.693%, 6/25/36 1 2,794,198 2,493,885
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 10,166,117 10,143,335
Trust 2006-64, Cl. MD, 5.50%, 7/25/36 2,753,828 2,626,569
- --------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 2001-15, Cl. SA, 10.25%, 3/17/31 4 1,516,318 165,169
Trust 2001-65, Cl. S, 10.815%, 11/25/31 4 4,965,236 491,969
Trust 2001-81, Cl. S, 4.534%, 1/25/32 4 627,575 59,784
Trust 2002-12, Cl. SB, 14.125%, 7/25/31 4 1,002,505 88,367
Trust 2002-2, Cl. SW, 14.49%, 2/25/32 4 1,129,347 98,429
Trust 2002-38, Cl. IO, (1.087)%, 4/25/32 4 418,626 20,299
Trust 2002-41, Cl. S, 15.802%, 7/25/32 4 4,216,035 357,660
Trust 2002-47, Cl. NS, 3.811%, 4/25/32 4 1,558,291 147,080
Trust 2002-5, Cl. SD, 9.113%, 2/25/32 4 754,924 61,112
Trust 2002-51, Cl. S, 3.946%, 8/25/32 4 1,430,854 135,887
20 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security: Continued
Trust 2002-52, Cl. SD, 0.548%, 9/25/32 4 $ 1,628,311 $ 136,556
Trust 2002-60, Cl. SY, 15.683%, 4/25/32 4 952,210 37,832
Trust 2002-75, Cl. SA, 11.434%, 11/25/32 4 3,906,622 369,776
Trust 2002-77, Cl. IS, 3.839%, 12/18/32 4 713,214 62,257
Trust 2002-77, Cl. SH, 5.525%, 12/18/32 4 819,878 74,464
Trust 2002-84, Cl. SA, 12.682%, 12/25/32 4 975,371 94,733
Trust 2002-89, Cl. S, 15.16%, 1/25/33 4 6,432,044 574,007
Trust 2002-9, Cl. MS, 5.134%, 3/25/32 4 51,452 5,111
Trust 2003-33, Cl. SP, 13.311%, 5/25/33 4 5,926,067 633,284
Trust 2003-4, Cl. S, 10.533%, 2/25/33 4 1,903,293 191,417
Trust 2004-54, Cl. DS, (2.177)%, 11/25/30 4 328,752 17,625
Trust 2005-105, Cl. S, 11.958%, 12/25/35 4 9,868,611 447,267
Trust 2005-19, Cl. SA, 0.047%, 3/25/35 4 17,940,835 740,831
Trust 2005-40, Cl. SA, (0.105)%, 5/25/35 4 3,309,308 130,752
Trust 2005-6, Cl. SE, 1.773%, 2/25/35 4 3,772,877 152,277
Trust 2005-71, Cl. SA, 3.842%, 8/25/25 4 6,475,126 300,150
Trust 2005-83, Cl. SL, 10.362%, 10/25/35 4 12,835,929 574,069
Trust 2006-119, Cl. MS, 11.189%, 12/25/36 4 10,381,484 471,192
Trust 2006-33, Cl. SP, 14.61%, 5/25/36 4 14,256,887 1,055,406
Trust 2006-34, Cl. SK, 14.398%, 5/25/36 4 19,919,570 1,516,347
Trust 222, Cl. 2, 17.842%, 6/1/23 4 2,477,702 617,731
Trust 240, Cl. 2, 20.676%, 9/1/23 4 3,028,308 803,912
Trust 247, Cl. 2, 14.97%, 10/1/23 4 212,587 56,312
Trust 252, Cl. 2, 15.029%, 11/1/23 4 2,182,124 604,967
Trust 254, Cl. 2, 9.252%, 1/1/24 4 3,749,089 1,039,611
Trust 2682, Cl. TQ, 15.633%, 10/15/33 4 5,732,436 285,174
Trust 273, Cl. 2, 16.766%, 8/1/26 4 554,912 138,868
Trust 2981, Cl. BS, 14.587%, 5/15/35 4 10,806,527 427,533
Trust 301, Cl. 2, 9.264%, 4/1/29 4 1,424,668 376,809
Trust 303, Cl. IO, (1.202)%, 11/1/29 4 176,502 49,223
Trust 319, Cl. 2, 9.985%, 2/1/32 4 874,248 231,452
Trust 321, Cl. 2, 13.098%, 4/1/32 4 3,601,630 951,589
Trust 322, Cl. 2, 16.788%, 4/1/32 4 4,546,254 1,194,605
Trust 324, Cl. 2, 9.82%, 7/1/32 4 2,847,645 752,917
Trust 331, Cl. 9, 4.626%, 2/1/33 4 9,250,235 2,313,052
Trust 334, Cl. 15, 2.115%, 2/1/33 4 5,623,544 1,399,826
Trust 334, Cl. 17, 23.225%, 2/1/33 4 287,770 80,571
Trust 339, Cl. 7, 5.818%, 7/1/33 4 9,690,205 2,371,069
Trust 342, Cl. 2, 12.645%, 9/1/33 4 7,749,897 2,028,393
Trust 344, Cl. 2, 10.696%, 12/1/33 4 45,840,364 12,020,094
Trust 345, Cl. 9, 8.846%, 1/1/34 4 6,004,784 1,486,441
Trust 346, Cl. 2, 13.365%, 12/1/33 4 10,185,682 2,671,217
Trust 350, Cl. 2, 11.699%, 3/1/34 4 18,941,677 4,965,585
Trust 362, Cl. 12, 6.752%, 8/1/35 4 9,900,904 2,288,728
Trust 362, Cl. 13, 6.735%, 8/1/35 4 5,489,112 1,266,360
- --------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped
Mtg.-Backed Security, Trust 1993-184, Cl. M, 5.018%, 9/25/23 5 742,621 598,669
----------------
1,084,113,524
21 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage Assn.:
5.75%, 7/20/25-7/20/27 1 $ 25,221 $ 25,462
7%, 7/15/09 6,844 6,956
8.50%, 8/15/17-12/15/17 251,139 267,487
9%, 2/15/09-6/15/09 6,881 7,106
10.50%, 12/15/17-5/15/21 17,897 19,958
11%, 10/20/19 42,941 47,238
12%, 5/15/14 300 339
- --------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, (3.214)%, 1/16/27 4 1,568,619 105,081
Series 2002-15, Cl. SM, (6.088)%, 2/16/32 4 1,605,196 107,520
Series 2002-41, Cl. GS, 5.165%, 6/16/32 4 1,236,930 140,423
Series 2002-76, Cl. SY, (3.849)%, 12/16/26 4 782,015 57,181
Series 2004-11, Cl. SM, (6.221)%, 1/17/30 4 271,294 17,321
Series 2006-47, Cl. SA, 14.941%, 8/16/36 4 19,165,726 958,204
----------------
1,760,276
- --------------------------------------------------------------------------------------------------------------
NON-AGENCY--8.3%
- --------------------------------------------------------------------------------------------------------------
COMMERCIAL--6.8%
Asset Securitization Corp., Commercial Interest-Only Stripped
Mtg.-Backed Security, Series 1997-D4, Cl. PS1, 1.695%, 4/14/29 4 14,558,053 642,335
- --------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates,
Series 1996-MD6, Cl. A3, 7.546%, 11/13/29 1 800,000 804,556
- --------------------------------------------------------------------------------------------------------------
Banc of America Commercial Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2005-3, Cl. A2, 4.501%, 7/10/43 3,580,000 3,486,843
Series 2006-5, Cl. A2, 5.348%, 10/10/11 6,320,000 6,240,424
- --------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 1,861,508 1,877,902
- --------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates,
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 1,583,851 1,584,098
- --------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc.,
Commercial Mtg. Obligations, Series 2003-T10, Cl. A1, 4%, 3/13/40 159,335 153,476
- --------------------------------------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only
Corporate-Backed Pass-Through Certificates,
Series 1997-CTL1, (6.094)%, 6/22/24 4 5,385,559 161,022
- --------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust 2006-WF1, Asset-Backed
Pass-Through Certificates, Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36 1,150,000 1,145,693
- --------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank Commercial Mortgage Trust,
Commercial Mtg. Obligations, Series 2007-CD4, Cl. A2B, 5.205%, 12/11/49 3 7,620,000 7,485,069
- --------------------------------------------------------------------------------------------------------------
Deutsche Alt-A Securities Mortgage Loan Trust, Mtg.
