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
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(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: December 31
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Date of reporting period: 12/31/2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
DECEMBER 31, 2007
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Management
Oppenheimer Commentaries
CORE BOND FUND and
Annual Report
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MANAGEMENT COMMENTARIES
Market Recap and Outlook
Listing of Top Holdings
ANNUAL REPORT [GRAPHIC]
Fund Performance Discussion
Listing of Investments
Financial Statements
[LOGO] OPPENHEIMERFUNDS(R)
The Right Way to Invest
TOP HOLDINGS AND ALLOCATIONS
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CORPORATE BONDS & NOTES--TOP TEN INDUSTRIES
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Commercial Banks 3.6%
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Media 3.2
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Insurance 1.9
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Automobiles 1.2
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Household Durables 1.2
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Oil, Gas & Consumable Fuels 1.0
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Hotels, Restaurants & Leisure 0.9
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Electric Utilities 0.7
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Capital Markets 0.7
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Diversified Financial Services 0.7
Portfolio holdings and allocations are subject to change. Percentages are as of
December 31, 2007, and are based on net assets.
CREDIT ALLOCATION
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Treasury 0.3%
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Agency 49.0
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AAA 30.8
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AA 2.6
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A 3.2
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BBB 6.0
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BB 3.6
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B 0.2
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Not Rated 2.1
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Other Securities 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
December 31, 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 B.
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10 | OPPENHEIMER CORE BOND FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED DECEMBER 31, 2007, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For the fiscal year ended December
31, 2007, Oppenheimer Core Bond Fund delivered returns that lagged those of its
benchmarks. Despite this disappointing end result, it is important to note that
we had positioned the Fund defensively during the first six months of the year
and year-to-date through mid-October, the Fund had posted positive, competitive
returns while ranking in the top half of its peer group of similarly managed
funds. The greater part of our difficulties occurred from mid-October through
the end of November, after we had begun to add exposures in response to what
appeared to be opportunities, but then market liquidity deteriorated further and
the sub-prime mortgage crisis hit its peak. Although conditions improved
slightly as the year ended, we were unable to recoup these losses in so short a
timeframe and as a result, the Fund's fiscal-year results suffered. As such, the
most significant detractor compressing the Fund's performance this period was
the challenging market environment that plagued the capital markets throughout
the second half of 2007.
Another detractor to performance was the composition of our
investment-grade credit allocation, which worked against us at year-end. In this
area of the portfolio, we had emphasized financial bonds at the expense of
industrial names, based on our belief that the wider spreads associated with
industrials at that time indicated less an opportunity than a higher level of
leveraged buyout (LBO) or "event" risk. Unfortunately, when the sub-prime
lending crisis peaked in mid-October, industrial bonds rallied while spreads on
financials widened dramatically and their values dropped. Similarly, our
decision to increase our allocation to high-yield bonds detracted from
short-term returns after mid-October.
On the positive side, the makeup of our mortgage holdings helped mitigate
losses for the year. First, because we remained quite wary of sub-prime
mortgages throughout the year, we generally avoided this segment of the
market--a decision that helped support Fund returns given market events. Next,
what marginal exposure we did have to the sub-prime sector was comprised of
select, AAA-rated, short-term issues, which suffered less on a relative basis.
Otherwise, although the portfolio's overall mortgage allocation lagged this
year, it did so less severely than the overall market. This advantage largely
stemmed from our focus on agency
11 | OPPENHEIMER CORE BOND FUND
FUND PERFORMANCE DISCUSSION
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mortgage-backed securities, such as Fannie Mae and Freddie Mac issues, where
minimal credit risk and sounder guarantees helped these mortgages fare better
than the rest of the mortgage market as a whole. On the other hand, performance
suffered as a result of our decision late in the year to add to the portfolio's
CMBS and non-agency mortgage holdings.
Our interest rate strategy supported performance in the first half of the
year, and mildly detracted from performance during the second half. We began
2007 with less interest-rate risk, or duration, relative to the benchmark, based
on our conviction that both current rates as well as investors' expectations for
longer-term rates were lower than warranted by actual economic fundamentals. As
rates rose significantly in the first half of the year, being short-duration
helped returns. We moved to a neutral duration in July, but as rates declined in
response to sub-prime concerns, we restored our less-than-market interest rate
sensitivity soon after, again believing that the market was projecting lower
rates too far into the future. When rates fell thereafter, our strategy
detracted from returns versus the benchmark. Fortunately, because we were only
slightly short duration, the impact of our rate strategy proved to be minimal.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until December 31, 2007. In the case of Class A, Class B and Class C
shares, performance is measured over a ten-fiscal-year period. In the case of
Class N shares, performance is measured from inception of the Class on March 1,
2001. In the case of Class Y shares, performance is measured from inception of
the Class on April 27, 1998. The Fund's performance reflects the deduction of
the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B, Class C and Class N shares, and reinvestments
of all dividends and capital gains distributions. Past performance cannot
guarantee future results.
The Fund's performance is compared to the performance of the Lehman
Brothers Aggregate Bond Index, a broad-based index of government agencies and
corporate debt; the Citigroup Broad Investment Grade ("Citigroup BIG") Index, an
index of investment grade corporate and U.S. government bonds; and the Lehman
Brothers Credit Index, an index of non-convertible U.S. investment grade
corporate bonds. Indices are unmanaged and cannot be purchased directly by
investors. Index performance is shown for illustrative purposes only and does
not predict or depict the performance of the Fund. Index performance reflects
the reinvestment of income but does not consider the effect of transaction
costs, and none of the data in the
12 | OPPENHEIMER CORE BOND FUND
graphs shows the effect of taxes. The Fund's performance reflects the effects of
the Fund's business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the investments in the index.
13 | OPPENHEIMER CORE BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Core Bond Fund (Class A)
Citigroup Broad Investment Grade Index
Lehman Brothers Credit Index
Lehman Brothers Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Core Bond Citigroup Broad Lehman Brothers
Fund Investment Lehman Brothers Aggregate
(Class A) Grade Index Credit Index Bond Index
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12/31/1997 $ 9,525 $10,000 $10,000 $10,000
03/31/1998 $ 9,688 $10,161 $10,153 $10,156
06/30/1998 $ 9,888 $10,396 $10,415 $10,393
09/30/1998 $10,055 $10,827 $10,792 $10,832
12/31/1998 $10,059 $10,871 $10,857 $10,869
03/31/1999 $10,013 $10,821 $10,780 $10,815
06/30/1999 $ 9,885 $10,721 $10,611 $10,720
09/30/1999 $ 9,849 $10,798 $10,641 $10,793
12/31/1999 $ 9,893 $10,781 $10,645 $10,779
03/31/2000 $ 9,983 $11,017 $10,797 $11,017
06/30/2000 $10,067 $11,204 $10,930 $11,209
09/30/2000 $10,259 $11,546 $11,266 $11,547
12/31/2000 $10,467 $12,031 $11,644 $12,033
03/31/2001 $10,882 $12,402 $12,142 $12,398
06/30/2001 $10,993 $12,466 $12,271 $12,468
09/30/2001 $11,393 $13,053 $12,742 $13,043
12/31/2001 $11,205 $13,056 $12,856 $13,049
03/31/2002 $11,158 $13,064 $12,822 $13,061
06/30/2002 $11,478 $13,524 $13,193 $13,543
09/30/2002 $12,048 $14,147 $13,785 $14,164
12/31/2002 $12,332 $14,373 $14,209 $14,387
03/31/2003 $12,543 $14,575 $14,550 $14,587
06/30/2003 $12,910 $14,948 $15,247 $14,952
09/30/2003 $12,965 $14,923 $15,226 $14,930
12/31/2003 $13,056 $14,977 $15,301 $14,977
03/31/2004 $13,401 $15,379 $15,802 $15,375
06/30/2004 $13,088 $15,004 $15,261 $15,000
09/30/2004 $13,531 $15,493 $15,902 $15,479
12/31/2004 $13,695 $15,647 $16,104 $15,627
03/31/2005 $13,644 $15,568 $15,934 $15,552
06/30/2005 $13,988 $16,055 $16,503 $16,020
09/30/2005 $13,944 $15,946 $16,337 $15,912
12/31/2005 $14,017 $16,049 $16,419 $16,007
03/31/2006 $13,958 $15,942 $16,228 $15,903
06/30/2006 $13,937 $15,925 $16,164 $15,891
09/30/2006 $14,471 $16,537 $16,892 $16,496
12/31/2006 $14,695 $16,744 $17,117 $16,700
03/31/2007 $14,920 $16,994 $17,166 $16,951
06/30/2007 $14,836 $16,893 $17,256 $16,863
09/30/2007 $15,182 $17,405 $17,579 $17,343
12/31/2007 $15,356 $17,952 $17,815 $17,864
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
12/31/07
1-Year -0.47% 5-Year 3.47% 10-Year 4.38%
14 | OPPENHEIMER CORE BOND FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Core Bond Fund (Class B)
Citigroup Broad Investment Grade Index
Lehman Brothers Credit Index
Lehman Brothers Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Core Bond Citigroup Broad Lehman Brothers
Fund Investment Lehman Brothers Aggregate
(Class B) Grade Index Credit Index Bond Index
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12/31/1997 $10,000 $10,000 $10,000 $10,000
03/31/1998 $10,152 $10,161 $10,153 $10,156
06/30/1998 $10,342 $10,396 $10,415 $10,393
09/30/1998 $10,496 $10,827 $10,792 $10,832
12/31/1998 $10,481 $10,871 $10,857 $10,869
03/31/1999 $10,414 $10,821 $10,780 $10,815
06/30/1999 $10,251 $10,721 $10,611 $10,720
09/30/1999 $10,204 $10,798 $10,641 $10,793
12/31/1999 $10,221 $10,781 $10,645 $10,779
03/31/2000 $10,304 $11,017 $10,797 $11,017
06/30/2000 $10,371 $11,204 $10,930 $11,209
09/30/2000 $10,549 $11,546 $11,266 $11,547
12/31/2000 $10,743 $12,031 $11,644 $12,033
03/31/2001 $11,136 $12,402 $12,142 $12,398
06/30/2001 $11,240 $12,466 $12,271 $12,468
09/30/2001 $11,616 $13,053 $12,742 $13,043
12/31/2001 $11,402 $13,056 $12,856 $13,049
03/31/2002 $11,334 $13,064 $12,822 $13,061
06/30/2002 $11,649 $13,524 $13,193 $13,543
09/30/2002 $12,207 $14,147 $13,785 $14,164
12/31/2002 $12,458 $14,373 $14,209 $14,387
03/31/2003 $12,660 $14,575 $14,550 $14,587
06/30/2003 $12,992 $14,948 $15,247 $14,952
09/30/2003 $13,035 $14,923 $15,226 $14,930
12/31/2003 $13,108 $14,977 $15,301 $14,977
03/31/2004 $13,454 $15,379 $15,802 $15,375
06/30/2004 $13,141 $15,004 $15,261 $15,000
09/30/2004 $13,585 $15,493 $15,902 $15,479
12/31/2004 $13,750 $15,647 $16,104 $15,627
03/31/2005 $13,699 $15,568 $15,934 $15,552
06/30/2005 $14,045 $16,055 $16,503 $16,020
09/30/2005 $14,000 $15,946 $16,337 $15,912
12/31/2005 $14,074 $16,049 $16,419 $16,007
03/31/2006 $14,014 $15,942 $16,228 $15,903
06/30/2006 $13,993 $15,925 $16,164 $15,891
09/30/2006 $14,529 $16,537 $16,892 $16,496
12/31/2006 $14,754 $16,744 $17,117 $16,700
03/31/2007 $14,980 $16,994 $17,166 $16,951
06/30/2007 $14,896 $16,893 $17,256 $16,863
09/30/2007 $15,243 $17,405 $17,579 $17,343
12/31/2007 $15,419 $17,952 $17,815 $17,864
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
12/31/07
1-Year -1.37% 5-Year 3.35% 10-Year 4.42%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES
REFLECT CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 19 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER CORE BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Core Bond Fund (Class C)
Citigroup Broad Investment Grade Index
Lehman Brothers Credit Index
Lehman Brothers Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Core Bond Citigroup Broad Lehman Brothers
Fund Investment Lehman Brothers Aggregate
(Class C) Grade Index Credit Index Bond Index
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12/31/1997 $10,000 $10,000 $10,000 $10,000
03/31/1998 $10,152 $10,161 $10,153 $10,156
06/30/1998 $10,342 $10,396 $10,415 $10,393
09/30/1998 $10,496 $10,827 $10,792 $10,832
12/31/1998 $10,481 $10,871 $10,857 $10,869
03/31/1999 $10,414 $10,821 $10,780 $10,815
06/30/1999 $10,251 $10,721 $10,611 $10,720
09/30/1999 $10,204 $10,798 $10,641 $10,793
12/31/1999 $10,222 $10,781 $10,645 $10,779
03/31/2000 $10,305 $11,017 $10,797 $11,017
06/30/2000 $10,362 $11,204 $10,930 $11,209
09/30/2000 $10,550 $11,546 $11,266 $11,547
12/31/2000 $10,744 $12,031 $11,644 $12,033
03/31/2001 $11,138 $12,402 $12,142 $12,398
06/30/2001 $11,242 $12,466 $12,271 $12,468
09/30/2001 $11,618 $13,053 $12,742 $13,043
12/31/2001 $11,404 $13,056 $12,856 $13,049
03/31/2002 $11,336 $13,064 $12,822 $13,061
06/30/2002 $11,650 $13,524 $13,193 $13,543
09/30/2002 $12,208 $14,147 $13,785 $14,164
12/31/2002 $12,460 $14,373 $14,209 $14,387
03/31/2003 $12,664 $14,575 $14,550 $14,587
06/30/2003 $12,997 $14,948 $15,247 $14,952
09/30/2003 $13,040 $14,923 $15,226 $14,930
12/31/2003 $13,106 $14,977 $15,301 $14,977
03/31/2004 $13,426 $15,379 $15,802 $15,375
06/30/2004 $13,089 $15,004 $15,261 $15,000
09/30/2004 $13,507 $15,493 $15,902 $15,479
12/31/2004 $13,645 $15,647 $16,104 $15,627
03/31/2005 $13,568 $15,568 $15,934 $15,552
06/30/2005 $13,885 $16,055 $16,503 $16,020
09/30/2005 $13,801 $15,946 $16,337 $15,912
12/31/2005 $13,848 $16,049 $16,419 $16,007
03/31/2006 $13,778 $15,942 $16,228 $15,903
06/30/2006 $13,717 $15,925 $16,164 $15,891
09/30/2006 $14,231 $16,537 $16,892 $16,496
12/31/2006 $14,424 $16,744 $17,117 $16,700
03/31/2007 $14,602 $16,994 $17,166 $16,951
06/30/2007 $14,507 $16,893 $17,256 $16,863
09/30/2007 $14,817 $17,405 $17,579 $17,343
12/31/2007 $14,942 $17,952 $17,815 $17,864
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
12/31/07
1-Year 2.60% 5-Year 3.70% 10-Year 4.10%
16 | OPPENHEIMER CORE BOND FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Core Bond Fund (Class N)
Citigroup Broad Investment Grade Index
Lehman Brothers Credit Index
Lehman Brothers Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Core Bond Citigroup Broad Lehman Brothers
Fund Investment Lehman Brothers Aggregate
(Class N) Grade Index Credit Index Bond Index
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03/01/2001 $10,000 $10,000 $10,000 $10,000
03/31/2001 $10,025 $10,052 $10,062 $10,050
06/30/2001 $10,136 $10,104 $10,169 $10,107
09/30/2001 $10,496 $10,580 $10,559 $10,573
12/31/2001 $10,318 $10,582 $10,653 $10,578
03/31/2002 $10,268 $10,589 $10,625 $10,588
06/30/2002 $10,567 $10,962 $10,932 $10,979
09/30/2002 $11,088 $11,467 $11,423 $11,482
12/31/2002 $11,321 $11,650 $11,775 $11,663
03/31/2003 $11,519 $11,814 $12,057 $11,825
06/30/2003 $11,833 $12,116 $12,635 $12,121
09/30/2003 $11,883 $12,096 $12,617 $12,103
12/31/2003 $11,944 $12,140 $12,680 $12,141
03/31/2004 $12,261 $12,466 $13,095 $12,464
06/30/2004 $11,968 $12,162 $12,647 $12,159
09/30/2004 $12,365 $12,558 $13,178 $12,548
12/31/2004 $12,507 $12,683 $13,345 $12,668
03/31/2005 $12,453 $12,619 $13,204 $12,607
06/30/2005 $12,759 $13,013 $13,675 $12,986
09/30/2005 $12,698 $12,925 $13,538 $12,899
12/31/2005 $12,757 $13,009 $13,606 $12,976
03/31/2006 $12,708 $12,922 $13,447 $12,892
06/30/2006 $12,668 $12,908 $13,395 $12,882
09/30/2006 $13,159 $13,404 $13,998 $13,372
12/31/2006 $13,354 $13,572 $14,185 $13,538
03/31/2007 $13,536 $13,775 $14,225 $13,741
06/30/2007 $13,465 $13,693 $14,300 $13,670
09/30/2007 $13,769 $14,108 $14,567 $14,059
12/31/2007 $13,903 $14,551 $14,763 $14,481
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
12/31/07
1-Year 3.12% 5-Year 4.19% Since Inception (3/1/01) 4.94%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES
REFLECT CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 19 FOR
FURTHER INFORMATION.
