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 811-5281
Oppenheimer Champion Income Fund
--------------------------------
(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: September 30
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Date of reporting period: 03/31/2008
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ITEM 1. REPORTS TO STOCKHOLDERS.
MARCH 31, 2008
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Oppenheimer Management
Champion Income Commentaries
Fund and
Semiannual
Report
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MANAGEMENT COMMENTARIES
An Interview with Your Fund's Managers
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
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TOP FIVE HOLDINGS BY ISSUER
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Nextel Communications, Inc. 2.7%
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Federal National Mortgage Assn. 2.3
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HBOS plc 1.8
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Barclays Bank 1.7
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HSBC Financial Capital Trust IX 1.7
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2008, and are based on the total market value of investments. For more
current Fund holdings, please visit www.oppenheimerfunds.com.
CREDIT ALLOCATION
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Agency 2.1%
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AAA 6.2
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AA 3.9
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A 4.9
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BBB 11.6
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BB 29.6
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B 27.7
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CCC 7.1
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D 0.2
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Not Rated 4.4
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Other Securities 2.3
Portfolio holdings and allocations are subject to change. Percentages are as of
March 31, 2008, are subject to change and based on the total market value of
investments. Securities rated by any rating organization are included in the
equivalent S&P's rating category. Average credit quality and allocation include
rated securities and those not rated by a national rating organization but which
the ratings given above have been assigned by the Manager for internal purposes
as being comparable, in the Manager's judgment, to securities rated by a rating
agency in the same category.
10 | OPPENHEIMER CHAMPION INCOME FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the
periods shown. Cumulative total returns are not annualized. The Fund's
total returns shown do not reflect the deduction of income taxes on an
individual's investment. Taxes may reduce your actual investment returns on
income or gains paid by the Fund or any gains you may realize if you sell
your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES,
RISKS AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S
PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE
OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR
VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 11/16/87. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert
to Class A shares 72 months after purchase, the 10-year return for Class B
uses Class A performance for the period after conversion. Class B shares
are subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 12/1/93. Unless
otherwise noted, Class C returns include the contingent deferred sales
charge of 1% for the 1-year period. Class C shares are subject to an annual
0.75% asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N
shares are offered only through retirement plans. Unless otherwise noted,
Class N returns include the contingent deferred sales charge of 1% for the
1-year period. Class N shares are subject to an annual 0.25% asset-based
sales charge.
CLASS Y shares of the Fund were first publicly offered on 9/1/06. 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.
11 | OPPENHEIMER CHAMPION INCOME 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 March
31, 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), redemption fees, or
a $12.00 fee imposed annually on accounts valued at less than $500.00
(subject to exceptions
12 | OPPENHEIMER CHAMPION INCOME FUND
described in the Statement of Additional Information). Therefore, the
"hypothetical" section of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included,
your costs would have been higher.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
ACTUAL OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008
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Class A $1,000.00 $ 877.00 $4.71
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Class B 1,000.00 874.10 8.62
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Class C 1,000.00 873.30 8.47
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Class N 1,000.00 875.20 6.68
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Class Y 1,000.00 878.70 2.87
HYPOTHETICAL
(5% return before expenses)
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Class A 1,000.00 1,020.00 5.06
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Class B 1,000.00 1,015.85 9.26
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Class C 1,000.00 1,016.00 9.11
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Class N 1,000.00 1,017.90 7.19
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Class Y 1,000.00 1,021.95 3.09
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 183/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended March 31, 2008 are as follows:
CLASS EXPENSE RATIOS
- --------------------------
Class A 1.00%
- --------------------------
Class B 1.83
- --------------------------
Class C 1.80
- --------------------------
Class N 1.42
- --------------------------
Class Y 0.61
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.
13 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS March 31, 2008 / Unaudited
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PRINCIPAL
AMOUNT VALUE
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ASSET-BACKED SECURITIES--2.3%
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Ameriquest Mortgage Securities, Inc., Home Equity Mtg. Obligations,
Series 2005-R10, Cl. A2B, 2.819%, 12/25/35 1 $ 1,601,375 $ 1,515,389
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Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond
Obligations, Series 1A, Cl. D, 6/13/11 2,3 4,250,800 --
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Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.,
Series 2007-3, Cl. A3, 3.168%, 6/15/12 1 26,040,000 25,726,103
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Mastr Asset-Backed Securities Trust 2005-WF1, Mtg. Pass-Through Certificates, Series
2005-WF1, Cl. A2C, 2.839%, 6/25/35 1 1,030,666 978,849
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NC Finance Trust, CMO Pass-Through Certificates, Series 1999-I,
Cl. ECFD, 2.249%, 1/25/29 1,3 437,665 56,896
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Soundview Home Loan Trust 2006-OPT5, Asset-Backed Certificates, Series 2006-OPT5, Cl.
2A2, 2.689%, 7/25/36 1 20,113,549 19,553,364
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Total Asset-Backed Securities (Cost $52,076,826) 47,830,601
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MORTGAGE-BACKED OBLIGATIONS--6.4%
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Bear Stearns ARM Trust 2006-4, Mtg. Pass-Through Certificates, Series 2006-4, Cl. 2A1,
5.795%, 10/25/36 1 558,794 503,373
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CitiMortgage Alternative Loan Trust 2006-A5, Real Estate Mtg.
Investment Conduit Pass-Through Certificates:
Series 2006-A5, Cl. 1A1, 3.006%, 10/25/36 1 1,773,345 1,458,337
Series 2006-A5, Cl. 1A13, 3.056%, 10/25/36 1 910,422 667,190
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Countrywide Alternative Loan Trust 2004-28CB, Mtg. Pass-Through
Certificates, Series 2004-28CB, Cl.2A4, 5.75%, 1/25/35 4,148,000 3,542,804
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Countrywide Alternative Loan Trust 2005-18CB, Mtg. Pass-Through
Certificates, Series 2005-18CB, Cl. A8, 5.50%, 5/25/36 1,420,000 1,273,788
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Countrywide Alternative Loan Trust 2005-85CB, Mtg. Pass-Through
Certificates, Series 2005-85CB, Cl.2A3, 5.50%, 2/25/36 1,050,000 933,457
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Countrywide Alternative Loan Trust 2005-J1, Mtg. Pass-Through
Certificates, Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 1,568,894 1,391,380
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Countrywide Home Loans Servicing LP, Mtg. Pass-Through Certificates:
Series 2005-HYB1, Cl. 5A1, 4.995%, 3/25/35 1 4,637,975 4,458,253
Series 2007-HY1, Cl. 1A1, 5.691%, 4/25/37 1 1,621,436 1,536,717
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Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 2001-5, Cl. PJ, 6.50%, 3/25/31 202,996 215,021
Series 2319, Cl. PZ, 6.50%, 5/15/31 2,767,965 2,921,398
Series 2338, Cl. ZC, 6.50%, 7/15/31 2,354,075 2,478,003
Series 2344, Cl. ZD, 6.50%, 8/15/31 1,445,542 1,528,087
Series 2363, Cl. BZ, 6.50%, 9/15/31 3,041,501 3,200,079
Series 2457, Cl. PE, 6.50%, 6/15/32 2,557,492 2,674,169
Series 2936, Cl. PE, 5%, 2/1/35 1,017,000 953,871
14 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
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MORTGAGE-BACKED OBLIGATIONS Continued
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Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed Security:
Series 2520, Cl. SE, 52.468%, 5/15/22 5 $ 1,724,675 $ 158,469
Series 2574, Cl. IN, 6.231%, 12/15/22 5 8,483,447 1,424,277
Series 2989, Cl. TS, 48.304%, 6/15/25 5 8,787,885 868,586
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Federal National Mortgage Assn.:
5%, 12/25/17-8/25/33 4,569,347 4,612,106
5%, 3/25/18 6 8,368,352 8,488,263
5%, 4/1/38 7 1,760,000 1,742,125
5.50%, 10/1/33-1/25/34 4,000,224 4,051,863
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Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Trust 2001-74, Cl. QE, 6%,
12/25/31 4,450,433 4,604,979
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Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed Security:
Trust 2003-14, Cl. OI, 10.882%, 3/25/33 5 1,556,927 313,789
Trust 2003-23, Cl. ES, 42.373%, 10/25/22 5 3,447,736 309,223
Trust 2003-52, Cl. NS, 37.953%, 6/25/23 5 3,666,081 402,934
Trust 2004-65, Cl. SA, 60.542%, 5/25/23 5 6,830,812 527,138
Trust 2005-86, Cl. AI, 8.019%, 10/1/35 5 1,633,654 339,066
Trust 2006-33, Cl. SP, 40.625%, 5/25/36 5 2,406,540 274,708
Trust 2006-43, Cl. SJ, 44.148%, 6/25/36 5 4,820,634 502,648
Trust 2006-51, Cl. SA, 23.289%, 6/25/36 5 16,941,915 1,720,411
Trust 334, Cl. 4, 11.074%, 7/1/33 5 2,629,578 565,147
Trust 342, Cl. 2, 5.696%, 9/1/33 5 5,920,530 1,315,046
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First Horizon Alternative Mortgage Securities Trust 2004-FA2,
Mtg. Pass-Through Certificates, Series 2004-FA2, Cl. 3A1, 6%, 1/25/35 469,269 424,084
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GMAC Mortgage Corp. Loan Trust, Mtg. Pass-Through Certificates,
Series 2004-J4, Cl. A7, 5.50%, 9/25/34 970,000 854,505
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GSR Mortgage Loan Trust 2005-4F, Mtg. Pass-Through Certificates,
Series 2005-4F, Cl. 6A1, 6.50%, 2/25/35 1,188,848 1,141,861
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GSR Mortgage Loan Trust 2005-AR7, Mtg. Pass-Through Certificates,
Series 2005-AR7, Cl. 3A1, 5.149%, 11/25/35 1 7,448,906 7,162,005
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LB-UBS Commercial Mortgage Trust 2003-C5, Commercial Mtg. Pass
- -Through Certificates, Series 2003-C5, Cl. A2, 3.478%, 7/15/27 6,962,524 6,927,987
- ----------------------------------------------------------------------------------------------------------------------
Mastr Asset Securitization Trust 2006-3, Mtg. Pass-Through
Certificates, Series 2006-3, Cl. 2A1, 3.049%, 10/25/36 1 23,021,898 21,078,458
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Merrill Lynch Mortgage Investors Trust 2006-3, Mtg. Pass-Through
Certificates, Series 2006-3, Cl. 2A1, 6.085%, 10/25/36 1 1,758,493 1,687,076
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors Trust 2007-2, Mtg. Pass-Through
Certificates, Series 2007-2, Cl. 2A1, 6.002%, 6/25/37 1 2,193,763 2,080,356
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Merrill Lynch Mortgage Investors Trust 2007-3, Mtg. Pass-Through
Certificates, Series 2007-3, Cl. 1A1, 5.861%, 9/1/37 1,3 1,073,593 1,041,385
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Morgan Stanley Mortgage Loan Trust 2006-AR, Mtg. Pass-Through
Certificates, Series 2006-AR, Cl. 5A3, 5.426%, 6/25/36 1 650,000 602,496
15 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL
AMOUNT VALUE
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MORTGAGE-BACKED OBLIGATIONS Continued
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WaMu Mortgage Pass-Through Certificates 2006-AR12 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 5.75%, 10/25/36 1 $ 2,412,092 $ 2,254,415
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WaMu Mortgage Pass-Through Certificates 2006-AR8 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR8, Cl. 2A1, 6.131%, 8/25/36 1 2,466,111 2,392,165
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Wells Fargo Mortgage-Backed Securities 2005-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR2, Cl. 2A2, 4.541%, 3/25/35 1 327,237 318,115
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Wells Fargo Mortgage-Backed Securities 2005-AR4 Trust, Mtg.