Pass-Through Certificates:
Series 2006-AB2, Cl. A7, 5.961%, 6/25/36 3,423,190 3,416,937
Series 2006-AB3, Cl. A7, 6.36%, 4/25/08 1,094,391 1,093,659
Series 2006-AB4, Cl. A1A, 6.005%, 10/25/36 6,620,725 6,620,672
22 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
DLJ Commercial Mortgage Corp., Commercial Mtg. Pass-Through
Certificates, Series 1998-CF2, Cl. A1B, 6.24%, 11/12/31 $ 4,443,987 $ 4,473,182
- --------------------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America
Commercial Mtg. Trust, Pass-Through Certificates,
Series 1998-C2, Cl. A2, 6.56%, 11/18/35 3,786,542 3,803,715
- --------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2003-C1, Cl. A2, 4.093%, 1/10/38 215,000 210,862
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 1,850,000 1,815,459
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 2,250,000 2,213,630
- --------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 2,000,000 1,949,607
Series 2005-GG5, Cl. A2, 5.117%, 4/10/37 6,378,000 6,311,160
Series 2007-GG9, Cl. A2, 5.381%, 3/10/39 3 5,600,000 5,538,915
- --------------------------------------------------------------------------------------------------------------------
JP Morgan Commercial Mortgage Finance Corp., Commercial Mtg.
Obligations, Series 2000-C9, Cl. A2, 7.77%, 10/15/32 4,595,263 4,786,181
- --------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial
Mtg. Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 860,000 839,182
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 3,566,000 3,496,641
Series 2007-LDPX, Cl. A2S, 5.305%, 1/15/49 6,640,000 6,533,944
- --------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial
Mtg. Pass-Through Certificates:
Series 2005-C5, Cl. A2, 4.885%, 9/15/30 2,700,000 2,662,448
Series 2007-C1, Cl. A2, 5.318%, 1/15/12 6,200,000 6,124,130
- --------------------------------------------------------------------------------------------------------------------
Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 9.067%, 2/18/30 4 9,133,018 151,767
- --------------------------------------------------------------------------------------------------------------------
Lehman Structured Securities Corp., CMO,
Series 2002-GE1, Cl. A, 2.514%, 7/26/24 3 191,746 148,603
- --------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO Pass-Through Certificates:
Series 2004-6, Cl. 10A1, 6%, 7/25/34 2,321,801 2,300,840
Series 2004-9, Cl. A3, 4.70%, 8/25/34 1 758,861 755,818
- --------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 8,273,478 8,327,536
- --------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg.
Pass-Through Certificates, Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 3 182,000 193,773
- --------------------------------------------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 1,458,734 1,453,832
- --------------------------------------------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2007-QS6, Cl. A114, 5.75%, 4/25/37 5,988,163 5,950,719
- --------------------------------------------------------------------------------------------------------------------
Residential Asset Securitization Trust 2006-A9CB, CMO
Pass-Through Certificates, Series 2006-A9CB, Cl. A5, 6%, 9/25/36 6,660,120 6,645,193
- --------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Interest-Only
Commercial Mtg. Pass-Through Certificates,
Series 1999-C1, Cl. X, (4.514)%, 5/18/32 4 185,678,283 455,859
23 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
Wachovia Bank Commercial Mortgage Trust 2005-C17,
Commercial Mtg. Pass-Through Certificates,
Series 2005-C17, Cl. A2, 4.782%, 3/15/42 $ 3,830,000 $ 3,770,611
- --------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2006-C29,
Commercial Mtg. Pass-Through Certificates,
Series 2006-C29, Cl. A2, 5.272%, 11/15/48 2,146,000 2,114,148
----------------
117,740,441
- --------------------------------------------------------------------------------------------------------------------
MULTIFAMILY--0.0%
WAMU Mortgage Pass-Through Certificates, Series 2005-AR8 Trust,
Series 2005-AR8, Cl. 2AB1, 5.57%, 7/25/45 1 543,307 543,827
- --------------------------------------------------------------------------------------------------------------------
OTHER--0.3%
JP Morgan Mortgage Trust, CMO Pass-Through Certificates,
Series 2005-S2, Cl. 3A1, 6.726%, 2/25/32 1 4,306,115 4,319,389
- --------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Inc., Interest-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. B, 22.014%, 10/23/17 4 10,527 1,704
- --------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. A, 1.476%, 10/23/17 5 15,581 14,357
----------------
4,335,450
- --------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--1.2%
Countrywide Alternative Loan Trust, CMO:
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 7,295,622 7,319,559
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 3,809,058 3,839,319
- --------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS13 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-QS13, Cl. 1A8, 6%, 9/25/36 5,105,484 5,096,300
- --------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-QS5, Cl. 2A2, 6%, 4/25/08 4,450,189 4,442,927
- --------------------------------------------------------------------------------------------------------------------
WAMU Mortgage Pass-Through Certificates, Series 2005-AR5 Trust,
Series 2005-AR5, Cl. A1, 4.676%, 5/25/35 1 170,586 170,667
----------------
20,868,772
----------------
Total Mortgage-Backed Obligations (Cost $1,239,300,919) 1,229,362,290
- --------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.7%
- --------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 7 565,000 561,194
- --------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts., 4%, 8/17/07 7 1,025,000 1,023,199
- --------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
4.50%, 5/15/17 7 4,896,000 4,695,572
8.875%, 8/15/17 7 3,464,000 4,488,589
STRIPS, 3.862%, 2/15/13 7,8 1,520,000 1,157,980
24 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- --------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.875%, 2/15/13 7 $ 6,116,000 $ 5,810,683
4.50%, 5/15/10-4/30/12 7 30,536,000 29,997,458
4.75%, 2/15/10-5/31/12 7 11,030,000 10,967,353
4.875%, 5/31/09 7 4,936,000 4,936,005
----------------
Total U.S. Government Obligations (Cost $64,498,711) 63,638,033
- --------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--26.6%
- --------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.8%
- --------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--1.7%
DaimlerChrysler North America Holding Corp.:
5.71% Nts., Series E, 3/13/09 1 2,880,000 2,886,512
7.30% Nts., 1/15/12 7 2,170,000 2,303,692
- --------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75% Sr. Unsec. Nts., 9/15/10 15,015,000 15,689,113
- --------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 8% Bonds, 11/1/31 7 6,070,000 6,223,844
- --------------------------------------------------------------------------------------------------------------------
Hyundai Motor Manufacturing Alabama LLC, 5.30%
Sr. Unsec. Nts., 12/19/08 2,7 3,070,000 3,046,039
----------------
30,149,200
- --------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.4%
Caesars Entertainment, Inc., 7.50% Sr. Unsec. Nts., 9/1/09 3 7,245,000 7,411,693
- --------------------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr. Unsec. Nts., 2/15/11 3 4,735,000 5,007,263
- --------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts., 10/1/09 9,920,000 9,882,800
- --------------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 7% Sr. Unsec. Unsub. Nts., 10/15/07 3 1,525,000 1,537,372