17 | OPPENHEIMER CORE BOND FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Core Bond Fund (Class Y)
Citigroup Broad Investment Grade Index
Lehman Brothers Credit Index
Lehman Brothers Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Core Bond Citigroup Broad Lehman Brothers
Fund Investment Lehman Brothers Aggregate
(Class Y) Grade Index Credit Index Bond Index
- --------------------------------------------------------------------------------
04/27/1998 $10,000 $10,000 $10,000 $10,000
06/30/1998 $10,254 $10,179 $10,193 $10,180
09/30/1998 $10,436 $10,601 $10,563 $10,611
12/31/1998 $10,440 $10,644 $10,627 $10,647
03/31/1999 $10,405 $10,595 $10,551 $10,594
06/30/1999 $10,272 $10,497 $10,386 $10,501
09/30/1999 $10,250 $10,573 $10,416 $10,572
12/31/1999 $10,297 $10,556 $10,419 $10,559
03/31/2000 $10,380 $10,787 $10,568 $10,792
06/30/2000 $10,471 $10,970 $10,698 $10,980
09/30/2000 $10,667 $11,304 $11,026 $11,311
12/31/2000 $11,031 $11,779 $11,397 $11,787
03/31/2001 $11,464 $12,143 $11,884 $12,145
06/30/2001 $11,594 $12,205 $12,011 $12,213
09/30/2001 $12,027 $12,780 $12,471 $12,776
12/31/2001 $11,836 $12,783 $12,583 $12,782
03/31/2002 $11,797 $12,791 $12,550 $12,794
06/30/2002 $12,163 $13,242 $12,913 $13,267
09/30/2002 $12,784 $13,851 $13,492 $13,874
12/31/2002 $13,088 $14,072 $13,907 $14,093
03/31/2003 $13,340 $14,270 $14,241 $14,289
06/30/2003 $13,732 $14,636 $14,924 $14,646
09/30/2003 $13,820 $14,611 $14,902 $14,625
12/31/2003 $13,920 $14,664 $14,976 $14,671
03/31/2004 $14,316 $15,058 $15,467 $15,061
06/30/2004 $13,992 $14,690 $14,937 $14,693
09/30/2004 $14,477 $15,169 $15,565 $15,163
12/31/2004 $14,657 $15,320 $15,762 $15,308
03/31/2005 $14,611 $15,243 $15,596 $15,234
06/30/2005 $14,989 $15,719 $16,152 $15,693
09/30/2005 $14,937 $15,613 $15,990 $15,587
12/31/2005 $15,024 $15,714 $16,070 $15,680
03/31/2006 $14,985 $15,609 $15,883 $15,578
06/30/2006 $14,959 $15,592 $15,821 $15,566
09/30/2006 $15,563 $16,192 $16,534 $16,159
12/31/2006 $15,818 $16,394 $16,754 $16,359
03/31/2007 $16,060 $16,639 $16,802 $16,605
06/30/2007 $16,001 $16,540 $16,890 $16,519
09/30/2007 $16,389 $17,041 $17,206 $16,989
12/31/2007 $16,577 $17,577 $17,437 $17,499
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 12/31/07
1-Year 4.80% 5-Year 4.84% Since Inception (4/27/98) 5.36%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 4.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE 1% CONTINGENT DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, 10-YEAR RETURNS FOR CLASS B SHARES
REFLECT CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 19 FOR
FURTHER INFORMATION.
18 | OPPENHEIMER CORE BOND FUND
NOTES
- --------------------------------------------------------------------------------
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 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 returns for Class B reflect
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.
19 | OPPENHEIMER CORE BOND FUND
NOTES
- --------------------------------------------------------------------------------
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.
20 | OPPENHEIMER CORE BOND FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees (if
applicable); 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 December 31, 2007.
ACTUAL EXPENSES. The first section of the table provides information about
actual account values and actual expenses. You may use the information in this
section 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 first section
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 second section of the table
provides 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 for each class before expenses, which is
not the 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
21 | OPPENHEIMER CORE BOND FUND
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
the Statement of Additional Information). Therefore, the "hypothetical" section
of the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- ----------------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
ACTUAL JULY 1, 2007 DECEMBER 31, 2007 DECEMBER 31, 2007
- ----------------------------------------------------------------------------------------
Class A $1,000.00 $1,035.00 $4.47
- ----------------------------------------------------------------------------------------
Class B 1,000.00 1,030.10 8.48
- ----------------------------------------------------------------------------------------
Class C 1,000.00 1,030.00 8.43
- ----------------------------------------------------------------------------------------
Class N 1,000.00 1,032.60 5.86
- ----------------------------------------------------------------------------------------
Class Y 1,000.00 1,036.00 2.41
HYPOTHETICAL
(5% return before expenses)
- ----------------------------------------------------------------------------------------
Class A 1,000.00 1,020.82 4.44
- ----------------------------------------------------------------------------------------
Class B 1,000.00 1,016.89 8.42
- ----------------------------------------------------------------------------------------
Class C 1,000.00 1,016.94 8.37
- ----------------------------------------------------------------------------------------
Class N 1,000.00 1,019.46 5.82
- ----------------------------------------------------------------------------------------
Class Y 1,000.00 1,022.84 2.40
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended December 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------
Class A 0.87%
- ------------------------------------
Class B 1.65
- ------------------------------------
Class C 1.64
- ------------------------------------
Class N 1.14
- ------------------------------------
Class Y 0.47
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses 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 and reduction to
custodian expenses, if applicable.
- --------------------------------------------------------------------------------
22 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS December 31, 2007
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--4.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Ace Securities Corp. Home Equity Loan Trust Series 2005-HE7, Asset-Backed
Pass-Through Certificates, Series 2005-HE7, Cl. A2B, 5.045%, 11/25/35 1 $ 1,491,086 $ 1,485,100
- ------------------------------------------------------------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile Asset-Backed Certificates, Series 2005-1A,
Cl. A2, 5.009%, 4/20/09 1,2 640,000 639,947
- ------------------------------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2004-W8, Asset-Backed Pass-Through Certificates,
Series 2004-W8, Cl. A2, 5.345%, 5/25/34 1 3,925,924 3,698,581
- ------------------------------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2006-W5, Asset-Backed Pass-Through Certificates,
Series 2006-W5, Cl. A2B, 4.965%, 5/26/36 1 3,380,000 3,292,972
- ------------------------------------------------------------------------------------------------------------------------------------
Capital One Prime Auto Receivables Trust, Automobile Asset-Backed
Certificates, Series 2005-1, Cl. A4, 5.048%, 4/15/11 1 21,500,000 21,421,936
- ------------------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2005-D, Asset-Backed Certificates, Series
2005-D, Cl. AV2, 5.135%, 10/25/35 1 945,322 943,972
- ------------------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2006-A, Asset-Backed Certificates, Series
2006-A, Cl. AV2, 4.965%, 5/16/36 1 4,220,000 4,147,121
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Funding Trust 2003-2, Mtg. Loan Asset-Backed Certificates, Series
2003-2, Cl. 2A2, 5.145%, 2/25/33 1 1,787,072 1,767,326
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts., Series
2003-C4, Cl. C4, 5%, 6/10/15 460,000 433,332
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2005-WF2, Asset-Backed Pass-Through
Certificates, Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 1 143,090 142,757
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2006-WFH3, Asset-Backed Pass-Through
Certificates, Series 2006-WFH3, Cl. A2, 4.965%, 10/31/36 1 2,300,000 2,190,654
- ------------------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2002-4, Asset-Backed Certificates,
Series 2002-4, Cl. A1, 5.605%, 2/25/33 1 48,808 43,707
- ------------------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-11, Asset-Backed Certificates,
Series 2005-11, Cl. AF2, 4.657%, 2/25/36 2,790,000 2,773,214
- ------------------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-16, Asset-Backed Certificates,
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 1 4,980,000 4,799,961
- ------------------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-17, Asset-Backed Certificates:
Series 2005-17, Cl. 1AF1, 5.096%, 5/25/36 1 390,089 389,503
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36 1 970,000 962,573
- ------------------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2006-25, Asset-Backed Certificates,
Series 2006-25, Cl. 2A2, 4.985%, 12/25/29 1 3,020,000 2,826,722
- ------------------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2005-FF10, Mtg. Pass-Through
Certificates, Series 2005-FF10, Cl. A3, 5.075%, 11/25/35 1 4,160,876 4,134,611
- ------------------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF10, Mtg. Pass-Through
Certificates, Series 2006-FF10, Cl. A3, 4.955%, 7/25/36 1 3,550,000 3,385,412
- ------------------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF5, Mtg. Pass-Through Certificates,
Series 2006-FF5, Cl. 2A1, 4.915%, 5/15/36 1 746,789 738,805
- ------------------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF9, Mtg. Pass-Through Certificates,
Series 2006-FF9, Cl. 2A2, 4.975%, 7/7/36 1 1,820,000 1,737,334
- ------------------------------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations,
Series 2005-2, Cl. A4, 4.15%, 10/15/10 4,000,000 3,988,127
23 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Household Home Equity Loan Trust, Home Equity Loan Pass-Through
Certificates:
Series 2005-3, Cl. A1, 5%, 1/20/35 1 $ 1,385,610 $ 1,354,111
Series 2006-4, Cl. A2V, 5.059%, 3/20/36 1 1,120,000 1,055,302
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman XS Trust, Mtg. Pass-Through Certificates:
Series 2005-10, Cl. 2A3B, 5.55%, 1/25/36 1,574,372 1,577,201
Series 2005-2, Cl. 2A1B, 5.18%, 8/25/35 1 1,018,536 1,021,702
Series 2005-4, Cl. 2A1B, 5.17%, 10/25/35 895,641 897,043
- ------------------------------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 3 1,176,973 1,173,677
- ------------------------------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables, Series
2003-C7, Cl. C7, 6.378%, 3/15/16 1 4,380,000 4,237,598
- ------------------------------------------------------------------------------------------------------------------------------------
NC Finance Trust, CMO Pass-Through Certificates, Series 1999-I, Cl. ECFD,
0.491%, 1/25/29 3,17 1,750,658 297,612
- ------------------------------------------------------------------------------------------------------------------------------------
Option One Mortgage Loan Trust, Asset-Backed Certificates, Series
2006-2, Cl. 2A2, 4.965%, 7/1/36 1 11,300,000 11,003,541
- ------------------------------------------------------------------------------------------------------------------------------------
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 1,507,018
- ------------------------------------------------------------------------------------------------------------------------------------
RAMP Series 2006-RS4 Trust, Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-RS4, Cl. A1, 4.945%, 7/25/36 1 873,358 857,762
- ------------------------------------------------------------------------------------------------------------------------------------
Specialty Underwriting & Residential Finance Trust, Home Equity
Asset-Backed Obligations, Series 2005-BC3, Cl. A2B, 5.115%, 6/25/36 1 3,258,369 3,248,833
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Asset Investment Loan Trust, Mtg. Pass-Through Certificates:
Series 2006-2, Cl. A1, 4.925%, 4/25/36 1 1,368,551 1,359,472
Series 2006-BNC3, Cl. A2, 4.905%, 9/25/36 1 3,973,375 3,882,301
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Mtg. Pass-Through Certificates:
Series 2002-AL1, Cl. B2, 3.45%, 2/25/32 2,332,149 1,850,415
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 437,268 437,755
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Authority, Asset-Backed Securities, Series 2001-A,
6.79%, 6/1/10 1,045,000 1,066,391
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust, Home
Equity Asset-Backed Certificates, Series 2006-2, Cl. A2, 4.965%, 7/25/36 1 3,530,000 3,440,371
-----------------
Total Asset-Backed Securities (Cost $109,820,203) 106,211,772
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--85.2%
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--55.5%
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--55.4%
Fannie Mae Trust 2004-W9, Pass-Through Certificates, Trust 2004-W9,
Cl. 2A2, 7%, 2/25/44 1,476,876 1,566,836
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
4.50%, 5/15/19 22,933,974 22,555,393
5%, 6/15/33-8/15/33 11,770,862 11,505,190
5.50%, 5/1/34 10,020,978 10,013,619
24 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp.: Continued
6%, 5/15/18-3/15/33 $ 9,606,814 $ 9,812,497
6.50%, 4/15/18-4/15/34 7,286,770 7,552,550
7%, 7/15/21-3/15/35 13,126,946 13,763,443
8%, 4/15/16 519,939 551,571
9%, 4/14/17-5/15/25 149,519 161,054
12.50%, 5/15/14 804 931
13.50%, 12/15/10 1,370 1,523
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., CMO Gtd. Multiclass Mtg.
