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 811-21923
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Oppenheimer Transition 2020 Fund
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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: February 28
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Date of reporting period: 02/29/2008
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ITEM 1. REPORTS TO STOCKHOLDERS.
FEBRUARY 29, 2008
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Oppenheimer Management
Transition 2020 Commentaries
Fund and
Annual Report
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MANAGEMENT COMMENTARIES
Listing of Top Holdings
ANNUAL REPORT
Fund Performance Discussion
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
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ASSET CLASS ALLOCATION
[PIE CHART]
U.S. Equity Funds 65.2%
Global Equity Funds 14.3
Fixed Income Fund 10.1
Alternative Investment Fund 6.4
Money Market Fund 4.0
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on the total market value of investments in
affiliated companies.
6 | OPPENHEIMER TRANSITION 2020 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 FEBRUARY 29, 2008, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. In an especially volatile period
for the financial markets, Oppenheimer Transition 2020 Fund's Class A shares
(without sales charge) returned -1.51% for the 12-month period ended February
29, 2008 and outperformed its equity benchmark, the S&P 500 Index, which
returned -3.60% during the same time span.
The equity and fixed income markets were quite volatile during the
reporting period. As mentioned above, the U.S. equity market, as represented by
the S&P 500 Index, returned -3.60%. The strongest-performing group in the S&P
500 Index was the energy sector, which benefited in part from continued-high oil
prices. International equities, as represented by the MSCI World Index ex-U.S.,
did much better than the U.S. equity market, and gained 2.70% during the same
time frame, with the materials sector performing particularly well. The U.S.
fixed-income market, as measured by the Lehman Brothers Aggregate Bond Index,
also performed much better than U.S. equities for the reporting period, with a
return of 7.30%.
The big story of the period was the summer's credit crunch. It began with
sub-prime mortgages--high-interest loans made to homebuyers with very weak
credit. As mortgage defaults and delinquencies rose, the housing market
deteriorated, leading lenders to dramatically tighten their lending
requirements. As credit became more difficult to come by, a number of financial
institutions experienced significant losses. The troubles soon spread to other
pockets of the financial markets. Equities around the world fell sharply in July
and in the first half of August, before rebounding in the second half of August.
The rally was short-lived, however, as the U.S. equity market continued to fall
amidst recession fears, high oil prices and continuing credit difficulties. The
financial sector was among the hardest hit, as investors worried that new credit
problems could surface and weigh even further on companies' earnings.
Bonds were hardly immune from the market turmoil. Corporate bonds and other
debt perceived as riskier saw their credit spreads--the amount of additional
income an investor receives in exchange for taking on credit risk--widen from
historically narrow levels. The riskier the bond, the more likely it was to
underperform during the period's final months. In a "flight to quality,"
investors flocked to the safest parts of the bond market. U.S. Treasury bond
yields, which had been rising earlier in the period, fell sharply beginning in
June, while the bonds' prices rose accordingly (bond prices and yields move in
opposite directions). Against this backdrop, the Federal Reserve Bank (the
"Fed") moved aggressively to stop the spreading credit crunch from sinking the
economy by cutting its target
7 | OPPENHEIMER TRANSITION 2020 FUND
FUND PERFORMANCE DISCUSSION
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for the federal funds rate over its last several meetings. As of the reporting
period's end on February 29, 2008, the most recent change the Federal Open
Market Committee (FOMC) had made to the fed funds rate was a 50 basis point cut
from 3.5% to 3.0% on January 30, 2008. This followed the unusually large 75
basis point cut made during a special January 22, 2008 meeting in response to
the stock market turmoil and U.S. recession worries. Subsequently, the Fed cut
the fed funds rate again on March 18, 2008 to 2.25%, after cutting the federal
discount rate a quarter point a few days prior in an unusual weekend session.
The Fund's relative outperformance as compared to the S&P 500 Index can be
attributed to the stellar performance in the commodities asset class, which
resumed its bull run in 2007 and continued into 2008. The basic underpinnings of
the reporting period's commodities returns included rising production costs,
strong demand from developing economies, currency debasement, and investment
capital flows. Our approximate 6.4% allocation in Oppenheimer Commodity Strategy
Total Return Fund was the best performing underlying fund. Our approximate 10%
position in the Oppenheimer International Growth Fund also served us well. The
Class Y shares returned 3.01% and easily outpaced its benchmark, the MSCI EAFE
Index, which returned 0.84%.
Also contributing to performance was Oppenheimer Capital Appreciation
Fund. Here the Class Y shares returned 0.48% as compared to the Russell 1000
Growth R Index's return of 0.40%. Similarly, our primary fixed income
underlying fund, Oppenheimer Core Bond Fund, also contributed positively to
overall Fund performance, although Oppenheimer Core Bond Fund underperformed its
benchmark, the Lehman Brothers Aggregate Bond Index, which returned 7.30%. While
the performance in the fixed income sector falls short of our expectations, we
are encouraged by the fact that the bulk of the underlying fund's difficulties
occurred over a relatively short, concentrated time frame at year-end and in the
first two months of the year. We view this recent period of difficulty for
Oppenheimer Core Bond Fund as short term.
Unfortunately, our exposure in many of the domestic equity funds and in
one international equity fund detracted from the Fund's performance. Oppenheimer
Value Fund's Class Y shares and Oppenheimer MidCap Fund's Class Y were both
detractors. While Oppenheimer Value Fund performed well relative to its
benchmark, its absolute return was -5.13% and we held an approximate 18%
position. The other relative underperformer on the stock side of the portfolio
was our approximately 9% allocation to Oppenheimer MidCap Fund, which lagged
largely on disappointing security selection. On the international equity side,
Oppenheimer Quest International Value Fund, Inc.'s Class A shares
8 | OPPENHEIMER TRANSITION 2020 FUND
detracted from performance, with a negative return also due to disappointing
stock selection; however, the Fund's allocation to Oppenheimer Quest
International Value Fund is less than 5% of the Fund's holdings.