----------------
23,839,128
- --------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.7%
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09 5,530,000 5,525,034
- --------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 3,730,000 3,503,082
6.125% Nts., 1/15/14 2,640,000 2,534,115
8% Sr. Nts., 2/1/09 4,474,000 4,601,366
- --------------------------------------------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec. Nts., 3/1/09 6,115,000 6,296,322
- --------------------------------------------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09 3,465,000 3,410,825
- --------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp., 5.125% Sr. Unsec. Unsub. Nts., 4/1/09 3,565,000 3,368,925
----------------
29,239,669
- --------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.0%
Eastman Kodak Co., 3.625% Nts., Series A, 5/15/08 3,7 773,000 755,608
- --------------------------------------------------------------------------------------------------------------------
MEDIA--5.2%
Belo Corp., 8% Sr. Unsec. Unsub. Nts., 11/1/08 11,900,000 12,223,466
25 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
MEDIA Continued
British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 $ 3,891,000 $ 4,082,667
- --------------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 5,130,000 5,263,457
- --------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.25% Nts., 3/15/11 4,150,000 3,996,952
- --------------------------------------------------------------------------------------------------------------------
Comcast Corp., 6.45% Unsec. Nts., 3/15/37 10,590,000 10,238,772
- --------------------------------------------------------------------------------------------------------------------
Cox Enterprises, Inc., 4.375% Nts., 5/1/08 2 7,710,000 7,634,234
- --------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.25% Sr. Unsec. Nts., 7/15/08 7 6,560,000 6,625,600
- --------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec. Nts., 10/1/08 9,370,000 9,370,000
- --------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 7.875% Sr. Nts., 7/15/09 2,015,000 2,100,230
- --------------------------------------------------------------------------------------------------------------------
Liberty Media LLC, 7.75% Sr. Nts., 7/15/09 7,445,000 7,740,931
- --------------------------------------------------------------------------------------------------------------------
Time Warner Entertainment Co. LP, 8.375% Sr. Nts., 7/15/33 8,610,000 10,021,084
- --------------------------------------------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E, 10/6/08 5,070,000 5,029,242
- --------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc.:
3.50% Sr. Unsec. Nts., 10/15/07 3,865,000 3,845,675
3.875% Sr. Unsec. Nts., 10/15/08 3 1,795,000 1,738,906
----------------
89,911,216
- --------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.3%
Dillard's, Inc., 6.625% Unsec. Nts., 11/15/08 3,9 1,850,000 1,863,875
- --------------------------------------------------------------------------------------------------------------------
May Department Stores Co., 7.90% Unsec. Debs., 10/15/07 2,515,000 2,527,047
----------------
4,390,922
- --------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--0.5%
Gap, Inc. (The):
6.90% Nts., 9/15/07 7,635,000 7,679,550
9.80% Unsub. Nts., 12/15/08 1 530,000 562,167
----------------
8,241,717
- --------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--1.4%
- --------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.0%
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 7,9 6,600,000 6,778,787
- --------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 4,083,000 4,953,287
- --------------------------------------------------------------------------------------------------------------------
Kroger Co. (The), 5.50% Unsec. Unsub. Nts., 2/1/13 5,745,000 5,601,588
- --------------------------------------------------------------------------------------------------------------------
Real Time Data Co., 11% Disc. Nts., 5/31/09 3,10,11,12 476,601 --
----------------
17,333,662
- --------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--0.4%
Earthgrains Co. (The), 6.50% Nts., 4/15/09 2,275,000 2,302,912
- --------------------------------------------------------------------------------------------------------------------
Heinz (H.J.) Co., 6.428% Bonds, 12/1/08 2 970,000 980,007
- --------------------------------------------------------------------------------------------------------------------
Sara Lee Corp., 2.75% Unsec. Nts., 6/15/08 2,695,000 2,621,488
----------------
5,904,407
26 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
ENERGY--2.5%
- --------------------------------------------------------------------------------------------------------------------
OIL & GAS--2.5%
Buckeye Partners LP, 4.625% Sr. Nts., 7/15/13 $ 8,720,000 $ 8,159,461
- --------------------------------------------------------------------------------------------------------------------
El Paso Corp., 6.50% Sr. Unsec. Nts., 6/1/08 1,170,000 1,181,092
- --------------------------------------------------------------------------------------------------------------------
Kaneb Pipe Line Operating Partnership LP:
5.875% Sr. Unsec. Nts., 6/1/13 5,745,000 5,721,595
7.75% Sr. Unsec. Nts., 2/15/12 620,000 665,532
- --------------------------------------------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP, 7.30% Sr. Unsec. Nts., 8/15/33 9,570,000 10,023,398
- --------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 2 1,252,797 1,166,523
- --------------------------------------------------------------------------------------------------------------------
TEPPCO Partners LP:
6.125% Nts., 2/1/13 3,060,000 3,080,153
7.625% Sr. Unsec. Nts., 2/15/12 2,335,000 2,494,849
- --------------------------------------------------------------------------------------------------------------------
Valero Logistics Operations LP, 6.05% Nts., 3/15/13 1,950,000 1,951,576
- --------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The), Credit Linked Certificate Trust, 6.75% Nts., 4/15/09 3 8,850,000 8,982,750
----------------
43,426,929
- --------------------------------------------------------------------------------------------------------------------
FINANCIALS--6.2%
- --------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--0.7%
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34 7 13,130,000 12,561,392
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--2.8%
Barclays Bank plc, 6.278% Perpetual Bonds 13 16,120,000 14,659,850
- --------------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 2,13 16,200,000 15,210,277
- --------------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 1 12,200,000 11,831,365
- --------------------------------------------------------------------------------------------------------------------
Popular North America, Inc., 4.70% Nts., 6/30/09 6,799,000 6,699,741
----------------
48,401,233
- --------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
SLM Corp., 4% Nts., 1/15/09 6,926,000 6,657,098
- --------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.6%
Capmark Financial Group, Inc., 5.875% Nts., 5/10/12 2 4,405,000 4,351,796
- --------------------------------------------------------------------------------------------------------------------
CIT Group Funding Co. of Canada, 4.65% Sr. Unsec. Nts., 7/1/10 5,029,000 4,885,125
----------------
9,236,921
- --------------------------------------------------------------------------------------------------------------------
INSURANCE--1.7%