Participation Certificates:
Series 2046, Cl. G, 6.50%, 4/15/28 3,548,997 3,709,140
Series 2410, Cl. PF, 6.008%, 2/15/32 1 4,827,717 4,940,540
Series 2423, Cl. MC, 7%, 3/15/32 3,355,329 3,545,003
Series 2453, Cl. BD, 6%, 5/15/17 1,295,599 1,338,902
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass Pass-Through Certificates, Series 2681,
Cl. B, 5%, 9/15/23 3,233,000 3,153,424
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 151, Cl. F, 9%, 5/15/21 30,394 30,343
Series 1590, Cl. IA, 6.113%, 10/15/23 1 4,903,583 4,966,317
Series 2006-11, Cl. PS, 6.728%, 3/25/36 1 2,734,173 3,034,864
Series 2034, Cl. Z, 6.50%, 2/15/28 40,781 42,412
Series 2043, Cl. ZP, 6.50%, 4/15/28 3,534,157 3,672,812
Series 2053, Cl. Z, 6.50%, 4/15/28 43,983 45,946
Series 2055, Cl. ZM, 6.50%, 5/15/28 51,717 53,476
Series 2063, Cl. PG, 6.50%, 6/15/28 2,868,341 2,978,474
Series 2075, Cl. D, 6.50%, 8/15/28 567,599 592,715
Series 2080, Cl. Z, 6.50%, 8/15/28 1,510,607 1,576,023
Series 2145, Cl. MZ, 6.50%, 4/15/29 1,016,118 1,062,720
Series 2148, Cl. ZA, 6%, 4/15/29 2,065,381 2,106,052
Series 2195, Cl. LH, 6.50%, 10/15/29 2,354,375 2,439,168
Series 2326, Cl. ZP, 6.50%, 6/15/31 859,836 900,399
Series 2399, Cl. PG, 6%, 1/15/17 1,380,862 1,431,245
Series 2426, Cl. BG, 6%, 3/15/17 8,153,382 8,436,213
Series 2427, Cl. ZM, 6.50%, 3/15/32 4,497,412 4,712,457
Series 2461, Cl. PZ, 6.50%, 6/15/32 4,752,193 4,967,181
Series 2463, Cl. F, 6.028%, 6/15/32 1 7,373,046 7,573,836
Series 2500, Cl. FD, 5.528%, 3/15/32 1 356,571 356,962
Series 2526, Cl. FE, 5.428%, 6/15/29 1 550,134 548,771
Series 2551, Cl. FD, 5.428%, 1/15/33 1 426,374 428,265
Series 2676, Cl. KY, 5%, 9/15/23 4,548,000 4,423,740
Series 2764, Cl. UG, 5%, 3/15/34 8,661,000 8,043,953
Series 3025, Cl. SJ, 6.316%, 8/15/35 1 1,112,327 1,265,696
Series 3094, Cl. HS, 5.949%, 6/15/34 1 1,662,408 1,813,626
Series 3138, Cl. PA, 5.50%, 2/15/27 19,907,427 20,145,130
25 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. IO, 4.874%, 6/1/26 4 $ 660,748 $ 152,392
Series 183, Cl. IO, 3.44%, 4/1/27 4 2,233,825 510,353
Series 184, Cl. IO, 9.132%, 12/1/26 4 1,140,878 259,312
Series 192, Cl. IO, 8.228%, 2/1/28 4 278,429 67,572
Series 200, Cl. IO, 7.301%, 1/1/29 4 335,364 77,940
Series 2003-26, Cl. IK, 9.508%, 4/25/33 4 3,297,949 689,986
Series 206, Cl. IO, (9.58)%, 12/1/29 4 360,136 78,677
Series 2130, Cl. SC, 3.254%, 3/15/29 4 739,945 71,697
Series 2134, Cl. SB, 9.271%, 3/15/29 4 797,306 74,697
Series 216, Cl. IO, 9.04%, 12/1/31 4 1,351,363 327,435
Series 224, Cl. IO, 5.643%, 3/1/33 4 3,916,472 919,348
Series 2422, Cl. SJ, 15.036%, 1/15/32 4 3,575,525 330,655
Series 243, Cl. 6, 15.199%, 12/15/32 4 2,424,456 511,475
Series 2493, Cl. S, 8.271%, 9/15/29 4 207,281 18,831
Series 2796, Cl. SD, (2.107)%, 7/15/26 4 1,180,706 104,614
Series 2802, Cl. AS, 5.232%, 4/15/33 4 4,033,224 272,257
Series 2920, Cl. S, (4.791)%, 1/15/35 4 4,767,860 339,065
Series 3000, Cl. SE, 11.917%, 7/15/25 4 7,132,657 382,586
Series 3110, Cl. SL, 24.356%, 2/15/26 4 2,141,037 109,418
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. PO, 5.97%, 6/1/26 5 282,395 232,963
Series 192, Cl. PO, 7.631%, 2/1/28 5 278,429 220,199
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 5/25/18-8/25/20 79,372,328 78,116,232
4.50%, 1/1/22 6 5,445,000 5,359,922
5%, 12/25/17-3/25/34 156,437,648 155,614,855
5%, 1/1/22-11/25/33 6 103,972,800 102,628,579
5.50%, 12/25/18-5/25/34 150,173,886 150,375,606
5.50%, 1/1/22-1/1/37 6 110,511,000 110,621,156
6%, 5/25/20-11/1/33 61,817,360 63,031,714
6%, 1/1/22 6 19,276,000 19,724,765
6.50%, 6/25/17-11/25/31 35,313,013 36,626,309
6.50%, 1/1/37 6 44,334,000 45,573,978
7%, 1/25/09-4/1/37 15,367,899 16,134,871
7.50%, 2/25/08-8/25/33 11,612,083 12,426,897
8%, 8/25/17 1,502 1,515
8.50%, 7/25/32 50,598 54,507
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1,
Cl. A2, 7%, 11/25/31 1,707,562 1,800,851
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1992-34, Cl. G, 8%, 3/25/22 20,117 21,061
Trust 1993-104, Cl. ZB, 6.50%, 7/25/23 1,021,074 1,057,391
Trust 1993-215, Cl. ZQ, 6.50%, 11/25/23 7 4,029,967 4,174,293
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 423,862 437,252
26 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates: Continued
Trust 1996-35, Cl. Z, 7%, 7/25/26 $ 155,632 $ 159,073
Trust 1998-58, Cl. PC, 6.50%, 10/25/28 1,664,359 1,723,459
Trust 1998-61, Cl. PL, 6%, 11/25/28 2,089,617 2,144,186
Trust 1999-54, Cl. LH, 6.50%, 11/25/29 2,909,541 3,057,666
Trust 1999-60, Cl. PG, 7.50%, 12/25/29 10,700,699 11,163,114
Trust 2001-50, Cl. NE, 6%, 8/25/30 525 523
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 2,635,770 2,743,127
Trust 2001-70, Cl. LR, 6%, 9/25/30 200,607 201,259
Trust 2001-74, Cl. QE, 6%, 12/25/31 11,211,326 11,476,977
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32 1,822,283 1,860,800
Trust 2002-16, Cl. PG, 6%, 4/25/17 2,224,000 2,308,652
Trust 2002-56, Cl. FN, 5.865%, 7/25/32 1 1,940,760 1,989,872
Trust 2002-9, Cl. PC, 6%, 3/25/17 7,844,753 8,117,924
Trust 2003-130, Cl. CS, 4.37%, 12/25/33 1 8,137,621 7,694,973
Trust 2003-17, Cl. EQ, 5.50%, 3/25/23 6,305,000 6,368,791
Trust 2003-21, Cl. FK, 5.265%, 3/25/33 1 719,704 724,143
Trust 2003-23, Cl. EQ, 5.50%, 4/25/23 8,316,000 8,331,287
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,492,000 1,501,731
Trust 2003-84, Cl. GC, 4.50%, 5/25/15 11,330,000 11,342,398
Trust 2003-84, Cl. PW, 3%, 6/25/22 1,388,805 1,379,883
Trust 2004-101, Cl. BG, 5%, 1/25/20 2,603,000 2,611,651
Trust 2005-100, Cl. BQ, 5.50%, 11/25/25 2,450,000 2,461,282
Trust 2005-104, Cl. MC, 5.50%, 12/25/25 12,330,000 12,285,046
Trust 2005-109, Cl. AH, 5.50%, 12/25/25 10,000,000 9,910,998
Trust 2005-31, Cl. PB, 5.50%, 4/25/35 2,480,000 2,460,170
Trust 2005-59, Cl. NQ, 4.713%, 5/25/35 1 3,050,202 3,050,603
Trust 2005-71, Cl. DB, 4.50%, 8/25/25 1,260,000 1,194,665
Trust 2006-44, Cl. OA, 5.50%, 12/25/26 7,759,770 7,842,626
Trust 2006-46, Cl. SW, 6.362%, 6/25/36 1 2,596,350 2,848,989
Trust 2006-50, Cl. KS, 6.362%, 6/25/36 1 3,672,447 3,908,996
Trust 2006-50, Cl. SA, 6.362%, 6/25/36 1 3,437,418 3,663,727
Trust 2006-50, Cl. SK, 6.362%, 6/25/36 1 2,600,405 2,766,266
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 8,815,668 8,908,871
Trust 2006-64, Cl. MD, 5.50%, 7/25/36 2,753,828 2,733,699
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security:
Trust 2001-15, Cl. SA, 19.031%, 3/17/31 4 1,361,889 135,305
Trust 2001-65, Cl. S, 12.568%, 11/25/31 4 4,578,353 591,320
Trust 2001-81, Cl. S, 3.759%, 1/25/32 4 577,701 62,221
Trust 2002-12, Cl. SB, 14.559%, 7/25/31 4 922,836 88,954
Trust 2002-2, Cl. SW, 14.971%, 2/25/32 4 1,036,337 128,476
Trust 2002-38, Cl. IO, (0.904)%, 4/25/32 4 378,548 39,805
Trust 2002-41, Cl. S, 17.236%, 7/25/32 4 3,923,416 429,017
Trust 2002-47, Cl. NS, 2.917%, 4/25/32 4 1,434,073 157,996
Trust 2002-5, Cl. SD, 8.837%, 2/25/32 4 676,168 77,613
Trust 2002-51, Cl. S, 3.07%, 8/25/32 4 1,316,795 147,881
Trust 2002-52, Cl. SD, (0.559)%, 9/25/32 4 1,472,421 239,690
27 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security: Continued
Trust 2002-60, Cl. SY, 14.281%, 4/25/32 4 $ 894,958 $ 31,159
Trust 2002-75, Cl. SA, 13.682%, 11/25/32 4 3,671,735 413,889
Trust 2002-77, Cl. IS, 2.758%, 12/18/32 4 644,933 108,224
Trust 2002-77, Cl. SH, 5.025%, 12/18/32 4 759,489 74,889
Trust 2002-84, Cl. SA, 14.525%, 12/25/32 4 913,091 106,026
Trust 2002-89, Cl. S, 14.738%, 1/25/33 4 5,769,223 626,686
Trust 2002-9, Cl. MS, 4.207%, 3/25/32 4 47,214 5,103
Trust 2003-118, Cl. S, 9.838%, 12/25/33 4 8,684,610 1,492,715
Trust 2003-14, Cl. OI, 8.765%, 3/25/33 4 8,631,083 1,976,183
Trust 2003-33, Cl. SP, 9.123%, 5/25/33 4 5,553,206 720,942
Trust 2003-4, Cl. S, 12.217%, 2/25/33 4 1,782,281 217,394
Trust 2003-52, Cl. NS, 7.228%, 6/25/23 4 28,459,078 2,850,060
Trust 2004-54, Cl. DS, (2.056)%, 11/25/30 4 302,399 24,304
Trust 2005-105, Cl. S, 17.377%, 12/25/35 4 9,218,925 678,803
Trust 2005-19, Cl. SA, 1.225%, 3/25/35 4 16,297,487 1,158,908
Trust 2005-40, Cl. SA, 0.846%, 5/25/35 4 2,961,841 203,805
Trust 2005-6, Cl. SE, 3.326%, 2/25/35 4 3,414,464 296,355
Trust 2005-71, Cl. SA, 9.977%, 8/25/25 4 5,948,701 462,833
Trust 2005-83, Cl. SL, 11.659%, 10/25/35 4 11,919,716 871,697
Trust 2005-87, Cl. SE, 12.247%, 10/25/35 4 21,906,966 1,528,280
Trust 2005-87, Cl. SG, 13.837%, 10/25/35 4 17,226,755 1,614,174
Trust 2006-119, Cl. MS, 22.78%, 12/25/36 4 9,671,848 731,383
Trust 2006-33, Cl. SP, 15.444%, 5/25/36 4 13,474,400 1,244,539
Trust 2006-34, Cl. SK, 14.651%, 5/25/36 4 18,820,539 1,726,331
Trust 222, Cl. 2, 14.433%, 6/1/23 4 2,295,656 543,687
Trust 240, Cl. 2, 17.308%, 9/1/23 4 2,796,161 642,924
Trust 247, Cl. 2, 14.164%, 10/1/23 4 191,207 50,523
Trust 252, Cl. 2, 14.3%, 11/1/23 4 2,023,194 499,077
Trust 254, Cl. 2, 8.508%, 1/1/24 4 3,490,640 863,316
Trust 2682, Cl. TQ, 12.29%, 10/15/33 4 5,242,464 402,229
Trust 273, Cl. 2, 13.126%, 8/1/26 4 512,025 116,264
Trust 2981, Cl. BS, 12.367%, 5/15/35 4 9,735,891 727,714
Trust 301, Cl. 2, 5.703%, 4/1/29 4 1,319,732 296,624
Trust 303, Cl. IO, (3.377)%, 11/1/29 4 158,118 37,749
Trust 319, Cl. 2, 10.717%, 2/1/32 4 802,247 186,362
Trust 321, Cl. 2, 8.867%, 4/1/32 4 3,314,530 768,261
Trust 322, Cl. 2, 16.524%, 4/1/32 4 4,272,910 1,011,365
Trust 324, Cl. 2, 5.85%, 7/1/32 4 2,629,560 602,862
Trust 331, Cl. 9, 11.319%, 2/1/33 4 8,433,566 2,090,961
Trust 334, Cl. 15, 8.69%, 2/1/33 4 5,175,958 1,211,166
Trust 334, Cl. 17, 23.16%, 2/1/33 4 263,882 60,919
Trust 339, Cl. 7, 9.534%, 7/1/33 4 9,085,923 2,147,141
Trust 342, Cl. 2, 6.625%, 9/1/33 4 1,594,878 373,417
Trust 344, Cl. 2, 5.109%, 12/1/33 4 42,706,902 9,792,427
Trust 345, Cl. 9, 8.864%, 1/1/34 4 5,661,125 1,346,928
Trust 354, Cl. 2, 5.133%, 11/1/34 4 13,733,095 3,316,028
Trust 362, Cl. 12, 9.377%, 8/1/35 4 9,242,787 2,139,462
Trust 362, Cl. 13, 9.359%, 8/1/35 4 5,124,810 1,176,865
28 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security:
Trust 1993-184, Cl. M, 5.606%, 9/25/23 5 $ 696,400 $ 569,162
Trust 324, Cl. 1, 6.135%, 7/1/32 5 656,621 538,253
-----------------
1,195,065,711
- ------------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage Assn.:
5.625%, 8/8/25-8/8/27 1 22,339 22,461
7%, 7/29/09 4,305 4,385
8.50%, 8/15/17-12/29/17 221,733 239,281
9%, 3/1/09-6/29/09 4,762 4,905
10.50%, 12/29/17-5/29/21 17,302 20,186
11%, 11/8/19 37,287 42,635
12%, 5/29/14 282 332
- ------------------------------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 8.513%, 1/16/27 4 1,419,145 142,819
Series 2002-15, Cl. SM, 6.07%, 2/16/32 4 1,495,276 230,593
Series 2002-41, Cl. GS, 19.353%, 6/16/32 4 1,135,193 290,410
Series 2002-76, Cl. SY, 6.441%, 12/16/26 4 724,607 70,477
Series 2004-11, Cl. SM, 1.748%, 1/17/30 4 242,111 39,241
Series 2006-47, Cl. SA, 31.192%, 8/16/36 4 17,524,199 1,381,927
-----------------
2,489,652
- ------------------------------------------------------------------------------------------------------------------------------------
NON-AGENCY--29.7%
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL--13.9%
Asset Securitization Corp., Commercial Interest-Only Stripped Mtg.-Backed
Security, Series 1997-D4, Cl. PS1, 2.706%, 4/14/29 4 13,797,762 564,607
- ------------------------------------------------------------------------------------------------------------------------------------
Banc of America Commercial Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2005-3, Cl. A2, 4.501%, 7/10/43 3,580,000 3,538,159
Series 2006-5, Cl. A2, 5.348%, 10/10/11 6,320,000 6,347,058
- ------------------------------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., CMO Pass-Through Certificates, Series
2004-2, Cl. 2A1, 6.50%, 7/20/32 1,760,357 1,790,339
- ------------------------------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates,
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 1,557,946 1,587,816
- ------------------------------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities Trust 2007-PW18-PW18,
Commercial Mtg. Pass-Through Certificates, Series PW18, Cl. A2, 5.613%,
6/1/50 17,675,000 17,854,512
- ------------------------------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg.
Obligations, Series 2003-T10, Cl. A1, 4%, 3/13/40 142,663 140,461
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only Corporate-Backed
Pass-Through Certificates, Series 1997-CTL1, (6.902)%, 6/22/24 4 4,568,105 135,746
29 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
Citigroup Mortgage Loan Trust, Inc. 2006-WF1, Asset-Backed
Pass-Through Certificates, Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36 $ 1,150,000 $ 1,149,759
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank 2007-CD4 Commercial Mortgage Trust,
Commercial Mtg. Pass-Through Certificates:
Series 2007-CD4, Cl. A2B, 5.205%, 12/11/49 7,620,000 7,618,797
Series 2007-CD4, Cl. A4, 5.322%, 12/1/49 8 9,110,000 9,100,342
- ------------------------------------------------------------------------------------------------------------------------------------
CitiMortgage Alternative Loan Trust 2006-A5:
Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series
2006-A5, Cl. 1A1, 5.265%, 10/25/36 1 13,367,013 12,680,030
Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series
2006-A5, Cl. 1A13, 5.315%, 10/25/36 1 7,009,531 6,853,751
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Alt-A Securities Mortgage Loan Trust, Mtg. Pass-Through
Certificates:
Series 2006-AB2, Cl. A7, 5.961%, 6/25/36 2,249,252 2,248,850
Series 2006-AB3, Cl. A7, 6.36%, 7/1/36 747,602 748,219
Series 2006-AB4, Cl. A1A, 6.005%, 10/25/36 7,634,970 7,634,567
- ------------------------------------------------------------------------------------------------------------------------------------
DLJ Commercial Mortgage Corp., Commercial Mtg. Pass-Through
Certificates, Series 1998-CF2, Cl. A1B, 6.24%, 11/12/31 4,112,103 4,133,178
- ------------------------------------------------------------------------------------------------------------------------------------
First Horizon Alternative Mortgage Securities Trust 2004-FA2, Mtg.