We made no material changes to the underlying funds in Oppenheimer
Transition 2020 Fund. Despite significant market volatility during the period,
all of our portfolio allocations remained close to our target allocations as of
the end of February. These targets include approximately 85% of the portfolio in
Oppenheimer equity funds--70% in U.S. equity funds and 15% invested
internationally (via Oppenheimer International Growth Fund and Oppenheimer Quest
International Value Fund, Inc.)--and 10% allocated to Oppenheimer fixed-income
funds (via Oppenheimer Core Bond Fund). The remaining 5% is targeted toward
Oppenheimer Commodity Strategy Total Return Fund, which invests in
commodity-oriented securities and provides an additional level of
diversification that we believe is extremely valuable for shareholders. We may
make modest changes in the coming months to bring the Fund further along its
"glide path." These changes may entail reducing the Fund's equity allocation and
modestly increasing its fixed-income weighting. As we near and eventually move
past the Fund's 2020 target date, the portfolio is designed to become gradually
more conservative while still maintaining a healthy exposure to equities to
continue generating sufficient capital appreciation for today's ever-longer
retirements.
We do not plan any further immediate changes to the portfolio, although
we'll continue to monitor it to ensure that Oppenheimer Transition 2020 Fund's
allocations remain sufficiently close to our targets. We will not hesitate to
step in, of course, if the portfolio begins to diverge too greatly from those
targets. However, as we mentioned, the portfolio's actual allocations at period
end were very close to our intended levels, and we do not expect that
rebalancing will be necessary for the foreseeable future.
As we saw during the period, the market can fluctuate greatly over the
short term. We believe that the broad diversification offered by Oppenheimer
Transition 2020 Fund and the other Oppenheimer LifeCycle Funds is an important
tool to help investors manage market volatility and get closer to their
long-term retirement goals.
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 February 29, 2008. Performance is measured from the inception of
Classes A, B, C, N and Y on December 15, 2006. 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.
9 | OPPENHEIMER TRANSITION 2020 FUND
FUND PERFORMANCE DISCUSSION
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The Fund's performance is compared to the performance of the S&P 500 Index
and the Lehman Brothers Aggregate Bond Index. The S&P 500 Index is an unmanaged
index of equity securities. The Lehman Brothers Aggregate Bond Index is an
unmanaged index of U.S. corporate, government and mortgage-backed securities.
Index performance reflects the reinvestment of income but does not consider the
effect of transaction costs, and none of the data in the graphs shows the effect
of taxes. The Fund's performance reflects the effects of the Fund's business and
operating expenses. While index comparisons may be useful to provide a benchmark
for the Fund's performance, it must be noted that the Fund's investments are not
limited to the investments in the index.
10 | OPPENHEIMER TRANSITION 2020 FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[AVERAGE ANNUAL TOTAL RETURN LINE CHART]
OPPENHEIMER
TRANSITION 2020 S & P 500 LEHMAN BROTHERS
FUND (CLASS A) INDEX AGGREGATE BOND INDEX
12/15/2006 9,425 10,000 10,000
02/28/2007 9,585 10,093 10,091
05/31/2007 10,424 11,029 10,069
08/31/2007 10,160 10,667 10,247
11/30/2007 10,273 10,772 10,605
02/29/2008 9,440 9,729 10,828
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
2/29/08
1-Year Since Inception (12/15/06)
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- -7.18% -4.67%
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 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 4% (SINCE INCEPTION); 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. SEE PAGE 16 FOR FURTHER
INFORMATION.
11 | OPPENHEIMER TRANSITION 2020 FUND
FUND PERFORMANCE DISCUSSION
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CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[AVERAGE ANNUAL TOTAL RETURN LINE CHART]
OPPENHEIMER
TRANSITION 2020 S & P 500 LEHMAN BROTHERS
FUND (CLASS B) INDEX AGGREGATE BOND INDEX
12/15/2006 10,000 10,000 10,000
02/28/2007 10,160 10,093 10,091
05/31/2007 11,030 11,029 10,069
08/31/2007 10,720 10,667 10,247
11/30/2007 10,810 10,772 10,605
02/29/2008 9,533 9,729 10,828
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
2/29/08
1-Year Since Inception (12/15/06)
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- -7.12% -3.89%
12 | OPPENHEIMER TRANSITION 2020 FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[AVERAGE ANNUAL TOTAL RETURN LINE CHART]
OPPENHEIMER
TRANSITION 2020 S & P 500 LEHMAN BROTHERS
FUND (CLASS C) INDEX AGGREGATE BOND INDEX
12/15/2006 10,000 10,000 10,000
02/28/2007 10,160 10,093 10,091
05/31/2007 11,030 11,029 10,069
08/31/2007 10,730 10,667 10,247
11/30/2007 10,820 10,772 10,605
02/29/2008 9,923 9,729 10,828
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
2/29/08
1-Year Since Inception (12/15/06)
- -------- --------------------------
- -3.29% -0.64%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 4% (SINCE INCEPTION); 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. SEE PAGE 16 FOR FURTHER
INFORMATION.
13 | OPPENHEIMER TRANSITION 2020 FUND
FUND PERFORMANCE DISCUSSION
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CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[AVERAGE ANNUAL TOTAL RETURN LINE CHART]
OPPENHEIMER
TRANSITION 2020 S & P 500 LEHMAN BROTHERS
FUND (CLASS N) INDEX AGGREGATE BOND INDEX
12/15/2006 10,000 10,000 10,000
02/28/2007 10,160 10,093 10,091
05/31/2007 11,050 11,029 10,069
08/31/2007 10,770 10,667 10,247
11/30/2007 10,870 10,772 10,605
02/29/2008 9,885 9,729 10,828
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
2/29/08
1-Year Since Inception (12/15/06)
- --------- --------------------------
- -2.71% -0.95%
14 | OPPENHEIMER TRANSITION 2020 FUND
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[AVERAGE ANNUAL TOTAL RETURN LINE CHART]
OPPENHEIMER
TRANSITION 2020 S & P 500 LEHMAN BROTHERS
FUND (CLASS Y) INDEX AGGREGATE BOND INDEX
12/15/2006 10,000 10,000 10,000
02/28/2007 10,170 10,093 10,091
05/31/2007 11,070 11,029 10,069
08/31/2007 10,800 10,667 10,247
11/30/2007 10,920 10,772 10,605
02/29/2008 10,045 9,729 10,828
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 2/29/08
1-Year Since Inception (12/15/06)
- -------- --------------------------
- -1.23% 0.37%
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 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 4% (SINCE INCEPTION); 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. SEE PAGE 16 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER TRANSITION 2020 FUND
NOTES
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Total returns and the ending account values in the graphs include changes
in share price and reinvestment of dividends and capital gains
distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns
shown do not reflect the deduction of income taxes on an individual's
investment. Taxes may reduce your actual investment returns on income or
gains paid by the Fund or any gains you may realize if you sell your
shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS,
AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE
OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR
VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 12/15/06. Class
A returns include the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 12/15/06. Class
B returns include the applicable contingent deferred sales charge of 5%
(1-year) and 4% (since inception). 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 12/15/06. 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 12/15/06. Class
N shares are offered only through retirement plans. Unless otherwise
noted, Class N returns include the contingent deferred sales charge of 1%
for the 1-year period. Class N shares are subject to an annual 0.25%
asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 12/15/06. 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.