Pass-Through Certificates, Series 2005-AR4, Cl. 2A2, 4.523%, 4/25/35 1 543,264 507,953
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Wells Fargo Mortgage-Backed Securities 2006-AR10 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR10, Cl. 4A1, 5.561%, 7/25/36 1 1,088,801 1,044,400
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Wells Fargo Mortgage-Backed Securities 2006-AR12 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 6.10%, 9/25/36 1 1,920,319 1,810,385
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Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR2, Cl. 2A5, 5.109%, 3/25/36 1 2,269,190 2,176,313
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Wells Fargo Mortgage-Backed Securities 2006-AR8 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR8, Cl. 1A3, 5.609%, 4/25/36 1 15,819,005 15,696,436
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Total Mortgage-Backed Obligations (Cost $133,138,585) 131,157,100
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CORPORATE BONDS AND NOTES--88.9%
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CONSUMER DISCRETIONARY--26.7%
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AUTO COMPONENTS--1.7%
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 6,280,000 6,460,550
9% Sr. Unsec. Nts., 7/1/15 4,246,000 4,511,375
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Lear Corp., 8.75% Sr. Unsec. Nts., Series B, 12/1/16 26,880,000 23,083,200
----------------
34,055,125
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AUTOMOBILES--0.6%
General Motors Acceptance Corp., 8% Bonds, 11/1/31 17,520,000 12,583,197
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DIVERSIFIED CONSUMER SERVICES--0.5%
Service Corp. International, 6.75% Sr. Unsec. Nts., 4/1/15 9,983,000 9,870,691
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HOTELS, RESTAURANTS & LEISURE--9.2%
CCM Merger, Inc., 8% Unsec. Nts., 8/1/13 8 8,520,000 7,199,400
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Gaylord Entertainment Co.:
6.75% Sr. Unsec. Unsub. Nts., 11/15/14 3,800,000 3,325,000
8% Sr. Nts., 11/15/13 1,600,000 1,492,000
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Greektown Holdings, Inc., 10.75% Sr. Nts., 12/1/13 8 9,065,000 8,294,475
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Harrah's Operating Co., Inc., 10.75% Sr. Unsec. Nts., 2/1/16 8 8,735,000 7,402,913
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Isle of Capri Casinos, Inc., 7% Sr. Unsec. Sub. Nts., 3/1/14 21,310,000 15,289,925
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Mashantucket Pequot Tribe, 8.50% Bonds, Series A, 11/15/15 8 17,705,000 15,668,925
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MGM Mirage, Inc.:
6.625% Sr. Unsec. Nts., 7/15/15 9,700,000 8,487,500
8.375% Sr. Unsec. Sub. Nts., 2/1/11 11,010,000 11,092,575
16 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
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HOTELS, RESTAURANTS & LEISURE Continued
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 $ 4,225,000 $ 3,876,438
6.875% Sr. Unsec. Sub. Nts., 2/15/15 3,485,000 2,822,850
8% Sr. Sub. Nts., 4/1/12 7,885,000 7,254,200
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Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 3/15/10 27,995,000 26,385,288
- ----------------------------------------------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts., 3/1/15 780,000 711,750
6.875% Sr. Sub. Nts., 12/1/11 1,100,000 1,039,500
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Pinnacle Entertainment, Inc., 8.25% Sr. Unsec. Sub. Nts., 3/15/12 10,445,000 9,896,638
- ----------------------------------------------------------------------------------------------------------------------
Pokagon Gaming Authority, 10.375% Sr. Nts., 6/15/14 8 3,063,000 3,246,780
- ----------------------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08 2,3,9 3,900,000 --
- ----------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 15,070,000 9,117,350
6.875% Sr. Unsec. Sub. Nts., 3/1/16 2,840,000 1,668,500
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Travelport LLC, 11.875% Sr. Unsec. Sub. Nts., 9/1/16 7,600,000 6,498,000
- ----------------------------------------------------------------------------------------------------------------------
Trump Entertainment Resorts, Inc., 8.50% Sec. Nts., 6/1/15 13,045,000 8,870,600
- ----------------------------------------------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub. Nts., 2/15/14 3 6,610,000 6,477,800
- ----------------------------------------------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 6.625% Nts.,
12/1/14 23,955,000 23,176,463
----------------
189,294,870
- ----------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.7%
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09 9,170,000 8,622,689
- ----------------------------------------------------------------------------------------------------------------------
Jarden Corp., 7.50% Sr. Unsec. Sub. Nts., 5/1/17 8,280,000 7,286,400
- ----------------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.:
7.75% Sr. Unsec. Sub. Nts., 5/15/13 3,495,000 1,869,825
8.875% Sr. Sub. Nts., 4/1/12 6,145,000 3,441,200
- ----------------------------------------------------------------------------------------------------------------------
KB Home, 8.625% Sr. Sub. Nts., 12/15/08 4,300,000 4,332,250
- ----------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 5,720,000 5,233,800
- ----------------------------------------------------------------------------------------------------------------------
William Lyon Homes, Inc.:
7.50% Sr. Unsec. Nts., 2/15/14 1,165,000 576,675
10.75% Sr. Nts., 4/1/13 7,900,000 4,147,500
----------------
35,510,339
- ----------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.5%
Eastman Kodak Co., 3.625% Nts., Series A, 5/15/08 2,960,000 2,960,000
- ----------------------------------------------------------------------------------------------------------------------
Leslie's Poolmart, Inc., 7.75% Sr. Unsec. Nts., 2/1/13 7,015,000 6,418,725
----------------
9,378,725
- ----------------------------------------------------------------------------------------------------------------------
MEDIA--9.4%
Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12 3,600,000 3,546,000
- ----------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 8% Sr. Unsec. Sub. Nts., 3/1/14 5,110,000 4,356,275
17 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
MEDIA Continued
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 3 $ 250,884 $ 166,838
8.875% Sr. Unsec. Sub. Nts., 1/15/11 6,900,000 4,588,500
10.25% Sr. Unsec. Sub. Nts., Series B, 5/1/09 8 223,614 149,821
10.25% Sr. Unsec. Sub. Nts., Series B, 5/1/09 6,150,000 4,151,250
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CCH I Holdings LLC/CCH I Holdings Capital Corp., 11% Sr. Sec. Nts.,
10/1/15 14,454,000 10,117,800
- -----------------------------------------------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr. Unsec. Disc. Nts., 3/15/14 10 12,850,000 11,629,250
- -----------------------------------------------------------------------------------------------------------------------
Dex Media West LLC/Dex Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 4,300,000 4,203,250
9.875% Sr. Sub. Nts., 8/15/13 9,529,000 8,314,053
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Dex Media, Inc.:
0%/9% Unsec. Disc. Nts., 11/15/13 10 1,100,000 797,500
0%/9% Unsec. Disc. Nts., 11/15/13 10 2,715,000 1,968,375
8% Unsec. Nts., 11/15/13 2,090,000 1,536,150
- -----------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 6.375% Sr. Unsec. Nts., 10/1/11 16,570,000 15,948,625
- -----------------------------------------------------------------------------------------------------------------------
Entercom Radio LLC/Entercom Capital, Inc.,
7.625% Sr. Unsec. Sub. Nts., 3/1/14 3,000,000 2,662,500
- -----------------------------------------------------------------------------------------------------------------------
Idearc, Inc., 8% Sr. Unsec. Nts., 11/15/16 12,855,000 8,387,888
- -----------------------------------------------------------------------------------------------------------------------
Lamar Media Corp.:
6.625% Sr. Unsec. Sub. Nts., 8/15/15 4,899,000 4,335,615
7.25% Sr. Unsec. Sub. Nts., 1/1/13 2,000,000 1,910,000
- -----------------------------------------------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13 5,055,000 4,713,788
- -----------------------------------------------------------------------------------------------------------------------
Marquee Holdings, Inc., 0%/12% Sr. Disc. Nts., 8/15/14 10 10,900,000 8,202,250
- -----------------------------------------------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 6,800,000 3,196,000
6.875% Sr. Unsec. Sub. Nts., 10/1/13 10,940,000 5,387,950
- -----------------------------------------------------------------------------------------------------------------------
Nielsen Finance LLC, 10% Sr. Unsec. Nts., 8/1/14 15,135,000 15,135,000
- -----------------------------------------------------------------------------------------------------------------------
Nielsen Finance LLC/Nielsen Finance Co., 0%/12.50% Sr. Unsec. Sub.