Pass-Through Certificates, Series 2004-FA2, Cl. 3A1, 6%, 1/25/35 3,581,303 3,447,202
- ------------------------------------------------------------------------------------------------------------------------------------
First Horizon Alternative Mortgage Securities Trust 2007-FA2, Mtg.
Pass-Through Certificates, Series 2007-FA2, Cl. 1A1, 5.50%, 4/25/37 4,015,909 3,967,137
- ------------------------------------------------------------------------------------------------------------------------------------
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 3,018,393 3,016,328
- ------------------------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2003-C1, Cl. A2, 4.093%, 1/10/38 215,000 213,356
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 1,850,000 1,843,575
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 2,250,000 2,242,238
- ------------------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 2,000,000 1,976,127
Series 2005-GG5, Cl. A2, 5.117%, 4/10/37 6,378,000 6,393,115
Series 2007-GG9, Cl. A2, 5.381%, 3/10/39 17,310,000 17,417,099
- ------------------------------------------------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg. Obligations, Series
2006-GG8, Cl. A2, 5.479%, 11/10/39 1 10,380,000 10,491,961
- ------------------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust 2005-4F, CMO, Series 2005-4F, Cl. 6A1, 6.50%,
2/25/35 9,282,505 9,394,280
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 860,000 851,190
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 3,566,000 3,544,350
Series 2006-CB14, Cl. A4, 5.481%, 12/12/44 9,520,000 9,646,824
Series 2007-LD12, Cl. A2, 5.827%, 2/15/51 4,480,000 4,575,575
Series 2007-LDPX, Cl. A2S, 5.305%, 1/15/49 6,640,000 6,649,677
30 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
JPMorgan Chase Commercial Mortgage Securities Trust 2005-LDP2,
Commercial Mtg. Pass-Through Certificates, Series 2005-LDP2, Cl. AM,
4.78%, 7/1/42 $ 6,600,000 $ 6,221,558
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Commercial Mortgage Finance Corp., Commercial Mtg.
Pass-Through Certificates, Series 2000-C9, Cl. A2, 7.77%, 10/15/32 4,431,688 4,630,461
- ------------------------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through
Certificates:
Series 2005-C5, Cl. A2, 4.885%, 9/15/30 2,700,000 2,695,959
Series 2006-C1, Cl. A2, 5.084%, 2/11/31 10,240,000 10,257,395
Series 2007-C1, Cl. A2, 5.318%, 1/15/12 13,940,000 14,007,596
Series 2007-C1, Cl. A4, 5.424%, 2/11/40 7,740,000 7,788,469
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 1.434%, 2/18/30 4 4,539,525 117,543
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Structured Securities Corp., CMO, Series 2002-GE1, Cl. A, 2.514%,
7/26/24 3 181,969 140,116
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO Pass-Through Certificates:
Series 2004-6, Cl. 10A1, 6%, 7/25/34 2,113,708 2,093,406
Series 2004-9, Cl. A3, 4.70%, 8/25/34 1 57,747 57,542
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Asset Securitization Trust 2006-3, Mtg. Pass-Through Certificates,
Series 2006-3, Cl. 2A1, 5.239%, 10/25/36 1 21,522,438 21,205,385
- ------------------------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 5,784,200 5,798,037
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 182,000 193,005
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 1,292,303 1,285,886
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2007-QS6, Cl. A114, 5.75%, 4/25/37 5,485,305 5,422,237
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Asset Securitization Trust 2006-A9CB, CMO Pass-Through
Certificates, Series 2006-A9CB, Cl. A5, 6%, 9/25/36 5,756,394 5,745,781
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Interest-Only Commercial
Mtg. Pass-Through Certificates, Series 1999-C1, Cl. X, (5.456)%, 5/18/32 4 172,540,333 265,850
- ------------------------------------------------------------------------------------------------------------------------------------
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 3,813,560
- ------------------------------------------------------------------------------------------------------------------------------------
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 2,151,022
- ------------------------------------------------------------------------------------------------------------------------------------
WaMu, Mtg. Pass-Through Certificates:
Series 2003-AR9, Cl. 2A, 4.047%, 9/25/33 1 6,321,620 6,285,346
Series 2006-AR8, Cl. 2A1, 6.133%, 8/25/36 1 18,818,842 18,815,426
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-V Trust, Mtg. Pass-Through
Certificates, Series 2004-V, Cl. 1A1, 3.836%, 10/1/34 1 11,500,434 11,383,176
-----------------
300,170,981
31 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURED HOUSING--1.5%
Wells Fargo Mortgage-Backed Securities 2006-AR12 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 6.102%, 9/25/36 1 $ 14,697,682 $ 14,730,120
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR2, Cl. 2A5, 5.10%, 3/25/36 1 17,073,965 16,947,337
-----------------
31,677,457
- ------------------------------------------------------------------------------------------------------------------------------------
MULTIFAMILY--8.8%
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates:
Series 2003-E, Cl. 2A2, 4.35%, 6/25/33 1 10,137,125 10,100,505
Series 2005-F, Cl. 2A3, 4.716%, 7/25/35 1 12,097,816 12,004,159
- ------------------------------------------------------------------------------------------------------------------------------------
Bear Stearns ARM Trust 2006-4, Mtg. Pass-Through Certificates, Series
2006-4, Cl. 2A1, 5.802%, 10/25/36 1 6,770,362 6,822,386
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2006-AR5, Mtg. Pass-Through
Certificates, Series 2006-AR5, Cl. 1A3A, 5.894%, 7/25/36 1 5,081,369 5,126,564
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust, CMO:
Series 2004-28CB, Cl. 2A4, 5.75%, 1/25/35 10,018,000 9,576,220
Series 2008-85CB, Cl. 2A3, 5.50%, 2/25/36 7,710,000 7,323,490
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans Servicing LP, Mtg. Pass-Through Certificates:
Series 2003-46, Cl. 1A2, 4.122%, 1/19/34 1 8,671,453 8,777,644
Series 2005-HYB1, Cl. 5A1, 4.995%, 3/25/35 1 12,185,295 11,907,318
Series 2007-HY1, Cl. 1A1, 5.695%, 4/25/37 1 12,361,352 12,414,913
- ------------------------------------------------------------------------------------------------------------------------------------
GMAC Mortgage Corp. Loan Trust, Mtg. Pass-Through Certificates:
Series 2004-J4, Cl. A7, 5.50%, 9/25/34 7,166,000 6,858,991
Series 2005-AR4, Cl. 2A1, 5.292%, 7/19/35 1 13,542,118 13,588,938
- ------------------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust 2005-AR7, Mtg. Pass-Through Certificates,
Series 2005-AR7, Cl. 3A1, 5.152%, 11/25/35 1 20,119,974 20,103,999
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors Trust 2007-2, Mtg. Pass-Through
Certificates, Series 2007-2, Cl. 2A1, 6.007%, 6/25/37 1 16,447,025 16,538,263
- ------------------------------------------------------------------------------------------------------------------------------------
WaMu, Mtg. Pass-Through Certificates, Series 2005-AR8, Cl. 2AB1,
5.115%, 7/25/45 1 73,499 73,340
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2006-A R2, Cl. 2A3, 5.10%, 3/1/36 12,854,143 12,847,578
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-AA Trust, Mtg.
Pass-Through Certificates, Series 2004-AA, Cl. 2A, 4.993%, 12/25/34 1 4,010,168 3,954,153
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-S Trust, Mtg. Pass-Through
Certificates, Series 2004-S, Cl. A1, 3.54%, 9/25/34 1 3,326,127 3,275,436
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR2, Cl. 2A2, 4.547%, 3/25/35 1 2,609,580 2,588,730
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR4 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR4, Cl. 2A2, 4.524%, 4/25/35 1 4,097,193 4,064,236
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR10 Trust, Mtg.
Pass-Through Certificates:
Series 2006-AR10, Cl. 2A1, 5.646%, 7/25/36 1 6,267,986 6,314,963
Series 2006-AR10, Cl. 4A1, 5.56%, 7/25/36 1 8,125,263 8,171,089
32 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
MULTIFAMILY Continued
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR2. Cl. 2A6, 5.10%, 3/25/36 1 $ 3,247,983 $ 3,223,895
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR6 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR6, Cl. 3A1, 5.093%, 3/25/36 1 3,647,072 3,631,600
-----------------
189,288,410
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER--0.2%
JPMorgan Mortgage Trust, CMO Pass-Through Certificates, Series
2005-S2, Cl. 3A1, 6.756%, 2/25/32 1 3,968,602 4,034,858
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Inc., Interest-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. B, 62.025%, 10/23/17 4 8,386 1,040
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped
Mtg.-Backed Security, Series1987-3, Cl. A, 1.026%, 10/23/17 5 12,411 11,562
-----------------
4,047,460
- ------------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--5.3%
Chase Mortgage Finance Trust Series 2005-S1, Multiclass Mtg.
Pass-Through Certificates, Series 2005-S1, Cl. 1A5, 5.50%, 5/25/35 4,500,000 4,424,711
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust, CMO:
Series 2005-18CB, Cl. A8, 5.50%, 5/25/36 9,396,000 9,067,871
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 6,625,324 6,769,378
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 3,577,168 3,589,354
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Mortgage Loan Trust 2006-AR, Mtg. Pass-Through
Certificates, Series 2006-AR, Cl. 5A3, 5.427%, 6/25/36 1 4,750,000 4,771,948
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS13 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS13, Cl. 1A8, 6%, 9/25/36 4,203,399 4,201,622
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS5, Cl. 2A2, 6%, 4/25/08 3,080,980 3,077,538
- ------------------------------------------------------------------------------------------------------------------------------------
STARM Mortgage Loan Trust 2007-S1, Mtg. Pass-Through Certificates,
Series 2007-S1, Cl. 3A1, 5.004%, 8/1/22 1 19,673,970 19,406,527
- ------------------------------------------------------------------------------------------------------------------------------------
WaMu, Mtg. Pass-Through Certificates:
Series 2006-AR12, Cl. 2A1, 5.75%, 10/25/36 1 18,311,475 18,200,618
Series 2007-HY6, Cl. 2A1, 5.702%, 6/25/37 1 12,382,821 12,227,532
- ------------------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Loan Trust, Mtg. Pass-Through Certificates,
2007-A, Cl. 1A8, 6%, 2/25/37 15,697,359 15,746,030
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR5 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR5, Cl. 2A2, 5.535%, 4/1/36 1 8,098,511 7,360,818
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2003-6 Trust, Mtg. Pass-Through
Certificates, Series 2003-6, Cl. 1A1, 5%, 6/25/18 6,821,124 6,786,529
-----------------
115,630,476
-----------------
Total Mortgage-Backed Obligations (Cost $1,809,761,270) 1,838,370,147
33 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, 3.862%, 2/15/13 8,9 $ 1,520,000 $ 1,270,580
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 4.25%, 9/30/12 8 5,950,000 6,160,576
-----------------
Total U.S. Government Obligations (Cost $7,171,075) 7,431,156
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--17.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 6,950,000 7,085,330
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual Bonds 10 23,090,000 20,131,709
- ------------------------------------------------------------------------------------------------------------------------------------
Belo Corp., 8% Sr. Unsec. Unsub. Nts., 11/1/08 12,195,000 12,306,535
- ------------------------------------------------------------------------------------------------------------------------------------
Buckeye Partners LP, 4.625% Sr. Nts., 7/15/13 7,560,000 7,265,871
- ------------------------------------------------------------------------------------------------------------------------------------
Caesars Entertainment, Inc., 7.50% Sr. Unsec. Nts., 9/1/09 3 7,245,000 7,700,471
- ------------------------------------------------------------------------------------------------------------------------------------
Capmark Financial Group, Inc., 5.875% Nts., 5/10/12 2 6,985,000 5,534,076
- ------------------------------------------------------------------------------------------------------------------------------------
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09 6,190,000 5,703,379
- ------------------------------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 5,130,000 5,303,368
- ------------------------------------------------------------------------------------------------------------------------------------
CIT Group Funding Co. of Canada, 4.65% Sr. Unsec. Nts., 7/1/10 5,029,000 4,785,441
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 8.30% Jr. Sub. Bonds, 12/21/57 1 3,860,000 4,042,014
- ------------------------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.25% Nts., 3/15/11 6,350,000 5,750,795
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans, Inc., 3.25% Nts., Series L, 5/21/08 8 3,775,000 3,411,637
- ------------------------------------------------------------------------------------------------------------------------------------
Cox Enterprises, Inc., 4.375% Nts., 5/1/08 2 10,245,000 10,212,913
- ------------------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.25% Sr. Unsec. Nts., 7/15/08 7,080,000 7,106,550
- ------------------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 5,694,000 5,536,020
- ------------------------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 4,083,000 4,741,082
- ------------------------------------------------------------------------------------------------------------------------------------
Dillard's, Inc., 6.625% Unsec. Nts., 11/15/08 3 4,070,000 4,064,913
- ------------------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co., 3.625% Nts., Series A, 5/15/08 4,675,000 4,628,250
- ------------------------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec. Nts., 10/1/08 9,370,000 9,381,713
- ------------------------------------------------------------------------------------------------------------------------------------
El Paso Corp., 6.50% Sr. Unsec. Nts., 6/1/08 1,170,000 1,181,110
- ------------------------------------------------------------------------------------------------------------------------------------
Equus Cayman Finance Ltd., 5.50% Unsub. Nts., 9/12/08 2 1,780,000 1,779,379
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75% Sr. Unsec. Nts., 9/15/10 8 15,830,000 15,113,693
- ------------------------------------------------------------------------------------------------------------------------------------
Gap, Inc. (The), 10.05% Unsub. Nts., 12/15/08 1 530,000 549,875
- ------------------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 8% Bonds, 11/1/31 7,415,000 6,235,058
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34 8 17,505,000 15,856,677
- ------------------------------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 2,10 30,900,000 25,213,844
- ------------------------------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 1 22,900,000 21,221,453
- ------------------------------------------------------------------------------------------------------------------------------------
Hyundai Motor Manufacturing Alabama LLC, 5.30% Sr. Unsec. Nts., 12/19/08 2 3,145,000 3,156,561
- ------------------------------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 1,3 1,535,000 1,569,538
- ------------------------------------------------------------------------------------------------------------------------------------
Kaneb Pipe Line Operating Partnership LP, 5.875% Sr. Unsec. Nts., 6/1/13 6,075,000 6,189,398
- ------------------------------------------------------------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec. Nts., 3/1/09 8 6,355,000 6,056,251
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 7.875% Sr. Nts., 7/15/09 2,625,000 2,678,130
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media LLC, 7.75% Sr. Nts., 7/15/09 9,495,000 9,739,107
34 | OPPENHEIMER CORE BOND FUND
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub. Nts., 12/1/34 7 $ 4,160,000 $ 3,309,613
- ------------------------------------------------------------------------------------------------------------------------------------
MetLife, Inc., 6.40% Jr. Unsec. Sub. Bonds, 12/15/66 1 16,930,000 15,564,646
- ------------------------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts., 10/1/09 11,840,000 11,840,000
- ------------------------------------------------------------------------------------------------------------------------------------
Monongahela Power Co., 7.36% Unsec. Nts., Series A, 1/15/10 7,977,000 8,409,856
- ------------------------------------------------------------------------------------------------------------------------------------
Morton International, Inc., 9.75% Credit Sensitive Nts., 6/1/20 1 85,000 111,764
- ------------------------------------------------------------------------------------------------------------------------------------
NCR Corp., 7.125% Sr. Unsec. Unsub. Nts., 6/15/09 6,495,000 6,714,947
- ------------------------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 12.50% Sr. Unsub. Disc. Nts., 1/15/07 3,11 200,000 2
- ------------------------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 2 1,160,664 1,144,928
- ------------------------------------------------------------------------------------------------------------------------------------
Popular North America, Inc.:
3.875% Sr. Bonds, Series E, 10/1/08 5,450,000 5,398,781
4.70% Nts., 6/30/09 6,799,000 6,734,382
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 2 9,165,000 11,003,774
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 2 8,725,000 10,314,172
- ------------------------------------------------------------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09 4,465,000 4,157,527
- ------------------------------------------------------------------------------------------------------------------------------------
Qwest Corp., 5.625% Unsec. Nts., 11/15/08 3 729,000 729,000
- ------------------------------------------------------------------------------------------------------------------------------------
Real Time Data Co., 11% Disc. Nts., 5/31/09 3,11,12 476,601 --
- ------------------------------------------------------------------------------------------------------------------------------------
SLM Corp.:
3.95% Nts., Series A, 8/15/08 1,780,000 1,737,308
4% Nts., 1/15/09 6,926,000 6,673,921
- ------------------------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp., 5.125% Sr. Unsec. Unsub. Nts., 4/1/09 8 3,565,000 2,834,175
- ------------------------------------------------------------------------------------------------------------------------------------
TEPPCO Partners LP, 6.125% Nts., 2/1/13 3,060,000 3,191,063
- ------------------------------------------------------------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E, 10/6/08 3 5,370,000 5,081,363
- ------------------------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc., 3.875% Sr. Unsec. Nts., 10/15/08 1,795,000 1,761,344
- ------------------------------------------------------------------------------------------------------------------------------------
Valero Logistics Operations LP, 6.05% Nts., 3/15/13 2,712,000 2,775,241
- ------------------------------------------------------------------------------------------------------------------------------------
Westar Energy, Inc., 7.125% Sr. Unsec. Nts., 8/1/09 7,494,000 7,734,993
-----------------
Total Corporate Bonds and Notes (Cost $380,562,268) 368,454,941
SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp. (Cost $9) 181 7,095
UNITS
- ------------------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 3,13 150 --
- ------------------------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 3,13 2,028 71
-----------------
Total Rights, Warrants and Certificates (Cost $5,577) 71
35 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES--2.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.03% 14,15
(Cost $52,911,646) 52,911,646 $ 52,911,646
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased with
Cash Collateral from Securities Loaned) (Cost $2,360,232,048) 2,373,386,828
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--1.3% 16
- ------------------------------------------------------------------------------------------------------------------------------------
Five Finance, Inc., 4.38%, 1/2/08 $ 2,999,928 2,999,928
- ------------------------------------------------------------------------------------------------------------------------------------
Protective Life Insurance Co., 5.16%, 1/29/08 2,000,000 2,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Undivided interest of 1.99% in joint repurchase agreement (Principal
Amount/Value $1,000,000,000, with a maturity value of $1,000,250,000)
with Bank of America NA, 4.50%, dated 12/31/07, to be repurchased at
$19,945,354 on 1/2/08, collateralized by U.S. Agency Mortgages, 5%, 5/1/35,
with a value of $1,020,000,000 19,940,369 19,940,369
- ------------------------------------------------------------------------------------------------------------------------------------
Whitehawk CDO Funding Corp., 5.04%, 3/17/08 3,000,000 3,000,000
-----------------
Total Investments Purchased with Cash Collateral from Securities Loaned
(Cost $27,940,297) 27,940,297
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,388,172,345) 111.3% 2,401,327,125
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (11.3) (244,454,145)
------------------------------------
NET ASSETS 100.0% $ 2,156,872,980
====================================
INDUSTRY CLASSIFICATIONS ARE UNAUDITED
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 $68,999,594 or 3.20% of the Fund's net
assets as of December 31, 2007.