16 | OPPENHEIMER TRANSITION 2020 FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, which may include sales charges (loads) on purchase
payments, contingent deferred sales charges on redemptions; and redemption
fees (if 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
February 29, 2008.
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 the Statement
17 | OPPENHEIMER TRANSITION 2020 FUND
FUND EXPENSES Continued
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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 SEPTEMBER 1, 2007 FEBRUARY 29, 2008 FEBRUARY 29, 2008
- -------------------------------------------------------------------------------------------
Class A $ 1,000.00 $ 929.10 $ 3.60
- -------------------------------------------------------------------------------------------
Class B 1,000.00 925.60 7.69
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Class C 1,000.00 924.80 7.25
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Class N 1,000.00 926.90 5.04
- -------------------------------------------------------------------------------------------
Class Y 1,000.00 930.10 2.59
HYPOTHETICAL
(5% return before expenses)
- -------------------------------------------------------------------------------------------
Class A 1,000.00 1,021.13 3.78
- -------------------------------------------------------------------------------------------
Class B 1,000.00 1,016.91 8.06
- -------------------------------------------------------------------------------------------
Class C 1,000.00 1,017.35 7.60
- -------------------------------------------------------------------------------------------
Class N 1,000.00 1,019.64 5.29
- -------------------------------------------------------------------------------------------
Class Y 1,000.00 1,022.18 2.72
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated funds, based on the 6-month period
ended February 29, 2008 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
- ----------------------------------------
Class A 0.75%
- ----------------------------------------
Class B 1.60
- ----------------------------------------
Class C 1.51
- ----------------------------------------
Class N 1.05
- ----------------------------------------
Class Y 0.54
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager and Transfer Agent that can
be terminated at any time, without advance notice. The "Financial Highlights"
tables in the Fund's financial statements, included in this report, also show
the gross expense ratios, without such waivers or reimbursements and reduction
to custodian expenses, if applicable.
18 | OPPENHEIMER TRANSITION 2020 FUND
STATEMENT OF INVESTMENTS February 29, 2008
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SHARES VALUE
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES--103.0% 1
- -------------------------------------------------------------------------------------------------------
ALTERNATIVE INVESTMENT FUND--6.6%
Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 134,076 $ 1,111,495
- -------------------------------------------------------------------------------------------------------
FIXED INCOME FUND--10.4%
Oppenheimer Core Bond Fund, Cl. Y 180,129 1,767,065
- -------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS--14.7%
Oppenheimer International Growth Fund, Cl. Y 59,676 1,707,928
- -------------------------------------------------------------------------------------------------------
Oppenheimer Quest International Value Fund, Inc., Cl. A 42,139 782,506
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2,490,434
- -------------------------------------------------------------------------------------------------------
MONEY MARKET FUND--4.1%
Oppenheimer Institutional Money Market Fund, Cl. E, 3.99% 2 698,973 698,973
- -------------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS--67.2%
Oppenheimer Capital Appreciation Fund, Cl. Y 52,994 2,501,837
- -------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund, Cl. Y 48,875 1,616,300
- -------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund, Cl. Y 3 87,179 1,615,427
- -------------------------------------------------------------------------------------------------------
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 72,665 2,447,373
- -------------------------------------------------------------------------------------------------------
Oppenheimer Value Fund, Cl. Y 136,720 3,203,354
-------------
11,384,291
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $18,963,179) 103.0% 17,452,258
- -------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (3.0) (515,814)
---------------------------
NET ASSETS 100.0% $16,936,444
===========================
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
19 | OPPENHEIMER TRANSITION 2020 FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended February 29, 2008, 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 SHARES
FEBRUARY 28, GROSS GROSS FEBRUARY 29,
2007 ADDITIONS REDUCTIONS 2008
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y 3,331 55,874 a 6,211 52,994
Oppenheimer Commodity Strategy Total Return Fund,
Cl. Y 12,311 135,753 13,988 134,076
Oppenheimer Core Bond Fund, Cl. Y 15,755 186,320 21,946 180,129
Oppenheimer Growth Fund, Cl. Y 2,488 15,066 17,554 a --
Oppenheimer Institutional Money Market Fund, Cl. E 18,516 9,507,488 8,827,031 698,973
Oppenheimer International Growth Fund, Cl. Y 5,776 61,058 7,158 59,676
Oppenheimer Main Street Fund, Cl. Y 3,911 50,926 5,962 48,875
Oppenheimer MidCap Fund, Cl. Y 8,089 89,910 10,820 87,179
Oppenheimer Quest International Value Fund, Inc., Cl. A 3,659 43,639 5,159 42,139
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 6,400 75,207 8,942 72,665
Oppenheimer Value Fund, Cl. Y 12,045 141,632 16,957 136,720
DIVIDEND REALIZED
VALUE INCOME LOSS
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund, Cl. Y $ 2,501,837 $ -- $ 23,902