Disc. Nts., 8/1/16 10 6,020,000 3,837,750
- -----------------------------------------------------------------------------------------------------------------------
Quebecor World Capital Corp., 8.75% Sr. Nts., 3/15/16 2,8 8,120,000 3,897,600
- -----------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts., Series A-1, 1/15/13 11,465,000 7,050,975
6.875% Sr. Disc. Nts., Series A-2, 1/15/13 16,770,000 10,313,550
6.875% Sr. Nts., 1/15/13 9,365,000 5,759,475
- -----------------------------------------------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 3,900,000 3,149,250
- -----------------------------------------------------------------------------------------------------------------------
Rainbow National Services LLC, 8.75% Sr. Nts., 9/1/12 8 5,325,000 5,471,438
- -----------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 8% Sr. Unsec. Sub. Nts., 3/15/12 8,833,000 8,943,413
- -----------------------------------------------------------------------------------------------------------------------
Vertis, Inc., 9.75% Sr. Sec. Nts., 4/1/09 6,400,000 5,472,000
- -----------------------------------------------------------------------------------------------------------------------
Virgin Media Finance plc, 8.75% Sr. Unsec. Nts., 4/15/14 3,800,000 3,429,500
- -----------------------------------------------------------------------------------------------------------------------
Warner Music Group Corp., 7.375% Sr. Sub. Bonds, 4/15/14 4,400,000 3,410,000
- -----------------------------------------------------------------------------------------------------------------------
WMG Holdings Corp., 0%/9.50% Sr. Disc. Nts., 12/15/14 10 11,979,000 6,288,975
- -----------------------------------------------------------------------------------------------------------------------
192,428,604
18 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.3%
Dillard's, Inc., 6.625% Unsec. Nts., 11/15/08 $ 5,870,000 $ 5,884,675
- ----------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--1.6%
Claire's Stores, Inc., 10.50% Sr. Unsec. Sub. Nts., 6/1/17 18,110,000 8,058,950
- ----------------------------------------------------------------------------------------------------------------------
GameStop Corp., 8% Sr. Unsec. Nts., 10/1/12 6,800,000 7,225,000
- ----------------------------------------------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr. Unsec. Sub. Nts., Series B, 5/1/10 2,200,000 2,046,000
- ----------------------------------------------------------------------------------------------------------------------
Sally Holdings LLC:
9.25% Sr. Unsec. Nts., 11/15/14 8,440,000 8,461,100
10.50% Sr. Unsec. Sub. Nts., 11/15/16 7,410,000 6,891,300
---------------
32,682,350
- ----------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.2%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 8 7,685,000 7,896,338
- ----------------------------------------------------------------------------------------------------------------------
Levi Strauss & Co., 9.75% Sr. Unsec. Unsub. Nts., 1/15/15 14,630,000 14,648,288
- ----------------------------------------------------------------------------------------------------------------------
Quiksilver, Inc., 6.875% Sr. Unsec. Nts., 4/15/15 3,660,000 2,964,600
---------------
25,509,226
- ----------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--5.5%
- ----------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.8%
Constellation Brands, Inc.:
8.125% Sr. Sub. Nts., 1/15/12 10,195,000 10,347,925
8.375% Sr. Nts., 12/15/14 5,635,000 5,832,225
---------------
16,180,150
- ----------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.0%
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 14,749,000 14,136,238
- ----------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 21,800,000 26,306,997
---------------
40,443,235
- ----------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--1.5%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts., 2/15/15 2,000,000 1,925,000
8.625% Sr. Sub. Nts., 12/15/12 6,900,000 7,055,250
- ----------------------------------------------------------------------------------------------------------------------
Dole Food Co., Inc.:
7.25% Sr. Unsec. Nts., 6/15/10 1,610,000 1,247,750
8.625% Sr. Nts., 5/1/09 4,200,000 3,675,000
8.875% Sr. Unsec. Nts., 3/15/11 942,000 767,730
- ----------------------------------------------------------------------------------------------------------------------
Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp., 10.625% Sr.
Sub. Nts., 4/1/17 16,510,000 14,116,050
- ----------------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc., 8% Sr. Nts., Series B, 10/15/09 2,800,000 2,856,000
---------------
31,642,780
- ----------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.3%
Church & Dwight Co., Inc., 6% Sr. Unsec. Sub. Nts., 12/15/12 5,925,000 5,806,500
19 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.3%
Elizabeth Arden, Inc., 7.75% Sr. Unsec. Sub. Nts., 1/15/14 $ 6,740,000 $ 6,436,700
- -----------------------------------------------------------------------------------------------------------------------
TOBACCO--0.6%
Reynolds American, Inc., 7.25% Sr. Sec. Nts., 6/1/13 12,010,000 12,786,038
- -----------------------------------------------------------------------------------------------------------------------
ENERGY--11.7%
- -----------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.5%
Helix Energy Solutions Group, Inc., 9.50% Sr. Unsec. Nts., 1/15/16 8 11,315,000 11,371,575
- -----------------------------------------------------------------------------------------------------------------------
Key Energy Services, Inc., 8.375% Sr. Nts., 12/1/14 8 11,725,000 11,754,313
- -----------------------------------------------------------------------------------------------------------------------
Pride International, Inc., 7.375% Sr. Unsec. Nts., 7/15/14 7,110,000 7,429,950
----------------
30,555,838
- -----------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--10.2%
Atlas Pipeline Partners LP, 8.125% Sr. Unsec. Nts., 12/15/15 11,235,000 11,487,788
- -----------------------------------------------------------------------------------------------------------------------
Berry Petroleum Co., 8.25% Sr. Sub. Nts., 11/1/16 5,335,000 5,481,713
- -----------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 6.875% Sr. Unsec. Nts., 1/15/16 21,580,000 21,472,100
- -----------------------------------------------------------------------------------------------------------------------
Denbury Resources, Inc., 7.50% Sr. Sub. Nts., 12/15/15 6,956,000 7,147,290
- -----------------------------------------------------------------------------------------------------------------------
Enterprise Products Operating LP, 8.375% Jr. Sub. Nts., 8/1/66 1 24,060,000 23,460,329
- -----------------------------------------------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 10,025,000 10,350,813
- -----------------------------------------------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP, 7.30% Sr. Unsec. Nts., 8/15/33 20,582,000 21,072,675
- -----------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co., 6.625% Sr. Unsec. Sub. Nts., 9/1/14 11,445,000 11,330,550
- -----------------------------------------------------------------------------------------------------------------------
Pacific Energy Partners LP/Pacific Energy Finance Corp., 6.25%
Sr. Unsec. Nts., 9/15/15 975,000 971,062
- -----------------------------------------------------------------------------------------------------------------------
Peabody Energy Corp., 6.875% Sr. Unsec. Nts., Series B, 3/15/13 23,245,000 23,709,900
- -----------------------------------------------------------------------------------------------------------------------
Quicksilver Resources, Inc., 7.125% Sr. Sub. Nts., 4/1/16 11,340,000 10,999,800
- -----------------------------------------------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 765,000 753,525
7.375% Sr. Sub. Nts., 7/15/13 2,475,000 2,524,500
7.50% Sr. Sub. Nts., 5/15/16 2,745,000 2,827,350
- -----------------------------------------------------------------------------------------------------------------------
Sabine Pass LNG LP:
7.25% Sr. Sec. Nts., 11/30/13 6,815,000 6,610,550
7.50% Sr. Sec. Nts., 11/30/16 10,000,000 9,700,000
- -----------------------------------------------------------------------------------------------------------------------
Southwestern Energy Co., 7.50% Sr. Nts., 2/1/18 8 4,980,000 5,179,200
- -----------------------------------------------------------------------------------------------------------------------
Tesoro Corp., 6.625% Sr. Unsec. Nts., 11/1/15 11,255,000 10,467,150
- -----------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc., 8.125% Sr. Unsec. Nts., 3/15/12 19,855,000 21,790,863
- -----------------------------------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.50% Nts., 12/1/08 1,600,000 1,596,000
----------------
208,933,158
- -----------------------------------------------------------------------------------------------------------------------
FINANCIALS--11.6%
- -----------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--2.1%
Berry Plastics Holding Corp., 8.875% Sr. Sec. Nts., 9/15/14 16,545,000 14,518,238