3. Illiquid security. The aggregate value of illiquid securities as of December
31, 2007 was $20,756,763, which represents 0.96% of the Fund's net assets. See
Note 8 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 $60,205,794 or 2.79% of the Fund's net assets
as of December 31, 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 $1,572,139 or 0.07% of the Fund's net assets as of
December 31, 2007.
6. When-issued security or delayed delivery to be delivered and settled after
December 31, 2007. See Note 1 of accompanying Notes.
36 | OPPENHEIMER CORE BOND FUND
7. 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 $4,460,514. See Note 6 of accompanying Notes.
8. Partial or fully-loaned security. See Note 9 of accompanying Notes.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. 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.
11. Issue is in default. See Note 1 of accompanying Notes.
12. Interest or dividend is paid-in-kind, when applicable.
13. Non-income producing security.
14. Rate shown is the 7-day yield as of December 31, 2007.
15. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended December 31, 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 adviser. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS DECEMBER 31, 2007
- ----------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E 67,486,873 1,076,035,420 1,090,610,647 52,911,646
DIVIDEND
VALUE INCOME
- ----------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 52,911,646 $4,729,851
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 9 of
accompanying Notes.
17. Short-fall security.
- ---------------------------------------------------------------------------------------------------------------------------------
FUTURES CONTRACTS AS OF DECEMBER 31, 2007 ARE AS FOLLOWS:
- ---------------------------------------------------------------------------------------------------------------------------------
UNREALIZED
NUMBER OF EXPIRATION APPRECIATION
CONTRACT DESCRIPTION BUY/SELL CONTRACTS DATE VALUE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. Long Bonds Buy 2,208 3/19/08 $256,956,000 $ (1,620,615)
U.S. Treasury Nts., 2 yr. Sell 1,928 3/31/08 405,362,000 63,381
U.S. Treasury Nts., 5 yr. Sell 437 3/31/08 48,192,906 (42,851)
U.S. Treasury Nts., 10 yr. Sell 9 3/19/08 1,020,516 (10,658)
---------------
$ (1,610,743)
===============
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT DEFAULT SWAPS AS OF DECEMBER 31, 2007 ARE AS FOLLOWS:
- ---------------------------------------------------------------------------------------------------------------------------------
PAY/
NOTIONAL RECEIVE PREMIUM
SWAP BUY/SELL AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY CREDIT PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes USA, Inc. Sell $ 1,690 2.1000% 6/20/08 $ -- $ (90,389)
Capmark Financial Group, Inc. Sell 3,950 1.0000 6/20/12 -- (787,273)
CDX.NA.IG.9 Index Sell 38,560 0.6000 12/20/12 (240,958) (283,385)
CDX.NA.IG.9 Index Sell 19,275 0.6000 12/20/12 (145,096) (141,656)
Countrywide Home Loans, Inc. Sell 5,980 0.7500 9/20/08 -- (876,642)
Dillard's, Inc. Sell 3,610 1.9000 12/20/08 -- (23,850)
General Mills, Inc. Sell 3,390 0.4000 12/20/12 -- (4,266)
iStar Financial, Inc. Sell 5,555 4.4000 12/20/12 -- 96,167
37 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT DEFAULT SWAPS: Continued
- ---------------------------------------------------------------------------------------------------------------------------------
PAY/
NOTIONAL RECEIVE PREMIUM
SWAP BUY/SELL CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc: Continued
Lehman Brothers Holdings, Inc. Sell $ 8,735 0.4900% 9/20/10 $ -- $ (221,320)
Merrill Lynch & Co., Inc. Sell 18,610 0.6800 9/20/08 -- (158,397)
Six Flags, Inc. Sell 4,885 8.2500 12/20/08 -- (68,848)
Toys "R" Us, Inc. Sell 4,370 1.4500 9/20/08 -- (86,926)
- ---------------------------------------------------------------------------------------------------------------------------------
Credit Suisse International:
ArvinMeritor, Inc. Sell 6,980 1.5500 9/20/08 -- (86,503)
Freescale Semiconductor, Inc. Sell 3,600 0.6000 3/20/08 -- (14,991)
Freescale Semiconductor, Inc. Sell 4,100 0.7500 3/20/08 -- (15,523)
Intelsat Ltd. Sell 4,600 3.4500 9/20/08 -- (25,333)
Quebecor World, Inc. Sell 5,125 2.6000 9/20/08 -- (461,122)
Rite Aid Corp. Sell 6,565 0.8750 6/20/08 -- (146,916)
Saks, Inc. Sell 7,380 2.0000 9/20/08 -- (22,723)
The Goodyear Tire & Rubber Co. Sell 7,205 1.5500 9/20/08 -- 15,723
TXU Corp. Sell 1,680 5.9100 12/20/12 -- 48,611
TXU Corp. Sell 1,620 6.0500 12/20/12 -- 55,682
TXU Corp. Sell 1,685 6.0000 12/20/12 -- 48,761
Univision Communications, Inc. Sell 1,840 0.7500 3/20/08 -- (5,302)
- ---------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
ABX.HE.AA.06-2 Index Sell 2,000 0.1700 5/25/46 (239,981) (762,306)
Allied Waste North America, Inc. Sell 1,830 2.0000 9/20/09 -- (8,912)
Allied Waste North America, Inc. Sell 3,020 2.0000 9/20/09 -- (14,707)
Capital One Bank Buy 6,035 1.7000 12/20/12 -- 106,601
Capital One Bank Buy 3,210 1.8000 12/20/12 -- 41,165
CDX.NA.HY.8 Index Sell 4,130 2.7500 6/20/12 (284,282) (205,085)
CDX.NA.HY.8 Index Sell 3,885 2.7500 6/20/12 (337,186) (192,919)
CDX.NA.HY.8 Index Sell 3,885 2.7500 6/20/12 (235,204) (192,919)
CDX.NA.HY.8 Index Sell 1,995 2.7500 6/20/12 (160,528) (99,066)
CDX.NA.IG.9 Index Sell 77,960 0.6000 12/20/12 (469,803) (587,812)
CDX.NA.IG.9 Index Sell 38,975 0.6000 12/20/12 (222,078) (293,868)
Centex Corp. Sell 1,765 1.5500 9/20/09 -- (79,796)
CIT Group, Inc. Sell 850 5.0000 12/20/08 -- 5,285
Countrywide Home Loans, Inc. Sell 5,180 3.2500 9/20/08 -- (671,485)
Dillard's, Inc. Sell 2,055 0.7500 9/20/08 -- (37,354)
Georgia-Pacific Corp. Sell 7,075 1.7500 9/20/08 -- 44,785
Intelsat Ltd. Sell 1,830 2.8500 9/20/08 -- (11,254)
iStar Financial, Inc. Sell 5,320 3.0000 12/20/08 -- (97,645)
iStar Financial, Inc. Sell 880 4.3200 12/20/12 -- 9,883
iStar Financial, Inc. Sell 320 4.5000 12/20/12 -- 6,721
iStar Financial, Inc. Sell 9,140 2.9250 12/20/08 -- (174,339)
Lehman Brothers Holdings, Inc. Sell 9,920 1.4100 9/20/08 -- 1,770
Levi Strauss & Co. Sell 2,965 0.9000 9/20/08 -- (31,866)
Levi Strauss & Co. Sell 3,920 1.0000 9/20/08 -- (39,207)
MBIA, Inc. Sell 2,670 4.9000 12/20/12 -- (121,707)
MBIA, Inc. Sell 4,340 0.5200 9/20/08 -- (253,458)
MBIA, Inc. Sell 4,350 0.6000 9/20/08 -- (251,771)
Merrill Lynch & Co., Inc. Sell 3,610 1.8500 6/20/08 -- 11,642
38 | OPPENHEIMER CORE BOND FUND
PAY/
NOTIONAL RECEIVE PREMIUM
SWAP BUY/SELL CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Owens-Illinois, Inc. Sell $ 3,880 1.2500% 9/20/08 $ -- $ 8,573
Tenet Healthcare Corp. Sell 6,900 1.6000 3/20/09 -- (172,047)
The Bear Stearns Cos., Inc. Sell 18,130 2.3500 9/20/08 -- 37,348
Washington Mutual, Inc. Sell 5,895 4.5000 12/20/08 -- (31,450)
Washington Mutual, Inc. Sell 1,195 4.5000 12/20/08 -- (6,375)
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital Markets LP:
ABX.HE.AA.06-2 Index Sell 2,680 0.1700 5/25/46 (1,058,537) (1,018,337)
ABX.HE.AA.06-2 Index Sell 730 0.1700 5/25/46 (60,146) (277,383)
Amkor Technology, Inc. Sell 620 2.6500 9/20/08 -- 5,360
Capmark Financial Group, Inc. Sell 4,595 0.9500 6/20/12 -- (914,548)
Citigroup, Inc. Sell 6,105 1.2500 9/20/08 -- (155,673)
D.R. Horton, Inc. Sell 2,490 4.2100 12/20/08 -- (2,686)
Dole Food Co., Inc. Sell 7,090 3.8800 9/20/08 -- (31,916)
First Data Corp. Sell 4,365 1.1500 9/20/08 -- (31,477)
General Mills, Inc. Sell 6,860 0.3800 12/20/12 -- (1,889)
iStar Financial, Inc. Sell 1,445 3.9500 12/20/12 -- 1,017
K. Hovnanian Enterprises, Inc. Sell 3,185 6.7500 9/20/08 -- (250,353)
Merrill Lynch & Co., Inc. Sell 8,170 1.8500 6/20/08 -- 27,658
Pulte Homes, Inc. Sell 7,100 2.7500 9/20/09 -- (223,313)
Quebecor World, Inc. Sell 2,130 3.0000 9/20/08 -- (161,054)
Sara Lee Corp. Buy 5,975 0.4190 9/20/12 -- (20,734)
Six Flags, Inc. Sell 315 10.8500 12/20/08 -- 2,148
Smurfit-Stone Container
Enterprises, Inc. Sell 7,175 1.4500 9/20/08 -- 1,558
Standard Pacific Corp. Sell 3,865 6.6250 9/20/08 -- (395,481)
- ---------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
ABX.HE.AA.06-2 Index Sell 990 0.1700 5/25/46 (242,494) (375,654)
Capital One Bank Buy 3,635 1.8000 12/20/12 -- 58,332
Dole Food Co., Inc. Sell 1,320 3.4500 9/20/08 -- (4,168)
D.R. Horton, Inc. Sell 7,430 4.2000 12/20/08 -- (3,611)
General Mills, Inc. Sell 4,915 0.4000 12/20/12 -- (2,156)
Georgia-Pacific LLC Sell 800 0.8000 12/20/08 -- (4,457)
Harrah's Operating Co., Inc. Sell 2,620 2.6000 12/20/08 -- (20,221)
Levi Strauss & Co. Sell 1,400 1.7500 9/20/08 -- (3,597)
Morgan Stanley Sell 18,645 0.6400 9/20/08 -- (79,318)
Nortel Networks Corp. Sell 1,135 1.8500 9/20/08 -- (2,791)
Residential Capital LLC Sell 5,000 5.0000 6/20/08 (650,000) (547,221)
Rite Aid Corp. Sell 1,750 3.3000 9/20/08 -- (21,949)
Saks, Inc. Sell 1,100 2.2000 12/20/08 -- (2,360)
The Bear Stearns Cos., Inc. Sell 3,100 2.1000 9/20/08 -- 1,208
Toys "R" Us, Inc. Sell 1,400 3.3000 9/20/08 -- (9,244)
Tribune Co. Sell 2,390 7.3500 12/20/08 -- (117,301)
Univision Communications, Inc. Sell 860 3.0000 12/20/08 -- (5,303)
Univision Communications, Inc. Sell 7,420 3.0000 12/20/08 -- (28,015)
Washington Mutual, Inc. Sell 2,785 4.4000 12/20/08 -- (25,367)
39 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
CREDIT DEFAULT SWAPS: Continued
- -----------------------------------------------------------------------------------------------------------------------------------
PAY/
NOTIONAL RECEIVE PREMIUM
SWAP BUY/SELL CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc:
ABX.HE.AA.06-2 Index Sell $ 600 0.1700% 5/25/46 $ (47,935) $ (227,669)
ABX.HE.AA.06-2 Index Sell 1,240 0.1700 5/25/46 (123,994) (465,119)
Beazer Homes USA, Inc. Sell 4,840 2.1500 6/20/08 -- (224,130)
CDX.NA.IG.9 Index Sell 24,160 0.6000 12/20/12 (191,276) (182,967)
Clear Channel
Communications, Inc. Sell 450 6.3000 9/20/12 -- 16,761
Countrywide Home Loans, Inc. Sell 4,080 0.7500 9/20/08 -- (538,425)
Countrywide Home Loans, Inc. Sell 11,880 0.4200 6/20/09 -- (2,417,240)
Dow Jones
CDX.NA.IG.HVOL.7 Index Sell 17,000 0.7500 12/20/11 (64,344) (662,672)
First Data Corp. Sell 2,675 1.3500 9/20/08 -- (18,590)
Ford Motor Co. Sell 4,900 6.0500 12/20/17 -- (415,385)
Ford Motor Co. Sell 6,445 7.1500 12/20/16 -- (182,743)
Ford Motor Co. Sell 3,065 7.0500 12/20/16 -- (101,174)
General Motors Corp. Sell 2,860 5.0500 12/20/17 -- (330,958)
General Motors Corp. Sell 3,250 5.8000 12/20/16 -- (235,178)
General Motors Corp. Sell 3,440 5.7500 12/20/16 -- (257,180)
Harrah's Operating Co., Inc. Sell 5,585 2.2000 9/20/08 -- (30,732)
Inco Ltd. Buy 3,670 0.6300 3/20/17 -- (18,557)
Inco Ltd. Buy 3,660 0.7000 3/20/17 -- (37,650)
Intelsat Ltd. Sell 650 2.7500 12/20/08 -- (8,673)
J.C. Penney Co., Inc. Sell 5,215 1.3000 12/20/17 -- (206,012)
J.C. Penney Co., Inc. Sell 4,665 1.0700 12/20/17 -- (262,027)
K. Hovnanian Enterprises, Inc. Sell 1,950 1.8500 6/20/08 -- (133,371)
K. Hovnanian Enterprises, Inc. Sell 1,950 1.8500 6/20/08 -- (133,371)
Kohl's Corp. Buy 7,745 0.8700 12/20/17 -- 129,594
Kohl's Corp. Buy 6,995 0.6600 12/20/17 -- 229,033
Lennar Corp. Sell 7,820 2.9000 12/20/08 -- (297,700)
Residential Capital LLC Sell 1,095 5.0000 6/20/08 (147,825) (131,712)
Residential Capital LLC Sell 1,525 5.0000 6/20/08 (221,125) (183,434)
Residential Capital LLC Sell 2,800 5.0000 6/20/08 (406,000) (336,798)
Residential Capital LLC Sell 10,585 6.1200 9/20/08 -- (1,730,851)
Sara Lee Corp. Buy 1,510 0.3900 9/20/12 -- (5,624)
Sara Lee Corp. Buy 7,680 0.4180 9/20/12 -- (36,114)
Toys "R" Us, Inc. Sell 2,605 2.5500 9/20/08 -- (28,038)
Tribune Co. Sell 4,225 1.0000 6/20/08 -- (190,338)
Vale Overseas Ltd. Sell 3,670 1.1000 3/20/17 -- (64,256)
Vale Overseas Ltd. Sell 3,660 1.1700 3/20/17 -- (45,391)
---------------------------
$(5,548,792) $(21,724,983)
===========================
40 | OPPENHEIMER CORE BOND FUND
- ------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS AS OF DECEMBER 31, 2007 ARE AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
Three-Month
Credit Suisse International $ 19,780,000 USD BBA LIBOR 5.428% 8/7/17 $ 1,362,526
- ------------------------------------------------------------------------------------------------------------------
Three-Month
Deutsche Bank AG 16,700,000 USD BBA LIBOR 5.445 8/8/17 1,275,263
-----------
$ 2,637,789
===========
Index abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN SWAPS AS OF DECEMBER 31, 2007 ARE AS FOLLOWS:
- ------------------------------------------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
If negative, the If positive, the Total
absolute value Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index minus
Barclays Bank plc $ 31,280,000 8.5+ Index 20 basis points 6/1/08 $ 524,934
- ------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
If negative, the If positive, the Total
absolute value Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index minus
19,020,000 8.5+ Index 45 basis points 2/1/08 331,688
If negative, the If positive, the
absolute value Total Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index plus 60
56,660,000 8.5+ Index basis points 2/1/08 1,037,666
If negative, the If positive, the Total
absolute value Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index minus
14,960,000 8.5+ Index 20 basis points 5/1/08 264,003
If negative, the If positive, the
absolute value Total Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index plus 25
5,100,000 8.5+ Index basis points 2/1/08 91,913
If negative, the If positive, the Total
absolute value Return of the
of the Lehman Lehman Brothers
Brothers U.S. U.S. CMBS AAA
CMBS AAA 8.5+ Index plus 55
1,976,000 8.5+ Index basis points 5/1/08 36,106
41 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN SWAPS: Continued
- ------------------------------------------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY THE RECEIVED BY THE TERMINATION
COUNTERPARTY AMOUNT FUND FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 25
$ 11,550,000 8.5+ Index basis points 5/1/08 $ 201,785
If negative, the If positive, the
absolute value Total Return of
of the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA 8.5+
23,460,000 8.5+ Index Index 2/1/08 414,259
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 40
36,400,000 8.5+ Index basis points 6/1/08 629,233