Marsh & McLennan Cos., Inc.:
5.875% Sr. Unsec. Bonds, 8/1/33 762,000 643,508
7.125% Sr. Unsec. Nts., 6/15/09 5,635,000 5,778,771
- --------------------------------------------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub. Nts., 12/1/34 3,920,000 3,614,969
- --------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 2 8,875,000 10,745,362
- --------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 7,395,000 9,011,473
----------------
29,794,083
27 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
HEALTH CARE--0.2%
- --------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.2%
HCA, Inc., 8.75% Sr. Nts., 9/1/10 7 $ 3,445,000 $ 3,604,331
- --------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--0.3%
- --------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.2%
Textron Financial Corp., 6% Jr. Unsec. Sub. Nts., 2/15/67 1,2,7 3,680,000 3,471,936
- --------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Ryder System, Inc., 5.95% Nts., 5/2/11 1,760,000 1,766,024
- --------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.0%
- --------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.0%
Orion Network Systems, Inc., 12.50% Sr. Unsub. Disc. Nts., 1/15/07 10,11 200,000 2
- --------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.4%
NCR Corp., 7.125% Sr. Unsec. Unsub. Nts., 6/15/09 6,495,000 6,637,974
- --------------------------------------------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.6%
Xerox Corp., 9.75% Sr. Unsec. Nts., 1/15/09 10,335,000 10,936,528
- --------------------------------------------------------------------------------------------------------------------
MATERIALS--0.0%
- --------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.0%
Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 85,000 104,314
- --------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.9%
- --------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.9%
Qwest Corp.:
5.625% Unsec. Nts., 11/15/08 3 729,000 729,911
7.875% Sr. Unsec. Nts., 9/1/11 8,045,000 8,427,138
- --------------------------------------------------------------------------------------------------------------------
Telecom Italia Capital SpA, 4% Unsec. Unsub. Nts., 1/15/10 6,625,000 6,372,541
----------------
15,529,590
- --------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Nextel Communications, Inc., 7.375% Sr. Nts., Series D, 8/1/15 8,220,000 8,223,592
- --------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc., 9.625% Sr. Sec. Nts., 5/1/11 7,240,000 8,153,724
----------------
16,377,316
- --------------------------------------------------------------------------------------------------------------------
UTILITIES--2.3%
- --------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.9%
Monongahela Power Co., 7.36% Unsec. Nts., Series A, 1/15/10 7,727,000 8,045,638
- --------------------------------------------------------------------------------------------------------------------
Westar Energy, Inc., 7.125% Sr. Unsec. Nts., 8/1/09 7,494,000 7,702,056
----------------
15,747,694
- --------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS--0.8%
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 1 1,535,000 1,573,375
- --------------------------------------------------------------------------------------------------------------------
TXU Energy Co. LLC:
5.86% Sr. Nts., 9/16/08 1,2,7 8,820,000 8,825,954
6.125% Nts., 3/15/08 3,065,000 3,072,089
----------------
13,471,418
28 | OPPENHEIMER CORE BOND FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.6%
CenterPoint Energy, Inc., 7.25% Sr. Nts., Series B, 9/1/10 $ 6,787,000 $ 7,092,558
- --------------------------------------------------------------------------------------------------------------------
PSEG Funding Trust I, 5.381% Nts., 11/16/07 4,170,000 4,166,656
----------------
11,259,214
----------------
Total Corporate Bonds and Notes (Cost $462,130,226) 458,749,526
SHARES
- --------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--0.0%
- --------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp. 181 6,269
- --------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. 10 2,169 106,888
----------------
Total Common Stocks (Cost $64,641) 113,157
UNITS
- --------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 3,10 150 --
- --------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 10 2,028 104
----------------
Total Rights, Warrants and Certificates (Cost $5,577) 104
SHARES
- --------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--10.2%
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.28% 14,15
(Cost $175,872,901) 175,872,901 175,872,901
- --------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased
with Cash Collateral from Securities Loaned)
(Cost $2,033,529,088) 2,018,151,952
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--4.4% 16
- --------------------------------------------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTE--0.2%
Whitehawk CDO Funding Corp., 5.41%, 9/17/07 $ 3,000,000 3,000,000
- --------------------------------------------------------------------------------------------------------------------
FUNDING AGREEMENT/GUARANTEED INVESTMENT CONTRACT--0.1%
Protective Life Insurance Co., 5.48%, 7/30/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.9%
Undivided interest of 0.93% in joint repurchase agreement
(Principal Amount/Value $3,500,000,000, with a maturity
value of $3,501,573,542) with Bank of America NA,
5.395%, dated 6/29/07, to be repurchased at
$32,444,795 on 7/2/07, collateralized by
U.S. Agency Mortgages, 5%-5.50%,
8/1/33-3/1/35, with a value of
$3,570,000,000 32,430,215 32,430,215
29 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 7% in joint repurchase agreement
(Principal Amount/Value $500,000,000, with a maturity
value of $500,225,625) with Barclays Capital, 5.415%,
dated 6/29/07, to be repurchased at $35,015,794
on 7/2/07, collateralized by Private Label CMOs,
0%, 5/27/35-2/25/48, with a value of $525,000,000 $ 35,000,000 $ 35,000,000
----------------
67,430,215
- --------------------------------------------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--0.2%
Five Finance, Inc., 5.38%, 7/2/07 2,999,782 2,999,782
----------------
Total Investments Purchased with Cash Collateral from Securities
Loaned (Cost $75,429,997) 75,429,997
- --------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,108,959,085) 121.3% 2,093,581,949
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (21.3) (367,186,054)
--------------------------------
NET ASSETS 100.0% $ 1,726,395,895
================================
30 | OPPENHEIMER CORE BOND FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Represents the current interest rate for a variable or increasing rate
security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $56,392,609 or 3.27% of the Fund's net
assets as of June 30, 2007.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $46,573,901, which represents 2.70% of the Fund's net assets. See Note
9 of accompanying Notes.
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $61,227,258 or 3.55% of the Fund's net assets
as of June 30, 2007.
5. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $2,796,573 or 0.16% of the Fund's net assets as of
June 30, 2007.
6. When-issued security or forward commitment to be delivered and settled after
June 30, 2007. See Note 1 of accompanying Notes.
7. Partial or fully-loaned security. See Note 10 of accompanying Notes.
8. Zero coupon bond reflects effective yield on the date of purchase.
9. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $2,141,189. See Note 6 of accompanying Notes.