Oppenheimer Commodity Strategy Total Return Fund,
Cl. Y 1,111,495 93,790 5,312
Oppenheimer Core Bond Fund, Cl. Y 1,767,065 39,016 2,001
Oppenheimer Growth Fund, Cl. Y -- -- 143
Oppenheimer Institutional Money Market Fund, Cl. E 698,973 3,901 --
Oppenheimer International Growth Fund, Cl. Y 1,707,928 16,148 12,901
Oppenheimer Main Street Fund, Cl. Y 1,616,300 18,998 47,130
Oppenheimer MidCap Fund, Cl. Y 1,615,427 -- 17,376
Oppenheimer Quest International Value Fund, Inc., Cl. A 782,506 7,303 14,524
Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 2,447,373 -- 56,339
Oppenheimer Value Fund, Cl. Y 3,203,354 30,452 75,082
--------------------------------------------
$17,452,258 $209,608 $254,710
============================================
a. All or a portion is the result of a merger between Oppenheimer Capital
Appreciation Fund and Oppenheimer Growth Fund
2. Rate shown is the 7-day yield as of February 29, 2008.
3. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER TRANSITION 2020 FUND
STATEMENT OF ASSETS AND LIABILITIES February 29, 2008
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------
Investments, at value--affiliated companies (cost $18,963,179)--see accompanying
statement of investments $ 17,452,258
- ----------------------------------------------------------------------------------------------------
Cash 16,542
- ----------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 232,110
Dividends 7,372
Other 994
-------------
Total assets 17,709,276
- ----------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 705,608
Shareholder communications 22,231
Shares of beneficial interest redeemed 18,694
Distribution and service plan fees 4,277
Transfer and shareholder servicing agent fees 2,065
Trustees' compensation 37
Custodian fees 9
Other 19,911
-------------
Total liabilities 772,832
- ----------------------------------------------------------------------------------------------------
NET ASSETS $ 16,936,444
=============
- ----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 1,737
- ----------------------------------------------------------------------------------------------------
Additional paid-in capital 18,366,022
- ----------------------------------------------------------------------------------------------------
Accumulated net investment loss (13)
- ----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 79,619
- ----------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments (1,510,921)
-------------
NET ASSETS $ 16,936,444
=============
21 | OPPENHEIMER TRANSITION 2020 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 $8,366,316
and 856,448 shares of beneficial interest outstanding) $ 9.77
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.37
- -------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,900,495 and 298,510 shares
of beneficial interest outstanding) $ 9.72
- -------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,842,968 and 292,642 shares
of beneficial interest outstanding) $ 9.71
- -------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,665,140 and 272,993 shares
of beneficial interest outstanding) $ 9.76
- -------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $161,525 and 16,488 shares of beneficial interest outstanding) $ 9.80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER TRANSITION 2020 FUND
STATEMENT OF OPERATIONS For the Year Ended February 29, 2008
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------
Dividends from affiliated companies $ 209,608
- ----------------------------------------------------------------------------------------------
Interest 789
-------------
Total investment income 210,397
- ----------------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 8,371
Class B 14,568
Class C 10,769
Class N 4,312
- ----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 7,810
Class B 2,572
Class C 2,273
Class N 891
Class Y 86
- ----------------------------------------------------------------------------------------------
Shareholder communications:
Class A 25,187
Class B 6,355
Class C 3,766
Class N 1,359
Class Y 111
- ----------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 21,131
- ----------------------------------------------------------------------------------------------
Registration and filing fees 2,182
- ----------------------------------------------------------------------------------------------
Trustees' compensation 80
- ----------------------------------------------------------------------------------------------
Custodian fees and expenses 38
- ----------------------------------------------------------------------------------------------
Other 5,660
-------------
Total expenses 117,521
Less reduction to custodian expenses (29)
Less waivers and reimbursements of expenses (28,847)
-------------
Net expenses 88,645
- ----------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 121,752
- ----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments--affiliated companies (254,710)
Distributions received from affiliated companies 559,538
-------------
Net realized gain 304,828
- ----------------------------------------------------------------------------------------------
Net change in unrealized depreciation on investments (1,529,316)
- ----------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,102,736)
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER TRANSITION 2020 FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
2008 2007 1
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 121,752 $ (374)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 304,828 --
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (1,529,316) 18,395
-------------------------------
Net increase (decrease) in net assets resulting from operations (1,102,736) 18,021
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (177,172) --
Class B (50,759) --
Class C (51,853) --
Class N (33,855) --
Class Y (3,593) --
-------------------------------
(317,232) --
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (579) --
Class B (202) --
Class C (195) --
Class N (122) --
Class Y (12) --
-------------------------------
(1,110) --
- ----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 7,667,115 1,271,856
Class B 2,952,585 198,523
Class C 3,122,214 --
Class N 2,839,188 9,598
Class Y 168,602 5,820
-------------------------------
16,749,704 1,485,797
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Total increase 15,328,626 1,503,818
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 1,607,818 104,000 2
-------------------------------
End of period (including accumulated net investment income (loss)
of $(13) and $63, respectively) $16,936,444 $1,607,818
===============================
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Reflects the value of the Manager's initial seed money investment on August
21, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER TRANSITION 2020 FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
CLASS A 2008 2007 1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.17 $ 10.00
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .15 -- 3
Net realized and unrealized gain (loss) (.28) .17
--------------------------
Total from investment operations (.13) .17
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) --
Distributions from net realized gain -- 3 --
--------------------------
Total dividends and/or distributions to shareholders (.27) --
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.77 $ 10.17
==========================
- -------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (1.51)% 1.70%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 8,366 $ 1,391
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 5,166 $ 1,191
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 1.46% (0.09)%
Total expenses 6 1.15% 7.92% 7
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.76% 0.84%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses paid including all underlying fund expenses were as follows:
Year Ended February 29, 2008 1.79%
Period Ended February 28, 2007 8.58%
7. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited operating
history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER TRANSITION 2020 FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
CLASS B 2008 2007 1
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.16 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .08 (.02)
Net realized and unrealized gain (loss) (.30) .18
--------------------------
Total from investment operations (.22) .16
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) --
Distributions from net realized gain -- 3 --
--------------------------
Total dividends and/or distributions to shareholders (.22) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.72 $ 10.16
==========================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (2.34)% 1.60%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,900 $ 199
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,463 $ 77
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 0.79% (0.96)%
Total expenses 6 1.94% 27.83% 7
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.60% 1.57%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses paid including all underlying fund expenses were as follows:
Year Ended February 29, 2008 2.58%
Period Ended February 28, 2007 28.49%
7. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited operating
history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER TRANSITION 2020 FUND
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
CLASS C 2008 2007 1
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.16 $10.00
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .21 (.02)
Net realized and unrealized gain (loss) (.43) .18
-------------------------
Total from investment operations (.22) .16
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) --
Distributions from net realized gain -- 3 --
-------------------------
Total dividends and/or distributions to shareholders (.23) --
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.71 $10.16
=========================
- -------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (2.33)% 1.60%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,843 $ 1
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,088 $ 1
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 2.03% (0.89)%
Total expenses 6 1.85% 67.57% 7
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.52% 1.57%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses paid including all underlying fund expenses were as follows:
Year Ended February 29, 2008 2.49%
Period Ended February 28, 2007 68.23%
7. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited operating
history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER TRANSITION 2020 FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
CLASS N 2008 2007 1
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.16 $ 10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .13 (.01)
Net realized and unrealized gain (loss) (.29) .17
-------------------------
Total from investment operations (.16) .16
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.24) --
Distributions from net realized gain -- 3 --
-------------------------
Total dividends and/or distributions to shareholders (.24) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.76 $ 10.16
=========================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (1.74)% 1.60%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,665 $ 10
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 869 $ 2
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 1.22% (0.41)%
Total expenses 6 1.05% 70.58% 7
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 1.03% 1.08%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses paid including all underlying fund expenses were as follows:
Year Ended February 29, 2008 1.69%
Period Ended February 28, 2007 71.24%
7. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited operating
history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER TRANSITION 2020 FUND
YEAR ENDED PERIOD ENDED
FEBRUARY 29, FEBRUARY 28,
CLASS Y 2008 2007 1
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.17 $ 10.00
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .21 -- 3
Net realized and unrealized gain (loss) (.32) .17
-------------------------------
Total from investment operations (.11) .17
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.26) --
Distributions from net realized gain -- 3 --
-------------------------------
Total dividends and/or distributions to shareholders (.26) --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.80 $ 10.17
===============================
- --------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (1.23)% 1.70%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 162 $ 7
- --------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 94 $ 2
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 1.96% 0.09%
Total expenses 6 0.58% 86.01% 7
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses 0.51% 0.55%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 0%
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5. Annualized for periods less than one full year.