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 20
27,300,000 8.5+ Index basis points 5/1/08 479,270
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 60
20,687,000 8.5+ Index basis points 2/1/08 374,601
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 55
31,250,000 8.5+ Index basis points 5/1/08 564,705
If positive, the
If negative, the Total Return of
absolute value the Lehman
of the Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 25
10,540,000 8.5+ Index basis points 3/1/08 184,139
42 | OPPENHEIMER CORE BOND FUND
SWAP NOTIONAL PAID BY THE RECEIVED BY THE TERMINATION
COUNTERPARTY AMOUNT FUND FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.: Continued
If negative, If positive, the
the absolute Total Return of
value of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 45
$ 39,950,000 8.5+ Index basis points 5/1/08 $ 718,922
- ------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
If negative, If positive, the
the absolute Total Return of
value of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 25
5,250,000 8.5+ Index basis points 5/1/08 80,808
If negative, If positive, the
the absolute Total Return of
value of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 40
25,800,000 8.5+ Index basis points 6/1/08 394,491
If negative, If positive, the
the absolute Total Return of
value of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 90
31,280,000 8.5+ Index basis points 6/1/08 505,144
If negative, If positive, the
the absolute Total Return of
value of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 110
2,500,000 8.5+ Index basis points 1/31/08 40,721
43 | OPPENHEIMER CORE BOND FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN SWAPS: Continued
- ------------------------------------------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY THE RECEIVED BY THE TERMINATION
COUNTERPARTY AMOUNT FUND FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------------
UBS AG:
If negative, the If positive, the
absolute value Total Return of
of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index minus 20
$ 9,400,000 8.5+ Index basis points 5/1/08 $ 166,171
If negative, the If positive, the
absolute value Total Return of
of the the Lehman
Lehman Brothers U.S.
Brothers U.S. CMBS AAA 8.5+
CMBS AAA Index plus 60
25,538,000 8.5+ Index basis points 2/1/08 469,048
-----------
$ 7,509,607
===========
Index abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44 | OPPENHEIMER CORE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES December 31, 2007
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,335,260,699) $ 2,348,415,479
Affiliated companies (cost $52,911,646) 52,911,646
----------------
2,401,327,125
- -----------------------------------------------------------------------------------------------------------
Cash 180,942
- -----------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $3,837,059) 7,926,668
- -----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 13,983,322
Investments sold (including $5,601,225 sold on a when-issued or
delayed delivery basis) 7,541,377
Shares of beneficial interest sold 5,587,459
Futures margins 770,058
Other 37,261
----------------
Total assets 2,437,354,212
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 27,940,297
- -----------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $1,711,733) 19,504,255
- -----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $229,041,129 purchased on a
when-issued or delayed delivery basis) 229,993,438
Shares of beneficial interest redeemed 1,803,227
Distribution and service plan fees 783,421
Transfer and shareholder servicing agent fees 262,287
Shareholder communications 116,446
Trustees' compensation 14,404
Dividends 654
Other 62,803
----------------
Total liabilities 280,481,232
- -----------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,156,872,980
================
- -----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 212,039
- -----------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,156,676,533
- -----------------------------------------------------------------------------------------------------------
Accumulated net investment income 8,250,048
- -----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (13,780,882)
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 5,515,242
----------------
NET ASSETS $ 2,156,872,980
================
45 | OPPENHEIMER CORE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $954,824,988
and 93,822,513 shares of beneficial interest outstanding) $ 10.18
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $ 10.69
- -----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $99,281,972 and 9,758,770 shares of
beneficial interest outstanding) $ 10.17
- -----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $194,070,965 and 19,057,152 shares
of beneficial interest outstanding) $ 10.18
- -----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $84,017,175 and 8,258,697 shares of
beneficial interest outstanding) $ 10.17
- -----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$824,677,880 and 81,142,345 shares of beneficial interest outstanding) $ 10.16
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46 | OPPENHEIMER CORE BOND FUND
STATEMENT OF OPERATIONS For the Year Ended December 31, 2007
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------
Interest $ 95,173,615
- -----------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 3,834
Affiliated companies 4,729,851
- -----------------------------------------------------------------------------------------------------------
Fee income 485,184
- -----------------------------------------------------------------------------------------------------------
Portfolio lending fees 167,857
- -----------------------------------------------------------------------------------------------------------
Other income 27,062
-------------
Total investment income 100,587,403
- -----------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------
Management fees 7,604,231
- -----------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,917,656
Class B 1,066,081
Class C 1,720,037
Class N 352,395
- -----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,323,040
Class B 320,995
Class C 339,472
Class N 220,919
Class Y 255,495
- -----------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 136,113
Class B 50,358
Class C 34,796
Class N 5,887
Class Y 498
- -----------------------------------------------------------------------------------------------------------
Trustees' compensation 33,430
- -----------------------------------------------------------------------------------------------------------
Custodian fees and expenses 10,832
- -----------------------------------------------------------------------------------------------------------
Administration service fees 1,500
- -----------------------------------------------------------------------------------------------------------
Other 93,606
-------------
Total expenses 15,487,341
Less reduction to custodian expenses (1,175)
Less waivers and reimbursements of expenses (346,436)
-------------
Net expenses 15,139,730
- -----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 85,447,673
47 | OPPENHEIMER CORE BOND FUND
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies 798,663
Closing and expiration of futures contracts (2,174,114)
Foreign currency transactions 752
Swap contracts (11,150,233)
-------------
Net realized loss (12,524,932)
- -----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 12,755,947
Futures contracts (855,488)
Swap contracts (6,256,668)
-------------
Net change in unrealized appreciation 5,643,791
- -----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 78,566,532
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48 | OPPENHEIMER CORE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2007 2006
- -------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 85,447,673 $ 53,623,801
- -------------------------------------------------------------------------------------------------------------------------------
Net realized loss (12,524,932) (1,035,336)
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 5,643,791 6,048,394
-----------------------------------
Net increase in net assets resulting from operations 78,566,532 58,636,859
- -------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (29,656,191) (27,534,042)
Class B (3,253,244) (4,835,065)
Class C (5,234,319) (5,213,068)
Class N (2,495,333) (2,161,598)
Class Y (25,916,933) (16,289,181)
-----------------------------------
(66,556,020) (56,032,954)
- -------------------------------------------------------------------------------------------------------------------------------
Tax return of capital distribution from net investment income:
Class A (8,456,006) --
Class B (1,158,167) --
Class C (1,868,050) --
Class N (765,637) --
Class Y (6,699,873) --
-----------------------------------
(18,947,733) --
- -------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 287,770,231 180,785,033
Class B (16,382,772) (8,537,515)
Class C 45,361,474 40,154,490
Class N 26,067,879 22,271,562
Class Y 391,767,895 261,623,548
-----------------------------------
734,584,707 496,297,118
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Total increase 727,647,486 498,901,023
- -------------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,429,225,494 930,324,471
-----------------------------------
End of period (including accumulated net investment income (loss) of
$8,250,048 and $(365,803), respectively) $2,156,872,980 $ 1,429,225,494
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.24 $ 10.44 $ 10.38 $ 10.14
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .50 1 .47 1 .42 1 .38 1 .35
Net realized and unrealized gain (loss) (.05) .01 (.18) .12 .24
------------------------------------------------------------------
Total from investment operations .45 .48 .24 .50 .59
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.39) (.49) (.44) (.44) (.35)
Tax return of capital distribution (.11) -- -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.50) (.49) (.44) (.44) (.35)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.18 $ 10.23 $ 10.24 $ 10.44 $ 10.38
==================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.49% 4.84% 2.35% 4.90% 5.87%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 954,825 $ 670,012 $ 488,889 $ 344,205 $ 382,966
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 779,234 $ 566,159 $ 423,182 $ 353,046 $ 382,420
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.89% 4.66% 4.12% 3.63% 3.39%
Total expenses 0.88% 4 0.96% 4 1.06% 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%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89% 5 107% 5 98% 5 94% 5 111%
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:
Year Ended December 31, 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
--------------------------------------------------------------------------
Year Ended December 31, 2007 $2,990,658,315 $2,928,450,309
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.
50 | OPPENHEIMER CORE BOND FUND
CLASS B YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .42 1 .40 1 .35 1 .30 1 .27
Net realized and unrealized gain (loss) (.06) .01 (.20) .13 .24
------------------------------------------------------------------
Total from investment operations .36 .41 .15 .43 .51
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.31) (.41) (.36) (.36) (.27)
Tax return of capital distribution (.11) -- -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.42) (.41) (.36) (.36) (.27)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.17 $ 10.23 $ 10.23 $ 10.44 $ 10.37
==================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.60% 4.17% 1.50% 4.21% 5.05%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 99,282 $ 116,230 $ 125,069 $ 148,445 $ 197,774
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 106,727 $ 118,240 $ 135,296 $ 167,685 $ 216,853
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.13% 3.92% 3.37% 2.86% 2.61%
Total expenses 1.79% 4 1.86% 4 1.91% 1.91% 1.87%
Expenses after waivers, payments and/or
reimbursements and reduction to
custodian expenses 1.64% 1.65% 1.65% 1.69% 1.87%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89% 5 107% 5 98% 5 94% 5 111%
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:
Year Ended December 31, 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
--------------------------------------------------------------------------
Year Ended December 31, 2007 $2,990,658,315 $2,928,450,309
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.
51 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.24 $ 10.24 $ 10.45 $ 10.39 $ 10.14
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .42 1 .40 1 .35 1 .30 1 .27
Net realized and unrealized gain (loss) (.06) .01 (.20) .12 .25
------------------------------------------------------------------
Total from investment operations .36 .41 .15 .42 .52
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.31) (.41) (.36) (.36) (.27)
Tax return of capital distribution (.11) -- -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.42) (.41) (.36) (.36) (.27)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.18 $ 10.24 $ 10.24 $ 10.45 $ 10.39
==================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.60% 4.16% 1.49% 4.12% 5.18%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 194,071 $ 149,440 $ 109,207 $ 84,696 $ 90,583
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 172,144 $ 126,593 $ 94,742 $ 86,020 $ 96,361
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.12% 3.92% 3.37% 2.87% 2.64%
Total expenses 1.66% 4 1.76% 4 1.86% 1.87% 1.84%
Expenses after waivers, payments and/or
reimbursements and reduction to
custodian expenses 1.64% 1.65% 1.65% 1.68% 1.84%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89% 5 107% 5 98% 5 94% 5 111%
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:
Year Ended December 31, 2007 1.67%
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
--------------------------------------------------------------------------
Year Ended December 31, 2007 $2,990,658,315 $2,928,450,309
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.