- -----------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34 32,620,000 28,328,219
----------------
42,846,457
20 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--5.5%
Barclays Bank plc, 6.278% Perpetual Bonds 11 $ 46,380,000 $ 37,122,552
- -----------------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 8,11 53,200,000 38,209,623
- -----------------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 1 45,465,000 36,933,947
--------------
112,266,122
- -----------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.8%
Ace Cash Express, Inc., 10.25% Sr. Nts., 10/1/14 3 3,265,000 2,677,300
- -----------------------------------------------------------------------------------------------------------------------
SLM Corp., 4.50% Nts., Series A, 7/26/10 17,210,000 14,131,992
--------------
16,809,292
- -----------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.6%
AAC Group Holding Corp., 0%/10.25% Sr. Unsec. Disc. Nts., 10/1/12 10 1,700,000 1,385,500
- -----------------------------------------------------------------------------------------------------------------------
Bank of America Corp., 8% Unsec. Perpetual Nts., Series K 11 4,265,000 4,278,733
- -----------------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 8.30% Jr. Sub. Bonds, 12/21/57 1 3,035,000 2,999,406
- -----------------------------------------------------------------------------------------------------------------------
Nell AF Sarl, 8.375% Sr. Nts., 8/15/15 8 3,895,000 2,862,825
- -----------------------------------------------------------------------------------------------------------------------
Universal City Florida, 8.375% Sr. Unsec. Nts., 5/1/10 3 1,035,000 1,019,475
--------------
12,545,939
- -----------------------------------------------------------------------------------------------------------------------
INSURANCE--0.3%
MetLife, Inc., 6.40% Jr. Unsec. Sub. Bonds, 12/15/66 1 6,195,000 4,937,973
- -----------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 8 875,000 1,090,092
- -----------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 8 845,000 944,241
--------------
6,972,306
- -----------------------------------------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--0.9%
Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 1 6,092,000 6,000,620
- -----------------------------------------------------------------------------------------------------------------------
Host Marriott LP, 6.375% Sr. Nts., Series O, 3/15/15 11,715,000 10,953,525
- -----------------------------------------------------------------------------------------------------------------------
iStar Financial, Inc., 3.35% Sr. Unsec. Nts., 3/16/09 1 1,160,000 1,034,899
--------------
17,989,044
- -----------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.4%
Countrywide Financial Corp., 3.345% Unsec. Unsub. Nts, 5/5/08 1 3,345,000 3,323,371
- -----------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans, Inc., 3.25% Nts., Series L, 5/21/08 24,638,000 24,163,275
--------------
27,486,646
- -----------------------------------------------------------------------------------------------------------------------
HEALTH CARE--6.2%
- -----------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Bausch & Lomb, Inc., 9.875% Sr. Unsec. Nts., 11/1/15 8 9,145,000 9,327,900
- -----------------------------------------------------------------------------------------------------------------------
Universal Hospital Services, Inc., 8.50% Sr. Sec. Nts., 6/1/15 12 4,030,000 4,050,150
--------------
13,378,050
21 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--5.0%
DaVita, Inc., 6.625% Sr. Unsec. Nts., 3/15/13 $ 20,040,000 $ 19,539,000
- -----------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust IV, 7.875% Sr. Sub. Nts., 6/15/11 7,150,000 7,453,875
- -----------------------------------------------------------------------------------------------------------------------
HCA, Inc., 6.375% Nts., 1/15/15 24,530,000 20,881,163
- -----------------------------------------------------------------------------------------------------------------------
HealthSouth Corp., 10.75% Sr. Unsec. Nts., 6/15/16 11,410,000 12,037,550
- -----------------------------------------------------------------------------------------------------------------------
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 100,000 89,750
6.875% Sr. Sub. Nts., 12/15/15 575,000 503,125
- -----------------------------------------------------------------------------------------------------------------------
PTS Acquisition, 9.50% Sr. Unsec. Nts., 4/15/15 12 12,300,000 10,024,500
- -----------------------------------------------------------------------------------------------------------------------
Select Medical Corp., 7.625% Sr. Unsec. Sub. Nts., 2/1/15 13,045,000 10,370,775
- -----------------------------------------------------------------------------------------------------------------------
US Oncology, Inc., 9% Sr. Unsec. Nts., 8/15/12 10,265,000 10,265,000
- -----------------------------------------------------------------------------------------------------------------------
Vanguard Health Holding Co. I LLC, 0%/11.25% Sr. Disc. Nts., 10/1/15 10 15,800,000 12,166,000
--------------
103,330,738
- -----------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.5%
ReAble Therapeutics Finance LLC, 10.875% Sr. Unsec. Nts., 11/15/14 8 11,945,000 11,258,163
- -----------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--6.9%
- -----------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.6%
Alliant Techsystems, Inc., 6.75% Sr. Sub. Nts., 4/1/16 3 11,665,000 11,402,538
- -----------------------------------------------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 3,900,000 3,831,750
6.875% Sr. Unsec. Sub. Nts., 11/1/13 1,700,000 1,674,500
7.625% Sr. Sub. Nts., 2/1/18 1,710,000 1,718,550
- -----------------------------------------------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 3,267,000 3,144,488
6.125% Sr. Unsec. Sub. Nts., 1/15/14 2,400,000 2,352,000
6.375% Sr. Unsec. Sub. Nts., Series B, 10/15/15 6,075,000 5,968,688
7.625% Sr. Sub. Nts., 6/15/12 3,100,000 3,189,125
--------------
33,281,639
- -----------------------------------------------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp.:
12.125% Sr. Unsec. Unsub. Nts., 6/15/10 2,3,9 2,000,000 --
13% Sr. Unsec. Nts., 2/1/09 2,3,9 13,545,000 --
--------------
--
- -----------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS--0.3%
Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts., 6/15/09 1,670,000 1,457,075
- -----------------------------------------------------------------------------------------------------------------------
Nortek, Inc., 8.50% Sr. Unsec. Unsub. Nts., 9/1/14 7,210,000 5,371,450
--------------
6,828,525
22 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.3%
Allied Waste North America, Inc., 7.375% Sr. Sec. Nts., Series B, 4/15/14 $ 17,935,000 $ 17,733,231
- -----------------------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 2,3,9 4,000,000 --
- -----------------------------------------------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 4,455,000 4,388,175
7.50% Sr. Nts., 5/1/11 3,705,000 3,760,575
--------------
25,881,981
- -----------------------------------------------------------------------------------------------------------------------
MACHINERY--1.2%
Case New Holland, Inc., 7.125% Sr. Unsec. Nts., 3/1/14 18,760,000 18,478,600
- -----------------------------------------------------------------------------------------------------------------------
Douglas Dynamics LLC, 7.75% Sr. Nts., 1/15/12 3 3,600,000 2,718,000
- -----------------------------------------------------------------------------------------------------------------------
Greenbrier Cos., Inc., 8.375% Sr. Unsec. Nts., 5/15/15 3,965,000 3,746,925
--------------
24,943,525
- -----------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--1.4%
Avis Budget Car Rental LLC, 7.625% Sr. Unsec. Unsub. Nts., 5/15/14 12,170,000 10,557,475
- -----------------------------------------------------------------------------------------------------------------------
Hertz Corp.:
8.875% Sr. Unsec. Nts., 1/1/14 865,000 823,913
10.50% Sr. Unsec. Sub. Nts., 1/1/16 8,185,000 7,704,131
- -----------------------------------------------------------------------------------------------------------------------
Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09 4,800,000 4,896,000
- -----------------------------------------------------------------------------------------------------------------------
Stena AB, 7.50% Sr. Unsec. Nts., 11/1/13 3 4,746,000 4,704,473
--------------
28,685,992
- -----------------------------------------------------------------------------------------------------------------------
ADING COMPANIES & DISTRIBUTORS--1.1%
Ashtead Capital, Inc., 9% Nts., 8/15/16 8 2,305,000 1,878,575
- -----------------------------------------------------------------------------------------------------------------------
H&E Equipment Services, Inc., 8.375% Sr. Unsec. Nts., 7/15/16 2,540,000 2,108,200
- -----------------------------------------------------------------------------------------------------------------------
United Rentals, Inc., 7% Sr. Sub. Nts., 2/15/14 21,915,000 17,312,850
--------------
21,299,625