6. Total expenses paid including all underlying fund expenses were as follows:
Year Ended February 29, 2008 1.22%
Period Ended February 28, 2007 86.67%
7. The fiscal 2007 total expenses ratio is higher than the anticipated total
expense ratio of the class for future years due to the Fund's limited operating
history at February 28, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER TRANSITION 2020 FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Transition 2020 Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek total return until the target
retirement date included in its name and then seeks income and secondarily
capital growth. The Fund is a special type of mutual fund known as a "fund of
funds" because it invests in other mutual funds. The Fund normally invests in a
portfolio consisting of a target weighted allocation in Class A or Class Y
shares of other Oppenheimer funds (the "Underlying Funds"). 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 each class of
its shares based upon the net asset value of the applicable Underlying Fund. For
each Underlying Fund, the net asset value per share for a class of shares is
determined 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
by dividing the value of the Underlying Fund's net assets attributable to that
class by the number of outstanding shares of that class on that day. To
determine net asset values, the Underlying Fund's assets are valued primarily on
the basis of current market quotations. Securities for which market quotations
are not readily available are valued at their fair value. Securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Underlying 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 Underlying Fund's Board of Trustees. "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.
30 | OPPENHEIMER TRANSITION 2020 FUND
- --------------------------------------------------------------------------------
RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in
which the Fund invests has its own investment risks, and those risks can affect
the value of the Fund's investments and therefore the value of the Fund's
shares. To the extent that the Fund invests more of its assets in one Underlying
Fund than in another, the Fund will have greater exposure to the risks of that
Underlying Fund.
- --------------------------------------------------------------------------------
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 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.
- --------------------------------------------------------------------------------
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, however, during the year ended February 29, 2008, the Fund paid
federal excise tax of $17. 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 generally remain open for the three preceding fiscal reporting
period ends.
The tax components of capital shown in the following table represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years and unrealized appreciation or depreciation of
securities and other investments for federal income tax purposes.
NET UNREALIZED
DEPRECIATION
BASED ON COST OF
SECURITIES AND OTHER
UNDISTRIBUTED NET UNDISTRIBUTED ACCUMULATED LOSS INVESTMENTS FOR FEDERAL
INVESTMENT INCOME LONG-TERM GAIN CARRYFORWARD INCOME TAX PURPOSES
- -----------------------------------------------------------------------------------------------------
$ -- $ 160,213 $ -- $ 1,591,516
31 | OPPENHEIMER TRANSITION 2020 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 February 29, 2008.
Net assets of the Fund were unaffected by the reclassifications.
REDUCTION TO
REDUCTION TO ACCUMULATED
ACCUMULATED NET REALIZED
INCREASE TO NET INVESTMENT GAIN ON
PAID-IN CAPITAL LOSS INVESTMENTS 1
-----------------------------------------------------------------
$ 28,695 $ 195,404 $ 224,099
1. $28,743, all of which was long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the year ended February 29, 2008
and the period ended February 28, 2007 was as follows:
YEAR ENDED PERIOD ENDED
FEBRUARY 29, 2008 FEBRUARY 28, 2007
------------------------------------------------------------------
Distributions paid from:
Ordinary income $ 318,342 $ --
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 February 29, 2008 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 $ 19,043,774
=============
Gross unrealized appreciation $ 141,571
Gross unrealized depreciation (1,733,087)
-------------
Net unrealized depreciation $ (1,591,516)
=============
- -------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the year ended February
32 | OPPENHEIMER TRANSITION 2020 FUND
29, 2008, the Fund's projected benefit obligations, payments to retired trustees
and accumulated liability were as follows:
Projected Benefit Obligations Increased $ 9
Payments Made to Retired Trustees 15
Accumulated Liability as of February 29, 2008 --
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 and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.
- --------------------------------------------------------------------------------
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. 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 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.