52 | OPPENHEIMER CORE BOND FUND
CLASS N YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.23 $ 10.23 $ 10.44 $ 10.37 $ 10.13
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .47 1 .45 1 .40 1 .35 1 .31
Net realized and unrealized gain (loss) (.06) .01 (.19) .13 .24
------------------------------------------------------------------
Total from investment operations (.36) .46 .21 .48 .55
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.36) (.46) (.42) (.41) (.31)
Tax return of capital distribution (.11) -- -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.47) (.46) (.42) (.41) (.31)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.17 $ 10.23 $ 10.23 $ 10.44 $ 10.37
==================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.11% 4.68% 1.99% 4.71% 5.51%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 84,017 $ 58,232 $ 35,836 $ 25,580 $ 17,732
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 70,555 $ 46,672 $ 30,274 $ 21,411 $ 15,338
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.62% 4.42% 3.87% 3.38% 3.03%
Total expenses 1.26% 4 1.35% 4 1.47% 1.51% 1.50%
Expenses after waivers, payments and/or
reimbursements and reduction to
custodian expenses 1.14% 1.15% 1.15% 1.20% 1.44%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89% 5 107% 5 98% 5 94% 5 111%
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:
Year Ended December 31, 2007 1.27%
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
--------------------------------------------------------------------------
Year Ended December 31, 2007 $2,990,658,315 $2,928,450,309
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.
53 | OPPENHEIMER CORE BOND FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED DECEMBER 31, 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.22 $ 10.22 $ 10.43 $ 10.36 $ 10.12
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .53 1 .51 1 .45 1 .41 1 .39
Net realized and unrealized gain (loss) (.05) .01 (.19) .13 .24
------------------------------------------------------------------
Total from investment operations .48 .52 .26 .54 .63
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.43) (.52) (.47) (.47) (.39)
Tax return of capital distribution (.11) -- -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.54) (.52) (.47) (.47) (.39)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.16 $ 10.22 $ 10.22 $ 10.43 $ 10.36
==================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 4.80% 5.29% 2.50% 5.30% 6.35%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 824,678 $ 435,311 $ 171,323 $ 38,190 $ 43,215
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 617,403 $ 309,558 $ 91,172 $ 45,333 $ 38,398
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 5.28% 5.03% 4.39% 3.92% 3.80%
Total expenses 0.48% 4 0.55% 4 0.76% 0.64% 0.63%
Expenses after waivers, payments and/or
reimbursements and reduction to
custodian expenses 0.47% 0.55% 0.65% 0.64% 0.63%
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 89% 5 107% 5 98% 5 94% 5 111%
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:
Year Ended December 31, 2007 0.49%
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
--------------------------------------------------------------------------
Year Ended December 31, 2007 $2,990,658,315 $2,928,450,309
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.
54 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 adviser 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 72
months 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 trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange 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 whose principal exchange is NASDAQ(R) are valued based on the closing
price reported 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, collateralized
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair
55 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
value. 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. Shares of a registered investment
company that are not traded on an exchange are valued at the acquired investment
company's net asset value per share. "Money market-type" debt instruments with
remaining maturities of sixty days or less are valued at cost adjusted by the
amortization of discount or premium to maturity (amortized cost), which
approximates market value.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. The Fund may purchase
securities on a "when-issued" basis, and may purchase or sell securities on a
"delayed delivery" basis. "When-issued" or "delayed delivery" refers to
securities whose terms and indenture are available and for which a market
exists, but which are not available for immediate delivery. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis
normally takes place within six months and possibly as long as two years or more
after the 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 purchase of securities on a when-issued basis may increase
the volatility of the Fund's net asset value to the extent the Fund executes
such transactions while remaining substantially fully invested. When the Fund
engages in when-issued or delayed delivery transactions, it relies on the buyer
or seller, as the case may be, to complete the transaction. Their failure to do
so may cause the Fund to lose the opportunity to obtain or dispose of the
security at a price and yield it considers advantageous. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. 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 December 31, 2007, the Fund had purchased securities issued on a
when-issued or delayed delivery basis and sold securities issued on a delayed
delivery basis as follows:
WHEN-ISSUED OR DELAYED
DELIVERY BASIS TRANSACTIONS
--------------------------------------------------------------
Purchased securities $229,041,129
Sold securities 5,601,225
The Fund may enter into "forward roll" transactions with respect to
mortgage-related securities. In this type of transaction, the Fund sells a
mortgage-related security to a buyer and simultaneously agrees to repurchase a
similar security (same type, coupon and maturity) at a later date at a set
price. During the period between the sale and the repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities that
have been sold. The Fund records the incremental difference between the forward
purchase and sale of each forward roll as realized gain (loss) on investments or
56 | OPPENHEIMER CORE BOND FUND
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. To assure its
future payment of the purchase price, the Fund maintains internally designated
assets with a market value equal to or greater than the payment obligation under
the roll.
- --------------------------------------------------------------------------------
CREDIT RISK. The Fund invests in high-yield, non-investment-grade bonds, which
may be subject to a greater degree of credit risk. Credit risk relates to the
ability of the issuer to meet interest or principal payments or both as they
become due. The Fund may acquire securities in default, and is not obligated to
dispose of securities whose issuers subsequently default. As of December 31,
2007, securities with an aggregate market value of $2, representing less than
0.01% of the Fund's net assets, were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations 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 appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") to seek current income while preserving
liquidity. 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 adviser of IMMF. The Fund's
investment in IMMF is included in the Statement
57 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
- --------------------------------------------------------------------------------
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. If the seller of the agreement defaults and the value of the
collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
- --------------------------------------------------------------------------------
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. The Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
remain open for the three preceding fiscal reporting period ends.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
58 | OPPENHEIMER CORE BOND FUND
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3,4 TAX PURPOSES
- -------------------------------------------------------------------------------
$-- $-- $15,524,233 $15,164,722
1. As of December 31, 2007, the Fund had $15,264,151 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of December 31, 2007,
details of the capital loss carryforwards were as follows:
EXPIRING
----------------------
2010 $ 2,007,359
2013 6,003,757
2014 5,185,579
2015 2,067,456
-----------
Total $15,264,151
===========
2. The Fund had $260,082 of straddle losses which were deferred.
3. During the fiscal year ended December 31, 2007, the Fund did not utilize any
capital loss carryforward.
4. During the fiscal year ended December 31, 2006, the Fund did not utilize any
capital loss carryforward.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
Accordingly, the following amounts have been reclassified for December 31, 2007.
Net assets of the Fund were unaffected by the reclassifications.
REDUCTION TO
REDUCTION TO ACCUMULATED
REDUCTION TO ACCUMULATED NET NET REALIZED LOSS
PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS
----------------------------------------------------------------
$18,947,733 $8,671,931 $10,275,802
The tax character of distributions paid during the years ended December 31, 2007
and December 31, 2006 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------------------------------------------------------
Distributions paid from:
Ordinary income $66,556,020 $56,032,954
Return of capital 18,947,733 --
-------------------------------
Total $85,503,753 $56,032,954
===============================
59 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of December 31, 2007 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $ 2,378,522,865
Federal tax cost of other investments (201,557,471)
---------------
Total federal tax cost $ 2,176,965,394
===============
Gross unrealized appreciation $ 46,404,296
Gross unrealized depreciation (31,239,574)
---------------
Net unrealized appreciation $ 15,164,722
===============
- --------------------------------------------------------------------------------
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 and
may differ from U.S. generally accepted accounting principles, 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 is recognized on an accrual basis. Market discount and
premium, which are included in interest income on the Statement of Operations,
are amortized or accreted daily.
- --------------------------------------------------------------------------------
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
60 | OPPENHEIMER CORE BOND FUND
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.
- --------------------------------------------------------------------------------
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 accounting
principles generally accepted in the United States of America 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 increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
YEAR ENDED DECEMBER 31, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS A
Sold 51,782,681 $ 526,866,898 24,694,647 $ 251,126,785
Dividends and/or
distributions reinvested 3,101,363 31,544,029 2,187,400 22,195,864
Acquisition-Note 11 -- -- 4,211,155 42,659,003
Redeemed (26,558,196) (270,640,696) (13,362,338) (135,196,619)
-------------------------------------------------------------
Net increase 28,325,848 $ 287,770,231 17,730,864 $ 180,785,033
=============================================================
- ------------------------------------------------------------------------------------------
CLASS B
Sold 3,194,204 $ 32,473,051 2,765,817 $ 28,133,557
Dividends and/or
distributions reinvested 375,245 3,817,248 404,022 4,097,199
Acquisition-Note 11 -- -- 481,162 4,874,168
Redeemed (5,176,614) (52,673,071) (4,509,251) (45,642,439)
-------------------------------------------------------------
Net decrease (1,607,165) $ (16,382,772) (858,250) $ (8,537,515)
=============================================================
61 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED DECEMBER 31, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS C
Sold 8,354,127 $ 84,954,263 5,956,040 $ 60,599,966
Dividends and/or
distributions reinvested 572,829 5,830,346 429,623 4,363,414
Acquisition-Note 11 -- -- 862,709 8,747,866
Redeemed (4,468,801) (45,423,135) (3,312,539) (33,556,756)
-------------------------------------------------------------
Net increase 4,458,155 $ 45,361,474 3,935,833 $ 40,154,490
=============================================================
- ------------------------------------------------------------------------------------------
CLASS N
Sold 4,388,857 $ 44,595,612 3,137,184 $ 31,843,965
Dividends and/or
distributions reinvested 239,554 2,435,640 171,486 1,739,889
Acquisition-Note 11 -- -- 315,811 3,199,167
Redeemed (2,064,166) (20,963,373) (1,432,560) (14,511,459)
-------------------------------------------------------------
Net increase 2,564,245 $ 26,067,879 2,191,921 $ 22,271,562
=============================================================
- ------------------------------------------------------------------------------------------
CLASS Y
Sold 41,552,519 $ 422,555,881 28,523,591 $ 288,469,512
Dividends and/or
distributions reinvested 3,196,427 32,455,691 1,606,546 16,289,132
Redeemed (6,215,861) (63,243,677) (4,282,356) (43,135,096)
-------------------------------------------------------------
Net increase 38,533,085 $ 391,767,895 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 year ended December
31, 2007, were as follows:
PURCHASES SALES
- ------------------------------------------------------------------------------------
Investment securities $ 1,269,653,822 $ 862,879,390
U.S. government and government agency obligations 332,499,259 375,908,179
To Be Announced (TBA) mortgage-related securities 2,990,658,315 2,928,450,309
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate 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.
62 | OPPENHEIMER CORE BOND FUND
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the year ended December 31, 2007, the Fund
paid $2,404,615 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event that the per account fee does not equal or exceed
the applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund 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 service 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 (the "Plans") for Class B, Class C
and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to
compensate the Distributor for its services in connection with the distribution
of those shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% on Class B and Class C
shares and 0.25% on Class N shares. The Distributor also receives a service fee
of 0.25% per year under each plan. If either the Class B, Class C or Class N
plan is terminated by the Fund or by the shareholders of a class, the Board of
Trustees and its independent trustees must determine whether the Distributor
shall be entitled to payment from the Fund of all or a portion of the service
fee and/or asset-based sales charge in respect to shares sold prior to the
effective date of such termination. The Distributor's aggregate uncompensated
expenses under the Plans at December 31, 2007 for Class B, Class C and Class N
shares were $2,132,824, $3,019,679 and $1,215,790, respectively. Fees incurred
by the Fund under the Plans are detailed in the Statement of Operations.
63 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
("CDSC") do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------------------------
December 31, 2007 $ 638,041 $ 35,800 $ 211,021 $ 18,648 $ 2,833
- ---------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 after waivers, payments and/or reimbursements and
reduction to custodian 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 year ended December 31, 2007, the
Manager reimbursed the Fund $513, $152,251, $22,409 and $80,946 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 year ended December 31, 2007, the Manager waived $90,317 for
IMMF management fees.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.
Foreign currency exchange contracts are reported on a schedule following
the Statement of Investments. Forward contracts will be valued daily based upon
the closing prices of the forward currency rates determined at the close of the
Exchange as provided by a bank, dealer or pricing service. The resulting
unrealized appreciation (depreciation) is reported in the Statement of Assets
and Liabilities as a receivable or payable and in the Statement of Operations
within the change in unrealized appreciation (depreciation). At contract close,
the difference between the original cost of the contract and the value at the
close date is recorded as a realized gain (loss) in the Statement of Operations.
64 | OPPENHEIMER CORE BOND FUND
Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.
As of December 31, 2007, the Fund had no outstanding forward contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
financial instrument at a negotiated price on a stipulated future date. The Fund
may buy and sell futures contracts that relate to broadly based securities
indices (financial futures), debt securities (interest rate futures) and various
commodities (commodity index futures). The Fund may also buy or write put or
call options on these futures contracts.
Futures contracts traded on a commodities or futures exchange will be
valued at the final settlement price or official closing price on the principal
exchange as reported by such principal exchange at its trading session ending
at, or most recently prior to, the time when the Fund's assets are valued.
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.
Futures contracts are reported on a schedule following the Statement of
Investments. Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. Cash held by the broker to cover initial margin requirements on
open futures contracts and the receivable and/or payable for the daily mark to
market for the variation margin are noted in the Statement of Assets and
Liabilities. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations. Realized gains (losses) are reported in
the Statement of Operations at the closing or expiration of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market where the Fund is unable to
liquidate the contract or enter into an offsetting position and, if used for
hedging purposes, the risk that the price of the contract will correlate
imperfectly with the prices of the Fund's securities.
- --------------------------------------------------------------------------------
7. SWAP CONTRACTS
The Fund may enter into swap contract agreements with a counterparty to exchange
a series of cash flows based on either specified reference rates, or the
occurrence of a credit event, over a specified period. Such contracts may
include interest rate, equity, debt, index, total return, credit and currency
swaps.
65 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. SWAP CONTRACTS Continued
Swaps are marked to market daily using primarily quotations from pricing
services, counterparties and brokers. Swap contracts are reported on a schedule
following the Statement of Investments. 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. 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.
Risks of entering into swap contracts include credit, market and liquidity
risk. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Fund's loss will consist of the net
amount of contractual payments that the Fund has not yet received. Market risk
is the risk that the value of the contract will depreciate due to unfavorable
changes in the reference asset. If there is an illiquid market for the
agreement, the Fund may be unable to close the contract prior to contract
termination.
- --------------------------------------------------------------------------------
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 on a single security,
or a basket of securities.
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. 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.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events.
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS. An interest rate swap is an agreement between
counterparties to exchange periodic interest payments on the notional amount of
the contract. One cash flow stream will typically be a floating rate payment
based upon a specified index while the other is typically a fixed rate.
Interest rate swap agreements include interest rate risk. There is a risk,
based on movements of interest rates in the future, the payments made by the
Fund under a swap agreement will be greater than the payments it received.
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between
counterparties to exchange a set of future cash flows on the notional amount of
the contract. One cash flow is typically based on a reference interest rate or
index and the other on
66 | OPPENHEIMER CORE BOND FUND
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.
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of December 31, 2007, investments in securities included issues that are
illiquid. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or dispose of them promptly at an
acceptable price. 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 an applicable footnote
on the Statement of Investments.
- --------------------------------------------------------------------------------
9. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income in the form of fees or interest on securities received as
collateral or the investment of any cash received as collateral. The loans are
secured by collateral (either securities, letters of credit, or cash) 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 each business day and any additional required collateral is
delivered to the Fund on the next business day. If the borrower defaults on its
obligation to return the securities loaned because of insolvency or other
reasons, the Fund could experience delays and cost in recovering the securities
loaned or in gaining access to the collateral. 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 and recognizes the gain
or loss in the fair value of the securities loaned that may occur during the
term of the loan. The Fund has the right under the lending agreement to recover
the securities from the borrower on demand. As of December 31, 2007, the Fund
had on loan securities valued at $30,332,838. Collateral of $30,876,771 was
received for the loans, of which $27,940,297 was received in cash and
subsequently invested in approved instruments. In addition, collateral of
$2,936,474 was also received in the form of securities.
- --------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of December
31, 2007, the Manager does not believe the adoption of SFAS No. 157 will
materially impact
67 | OPPENHEIMER CORE BOND FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENT Continued
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.
- --------------------------------------------------------------------------------
11. 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.