- -----------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--2.5%
- -----------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.5%
NXP BV/NXP Funding LLC, 9.50% Sr. Unsec. Unsub. Nts., 10/15/15 13,235,000 10,918,875
- -----------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 12.50% Sr. Unsub. Disc. Nts., 1/15/07 2,3 8,625,000 86
--------------
10,918,961
- -----------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.0%
PSINet, Inc., 10.50% Sr. Unsec. Nts., 12/1/06 2,3,9 4,250,000 EUR --
- -----------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.3%
RBS Global & Rexnord Corp., 11.75% Sr. Unsec. Sub. Nts., 8/1/16 5,925,000 5,154,750
- -----------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/09 2,3,9 7,603,797 EUR --
- -----------------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 2,3,9 2,562,215 --
--------------
--
23 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
IT SERVICES--1.7%
Fiserv, Inc., 6.125% Sr. Unsec. Unsub. Nts., 11/20/12 $ 19,910,000 $ 20,546,324
- -----------------------------------------------------------------------------------------------------------------------
iPayment Holdings, Inc., 9.75% Sr. Unsec. Sub. Nts., 5/15/14 3 4,090,000 3,650,325
- -----------------------------------------------------------------------------------------------------------------------
Iron Mountain, Inc., 8.625% Sr. Unsec. Sub. Nts., 4/1/13 10,875,000 11,038,125
--------------
35,234,774
- -----------------------------------------------------------------------------------------------------------------------
MATERIALS--7.2%
- -----------------------------------------------------------------------------------------------------------------------
CHEMICALS--1.5%
Huntsman International LLC:
7.375% Sr. Unsub. Nts., 1/15/15 3 1,800,000 1,872,000
7.875% Sr. Unsec. Sub. Nts., 11/15/14 3 1,365,000 1,453,725
- -----------------------------------------------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 1 3,860,000 4,130,200
11.625% Sr. Unsec. Nts., 10/15/10 190,000 201,400
- -----------------------------------------------------------------------------------------------------------------------
Momentive Performance Materials, Inc., 11.50% Sr. Unsec. Sub. Nts., 12/1/16 14,775,000 11,321,344
- -----------------------------------------------------------------------------------------------------------------------
Mosaic Co.:
7.375% Sr. Nts., 12/1/14 3 8,835,000 9,497,625
7.625% Sr. Nts., 12/1/16 8 1,160,000 1,252,800
--------------
29,729,094
- -----------------------------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.3%
NTK Holdings, Inc., 0%/10.75% Sr. Unsec. Nts., 3/1/14 10 14,465,000 7,087,850
- -----------------------------------------------------------------------------------------------------------------------
CONTAINERS & Packaging--2.2%
Crown Americas, Inc., 7.75% Sr. Nts., 11/15/15 16,725,000 17,268,563
- -----------------------------------------------------------------------------------------------------------------------
Graham Packaging Co., Inc., 9.875% Sr. Unsec. Sub. Nts., 10/15/14 13,365,000 11,293,425
- -----------------------------------------------------------------------------------------------------------------------
Graphic Packaging International Corp., 8.50% Sr. Nts., 8/15/11 16,705,000 16,496,188
--------------
45,058,176
- -----------------------------------------------------------------------------------------------------------------------
METALS & MINING--2.6%
Freeport-McMoRan Copper & Gold, Inc., 8.375% Sr. Nts., 4/1/17 27,860,000 29,636,075
- -----------------------------------------------------------------------------------------------------------------------
Ispat Inland ULC, 9.75% Sr. Sec. Nts., 4/1/14 8,032,000 8,641,163
- -----------------------------------------------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875% Sr. Sec. Nts., 10/15/13 3 4,031,000 4,252,705
- -----------------------------------------------------------------------------------------------------------------------
Novelis, Inc., 7.25% Sr. Unsec. Nts., 2/15/15 1 12,645,000 11,254,050
--------------
53,783,993
- -----------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.6%
NewPage Corp., 10% Sr. Sec. Nts., 5/1/12 11,505,000 11,735,100
- -----------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--9.4%
- -----------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--4.6%
Citizens Communications Co., 6.25% Sr. Nts., 1/15/13 29,465,000 26,813,150
- -----------------------------------------------------------------------------------------------------------------------
FairPoint Communications, Inc., 13.125% Sr. Nts., 4/1/18 10,185,000 9,828,525
- -----------------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05 2,3,9 8,000,000 --
- -----------------------------------------------------------------------------------------------------------------------
Qwest Corp., 8.875% Unsec. Unsub. Nts., 3/15/12 25,750,000 26,393,750
24 | OPPENHEIMER CHAMPION INCOME FUND
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Teligent, Inc., 11.50% Sr. Nts., 12/1/08 2,3,9 $ 4,550,000 $ --
- -----------------------------------------------------------------------------------------------------------------------
West Corp., 9.50% Sr. Unsec. Nts., 10/15/14 5,810,000 5,229,000
- -----------------------------------------------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Unsec. Unsub. Nts., 8/1/13 16,585,000 16,377,688
8.625% Sr. Unsec. Unsub. Nts., 8/1/16 10,705,000 10,571,188
- -----------------------------------------------------------------------------------------------------------------------
Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10 2,3,9 4,500,000 --
-----------------
95,213,301
- -----------------------------------------------------------------------------------------------------------------------
MEDIA--0.5%
NTL Cable plc, 9.125% Sr. Nts., 8/15/16 11,535,000 10,381,500
- -----------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.3%
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 2,643,000 2,715,683
7.50% Sr. Nts., 5/1/12 19,575,000 20,113,313
- -----------------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., Sr. Unsec. Disc. Nts., 10/1/07 2,3,9 13,969,000 --
- -----------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 7.375% Sr. Nts., Series D, 8/1/15 74,380,000 57,311,798
- -----------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.875% Sr. Nts., 2/1/10 3 5,800,000 5,988,500
- -----------------------------------------------------------------------------------------------------------------------
Sprint Capital Corp., 8.75% Nts., 3/15/32 2,408,000 2,039,309
-----------------
88,168,603
- -----------------------------------------------------------------------------------------------------------------------
UTILITIES--1.2%
- -----------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.0%
Edison Mission Energy, 7% Sr. Unsec. Nts., 5/15/17 17,975,000 17,975,000
- -----------------------------------------------------------------------------------------------------------------------
Sierra Pacific Resources, 6.75% Sr. Unsec. Nts., 8/15/17 3,335,000 3,233,849
-----------------
21,208,849
- -----------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS--0.2%
AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19 3 1,947,759 1,957,497
- -----------------------------------------------------------------------------------------------------------------------
Mirant Americas Generation LLC, 9.125% Sr. Unsec. Nts., 5/1/31 1,580,000 1,441,750
-----------------
3,399,247
-----------------
Total Corporate Bonds and Notes (Cost $2,032,231,213) 1,822,860,443
SHARES
- -----------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--1.3%
- -----------------------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg. 3,9,12 247,589 --
- -----------------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg. 3,9 43,000 --
- -----------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 8.25% Non-Cum. Sub.,
Series S, Non Vtg. 824,825 19,837,041
- -----------------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg. 3,9,12 3,728 --
- -----------------------------------------------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A 8 52,500 5,893,125
-----------------
Total Preferred Stocks (Cost $36,910,395) 25,730,166
25 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--3.7%
- ------------------------------------------------------------------------------------------------------------------------
AT&T, Inc. 275,012 $ 10,532,960
- ------------------------------------------------------------------------------------------------------------------------
Comcast Corp., Cl. A 941,686 18,212,207
- ------------------------------------------------------------------------------------------------------------------------
Constellation Energy Group, Inc. 176,191 15,552,380
- ------------------------------------------------------------------------------------------------------------------------
Global Aero Logistics, Inc. 3,9 45,938 344,535
- ------------------------------------------------------------------------------------------------------------------------
Mediacom Communications Corp. 9 159,186 689,275