10. Non-income producing security.
11. Issue is in default. See Note 1 of accompanying Notes.
12. Interest or dividend is paid-in-kind, when applicable.
13. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
14. Rate shown is the 7-day yield as of June 30, 2007.
15. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 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 GROSS GROSS SHARES
DEC. 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- --------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E 67,486,873 546,631,207 438,245,179 175,872,901
VALUE DIVIDEND
SEE NOTE 1 INCOME
- --------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E $175,872,901 $2,842,950
16. 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 10 of
accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER CORE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- ----------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $1,933,086,184) $ 1,917,709,048
Affiliated companies (cost $175,872,901) 175,872,901
----------------
2,093,581,949
- ----------------------------------------------------------------------------------------------------------
Cash 3,135,974
- ----------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $2,099,275) 7,959,202
- ----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $107,700,182 sold on a when-issued basis or forward
commitment) 110,929,117
Interest 14,839,182
Shares of beneficial interest sold 5,117,327
Futures margins 1,196,472
Other 18,553
----------------
Total assets 2,236,777,776
- ----------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 75,429,997
- ----------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $910,423) 3,951,387
- ----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $423,979,102 purchased on a when-issued basis or
forward commitment) 427,505,334
Shares of beneficial interest redeemed 1,916,801
Distribution and service plan fees 654,523
Dividends 573,841
Transfer and shareholder servicing agent fees 196,684
Shareholder communications 109,382
Trustees' compensation 12,074
Other 31,858
----------------
Total liabilities 510,381,881
- ----------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,726,395,895
================
- ----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 171,300
- ----------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,763,326,094
- ----------------------------------------------------------------------------------------------------------
Accumulated net investment loss (392,873)
- ----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (21,757,055)
- ----------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments (14,951,571)
----------------
NET ASSETS $ 1,726,395,895
================
32 | OPPENHEIMER CORE BOND FUND
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $754,985,051 and
74,878,004 shares of beneficial interest outstanding) $ 10.08
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $ 10.58
- ----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and
offering price per share (based on net assets of $108,469,917 and 10,761,545 shares of
beneficial interest outstanding) $ 10.08
- ----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and
offering price per share (based on net assets of $173,278,907 and 17,174,893 shares of
beneficial interest outstanding) $ 10.09
- ----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and
offering price per share (based on net assets of $69,681,687 and 6,913,484 shares of
beneficial interest outstanding) $ 10.08
- ----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$619,980,333 and 61,571,952 shares of beneficial interest outstanding) $ 10.07
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER CORE BOND FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------
Interest $ 41,786,161
- ----------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 3,631
Affiliated companies 2,842,950
- ----------------------------------------------------------------------------------------------------------
Fee income 205,153
- ----------------------------------------------------------------------------------------------------------
Portfolio lending fees 83,234
--------------
Total investment income 44,921,129
- ----------------------------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------------------------
Management fees 3,475,966
- ----------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 855,404
Class B 554,972
Class C 795,515
Class N 157,912
- ----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 588,971
Class B 158,660
Class C 156,644
Class N 98,079
Class Y 112,005
- ----------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 69,339
Class B 27,195
Class C 17,568
Class N 2,885
Class Y 27
- ----------------------------------------------------------------------------------------------------------
Trustees' compensation 16,046
- ----------------------------------------------------------------------------------------------------------
Custodian fees and expenses 4,545
- ----------------------------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------------------------
Other 45,236
--------------
Total expenses 7,137,719
Less reduction to custodian expenses (1,175)
Less waivers and reimbursements of expenses (186,805)
--------------
Net expenses 6,949,739
- ----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 37,971,390
34 | OPPENHEIMER CORE BOND FUND
- ----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments $ (6,528,130)
Closing and expiration of futures contracts (3,755,545)
Foreign currency transactions 752
Swap contracts 57,620
--------------
Net realized loss (10,225,303)
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (15,775,969)
Futures contracts 182,703
Swap contracts 770,244
--------------
Net change in unrealized depreciation (14,823,022)
- ----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,923,065
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER CORE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- ----------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 37,971,390 $ 53,623,801
- ----------------------------------------------------------------------------------------------------------
Net realized loss (10,225,303) (1,035,336)
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (14,823,022) 6,048,394
----------------------------------
Net increase in net assets resulting from operations 12,923,065 58,636,859
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (17,231,409) (27,534,042)
Class B (2,289,124) (4,835,065)
Class C (3,274,995) (5,213,068)
Class N (1,458,770) (2,161,598)
Class Y (13,744,162) (16,289,181)
----------------------------------
(37,998,460) (56,032,954)
- ----------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A 95,876,688 180,785,033
Class B (6,193,373) (8,537,515)
Class C 26,296,435 40,154,490
Class N 12,451,305 22,271,562
Class Y 193,814,741 261,623,548
----------------------------------
322,245,796 496,297,118
- ----------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Total increase 297,170,401 498,901,023
- ----------------------------------------------------------------------------------------------------------
Beginning of period 1,429,225,494 930,324,471
----------------------------------
End of period (including accumulated net investment loss of
$392,873 and $365,803, respectively) $ 1,726,395,895 $ 1,429,225,494
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS A (UNAUDITED) 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.24 $ 10.44 $ 10.38 $ 10.14 $ 9.74
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 1 .47 1 .42 1 .38 1 .35 .54
Net realized and unrealized gain (loss) (.15) .01 (.18) .12 .24 .40
------------------------------------------------------------------------
Total from investment operations .10 .48 .24 .50 .59 .94
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.25) (.49) (.44) (.44) (.35) (.54)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.08 $ 10.23 $ 10.24 $ 10.44 $ 10.38 $ 10.14
========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 0.96% 4.84% 2.35% 4.90% 5.87% 10.06%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $754,985 $670,012 $488,889 $344,205 $382,966 $356,480
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $712,303 $566,159 $423,182 $353,046 $382,420 $316,279
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.87% 4.66% 4.12% 3.63% 3.39% 5.47%
Total expenses 0.88% 4 0.96% 4 1.06% 1.10% 1.10% 1.10%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian expenses 0.87% 0.90% 0.90% 0.93% 1.10% 1.10%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 5 107% 5 98% 5 94% 5 111% 151%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one 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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.89%
Year Ended December 31, 2006 0.96
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended June 30, 2007 $1,733,246,671 $1,573,831,746
Year Ended December 31, 2006 2,924,444,249 2,991,206,014
Year Ended December 31, 2005 3,609,072,810 3,584,424,906
Year Ended December 31, 2004 3,447,306,025 3,473,854,068
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS B (UNAUDITED) 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13 $ 9.73
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 1 .40 1 .35 1 .30 1 .27 .47
Net realized and unrealized gain (loss) (.15) .01 (.20) .13 .24 .40
------------------------------------------------------------------------
Total from investment operations .06 .41 .15 .43 .51 .87
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.41) (.36) (.36) (.27) (.47)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.08 $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13