68 | OPPENHEIMER CORE BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER CORE BOND FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Core Bond Fund (the "Fund"), a series of Oppenheimer Integrity
Funds, including the statement of investments, as of December 31, 2007, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2007, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Fund as of December 31, 2007, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 13, 2008
69 | OPPENHEIMER CORE BOND FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2008, if applicable, shareholders of record received information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2007. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended December
31, 2007 which are not designated as capital gain distributions should be
multiplied by 0.01% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended December 31, 2007 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $3,720 of the Fund's fiscal year taxable income may be eligible for
the lower individual income tax rates. In early 2008, shareholders of record
received information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate
distributions not designated as capital gain distributions, as either interest
related dividends or short-term capital gain dividends, both of which are exempt
from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal
year ended December 31, 2007, $77,751,645 or 100% of the ordinary distributions
paid by the Fund qualifies as an interest related dividend.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
70 | 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.
71 | OPPENHEIMER CORE BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services, (v) whether economies of scale
are realized as the Fund grows and whether fee levels reflect these economies of
scale for Fund investors and (vi) other benefits to the Manager from its
relationship with the Fund. Outlined below is a summary of the principal
information considered by the Board as well as the Board's conclusions.
The Board was aware that there are alternatives to retaining the Manager.
NATURE, QUALITY AND EXTENT OF SERVICES. The Board considered information
about the nature and extent of the services provided to the Fund and information
regarding the Manager's key personnel who provide such services. The Manager's
duties include providing the Fund with the services of the portfolio managers
and the Manager's investment team, who provide research, analysis and other
advisory services in regard to the Fund's investments; securities trading
services; oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing and supervising
all administrative and clerical personnel who are necessary in order to provide
effective corporate administration for the Fund; compiling and maintaining
records with respect to the Fund's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Fund for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Fund's shares.
The Manager also provides the Fund with office space, facilities and equipment.
72 | OPPENHEIMER CORE BOND FUND
The Board also considered the quality of the services provided and the
quality of the Manager's resources that are available to the Fund. The Board
took account of the fact that the Manager has had over forty years of experience
as an investment adviser and that its assets under management rank it among the
top mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services, and information the
Board has received regarding the experience and professional qualifications of
the Manager's key personnel and the size and functions of its staff providing
investment management services to the Fund. In its evaluation of the quality of
the portfolio management services provided, the Board considered the experience
of Angelo Manioudakis and the Manager's Core Plus investment team and analysts.
Mr. Manioudakis has been a portfolio manager of the Fund since April 2002. The
Board members also considered the totality of their experiences with the Manager
as directors or trustees of the Fund and other funds advised by the Manager. In
light of the foregoing, the Board concluded that the Fund benefits from the
services provided under the Agreement as a result of the Manager's experience,
reputation, personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each Board meeting, including comparative performance information.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other retail front-end load and no-load
intermediate investment-grade debt funds (including both funds advised by the
Manager and funds advised by other investment advisers). The Board noted that
the Fund's one-year, three-year and five-year performance were better than its
peer group median although its ten-year performance was below its peer group
median.
COSTS OF SERVICES AND PROFITS REALIZED BY THE MANAGER. The Board
considered information regarding the Manager's costs in serving as the Fund's
investment adviser, including the costs associated with the personnel and
systems necessary to manage the Fund, and information regarding the Manager's
profitability from its relationship with the Fund. The Board reviewed the fees
paid to the Manager and the other expenses borne by the Fund. The Board also
considered the comparability of the fees charged and the services provided to
the Fund to the fees and services for other clients or accounts advised by the
Manager. The independent consultant provided comparative data in regard to the
fees and expenses of the Fund and other intermediate investment-grade debt funds
with comparable asset levels and distribution features. The Board noted that the
Manager has
73 | OPPENHEIMER CORE BOND FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
agreed to voluntarily limit the "Total Annual Operating Expenses" for all
classes of shares so that total expenses, as percentage 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. The Board noted that the Fund's
contractual and actual management fees are lower than its peer group median.
ECONOMIES OF SCALE. The Board reviewed whether the Manager may realize
economies of scale in managing and supporting the Fund. The Board noted that the
Fund currently has management fee breakpoints, which are intended to share with
Fund shareholders economies of scale that may exist as the Fund's assets grow.
OTHER BENEFITS TO THE MANAGER. In addition to considering the profits
realized by the Manager, the Board considered information that was provided
regarding the direct and indirect benefits the Manager receives as a result of
its relationship with the Fund, including compensation paid to the Manager's
affiliates. The Board also considered that the Manager must be able to pay and
retain experienced professional personnel at competitive rates to provide
quality services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees ' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
decided to continue the Agreement for another year. In arriving at this
decision, the Board considered all of the above information, and considered the
terms and conditions of the Agreement, including the management fee, in light of
all of the surrounding circumstances.
74 | OPPENHEIMER CORE BOND FUND
TRUSTEES AND OFFICERS Unaudited
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- ------------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(s) HELD WITH THE PRINCIPAL OCCUPATION(s) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, COLORADO
TRUSTEES 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, President, Colorado Christian University (since 2006); Chairman, Cherry Creek Mortgage Company
Chairman of the Board (since 1991), Chairman, Centennial State Mortgage Company (since 1994), Chairman, The El Paso
of Trustees (since 2003), Mortgage Company (since 1993); Chairman, Ambassador Media Corporation (since 1984); Chairman,
Trustee (since 1999) Broadway Ventures (since 1984); Director of Helmerich & Payne, Inc. (oil and gas
Age: 70 drilling/production company) (since 1992), Campus Crusade for Christ (non-profit) (since 1991);
Former Director, The Lynde and Harry Bradley Foundation, Inc. (non-profit organization)
(2002-2006); former Chairman of: Transland Financial Services, Inc. (private mortgage banking
company) (1997-2003), Great Frontier Insurance (1995-2000), Frontier Real Estate, Inc.
(residential real estate brokerage) (1994-2000) and Frontier Title (title insurance agency)
(1995-2000); former Director of the following: UNUMProvident (insurance company) (1991-2004),
Storage Technology Corporation (computer equipment company) (1991-2003) and International Family
Entertainment (television channel) (1992-1997); U.S. Senator (January 1979-January 1991).
Oversees 39 portfolios in the OppenheimerFunds complex.
GEORGE C. BOWEN, Assistant Secretary and Director of Centennial Asset Management Corporation (December 1991-April
Trustee (since 2001) 1999); President, Treasurer and Director of Centennial Capital Corporation (June 1989-April 1999);
Age: 71 Chief Executive Officer and Director of MultiSource Services, Inc. (March 1996-April 1999); Mr.
Bowen held several positions with the Manager and with subsidiary or affiliated companies of the
Manager (September 1987-April 1999). Oversees 39 portfolios in the OppenheimerFunds complex.
EDWARD L. CAMERON, Member of The Life Guard of Mount Vernon (George Washington historical site) (June 2000 - May
Trustee (since 2001) 2006); Partner of PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999); Chairman
Age: 69 of Price Waterhouse LLP Global Investment Management Industry Services Group (financial services
firm) (July 1994-June 1998). Oversees 39 portfolios in the OppenheimerFunds complex.
JON S. FOSSEL, Director of UNUMProvident (insurance company) (since June 2002); Director of Northwestern Energy
Trustee (since 1990) Corp. (public utility corporation) (since November 2004); Director of P.R. Pharmaceuticals
Age: 66 (October 1999-October 2003); Director of Rocky Mountain Elk Foundation (non-profit organization)
(February 1998-February 2003 and since February 2005); Chairman and Director (until October 1996)
and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief
Executive Officer and Director of the following: Oppenheimer Acquisition Corp. ("OAC") (parent
holding company of the Manager), Shareholders Services, Inc. and Shareholder Financial Services,
Inc. (until October 1995). Oversees 39 portfolios in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado UpLIFT (charitable organization) (since September 1984). Mr. Freedman held
Trustee (since 1996) several positions with the Manager and with subsidiary or affiliated companies of the Manager
Age: 67 (until October 1994). Oversees 39 portfolios in the OppenheimerFunds complex.
75 | OPPENHEIMER CORE BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
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BEVERLY L. HAMILTON, Trustee of Monterey Institute for International Studies (educational organization) (since February
Trustee (since 2002) 2000); Board Member of Middlebury College (educational organization) (since December 2005);
Age: 61 Director of The California Endowment (philanthropic organization) (since April 2002); Director
(February 2002-2005) and Chairman of Trustees (since 2006) of the Community Hospital of Monterey
Peninsula; Director (October 1991-2005) and Vice Chairman (since 2006) of American Funds' Emerging
Markets Growth Fund, Inc. (mutual fund); President of ARCO Investment Management Company (February
1991-April 2000); Member of the investment committees of The Rockefeller Foundation (since 2001)
and The University of Michigan (since 2000); Advisor at Credit Suisse First Boston's Sprout
venture capital unit (venture capital fund) (1994-January 2005); Trustee of MassMutual
Institutional Funds (investment company) (1996-June 2004); Trustee of MML Series Investment Fund
(investment company) (April 1989-June 2004); Member of the investment committee of Hartford
Hospital (2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 39
portfolios in the OppenheimerFunds complex.
ROBERT J. MALONE, Director of Jones Knowledge, Inc. (since 2006); Director of Jones International University
Trustee (since 2002) (educational organization) (since August 2005); Chairman, Chief Executive Officer and Director of
Age: 63 Steele Street State Bank (commercial banking) (since August 2003); Director of Colorado UpLIFT
(charitable organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit
organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp
and formerly Colorado National Bank) (July 1996-April 1999); Director of Commercial Assets, Inc.
(real estate investment trust) (1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004);
and Director of U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 39
portfolios in the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds) (investment company)
Trustee (since 2001) (since 1996) and MML Series Investment Fund (investment company) (since 1996); Trustee of
Age: 65 Worcester Polytech Institute (since 1985); Chairman (since 1994) of the Investment Committee of
the Worcester Polytech Institute (private university); President and Treasurer of the SIS Funds
(private charitable fund) (since January 1999); Chairman of SIS & Family Bank, F.S.B. (formerly
SIS Bank) (commercial bank) (January 1999-July 1999); and Executive Vice President of Peoples
Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999). Oversees 41 portfolios
in the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
AND OFFICER NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE TERM, OR UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS
POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since June 2001); President of the
Trustee, President and Manager (September 2000-March 2007); President and director or trustee of other Oppenheimer funds;
Principal Executive Officer President and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding com-
(since 2001) pany) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager)
Age: 58 (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager)
(November 2001-December 2006); Chairman and Director of Shareholder Services, Inc. and of
Shareholder Financial
76 | OPPENHEIMER CORE BOND FUND
JOHN V. MURPHY, Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and
Continued Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager)
(since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment
Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView
Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since
November 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.;
Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company)
(since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson
Capital Management LLC) (since June 1995); Chairman (since October 2007) and Member of the
Investment Company Institute's Board of Governors (since October 2003). Oversees 102 portfolios in
the OppenheimerFunds complex.
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OTHER OFFICERS OF THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. ZACK, GILLESPIE AND
THE FUND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR
MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL,
COLORADO 80112-3924; FOR MESSRS. MANIOUDAKIS, BOMFIM, CAAN, GORD AND SWANEY, 470 ATLANTIC AVENUE,
11TH FLOOR, BOSTON, MASSACHUSETTS 02210. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS
OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
ANGELO G. MANIOUDAKIS, Senior Vice President of the Manager and of HarbourView Asset Management Corporation (since April
Vice President and Portfolio 2002) and of OFI Institutional Asset Management, Inc. (since June 2002); Vice President of
Manager (since 2002) Oppenheimer Real Asset Management, Inc. (since November 2006). Executive Director and portfolio
Age: 41 manager for MSIM/Miller, Anderson & Sherrerd (Morgan Stanley Asset Management) (August 1993-April
2002). A portfolio manager and officer of 15 portfolios in the OppenheimerFunds complex.
ANTULIO N. BOMFIM, Vice President of the Manager (since October 2003); Senior Economist at the Board of Governors of
Vice President and Portfolio the Federal Reserve System (June 1992-October 2003). A portfolio manager and officer of 12
Manager (since 2006) portfolios in the OppenheimerFunds complex.
Age: 41
GEOFFREY CAAN, Vice President and Portfolio Manager of the Manager (since August 2003); Vice President of ABN
Vice President and Portfolio AMRO NA, Inc. (June 2002-August 2003); Vice President of Zurich Scudder Investments (January
Manager (since 2006) 1999-June 2002). A portfolio manager and officer of 12 portfolios in the OppenheimerFunds complex.
Age: 38
BENJAMIN J. GORD, Vice President of the Manager (since April 2002) of HarbourView Asset Management Corporation
Vice President and Portfolio (since April 2002) and of OFI Institutional Asset Management, Inc. (as of June 2002); Executive
Manager (since 2006) Director and senior fixed income analyst at Miller Anderson & Sherrerd, a division of Morgan
Age: 45 Stanley Investment Management (April 1992-March 2002). A portfolio manager and officer of 12
portfolios in the OppenheimerFunds complex.
THOMAS SWANEY, Vice President of the Manager (since April 2006); senior analyst, high grade investment team (June
Vice President and Portfolio 2002-March 2006); senior fixed income analyst at Miller Anderson & Sherrerd, a division of Morgan
Manager (since 2006) Stanley Investment Management (May 1998-May 2002). A portfolio manager and officer of 12
Age: 35 portfolios in the OppenheimerFunds complex.
77 | OPPENHEIMER CORE BOND FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief
Vice President and Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset Management and
Compliance Officer Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor,
(since 2004) Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983);
Age: 57 Former Vice President and Director of Internal Audit of the Manager (1997-February 2004). An
officer of 102 portfolios in the OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following:
Treasurer and Principal HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Financial & Accounting Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc.
Officer (since 1999) (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
Age: 48 International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management,
Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program
established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust
Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the
following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October
2003) and OppenheimerFunds Legacy Program (April 2000-June 2003). An officer of 102 portfolios in
the OppenheimerFunds complex.
BRIAN S. PETERSEN, Vice President of the Manager (since February 2007); Assistant Vice President of the Manager
Assistant Treasurer (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November
(since 2004) 1998-July 2002). An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 37
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting and
Assistant Treasurer Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of Berger
(since 2005) Financial Group LLC (May 2001-March 2003). An officer of 102 portfolios in the OppenheimerFunds
Age: 37 complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Vice President and Secretary Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of
(since 2001) Centennial Asset Management Corporation (since December 2001); Senior Vice President and General
Age: 59 Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General
Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director
(since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice
President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director
of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General
Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since
December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments,
Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy
Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset
Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since
December 2003); Senior Vice President (May 1985-December 2003). An officer of 102 portfolios in
the OppenheimerFunds complex.
78 | OPPENHEIMER CORE BOND FUND
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President (April
Assistant Secretary 2001-April 2004), Associate General Counsel (December 2000-April 2004) of UBS Financial Services,
(since 2004) Inc. An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 40
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004); First Vice
Assistant Secretary President (2000-September 2004), Director (2000-September 2004) and Vice President (1998-2000) of
(since 2004) Merrill Lynch Investment Management. An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 44
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October 2003)
Assistant Secretary of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the
(since 2001) Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003);
Age: 42 Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant
Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since
December 2001); Assistant Counsel of the Manager (August 1994-October 2003). An officer of 102
portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE, UPON
REQUEST, BY CALLING 1.800.525.7048.
79 | OPPENHEIMER CORE BOND FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that Edward L. Cameron,
the Chairman of the Board's Audit Committee, and George C. Bowen, a member of
the Board's Audit Committee, are audit committee financial experts and that
Messrs. Cameron and Bowen are "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $36,250 in fiscal 2007 and $18,000 in fiscal 2006.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2007 and $40,000 in fiscal 2006 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: Review of management's assessment of the financial
statements disclosure impacts of an IRS private letter ruling.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years to the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2007 and $967 in fiscal 2006.
The principal accountant for the audit of the registrant's annual financial
statements billed $32,732 in fiscal 2007 and no such fees in fiscal 2006 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such fees would include professional services for 22c-2 program and compliance
review.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $32,732 in fiscal 2007 and $40,967 in fiscal
2006 to the registrant and the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
(h) No such services were rendered.
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 12/31/2007, 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) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Integrity Funds
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 02/07/2008
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: 02/07/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 02/07/2008