- ------------------------------------------------------------------------------------------------------------------------
Premier Holdings Ltd. 3,9 288,828 --
- ------------------------------------------------------------------------------------------------------------------------
Public Service Enterprise Group, Inc. 130,548 5,246,724
- ------------------------------------------------------------------------------------------------------------------------
Revlon, Inc., Cl. A 9 5,346,038 5,239,117
- ------------------------------------------------------------------------------------------------------------------------
Telus Corp. 227,095 9,889,559
- ------------------------------------------------------------------------------------------------------------------------
Verizon Communications, Inc. 266,050 9,697,523
---------------
Total Common Stocks (Cost $81,872,906) 75,404,280
UNITS
- ------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ------------------------------------------------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 3,9 7,450 --
- ------------------------------------------------------------------------------------------------------------------------
Global Aero Logistics, Inc. Wts., Exp. 2/28/11 9 5,633 6,828
- ------------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 3,9 4,190 --
---------------
Total Rights, Warrants and Certificates (Cost $42,773) 6,828
SHARES
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY--2.4%
- ------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 3.29% 4,13 (Cost $ 50,105,512) 50,105,512 50,105,512
- ------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,386,378,210) 105.0% 2,153,094,930
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (5.0) (101,668,734)
-------------------------------
NET ASSETS 100.0% $2,051,426,196
===============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
EUR Euro
1. Represents the current interest rate for a variable or increasing rate
security.
2. Issue is in default. See Note 1 of accompanying Notes.
3. Illiquid security. The aggregate value of illiquid securities as of March 31,
2008 was $59,281,703, which represents 2.89% of the Fund's net assets. See Note
8 of accompanying Notes.
4. Rate shown is the 7-day yield as of March 31, 2008.
26 | OPPENHEIMER CHAMPION INCOME FUND
5. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $8,721,442 or 0.43% of the Fund's net assets
as of March 31, 2008.
6. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $8,488,263. See Note 6 of accompanying Notes.
7. When-issued security or delayed delivery to be delivered and settled after
March 31, 2008. See Note 1 of accompanying Notes.
8. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $160,250,122 or 7.81% of the Fund's net
assets as of March 31, 2008.
9. Non-income producing security.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
11. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
12. Interest or dividend is paid-in-kind, when applicable.
13. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended March 31, 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 GROSS GROSS SHARES
SEPTEMBER 30, 2007 ADDITIONS REDUCTIONS MARCH 31, 2008
- -----------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E 186,504,613 744,388,127 880,787,228 50,105,512
DIVIDEND
VALUE INCOME
- ---------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 50,105,512 $ 2,492,174
Futures Contracts as of March 31, 2008 are as follows:
UNREALIZED
NUMBER OF EXPIRATION APPRECIATION
CONTRACT DESCRIPTION BUY/SELL CONTRACTS DATE VALUE (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index Sell 192 6/19/08 $ 63,552,000 $ (797,384)
U.S. Long Bonds Sell 201 6/19/08 23,878,172 (218,933)
U.S. Treasury Nts., 2 yr. Buy 372 6/30/08 79,852,125 (34,782)
U.S. Treasury Nts., 5 yr. Buy 9 6/30/08 1,028,109 16,992
U.S. Treasury Nts., 10 yr. Buy 475 6/19/08 56,502,734 135,505
---------------
$ (898,602)
===============
27 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes USA, Inc. Sell $ 4,580 4.7000% 9/20/08 $ -- $ (154,845)
Capmark Financial Group, Inc. Sell 875 5.0000 6/20/12 (245,000) (238,434)
Citigroup, Inc. Sell 24,850 3.2500 9/20/08 -- (1,388,096)
Dillard's, Inc. Sell 3,850 1.9000 12/20/08 -- (39,728)
HCP, Inc. Sell 1,475 4.6000 3/20/09 -- 1,394
iStar Financial, Inc. Sell 1,940 4.4000 12/20/12 -- (258,154)
Merrill Lynch & Co., Inc. Sell 7,440 0.6800 9/20/08 -- 833
Six Flags, Inc. Sell 2,905 7.0000 9/20/08 -- (258,928)
Six Flags, Inc. Sell 1,885 8.2500 12/20/08 -- (253,864)
The Mosaic Co. Sell 2,350 1.5000 9/20/12 -- 58,985
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank NA, New York:
Amkor Technology, Inc. Sell 1,355 2.0500 9/20/08 -- (2,341)
Cablevision Systems Corp. Sell 750 3.1000 12/20/10 -- (39,403)
Capmark Financial Group, Inc. Sell 7,275 9.7000 12/20/12 -- (992,266)
Capmark Financial Group, Inc. Sell 6,050 9.7500 12/20/12 -- (817,095)
Capmark Financial Group, Inc. Sell 17,425 7.1250 12/20/12 -- (3,576,621)
Ford Motor Credit Co. Sell 13,200 2.3200 3/20/12 -- (2,817,883)
Intelsat Ltd. Sell 2,825 5.0000 3/20/09 -- (22,041)
Intelsat Ltd. Sell 2,895 4.3000 12/20/08 -- (73,215)
Nalco Co. Sell 2,200 3.6000 9/20/12 -- (25,498)
Nortel Networks Corp. Sell 8,855 1.8900 9/20/08 -- 2,603
Reliant Energy, Inc. Sell 2,300 2.4500 9/20/11 -- (162,051)
Reliant Energy, Inc. Sell 5,520 2.6000 9/20/11 -- (364,497)
Reliant Energy, Inc. Sell 5,900 3.9000 9/20/11 -- (163,288)
Tribune Co. Sell 2,500 5.0000 3/20/10 (825,000) (1,034,778)
Tribune Co. Sell 2,835 5.0000 3/20/10 (907,200) (1,173,438)
Tribune Co. Sell 2,735 5.0000 3/20/10 (895,713) (1,132,047)
Tribune Co. Sell 2,655 5.0000 3/20/10 (929,250) (1,098,934)
Tribune Co. Sell 6,665 7.6000 9/20/08 -- (665,834)
Tribune Co. Sell 5,915 7.5000 9/20/08 -- (593,588)
Univision Communications, Inc. Sell 2,301 1.1000 6/20/08 -- (75,418)
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Suisse International:
Aramark Corp. Sell 3,600 6.0000 3/20/13 -- 13,608
ArvinMeritor, Inc. Sell 4,610 1.4000 9/20/08 -- (117,431)
ArvinMeritor, Inc. Sell 4,330 1.6000 9/20/08 -- (106,024)
Capmark Financial Group, Inc. Sell 5,340 3.5000 6/20/12 -- (1,694,371)
Capmark Financial Group, Inc. Sell 5,875 5.2000 12/20/12 -- (1,508,342)
Capmark Financial Group, Inc. Sell 2,880 6.2500 12/20/12 -- (658,535)
CDX.NA.IG.10 Index Buy 20,515 1.5500 6/20/13 (133,790) (154,494)
CDX.NA.IG.HVOL.10 Index Buy 20,515 3.5000 6/20/13 (233,031) (236,635)
CenturyTel, Inc. Buy 5,750 0.3775 9/20/12 -- 236,176
28 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse International: Continued
Charter Communications
Holdings LLC Buy $ 880 7.0000% 9/20/10 $ -- $ 386,065
Charter Communications
Holdings LLC Sell 880 5.0000 9/20/17 (176,000) (538,146)
Charter Communications
Holdings LLC Buy 3,255 5.0000 9/20/10 207,506 1,497,606
Charter Communications
Holdings LLC Sell 3,255 5.0000 9/20/17 (651,000) (1,990,530)
Dean Foods Co. Sell 2,280 1.0200 6/20/11 -- (301,592)
Dean Foods Co. Sell 2,365 1.0000 6/20/11 -- (314,112)
El Paso Corp. Sell 2,575 2.8000 3/20/18 -- (59,663)
Ford Motor Credit Co. Sell 10,100 2.3850 3/20/12 -- (2,137,594)
Ford Motor Credit Co. Sell 4,100 2.5500 3/20/12 -- (848,659)
Freescale Semiconductor, Inc. Sell 5,270 5.0000 3/20/13 (961,775) (1,155,901)
GMAC LLC Sell 9,820 5.0000 3/20/09 (1,423,900) (943,378)
GMAC LLC Sell 9,605 1.3900 3/20/17 -- (3,044,449)
Harrah's Operating Co., Inc. Sell 6,015 5.0000 3/20/10 (383,456) (347,625)
Intelsat Ltd. Sell 295 5.7500 3/20/09 -- (168)
Intelsat Ltd. Sell 2,855 4.4000 3/20/09 -- (38,791)
iStar Financial, Inc. Sell 775 4.0000 12/20/12 -- (103,128)
iStar Financial, Inc. Sell 4,540 4.1500 12/20/12 -- (604,133)
iStar Financial, Inc. Sell 645 12.0000 3/20/09 -- (9,305)
Massey Energy Co. Sell 2,500 5.0000 3/20/13 -- 47,885
Massey Energy Co. Sell 995 5.0000 3/20/13 -- 19,058
Nalco Co. Sell 4,425 3.4000 9/20/12 -- (84,141)
Nalco Co. Sell 2,165 3.6000 9/20/12 -- (60,884)
Rite Aid Corp. Sell 2,265 7.5000 3/20/09 -- (31,370)
Smithfield Foods, Inc. Sell 4,650 1.4900 3/20/12 -- (474,830)
Sprint Nextel Corp. Sell 4,240 6.3000 3/20/09 -- 8,221
Tenet Healthcare Corp. Sell 10,155 4.0500 12/20/08 -- 88,795
The Goodyear Tire & Rubber Co. Sell 2,990 1.5500 9/20/08 -- (706)
Toys "R" Us, Inc. Sell 2,495 2.8000 9/20/08 -- (68,802)
Tribune Co. Sell 3,135 6.3500 12/20/08 -- (386,875)
TXU Corp. Sell 4,765 1.5300 6/20/11 -- (609,177)
TXU Corp. Sell 2,380 1.6100 6/20/11 -- (299,178)
TXU Corp. Sell 645 5.9100 12/20/12 -- (29,369)
TXU Corp. Sell 625 6.0500 12/20/12 -- (25,452)
TXU Corp. Sell 645 6.0000 12/20/12 -- (27,374)
Univision Communications, Inc. Sell 6,500 14.6000 3/20/09 -- 69,017
Vornado Realty LP Sell 985 3.6000 3/20/09 -- (1,686)
Wachovia Corp. Sell 2,100 1.0000 3/20/09 -- 34
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
ABX.HE.AA.06-2 Index Sell 5,710 0.1700 5/25/46 (685,146) (3,316,861)
Ambac Assurance Corp. Sell 2,820 4.5500 9/20/08 -- (66,967)
29 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Ambac Assurance Corp. Sell $ 2,235 4.5500% 9/20/08 $ -- $ (53,075)
Cemex Sell 985 2.0000 3/20/09 -- 32
CenturyTel, Inc. Buy 8,625 0.4250 9/20/12 -- 337,626
CenturyTel, Inc. Buy 10,520 0.5300 9/20/12 -- 366,938
Countrywide Home Loans, Inc. Sell 1,830 3.2500 9/20/08 -- (25,728)
Countrywide Home Loans, Inc. Sell 24,825 2.5500 9/20/08 -- (434,959)