========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 0.58% 4.17% 1.50% 4.21% 5.05% 9.26%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $108,470 $116,230 $125,069 $148,445 $197,774 $217,789
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $112,060 $118,240 $135,296 $167,685 $216,853 $187,343
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.12% 3.92% 3.37% 2.86% 2.61% 4.68%
Total expenses 1.79% 4 1.86% 4 1.91% 1.91% 1.87% 1.85%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian expenses 1.64% 1.65% 1.65% 1.69% 1.87% 1.85%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 5 107% 5 98% 5 94% 5 111% 151%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one 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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.80%
Year Ended December 31, 2006 1.86
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended June 30, 2007 $1,733,246,671 $1,573,831,746
Year Ended December 31, 2006 2,924,444,249 2,991,206,014
Year Ended December 31, 2005 3,609,072,810 3,584,424,906
Year Ended December 31, 2004 3,447,306,025 3,473,854,068
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER CORE BOND FUND
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS C (UNAUDITED) 2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.24 $ 10.24 $ 10.45 $ 10.39 $ 10.14 $ 9.74
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 1 .40 1 .35 1 .30 1 .27 .47
Net realized and unrealized gain (loss) (.15) .01 (.20) .12 .25 .40
----------------------------------------------------------------------
Total from investment operations .06 .41 .15 .42 .52 .87
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.41) (.36) (.36) (.27) (.47)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.09 $ 10.24 $ 10.24 $ 10.45 $ 10.39 $ 10.14
======================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 0.58% 4.16% 1.49% 4.12% 5.18% 9.26%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $173,279 $149,440 $109,207 $84,696 $90,583 $90,800
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $160,584 $126,593 $ 94,742 $86,020 $96,361 $75,531
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.11% 3.92% 3.37% 2.87% 2.64% 4.61%
Total expenses 1.67% 4 1.76% 4 1.86% 1.87% 1.84% 1.83%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian expenses 1.64% 1.65% 1.65% 1.68% 1.84% 1.83%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 5 107% 5 98% 5 94% 5 111% 151%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one 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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.68%
Year Ended December 31, 2006 1.76
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended June 30, 2007 $1,733,246,671 $1,573,831,746
Year Ended December 31, 2006 2,924,444,249 2,991,206,014
Year Ended December 31, 2005 3,609,072,810 3,584,424,906
Year Ended December 31, 2004 3,447,306,025 3,473,854,068
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS N (UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13 $ 9.73
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 1 .45 1 .40 1 .35 1 .31 .51
Net realized and unrealized gain (loss) (.14) .01 (.19) .13 .24 .40
----------------------------------------------------------------------
Total from investment operations .09 .46 .21 .48 .55 .91
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24) (.46) (.42) (.41) (.31) (.51)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.08 $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13
======================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 0.83% 4.68% 1.99% 4.71% 5.51% 9.73%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $69,682 $58,232 $35,836 $25,580 $17,732 $11,302
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $63,758 $46,672 $30,274 $21,411 $15,338 $ 7,071
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.61% 4.42% 3.87% 3.38% 3.03% 4.76%
Total expenses 1.27% 4 1.35% 4 1.47% 1.51% 1.50% 1.44%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian expenses 1.14% 1.15% 1.15% 1.20% 1.44% 1.44%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 5 107% 5 98% 5 94% 5 111% 151%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one 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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.28%
Year Ended December 31, 2006 1.35
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended June 30, 2007 $1,733,246,671 $1,573,831,746
Year Ended December 31, 2006 2,924,444,249 2,991,206,014
Year Ended December 31, 2005 3,609,072,810 3,584,424,906
Year Ended December 31, 2004 3,447,306,025 3,473,854,068
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER CORE BOND FUND
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS Y (UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.22 $ 10.22 $ 10.43 $ 10.36 $ 10.12 $ 9.72
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26 1 .51 1 .45 1 .41 1 .39 .59
Net realized and unrealized gain (loss) (.14) .01 (.19) .13 .24 .40
----------------------------------------------------------------------
Total from investment operations .12 .52 .26 .54 .63 .99
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.52) (.47) (.47) (.39) (.59)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.07 $ 10.22 $ 10.22 $ 10.43 $ 10.36 $ 10.12
======================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 1.15% 5.29% 2.50% 5.30% 6.35% 10.58%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $619,980 $435,311 $171,323 $38,190 $43,215 $24,358
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $527,061 $309,558 $ 91,172 $45,333 $38,398 $10,243
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 5.25% 5.03% 4.39% 3.92% 3.80% 5.53%
Total expenses 0.50% 4 0.55% 4 0.76% 0.64% 0.63% 0.63%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian expenses 0.49% 0.55% 0.65% 0.64% 0.63% 0.63%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 5 107% 5 98% 5 94% 5 111% 151%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one 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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.51%
Year Ended December 31, 2006 0.55
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended June 30, 2007 $1,733,246,671 $1,573,831,746
Year Ended December 31, 2006 2,924,444,249 2,991,206,014
Year Ended December 31, 2005 3,609,072,810 3,584,424,906
Year Ended December 31, 2004 3,447,306,025 3,473,854,068
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Core Bond Fund (the Fund), is a separate fund of Oppenheimer
Integrity Funds, an open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund's investment objective is
to seek total return by investing mainly in debt instruments. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(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
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
42 | OPPENHEIMER CORE BOND FUND
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).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment take place generally at least ten days or more after the
trade date. Normally the settlement date occurs within six months after the
trade date; however, the Fund may, from time to time, purchase securities whose
settlement date extends six months or more beyond trade date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains internally designated assets with a market value equal to or greater
than the amount of its purchase commitments. The purchase of securities on a
when-issued basis or forward commitment may increase the volatility of the
Fund's net asset value to the extent the Fund executes such transactions while
remaining substantially fully invested. The Fund may also sell securities that
it purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of June 30, 2007, the Fund had purchased $423,979,102
of securities issued on a when-issued basis or forward commitment and sold
$107,700,182 of securities issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
43 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of June 30, 2007, securities with an aggregate
market value of $2, representing less than 0.005% of the Fund's net assets, were
in default.
- --------------------------------------------------------------------------------
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 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.
44 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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 June 30, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $22,662,330 expiring by 2015.
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 June
30, 2007, it is estimated that the Fund will not utilize any capital loss
carryforward to offset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund did not utilize any capital loss carryforward to
offset capital gains realized in that fiscal year.
45 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of December 31, 2006, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
--------------------------
2010 $ 2,007,359
2013 5,244,089
2014 5,185,579
------------
Total $ 12,437,027
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral plan for independent trustees that enables trustees to elect to defer
receipt of all or a portion of the annual compensation they are entitled to
receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance 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 distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at 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.