33 | OPPENHEIMER TRANSITION 2020 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 FEBRUARY 29, 2008 PERIOD ENDED FEBRUARY 28, 2007 1,2
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
CLASS A
Sold 861,139 $ 9,206,136 126,742 $ 1,271,856
Dividends and/or
distributions reinvested 16,276 172,359 -- --
Redeemed (157,709) (1,711,380) -- --
------------------------------------------------------------------
Net increase 719,706 $ 7,667,115 126,742 $ 1,271,856
==================================================================
- -----------------------------------------------------------------------------------------------------------
CLASS B
Sold 311,195 $ 3,284,603 19,541 $ 198,794
Dividends and/or
distributions reinvested 4,735 49,955 -- --
Redeemed (37,035) (381,973) (26) (271)
------------------------------------------------------------------
Net increase 278,895 $ 2,952,585 19,515 $ 198,523
==================================================================
- -----------------------------------------------------------------------------------------------------------
CLASS C
Sold 304,997 $ 3,245,582 -- $ --
Dividends and/or
distributions reinvested 4,642 48,930 -- --
Redeemed (17,097) (172,298) -- --
------------------------------------------------------------------
Net increase 292,542 $ 3,122,214 -- $ --
==================================================================
34 | OPPENHEIMER TRANSITION 2020 FUND
YEAR ENDED FEBRUARY 29, 2008 PERIOD ENDED FEBRUARY 28, 2007 1,2
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
CLASS N
Sold 317,563 $ 3,315,631 920 $ 9,598
Dividends and/or
distributions reinvested 3,206 33,953 -- --
Redeemed (48,796) (510,396) -- --
------------------------------------------------------------------
Net increase 271,973 $ 2,839,188 920 $ 9,598
==================================================================
- -----------------------------------------------------------------------------------------------------------
CLASS Y
Sold 21,907 $ 234,907 557 $ 5,820
Dividends and/or
distributions reinvested 337 3,579 -- --
Redeemed (6,413) (69,884) -- --
------------------------------------------------------------------
Net increase 15,831 $ 168,602 557 $ 5,820
==================================================================
1. For the period from December 15, 2006 (commencement of operations) to
February 28, 2007.
2. The Fund sold 10,000 shares of Class A at a value of $100,000 and 100 shares
each of Class B, Class C, Class N and Class Y at a value of $1,000,
respectively, to the Manager upon seeding of the Fund on August 21, 2006.
- --------------------------------------------------------------------------------
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 February
29, 2008, were as follows:
PURCHASES SALES
---------------------------------------------------------------------------------------
Investment securities $ 18,463,733 $ 2,221,431
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not
charge a management fee, but rather collects indirect management fees from
investments in the Underlying Funds. The weighted indirect management fees
collected from the Underlying Funds, as a percent of average daily net assets of
the Fund for the year ended February 29, 2008 was 0.57%.
- --------------------------------------------------------------------------------
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 February 29, 2008, the Fund
paid $11,485 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.
- --------------------------------------------------------------------------------
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all initial offering and
organizational costs associated with the registration and seeding of the Fund.
35 | OPPENHEIMER TRANSITION 2020 FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (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 $48,066, $18,762 and $11,932, respectively. Fees incurred by the
Fund under the Plans are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
("CDSC") do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.
36 | OPPENHEIMER TRANSITION 2020 FUND
CLASS A CLASS B CLASS C CLASS N
CONTINGENT CONTINGENT CONTINGENT CONTINGENT
CLASS A DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES
FRONT-END SALES CHARGES CHARGES CHARGES CHARGES
CHARGES RETAINED RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED BY DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------------
February 29, 2008 $ 62,166 $ 124 $ 2,600 $ 435 $ 724
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a
total expense limitation on the aggregate amount of combined direct
(fund-of-funds level) and indirect expense so that as a percentage of average
daily net assets they will not exceed the following annual rates: 1.50%, 2.25%,
2.25%, 1.75% and 1.25%, for Class A, Class B, Class C, Class N and Class Y,
respectively. During the year ended February 29, 2008, the Manager reimbursed
the Fund $19,691, $4,828, $3,360, $170 and $53 for the Class A, Class B, Class
C, Class N and Class Y shares, respectively. The Manager may modify or terminate
this undertaking 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.
During the year ended February 29, 2008, OFS waived $130 for Class C shares.
This undertaking may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended February 29, 2008, the Manager waived $84 for IMMF
management fees.
The Distributor reimbursed Fund expenses in an amount equal to the
distribution and service plan fees incurred through the Fund's investment in the
Class A shares of Oppenheimer Quest International Value Fund, Inc. which, for
the year ended February 29, 2008, was $531.
- --------------------------------------------------------------------------------
5. 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 February
29, 2008, the Manager does not believe the adoption of SFAS No. 157 will
materially impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements on changes in net assets for the
period.
37 | OPPENHEIMER TRANSITION 2020 FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER TRANSITION 2020 FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Transition 2020 Fund, including the statement of investments, as of
February 29, 2008, the related statement of operations for the year then ended,
and the statements of changes in net assets and the financial highlights for the
year then ended and for the period December 15, 2006 (commencement of
operations) to February 28, 2007. 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.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of February 29, 2008, by correspondence with
the custodian and Transfer Agent or by other appropriate auditing procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Transition 2020 Fund as of February 29, 2008, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for the year then ended and for the period December 15,
2006 (commencement of operations) to February 28, 2007, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
April 18, 2008
38 | OPPENHEIMER TRANSITION 2020 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 February
29, 2008 which are not designated as capital gain distributions should be
multiplied by 20.95% 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 February 29, 2008 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. $101,929 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 February 29, 2008, $612 or 0.19% 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.
39 | OPPENHEIMER TRANSITION 2020 FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund and each underlying fund have adopted Portfolio Proxy Voting Policies
and Procedures under which the Fund and each underlying fund votes proxies
relating to securities ("portfolio proxies") held. A description of the
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 and each underlying 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 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.
40 | OPPENHEIMER TRANSITION 2020 FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER
FUND, LENGTH OF SERVICE, AGE TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE
FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S.
TRUSTEES TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH TRUSTEE
SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund)
Chairman of the Board of (September 1995-December 2007); Director of Special Value
Trustees (since 2007) and Opportunities Fund, LLC (registered investment company)
Trustee (since 2006) (affiliate of the Manager's parent company) (since September
Age: 65 2004); Chairman (since August 2007) and Trustee (since August
1991) of the Board of Trustees of The Jackson Laboratory (non-profit);
Treasurer and Trustee of the Institute for Advanced Study (non-profit
educational institute) (since May 1992); Member of Zurich Financial
Investment Management Advisory Council (insurance) (2004-2007); Special
Limited Partner of Odyssey Investment Partners, LLC (private equity
investment) (January 1999-September 2004). Oversees 67 portfolios in the
OppenheimerFunds complex.