Countrywide Home Loans, Inc. Sell 5,360 8.5000 12/20/08 -- 33,897
Countrywide Home Loans, Inc. Sell 11,420 9.0000 12/20/08 -- 113,378
Countrywide Home Loans, Inc. Sell 11,405 9.7500 12/20/08 -- 174,896
CVRD Inco Ltd. Buy 4,565 0.6300 3/20/17 -- 207,516
Ford Motor Co. Sell 2,930 8.2000 3/20/18 -- (216,120)
Ford Motor Co. Sell 12,110 6.0000 12/20/16 -- (1,789,010)
Ford Motor Co. Sell 17,975 5.8500 12/20/16 -- (3,661,508)
Ford Motor Co. Sell 14,385 5.8000 12/20/16 -- (2,958,505)
Ford Motor Credit Co. Sell 21,350 2.3900 3/20/12 -- (4,515,568)
Ford Motor Credit Co. Sell 7,120 2.3400 3/20/12 -- (1,515,933)
Freescale Semiconductor, Inc. Sell 1,060 5.0000 3/20/13 (188,150) (190,096)
Freescale Semiconductor, Inc. Sell 1,510 5.0000 3/20/13 (286,900) (295,965)
General Motors Corp. Sell 9,690 4.7500 12/20/16 -- (1,855,732)
General Motors Corp. Sell 11,510 4.6800 12/20/16 -- (2,239,213)
GMAC LLC Sell 9,315 1.3700 3/20/17 -- (2,963,195)
Intelsat, Ltd. Sell 2,835 4.7500 3/20/09 -- (28,951)
Intelsat, Ltd. Sell 1,700 5.0000 3/20/09 -- (13,263)
Intelsat, Ltd. Sell 1,145 4.4000 3/20/09 -- (15,557)
iStar Financial, Inc. Sell 5,570 4.0000 12/20/12 -- (741,194)
iStar Financial, Inc. Sell 1,590 12.0000 3/20/09 -- (22,939)
iStar Financial, Inc. Sell 19,975 2.9250 12/20/08 -- (1,562,584)
iStar Financial, Inc. Sell 11,620 3.0000 12/20/08 -- (902,955)
iStar Financial, Inc. Sell 12,890 5.8500 12/20/08 -- (746,937)
iStar Financial, Inc. Sell 4,265 4.3200 12/20/12 -- (567,539)
iStar Financial, Inc. Sell 5,405 4.5000 12/20/12 -- (719,238)
Lehman Brothers Holdings, Inc. Sell 3,720 1.4100 9/20/08 -- (94,577)
MBIA, Inc. Sell 3,770 1.5200 9/20/08 -- (245,691)
MBIA, Inc. Sell 5,730 4.9000 12/20/12 -- (743,662)
Merrill Lynch & Co., Inc. Sell 1,060 1.8500 6/20/08 -- 3,322
MGM Mirage Sell 4,610 1.1500 12/20/09 -- (173,258)
SLM Corp. Sell 2,985 2.0100 9/20/09 -- (285,527)
TXU Corp. Sell 5,635 2.5500 9/20/08 -- (52,152)
Vale Overseas Ltd. Sell 4,565 1.0500 3/20/17 -- (427,056)
Vornado Realty LP Sell 1,995 3.8750 6/20/09 -- 1,997
Wachovia Corp. Sell 4,660 1.0000 3/20/09 -- 77
Washington Mutual, Inc. Sell 3,500 4.5000 12/20/08 -- (74,102)
Washington Mutual, Inc. Sell 2,260 4.5000 12/20/08 -- (47,849)
30 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital Markets LP:
Amkor Technology, Inc. Sell $ 1,535 2.6500% 9/20/08 $ -- $ 1,969
ArvinMeritor, Inc. Sell 4,615 1.6000 9/20/08 -- (113,003)
ArvinMeritor, Inc. Sell 3,015 2.2500 9/20/08 -- (64,150)
Beazer Homes USA, Inc. Sell 4,720 2.5000 6/20/08 -- (97,931)
Beazer Homes USA, Inc. Sell 4,200 2.6500 9/20/08 -- (169,033)
Beazer Homes USA, Inc. Sell 4,580 4.8000 9/20/08 -- (136,525)
CenturyTel, Inc. Buy 3,555 2.2000 3/20/13 -- (48,572)
First Data Corp. Sell 890 3.0000 9/20/08 -- (1,060)
First Data Corp. Sell 3,015 1.3500 9/20/08 -- (27,771)
Ford Motor Co. Sell 2,500 6.4000 12/20/17 -- (354,190)
General Mills, Inc. Sell 2,540 0.3800 12/20/12 -- (1,933)
General Motors Corp. Sell 9,690 4.9500 12/20/16 -- (1,771,729)
General Motors Corp. Sell 2,500 5.9500 12/20/17 -- (340,810)
GMAC LLC Sell 4,650 1.3900 3/20/17 -- (1,473,887)
GMAC LLC Sell 5,660 1.3900 3/20/17 -- (1,794,022)
GMAC LLC Sell 2,115 1.3700 3/20/17 -- (672,803)
GMAC LLC Sell 15,150 1.3900 3/20/17 -- (4,802,020)
iStar Financial, Inc. Sell 12,460 3.9500 12/20/12 -- (1,658,040)
K. Hovnanian Enterprises, Inc. Sell 6,661 2.0000 6/20/08 -- (229,338)
K. Hovnanian Enterprises, Inc. Sell 9,189 2.0000 6/20/08 -- (316,377)
K. Hovnanian Enterprises, Inc. Sell 9,195 1.8000 6/20/08 -- (321,126)
Lehman Brothers Holdings, Inc. Sell 3,770 0.8000 9/20/10 -- (203,829)
Lennar Corp. Sell 4,375 2.9000 12/20/08 -- (119,766)
Merrill Lynch & Co.,Inc. Sell 2,410 1.8500 6/20/08 -- 7,553
Nalco Co. Sell 2,365 3.7000 9/20/12 -- (18,631)
Qwest Corp. Sell 3,555 4.7000 3/20/13 -- 104,471
R.H. Donnelley Corp. Sell 2,240 9.0000 3/20/09 -- (77,576)
Rite Aid Corp. Sell 3,845 8.0600 3/20/09 -- (33,244)
Sara Lee Corp. Buy 2,455 0.4190 9/20/12 -- 67,775
Six Flags, Inc. Sell 1,835 10.8500 12/20/08 -- (216,833)
Smurfit-Stone Container
Enterprises, Inc. Sell 2,980 1.4500 9/20/08 -- (89)
Sprint Nextel Corp. Sell 1,520 6.3000 3/20/09 -- 2,947
Standard Pacific Corp. Sell 19,931 2.2000 6/20/08 -- (359,356)
Univision Communications, Inc. Sell 4,895 5.0000 6/20/09 (489,500) (44,956)
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs International:
ABX.HE.AA.06-1 Index Sell 9,410 0.1700 5/25/46 (3,716,728) (5,457,533)
ABX.HE.AA.06-2 Index Sell 2,095 0.1700 5/25/46 (172,610) (1,215,041)
CMBX.NA.AJ.3 Index Sell 11,700 1.4700 12/13/49 (1,438,455) (2,125,304)
CMBX.NA.AJ.4 Index Sell 11,700 0.9600 2/17/51 (2,017,939) (2,530,095)
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank NA,
NY Branch:
Citigroup, Inc. Sell 4,520 1.3000 9/20/08 -- (294,623)
CMBX.NA.AJ.3 Index Sell 6,000 1.4700 12/13/49 (719,316) (1,003,203)
CMBX.NA.AJ.4 Index Sell 6,000 0.9600 2/17/51 (1,016,158) (1,251,751)
31 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank NA, NY Branch: Continued
Countrywide Home Loans, Inc. Sell $ 9,380 1.8000% 9/20/08 $ -- $ (199,137)
Dean Foods Co. Sell 4,795 1.0300 6/20/11 -- (632,974)
Dean Foods Co. Sell 4,795 1.0600 6/20/11 -- (629,090)
Dean Foods Co. Sell 2,400 1.0500 6/20/11 -- (315,521)
Dean Foods Co. Sell 6,145 1.0800 6/20/11 -- (802,887)
Dole Food Co., Inc. Sell 810 2.3800 9/20/08 -- (39,982)
Ford Motor Co. Sell 12,110 6.0000 12/20/16 -- (2,395,394)
General Motors Corp. Sell 14,375 4.7500 12/20/16 -- (2,752,956)
Lehman Brothers Holdings, Inc. Sell 29,550 1.5500 9/20/08 -- (730,860)
Merrill Lynch & Co., Inc. Sell 29,550 0.8000 9/20/08 -- 21,217
Rite Aid Corp. Sell 2,250 1.4000 9/20/08 -- (97,333)
The Bear Stearns Cos., Inc. Sell 7,530 2.7000 9/20/08 -- (6,039)
The Mosaic Co. Sell 2,345 1.5000 9/20/12 -- 58,860
The Mosaic Co. Sell 4,480 1.5000 9/20/12 -- 112,448
Toys "R" Us, Inc. Sell 2,300 1.9200 9/20/08 -- (73,347)
Tribune Co. Sell 4,560 8.5000 9/20/08 -- (436,957)
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special Financing, Inc.:
ABX.HE.AA.06-1 Index Sell 6,590 0.1700 5/25/46 (4,266,496) (3,816,592)
ABX.HE.AA.06-2 Index Sell 2,500 0.1700 5/25/46 (612,358) (1,447,872)
Allied Waste North America,
Inc. Sell 2,760 2.2100 9/20/09 -- 2,501
Ambac Assurance Corp. Sell 1,180 4.6500 9/20/08 -- (27,440)
Amkor Technology, Inc. Sell 2,093 2.5000 9/20/08 -- 1,109
Aramark Corp. Sell 2,560 6.0000 3/20/13 -- 9,677
ArvinMeritor, Inc. Sell 4,645 1.1500 9/20/08 -- (124,054)
ArvinMeritor, Inc. Sell 4,210 2.2000 9/20/08 -- (27,845)
ArvinMeritor, Inc. Sell 2,286 3.0000 9/20/08 -- (40,174)
Beazer Homes USA, Inc. Sell 4,885 2.6500 6/20/08 -- (99,527)
Beazer Homes USA, Inc. Sell 2,400 2.3300 6/20/08 -- (50,810)
Beazer Homes USA, Inc. Sell 6,810 5.4000 9/20/08 -- (183,169)
Beazer Homes USA, Inc. Sell 3,015 5.0000 9/20/08 (301,500) (86,947)
Cablevision Systems Corp. Sell 1,180 3.4000 12/20/10 -- (71,277)
Cablevision Systems Corp. Sell 4,735 3.1300 12/20/10 -- (252,489)
Capital One Bank Buy 1,290 1.8000 12/20/12 -- 94,144
Centex Corp. Sell 3,010 1.7500 9/20/09 -- (170,441)
CenturyTel, Inc. Buy 5,900 1.9200 3/20/13 -- (8,644)
CenturyTel, Inc. Buy 5,165 2.0500 3/20/13 -- (36,816)
CenturyTel, Inc. Buy 4,095 2.0500 3/20/13 -- (29,189)
CenturyTel, Inc. Buy 2,255 2.1700 3/20/13 -- (27,863)
Charter Communications
Holdings LLC Sell 2,210 5.0000 9/20/12 (331,500) (1,263,132)
Charter Communications
Holdings LLC Buy 2,210 7.2500 9/20/10 -- 963,642
32 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) RATE DATE (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special
Financing, Inc.: Continued
Charter Communications
Holdings LLC Sell $ 2,205 5.0000% 9/20/12 $ (352,800) $(1,260,274)
Charter Communications
Holdings LLC Buy 2,205 7.6000 9/20/10 -- 953,210
Charter Communications
Holdings LLC Buy 1,670 7.4000 9/20/10 -- 725,503
Charter Communications
Holdings LLC Sell 1,670 5.0000 9/20/12 (250,500) (954,494)
CMBX.NA.AJ.3 Index Sell 12,500 1.4700 12/13/49 (1,763,659) (2,092,830)
Companhia Vale Do Rio Doce Sell 3,540 1.5900 3/20/17 -- (260,409)
CSC Holdings, Inc. Sell 2,625 5.6000 3/20/13 -- 44,680
CVRD Inco Ltd. Buy 3,540 0.7100 3/20/17 -- 115,248
Dillard's, Inc. Sell 4,935 2.2500 12/20/08 -- 54,981
Dillard's, Inc. Sell 14,305 2.2500 12/20/08 -- 159,372
Dole Food Co., Inc. Sell 4,255 5.0000 3/20/09 (680,800) (489,648)
Dole Food Co., Inc. Sell 4,345 3.2000 9/20/08 -- (197,289)
Dole Food Co., Inc. Sell 2,955 5.2500 9/20/08 -- (104,959)
Dole Food Co., Inc. Sell 3,020 3.4500 9/20/08 -- (133,487)
D.R. Horton, Inc. Sell 5,735 4.2000 12/20/08 -- 9,813
First Data Corp. Sell 4,485 2.7500 9/20/08 -- (16,191)
First Data Corp. Sell 4,485 3.5000 9/20/08 -- 619
First Data Corp. Sell 2,100 3.0000 9/20/08 -- (4,956)
First Data Corp. Sell 2,400 3.0000 9/20/08 -- (5,664)
Ford Motor Credit Co. LLC Sell 6,320 9.0500 3/20/10 -- (133,023)
Freescale Semiconductor, Inc. Sell 1,340 5.0000 3/20/13 (251,250) (226,195)
General Mills, Inc. Sell 3,075 0.4000 12/20/12 -- 378
General Motors Corp. Sell 1,090 7.7000 3/20/18 -- (89,139)
Genworth Financial, Inc. Sell 3,055 3.2500 3/20/09 -- 4,479
Georgia-Pacific LLC Sell 3,100 0.8000 12/20/08 -- (64,880)
GMAC LLC Sell 4,985 1.4000 3/20/17 -- (1,577,219)
GMAC LLC Sell 4,650 1.4000 3/20/17 -- (1,471,227)
Harrah's Operating Co., Inc. Sell 5,600 2.3000 9/20/08 -- (120,305)
K. Hovnanian Enterprises, Inc. Sell 6,820 4.2200 9/20/08 -- (349,327)