46 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------
CLASS A
Sold 17,927,742 $ 183,245,230 24,694,647 $ 251,126,785
Dividends and/or
distributions reinvested 1,393,935 14,233,585 2,187,400 22,195,864
Acquisition-Note 12 -- -- 4,211,155 42,659,003
Redeemed (9,940,338) (101,602,127) (13,362,338) (135,196,619)
------------------------------------------------------------
Net increase 9,381,339 $ 95,876,688 17,730,864 $ 180,785,033
============================================================
- --------------------------------------------------------------------------------------------
CLASS B
Sold 1,362,018 $ 13,923,927 2,765,817 $ 28,133,557
Dividends and/or
distributions reinvested 194,510 1,985,534 404,022 4,097,199
Acquisition-Note 12 -- -- 481,162 4,874,168
Redeemed (2,160,918) (22,102,834) (4,509,251) (45,642,439)
------------------------------------------------------------
Net decrease (604,390) $ (6,193,373) (858,250) $ (8,537,515)
============================================================
- --------------------------------------------------------------------------------------------
CLASS C
Sold 4,060,527 $ 41,472,324 5,956,040 $ 60,599,966
Dividends and/or
distributions reinvested 267,405 2,731,600 429,623 4,363,414
Acquisition-Note 12 -- -- 862,709 8,747,866
Redeemed (1,752,036) (17,907,489) (3,312,539) (33,556,756)
------------------------------------------------------------
Net increase 2,575,896 $ 26,296,435 3,935,833 $ 40,154,490
============================================================
47 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------
CLASS N
Sold 1,908,009 $ 19,493,173 3,137,184 $ 31,843,965
Dividends and/or
distributions reinvested 109,987 1,122,376 171,486 1,739,889
Acquisition-Note 12 -- -- 315,811 3,199,167
Redeemed (798,964) (8,164,244) (1,432,560) (14,511,459)
------------------------------------------------------------
Net increase 1,219,032 $ 12,451,305 2,191,921 $ 22,271,562
============================================================
- --------------------------------------------------------------------------------------------
CLASS Y
Sold 19,176,759 $ 196,009,920 28,523,591 $ 288,469,512
Dividends and/or
distributions reinvested 1,346,621 13,724,272 1,606,546 16,289,132
Redeemed (1,560,688) (15,919,451) (4,282,356) (43,135,096)
------------------------------------------------------------
Net increase 18,962,692 $ 193,814,741 25,847,781 $ 261,623,548
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
---------------------------------------------------------------
Investment securities $ 526,177,058 $ 352,317,986
U.S. government and
government agency obligations 230,787,689 216,582,885
To Be Announced (TBA)
mortgage-related securities 1,733,246,671 1,573,831,746
- --------------------------------------------------------------------------------
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 $1 billion 0.50%
Over $1 billion 0.35
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2007, the Fund paid
$1,124,656 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.
48 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
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 June 30, 2007
for Class B, Class C and Class N shares were $2,368,013, $2,820,813 and
$1,038,104, 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
- -----------------------------------------------------------------------------------------------
June 30, 2007 $361,228 $14,189 $111,327 $8,665 $2,043
49 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
WAIVERS AND REIMBURSEMENTS OF EXPENSES. Effective March 1, 2004, the Manager has
voluntarily undertaken to limit the "Total Expenses" for all classes of shares
so that total expenses as percentages of average daily net assets, will not
exceed the following annual rates: 0.90% for the Class A shares; 1.65% for the
Class B and Class C shares, respectively; 1.15% for the Class N shares and 0.65%
for the Class Y shares. During the six months ended June 30, 2007, the Manager
reimbursed the Fund $513, $76,407, $16,957 and $38,721 for Class A, Class B,
Class C and Class N shares, respectively. The Manager may terminate this
voluntary expense limitation arrangement at any time without notice to
shareholders.
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. 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 June 30, 2007, the Manager waived $54,207 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 June 30, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
50 | OPPENHEIMER CORE BOND FUND
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations at the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of June 30, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2007 (DEPRECIATION)
- ---------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Treasury Long Bonds 9/19/07 1,658 $ 178,649,500 $ (1,971,979)
U.S. Treasury Nts., 10 yr. 9/19/07 704 74,415,000 636,218
---------------
(1,335,761)
---------------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 9/28/07 1,619 (329,921,844) 367,776
U.S. Treasury Nts., 5 yr. 9/28/07 854 (88,882,719) 395,433
---------------
763,209
---------------
$ (572,552)
===============
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
51 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS Continued
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain (loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
Credit default swaps are marked to market daily using primarily quotations
from counter-parties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
Information regarding such credit default swaps as of June 30, 2007 is as
follows:
BUY/SELL NOTIONAL PREMIUM
REFERENCE CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY ENTITY PROTECTION (000S) FIXED RATE DATE (RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes
USA, Inc. Sell $ 1,690 2.100% 6/20/08 $ -- $ (21,917)
Capmark Financial
Group, Inc. Sell 3,950 1.000 6/20/12 -- 11,445
Lear Corp. Sell 6,900 1.000 6/20/08 -- 18,924
Toys R US, Inc. Sell 4,370 1.450 9/20/08 -- (33,024)
- --------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Belo Corp. Buy 12,545 0.900 6/20/13 -- 151,726
CDX North America
High Yield Index Buy 8,095 2.750 6/20/14 116,759 373,566
CDX North America
High Yield Index Buy 19,165 2.750 6/20/14 347,233 884,418
CDX North America
High Yield Index Buy 3,565 2.750 6/20/12 7,056 68,831
52 | OPPENHEIMER CORE BOND FUND
BUY/SELL NOTIONAL PREMIUM
REFERENCE CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY ENTITY PROTECTION (000S) FIXED RATE DATE (RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Continued
CDX North America
High Yield Index Sell $ 8,095 2.750% 6/20/12 $ 65,378 $ (156,292)
CDX North America
High Yield Index Sell 19,165 2.750 6/20/12 107,936 (370,021)
Freescale
Semiconductor, Inc. Sell 3,600 0.600 3/20/08 -- (24,388)
Freescale
Semiconductor, Inc. Sell 4,100 0.750 3/20/08 -- (23,236)
Rite Aid Corp. Sell 6,565 0.875 6/20/08 -- (41,333)
Univision
Communications, Inc. Sell 1,840 0.750 3/20/08 -- (11,479)
- --------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Abitibi-Consolidated
Co. of Canada Sell 4,860 1.520 9/20/07 -- (3,254)
Allied Waste North
America, Inc. Sell 1,830 2.000 9/20/09 -- 12,349
Allied Waste North
America, Inc. Sell 3,020 2.000 9/20/09 -- 20,379