DAVID K. DOWNES, Independent Chairman GSK Employee Benefit Trust (since April
Trustee (since 2007) 2006); Director of Correctnet (since January 2006); Trustee of
Age: 68 Employee Trusts (since January 2006); President, Chief
Executive Officer and Board Member of CRAFund Advisors, Inc. (investment
management company) (since January 2004); Director of Internet Capital
Group (information technology company) (since October 2003); Independent
Chairman of the Board of Trustees of Quaker Investment Trust (registered
investment company) (2004-2007); President of The Community Reinvestment
Act Qualified Investment Fund (investment management company)
(2004-2007); Chief Operating Officer and Chief Financial Officer of
Lincoln National Investment Companies, Inc. (subsidiary of Lincoln
National Corporation, a publicly traded company) and Delaware Investments
U.S., Inc. (investment management subsidiary of Lincoln National
Corporation) (1993-2003); President, Chief Executive Officer and Trustee
of Delaware Investment Family of Funds (1993-2003); President and Board
Member of Lincoln National Convertible Securities Funds, Inc. and the
Lincoln National Income Funds, TDC (1993-2003); Chairman and Chief
Executive Officer of Retirement Financial Services, Inc. (registered
transfer agent and investment adviser and subsidiary of Delaware
Investments U.S., Inc.) (1993-2003); President and Chief Executive
Officer of Delaware Service Company, Inc. (1995-2003); Chief
Administrative Officer, Chief Financial Officer, Vice Chairman and
Director of Equitable Capital Management Corporation (investment
subsidiary of Equitable Life Assurance Society) (1985-1992); Corporate
Controller of Merrill Lynch & Company (financial services holding
company) (1977-1985); held the following positions at the Colonial Penn
Group, Inc. (insurance company): Corporate Budget Director (1974-1977),
Assistant Treasurer (1972-1974) and Director of Corporate Taxes
(1969-1972); held the following positions at Price Waterhouse & Company
(financial services firm): Tax Manager (1967-1969), Tax Senior
(1965-1967) and Staff Accountant (1963-1965); United States Marine Corps
(1957-1959). Oversees 67 portfolios in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research
Trustee (since 2006) foundation) (since 2005); Director of ICI Education Foundation
Age: 67 (education foundation) (October 1991-August 2006);
President of the Investment Company Institute (trade association)
(October 1991-June 2004); Director of ICI Mutual Insurance Company
(insurance company) (October 1991-June 2004). Oversees 57 portfolios in
the OppenheimerFunds complex.
41 | OPPENHEIMER TRANSITION 2020 FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 67
Trustee (since 2006) portfolios in the OppenheimerFunds complex.
Age: 74
PHILLIP A. GRIFFITHS, Fellow of the Carnegie Corporation (since 2007); Distinguished
Trustee (since 2006) Presidential Fellow for International Affairs (since 2002) and
Age: 69 Member (since 1979) of the National Academy of Sciences; Council
on Foreign Relations (since 2002); Director of GSI Lumonics Inc.
(precision technology products company) (since 2001); Senior Advisor of
The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative
Group (since 1999); Member of the American Philosophical Society (since
1996); Trustee of Woodward Academy (since 1983); Foreign Associate of
Third World Academy of Sciences; Director of the Institute for Advanced
Study (1991-2004); Director of Bankers Trust New York Corporation
(1994-1999); Provost at Duke University (1983-1991). Oversees 57
portfolios in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of International House (not-for-profit) (since June
Trustee (since 2006) 2007); Trustee of the American Symphony Orchestra
Age: 65 (not-for-profit) (since October 1998); and Senior Vice President
and General Auditor of American Express Company (financial services
company) (July 1998-February 2003). Oversees 57 portfolios in the
OppenheimerFunds complex.
JOEL W. MOTLEY, Managing Director of Public Capital Advisors, LLC (privately held
Trustee (since 2006) financial advisor) (since January 2006); Managing Director of
Age: 55 Carmona Motley, Inc. (privately-held financial advisor) (since
January 2002); Director of Columbia Equity Financial Corp.
(privately-held financial advisor) (2002-2007); Managing Director of
Carmona Motley Hoffman Inc. (privately-held financial advisor) (January
1998-December 2001); Member of the Finance and Budget Committee of the
Council on Foreign Relations, Member of the Investment Committee of the
Episcopal Church of America, Member of the Investment Committee and Board
of Human Rights Watch and Member of the Investment Committee of Historic
Hudson Valley. Oversees 57 portfolios in the OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of RSR Partners (formerly "The Directorship Search
Trustee (since 2006) Group, Inc.") (corporate governance consulting and executive
Age: 76 recruiting) (since 1993); Life Trustee of International House
(non-profit educational organization); Former Trustee of The Historical
Society of the Town of Greenwich; Former Director of Greenwich Hospital
Association. Oversees 57 portfolios in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of C-TASC (bio-statistics services) (since 2007);
Trustee (since 2006) Director of the following medical device companies: Medintec
Age: 67 (since 1992) and Cathco (since 1996); Director of Lakes
Environmental Association (environmental protection organization)
(since 1996); Member of the Investment Committee of the Associated Jewish
Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual
funds (1994-December 2001). Director of C-TASC (a privately-held
bio-statistics company) (since May 2007). Oversees 57 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration
Trustee (since 2006) and production company) (since 1994); Vice President of American
Age: 60 Talc Company, Inc. (talc mining and milling) (since 1999);
Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979);
Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda
ash processing and production) (1996-2006); Director and Chairman of the
Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and
Director of PacifiCorp. (electric utility) (1995-1999). Oversees 57
portfolios in the OppenheimerFunds complex.
42 | OPPENHEIMER TRANSITION 2020 FUND
- -----------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE AND THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225
OFFICER LIBERTY STREET, 11TH FLOOR, NEW YORK, NEW YORK 10281-1008. MR.
MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL
HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER
FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT,
DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO
HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager
President and Principal (since June 2001); President of the Manager (September
Executive Officer and 2000-February 2007); President and director or trustee of other
Trustee (since 2006) Oppenheimer funds; President and Director of Oppenheimer
Age: 58 Acquisition Corp. ("OAC") (the Manager's parent holding company)
and of Oppenheimer Partnership Holdings, Inc. (holding company
subsidiary of the Manager) (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 Services, Inc. (transfer agent subsidiaries
of the Manager) (since July 2001); President and Director of
OppenheimerFunds Legacy Program (charitable trust program established by
the Manager) (since July 2001); Director of the following investment
advisory subsidiaries of the Manager: OFI Institutional Asset Management,
Inc., Centennial Asset Management Corporation, Trinity Investment
Management Corporation and Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2001); President (since November 2001) and
Director (since July 2001) of Oppenheimer Real Asset Management, Inc.;
Executive Vice President of Massachusetts Mutual Life Insurance Company
(OAC's parent company) (since February 1997); Director of DLB Acquisition
Corporation (holding company parent of Babson Capital Management LLC)
(since June 1995); Chairman (since October 2007) and Member of the
Investment Company Institute's Board of Governors (since October 2003).