Bombardier, Inc. Sell 1,550 0.900 9/20/07 -- 2,324
CDX North America
High Yield Index Buy 11,650 2.750 6/20/14 154,363 554,663
CDX North America
High Yield Index Buy 19,195 2.750 6/20/14 322,316 913,884
CDX North America
High Yield Index Buy 7,495 2.750 6/20/12 (69,954) 124,385
CDX North America
High Yield Index Buy 19,160 2.750 6/20/14 375,483 912,218
CDX North America
High Yield Index Sell 11,650 2.750 6/20/12 107,763 (229,347)
CDX North America
High Yield Index Sell 19,195 2.750 6/20/12 121,568 (377,882)
CDX North America
High Yield Index Sell 19,275 2.750 6/20/12 135,594 (379,456)
CDX North America
High Yield Index Sell 19,160 2.750 6/20/12 91,542 (377,192)
Dillard's, Inc. Sell 2,055 0.750 9/20/08 -- 821
Dow Jones CDX
North America
Crossover Index Buy 19,275 2.750 6/20/14 298,093 917,693
Eastman Kodak Co. Sell 4,550 1.000 12/20/08 -- 924
Levi Strauss & Co. Sell 2,965 0.900 9/20/08 -- --
Levi Strauss & Co. Sell 3,920 1.000 9/20/08 -- 1,974
Tenet Healthcare Corp. Sell 6,900 1.600 3/20/09 -- (10,878)
Weyerhaeuser Co. Buy 5,950 0.580 9/20/11 -- (52,672)
53 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL PREMIUM
REFERENCE CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY ENTITY PROTECTION (000S) FIXED RATE DATE (RECEIVED) VALUE
- -------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
Capmark Financial
Group, Inc. Sell $ 4,595 0.950% 6/20/12 $ -- $(11,101)
First Data Corp. Sell 4,365 1.150 9/20/08 -- --
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.:
ArvinMeritor, Inc. Sell 1,410 1.100 9/20/07 -- 1,194
ArvinMeritor, Inc. Sell 185 1.200 9/20/07 -- 204
ArvinMeritor, Inc. Sell 1,720 1.050 9/20/07 -- 1,238
Beazer Homes
USA, Inc. Sell 4,840 2.150 6/20/08 -- (103,008)
Bombardier, Inc. Sell 1,720 1.000 9/20/07 -- 3,525
Bombardier, Inc. Sell 1,715 1.050 9/20/07 -- 3,734
CDX North America
High Yield Index Buy 19,525 2.750 6/20/14 280,807 905,129
CDX North America
High Yield Index Buy 20,160 2.750 6/20/14 267,120 934,566
CDX North America
High Yield Index Sell 19,525 2.750 6/20/12 158,505 (372,878)
CDX North America
High Yield Index Sell 20,160 2.750 6/20/12 186,480 (385,005)
CDX.NA.IG H VOL.7 Sell 17,000 0.750 12/20/11 (64,344) (97,568)
CountrywideHome
Loans, Inc. Sell 11,880 0.420 6/20/09 -- 5,945
El Paso Corp. Sell 7,740 0.520 3/20/10 -- (22,090)
Ford Motor Co. Buy 6,445 5.400 12/20/08 -- (288,268)
Ford Motor Co. Buy 3,065 5.300 12/20/08 -- (132,716)
Ford Motor Co. Sell 6,445 7.150 12/20/16 -- 385,166
Ford Motor Co. Sell 3,065 7.050 12/20/16 -- 167,255
General Motors Corp. Buy 3,250 4.000 12/20/08 -- (90,510)
General Motors Corp. Buy 3,440 3.950 12/20/08 -- (93,342)
General Motors Corp. Sell 3,250 5.800 12/20/16 -- 209,210
General Motors Corp. Sell 3,440 5.750 12/20/16 -- 211,753
Inco Ltd. Buy 3,670 0.630 3/20/17 -- (43,211)
Inco Ltd. Buy 3,660 0.700 3/20/17 -- (62,108)
J.C. Penney Co., Inc. Sell 5,950 0.610 6/20/13 -- (20,243)
K. Hovnanian
Enterprises, Inc. Sell 1,950 1.850 6/20/08 -- (8,037)
K. Hovnanian
Enterprises, Inc. Sell 1,950 1.850 6/20/08 -- (8,037)
Kroger Co. (The) Buy 5,740 0.478 6/20/12 -- (20,624)
Tribune Co. Sell 4,225 1.000 6/20/08 -- (80,270)
Vale Overseas Ltd. Sell 3,670 1.100 3/20/17 -- 61,078
Vale Overseas Ltd. Sell 3,660 1.170 3/20/17 -- 80,146
------------------------
$3,009,698 $3,989,280
========================
54 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of June 30, 2007, the Fund had entered into the following total return swap
agreements:
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- -----------------------------------------------------------------------------------------------------------
If positive, the
If negative, the Total Return of
absolute value of the Lehman CMBS
the Lehman Index plus 27.5
Deutsche Bank AG $23,200,000 CMBS Index. basis points. 11/1/07 $ --
- -----------------------------------------------------------------------------------------------------------
If positive, the
If negative, the absolute value of
absolute value of Lehman Brothers
Lehman Brothers U.S. CMBS Index:
Goldman Sachs U.S. CMBS Index: Aggregate AAA
Capital Markets LP 14,870,000 Aggregate AAA. plus 15 basis points. 9/1/07 6,290
- -----------------------------------------------------------------------------------------------------------
If positive, the
Total Return of
If negative, the the Lehman CMBS
Lehman Brothers absolute value of Index plus 32.5
Special Financing 17,880,000 CMBS Index. basis points. 11/1/07 9,671
- -----------------------------------------------------------------------------------------------------------
If positive, the
If negative, the Total Return of
absolute value of the Lehman CMBS
Morgan Stanley the Lehman CMBS 8.5 AAA+ Index plus
Capital Services, Inc. 5,000,000 8.5 AAA+ Index. 25 basis points. 10/31/07 2,574
----------
$ 18,535
==========
Index abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
55 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. ILLIQUID SECURITIES
As of June 30, 2007, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
10. 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 June 30, 2007, the Fund had
on loan securities valued at $87,135,932, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $88,646,614 was received for
the loans, $75,429,997 of which was received in cash and subsequently invested
in approved investments. In addition, collateral of $13,216,617 was also
received in the form of securities.
- --------------------------------------------------------------------------------
11. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board 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 June 30, 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.
56 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
12. ACQUISITION OF OPPENHEIMER TOTAL RETURN BOND FUND
On March 23, 2006, the Fund acquired all of the net assets of Oppenheimer Total
Return Bond Fund, pursuant to an Agreement and Plan of Reorganization approved
by the Oppenheimer Total Return Bond Fund shareholders on March 15, 2006. The
Fund issued (at an exchange ratio of 0.964160 for Class A, 0.964242 for Class B,
0.962906 for Class C and 0.964275 for Class N of the Fund to one share of
Oppenheimer Total Return Bond Fund), 4,211,155; 481,162; 862,709 and 315,811
shares of beneficial interest for Class A, Class B, Class C and Class N,
respectively, valued at $42,659,003, $4,874,168, $8,747,866 and $3,199,167 in
exchange for the net assets, resulting in combined Class A net assets of
$549,554,571, Class B net assets of $124,605,847, Class C net assets of
$122,287,022 and Class N net assets of $43,300,947 on March 23, 2006. The net
assets acquired included net unrealized depreciation of $949,524 and an unused
capital loss carryforward of $759,669, potential utilization subject to tax
limitations. The exchange qualified as a tax-free reorganization for federal
income tax purposes.
57 | OPPENHEIMER CORE BOND 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.
58 | OPPENHEIMER CORE BOND 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 06/30/2007, 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 Integrity Funds
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2007
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: 08/08/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2007