Oversees 106 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------
OTHER OFFICERS OF THE THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR
FUND MESSRS. SCHADT, WEBMAN, WOLFGRUBER, LEAVY, ZACK, GILLESPIE AND 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. EACH OFFICER
SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
RUDI W. SCHADT, Vice President, Director of Equity Analytics and Risk in Product Design
Vice President and Portfolio and Risk Management of the Manager (since February 2002). Prior to
Manager (since 2006) joining the Manager in February 2002, a Director and Senior Quantitative
Age: 50 Analyst (2000-2001) at UBS Asset Management prior to which an
Associate Director of Research (since June 1999) and Senior Researcher
and Portfolio Manager (from June 1997) at State Street Global Advisors.
An officer of 14 portfolios in the OppenheimerFunds complex.
DR. JERRY A. WEBMAN, Chief Economist of the Manager (since 2006); Senior Vice
Vice President and Portfolio President (since February 1996) and Senior Investment Officer and
Manager (since 2006) Director (since 1997) of the Manager's Fixed Income Investments; Senior
Age: 58 Vice President (since May 1999) of HarbourView Asset Management
Corporation. An officer of 11 portfolios in the OppenheimerFunds complex.
KURT WOLFGRUBER, President (since March 2007) and Chief Investment Officer and
Vice President and Portfolio Director (since July 2003) of the Manager; Executive Vice
Manager (since 2006) President of the Manager (March 2003-March 2007); Director of
Age: 57 HarbourView Asset Management Corporation and of OFI Institutional
Asset Management, Inc. (since June 2003) and of Tremont Capital
Management, Inc. (since October 2001). A portfolio manager and officer of
11 portfolios in the OppenheimerFunds complex.
43 | OPPENHEIMER TRANSITION 2020 FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
CHRISTOPHER LEAVY, Director of Equities of the Manager (since January 2007); Senior
Vice President and Portfolio Vice President of the Manager (since September 2000). Portfolio
Manager (since 2007) manager of Morgan Stanley Dean Witter Investment Management
Age: 37 (1997-September 2000). A portfolio manager and officer of 15
portfolios in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the
Vice President and Chief Manager (since March 2004); Chief Compliance Officer of
Compliance Officer OppenheimerFunds Distributor, Inc., Centennial Asset Management
(since 2006) and Shareholder Services, Inc. (since March 2004); Vice
Age: 57 President of OppenheimerFunds Distributor, Inc., Centennial
Asset Management Corporation and Shareholder Services, Inc.
(since June 1983); Former Vice President and Director of
Internal Audit of the Manager (1997-February 2004). An officer
of 106 portfolios in the OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March
Treasurer and Principal 1999); Treasurer of the following: HarbourView Asset Management
Financial & Accounting Corporation, Shareholder Financial Services, Inc., Shareholder
Officer (since 2006) Services, Inc., Oppenheimer Real Asset Management, Inc. and
Age: 48 Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI
Private Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. and OppenheimerFunds plc (since May 2000), OFI
Institutional Asset Management, Inc. (since November 2000), and
OppenheimerFunds Legacy Program (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 106
portfolios in the OppenheimerFunds complex.
BRIAN S. PETERSEN, Vice President of the Manager (since February 2007); Assistant
Assistant Treasurer Vice President of the Manager (August 2002-February 2007);
(since 2004) Manager/Financial Product Accounting of the Manager (November
Age: 37 1998-July 2002). An officer of 106 portfolios in the OppenheimerFunds
complex.
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director
Assistant Treasurer of Financial Reporting and Compliance of First Data Corporation
(since 2005) (April 2003-July 2004); Manager of Compliance of Berger
Age: 38 Financial Group LLC (May 2001-March 2003). An officer of 106
portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General
Secretary (since 2006) Counsel (since March 2002) of the Manager; General Counsel and
Age: 59 Director of the Distributor (since December 2001); General
Counsel of Centennial Asset Management Corporation (since December 2001);
Senior Vice President and General Counsel of HarbourView Asset Management
Corporation (since December 2001); Secretary and General Counsel of OAC
(since November 2001); Assistant Secretary (since September 1997) and
Director (since November 2001) of OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and Director of Oppenheimer
Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer
Real Asset Management, Inc. (since November 2001); Senior Vice President,
General Counsel and Director of Shareholder Financial Services, Inc. and
Shareholder Services, Inc. (since December 2001); Senior Vice President,
General Counsel and Director of OFI Private Investments, Inc. and OFI
Trust Company (since November 2001); Vice President of OppenheimerFunds
Legacy Program (since June 2003); Senior Vice President and General
Counsel of OFI Institutional Asset Management, Inc. (since November
2001); Director of OppenheimerFunds International Distributor Limited
(since December 2003); Senior Vice President (May 1985-December 2003). An
officer of 106 portfolios in the OppenheimerFunds complex.
44 | OPPENHEIMER TRANSITION 2020 FUND
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May
Assistant Secretary 2004); First Vice President (April 2001-April 2004), Associate
(since 2006) General Counsel (December 2000-April 2004) of UBS Financial
Age: 40 Services, Inc. An officer of 106 portfolios in the OppenheimerFunds
complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager
Assistant Secretary (since September 2004); First Vice President (2000-September 2004),
(since 2006) Director (2000-September 2004) and Vice President (1998-2000) of
Age: 44 Merrill Lynch Investment Management. An officer of 106 portfolios
in the OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant
Assistant Secretary Secretary (since October 2003) of the Manager; Vice President
(since 2006) (since 1999) and Assistant Secretary (since October 2003) of the
Age: 42 Distributor; Assistant Secretary of Centennial Asset Management
Corporation (since October 2003); 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 106
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.
45 | OPPENHEIMER TRANSITION 2020 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 David Downes, a
member of the Board's Audit Committee, is an audit committee financial expert
and that Mr. Downes is "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 $17,000 in fiscal 2008 and $16,500 in fiscal 2007.
(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 $256,236 in fiscal 2008 and no such fees in fiscal 2007 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: internal control reviews and professional services
relating to FAS 123R.
(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 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 during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
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 02/29/2008, 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 Transition 2020 Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date:04/16/2008
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:04/16/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date:04/16/2008