K. Hovnanian Enterprises, Inc. Sell 3,015 7.5000 9/20/08 -- (107,150)
Lennar Corp. Sell 17,715 2.9000 12/20/08 -- (484,948)
Levi Strauss & Co. Sell 2,930 1.6000 9/20/08 -- 8,374
MBIA, Inc. Sell 24,915 1.9500 9/20/08 -- (1,571,763)
Morgan Stanley Sell 7,485 0.6400 9/20/08 -- (3,518)
Nalco Co. Sell 1,325 3.4000 9/20/12 -- (25,195)
Nortel Networks Corp. Sell 4,435 1.8500 9/20/08 -- 412
Owens-Illinois, Inc. Sell 5,285 3.2000 3/20/13 -- 16,236
Owens-Illinois, Inc. Sell 5,465 3.4100 3/20/13 -- 64,405
Owens-Illinois, Inc. Sell 6,105 3.4600 3/20/13 -- 84,609
Pulte Homes, Inc. Sell 4,525 2.8500 9/20/09 -- (54,897)
33 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited/ Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000s) RATE DATE (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Lehman
Brothers
Special
Financing,
Inc.:
Continued
Qwest Corp. Sell $ 2,255 4.7500% 3/20/13 $ -- $ 70,796
R.H. Donnelley Corp. Sell 285 5.0000 3/20/09 (28,500) (28,063)
Reliant Energy, Inc. Sell 3,925 2.1500 9/20/11 -- (311,284)
Reliant Energy, Inc. Sell 2,250 2.5000 9/20/11 -- (155,210)
Residential Capital LLC Sell 16,530 5.0000 6/20/08 (2,314,200) (3,167,528)
Residential Capital LLC Sell 1,775 5.0000 6/20/08 (230,750) (340,131)
Rite Aid Corp. Sell 2,320 1.3500 9/20/08 -- (100,927)
Rite Aid Corp. Sell 5,400 1.3500 9/20/08 -- (234,916)
Rite Aid Corp. Sell 525 1.4500 9/20/08 -- (22,583)
Rite Aid Corp. Sell 2,930 3.2500 9/20/08 -- (100,373)
Saks, Inc. Sell 2,930 1.7000 9/20/08 -- 138
Six Flags, Inc. Sell 7,590 5.2200 9/20/08 -- (738,416)
Six Flags, Inc. Sell 2,465 7.0000 9/20/08 -- (219,710)
Six Flags, Inc. Sell 1,950 5.0000 9/20/08 -- (191,677)
Smithfield Foods, Inc. Sell 6,100 1.5800 3/20/12 -- (604,016)
Smurfit-Stone Container
Enterprises, Inc. Sell 2,560 6.7000 6/20/13 -- (23,260)
Smurfit-Stone Container
Enterprises, Inc. Sell 2,235 6.6000 6/20/13 -- (28,566)
Sprint Nextel Corp. Sell 2,865 6.3000 3/20/09 -- 5,555
Standard Pacific Corp. Sell 3,550 5.0000 6/20/08 (426,000) (39,185)
Tenet Healthcare Corp. Sell 3,015 4.9000 3/20/09 -- 58,648
The Bear Stearns Cos., Inc. Sell 29,535 1.6000 9/20/08 -- (193,779)
The Hartford Financial Services
Group, Inc. Sell 1,010 2.3500 3/20/09 -- 13,329
The Hartford Financial Services
Group, Inc. Sell 1,040 2.3500 3/20/09 -- 13,725
Toys "R" Us, Inc. Sell 195 8.6100 3/20/09 -- 7,060
Toys "R" Us, Inc. Sell 200 8.6100 3/20/09 -- 7,241
Toys "R" Us, Inc. Sell 4,660 1.8500 9/20/08 -- (150,206)
Toys "R" Us, Inc. Sell 6,250 1.9500 9/20/08 -- (198,394)
Toys "R" Us, Inc. Sell 1,990 4.3000 9/20/08 -- (40,246)
Toys "R" Us, Inc. Sell 3,015 3.2500 9/20/08 -- (76,494)
Tribune Co. Sell 2,010 5.0000 3/20/10 (603,000) (831,961)
Tribune Co. Sell 2,110 5.0000 3/20/10 (664,650) (873,352)
Tribune Co. Sell 1,965 5.0000 3/20/10 (510,900) (813,335)
Tribune Co. Sell 985 5.0000 3/20/10 (325,050) (407,702)
Tribune Co. Sell 2,620 5.0000 3/20/10 (864,600) (1,084,447)
Tribune Co. Sell 2,660 5.0000 3/20/10 (931,000) (1,101,003)
Tribune Co. Sell 2,600 5.0000 3/20/10 (884,000) (1,076,169)
Tribune Co. Sell 2,205 7.4500 9/20/08 -- (221,779)
Tribune Co. Sell 2,935 7.5500 9/20/08 -- (293,873)
34 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000s) RATE DATE (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.: Continued
Tribune Co. Sell $ 1,180 7.5500% 9/20/08 $ -- $ (118,150)
Tribune Co. Sell 1,020 6.4000 12/20/08 -- (125,542)
Tribune Co. Sell 2,540 6.0000 12/20/08 -- (319,230)
Univision Communications,
Inc. Sell 4,455 5.0000 3/20/09 (378,675) (431,302)
Univision Communications,
Inc. Sell 4,594 1.1500 6/20/08 -- (150,003)
Univision Communications,
Inc. Sell 2,350 3.0000 12/20/08 -- (210,727)
Univision Communications,
Inc. Sell 2,150 3.0000 12/20/08 -- (192,793)
Univision Communications,
Inc. Sell 2,301 1.1000 6/20/08 -- (75,418)
Washington Mutual, Inc. Sell 8,135 4.4000 12/20/08 -- (178,106)
Washington Mutual, Inc. Sell 15,025 5.1500 12/20/08 -- (247,624)
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch
International:
El Paso Corp. Sell 2,725 2.9000 3/20/18 -- (44,875)
El Paso Corp. Sell 6,950 2.8900 3/20/18 -- (119,109)
Ford Motor Co. Sell 19,290 5.3000 12/20/12 -- (4,338,688)
Freescale Semiconductor,
Inc. Sell 2,520 5.0000 3/20/13 (469,350) (527,527)
General Motors Corp. Sell 12,860 4.0500 12/20/12 -- (2,691,894)
Reliant Energy, Inc. Sell 1,965 2.0500 9/20/11 -- (161,639)
Smurfit-Stone Container
Enterprises, Inc. Sell 5,120 6.7000 6/20/13 -- (46,520)
TXU Corp. Sell 4,760 1.5300 6/20/11 -- (608,537)
TXU Corp. Sell 4,745 1.5800 6/20/11 -- (600,276)
TXU Corp. Sell 4,745 1.5900 6/20/11 -- (599,004)
TXU Corp. Sell 6,000 1.6200 6/20/11 -- (752,622)
TXU Corp. Sell 6,785 2.0600 6/20/11 -- (771,271)
- -----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
& Co.
International
Ltd.:
Aramark Corp. Sell 4,320 5.9200 3/20/13 -- 3,430
Capmark Financial Group,
Inc. Sell 2,760 7.4000 12/20/12 -- (546,215)
Intelsat, Ltd. Sell 2,800 2.7500 12/20/08 -- (102,063)
J.C. Penney Co., Inc. Sell 2,015 1.3000 12/20/17 -- (99,712)
J.C. Penney Co., Inc. Sell 1,870 1.0700 12/20/17 -- (123,355)
Kohl's Corp. Buy 2,805 0.6600 12/20/17 -- 192,964
Kohl's Corp. Buy 3,020 0.8700 12/20/17 -- 160,984
Lennar Corp. Sell 8,835 2.9000 12/20/08 -- (241,858)
Massey Energy Co. Sell 3,860 5.1000 9/20/12 -- 133,649
Massey Energy Co. Sell 925 5.2300 9/20/12 -- 36,453
Residential Capital LLC Sell 4,525 6.2000 9/20/08 -- (1,476,281)
Residential Capital LLC Sell 995 5.0000 6/20/08 (144,275) (190,665)
Sara Lee Corp. Buy 3,160 0.4180 9/20/12 -- 87,368
The Hartford Financial
Services Group, Inc. Sell 1,005 2.4000 3/20/09 -- 13,760
35 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited/ Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
PAY/
BUY/SELL NOTIONAL RECEIVE PREMIUM
SWAP CREDIT AMOUNT FIXED TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000s) RATE DATE (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.:
ABX.HE.AA.06-2 Index Sell $ 1,845 0.1700% 5/25/46 $ (147,400) $ (1,068,530)
ABX.HE.AA.06-2 Index Sell 3,570 0.1700 5/25/46 (356,983) (2,067,562)
Capmark Financial
Group, Inc. Sell 2,880 7.1500 12/20/12 -- (589,219)
Dean Foods Co. Sell 4,790 0.9500 6/20/11 -- (642,660)
Ford Motor Co. Sell 12,110 6.1500 12/20/16 -- (2,323,982)
Ford Motor Co. Sell 835 5.9000 12/20/16 -- (168,448)
General Motors Corp. Sell 9,690 4.9000 12/20/16 -- (1,792,728)
General Motors Corp. Sell 655 4.6200 12/20/16 -- (129,131)
Residential Capital LLC Sell 13,380 6.1700 9/20/08 -- (4,369,721)
Residential Capital LLC Sell 4,380 6.2500 9/20/08 -- (1,426,527)
Residential Capital LLC Sell 385 5.0000 6/20/08 (51,975) (73,775)
Residential Capital LLC Sell 545 5.0000 6/20/08 (79,025) (104,435)
Smithfield Foods, Inc. Sell 3,780 1.5100 3/20/12 -- (383,390)
Smithfield Foods, Inc. Sell 1,600 1.7700 3/20/12 -- (149,566)
- ---------------------------------------------------------------------------------------------------------------------------------
UBS AG:
iStar Financial, Inc. Sell 2,900 4.5600 12/20/12 -- (385,900)
Lehman Brothers Holdings,
Inc. Sell 11,820 1.5500 9/20/08 -- (292,344)
Massey Energy Co. Sell 630 5.0500 9/20/12 -- 20,654
Massey Energy Co. Sell 2,195 5.1000 9/20/12 -- 76,000
-------------------------------
$(36,509,707) $(165,485,560)
===============================
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Three-Month
International $ 169,200,000 2.8440% USD BBA LIBOR 2/28/10 $ (805,561)
- ---------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital
Markets LP:
Three-Month
190,800,000 3.9860 USD BBA LIBOR 2/1/15 (2,591,827)
Three-Month
108,900,000 4.8275 USD BBA LIBOR 2/1/28 (3,348,566)
---------------
$ (6,745,954)
===============
Abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
36 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS AS OF MARCH 31, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ---------------------------------------------------------------------------------------------------------
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
Barclays Bank plc $ 11,860,000 20 basis points 20 basis points 6/1/08 $ 380,454
- ---------------------------------------------------------------------------------------------------------
Citibank NA:
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
8,000,000 15 basis points 15 basis points 8/1/08 256,964
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
Index minus Index plus
58,800,000 15 basis points 15 basis points 2/1/09 803,490
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
100,000,000 Index Index 2/1/09 1,353,980
- ---------------------------------------------------------------------------------------------------------
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
Deutsche Bank AG 18,900,000 15 basis points 15 basis points 8/1/08 607,077
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc.:
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus Index plus
104,400,000 35 basis points 35 basis points 8/1/08 3,367,396
37 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- --------------------------------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc.:
Continued
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
$115,300,000 42.5 basis points 42.5 basis points 6/1/08 $3,651,953
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
57,650,000 8.5+ Index 8.5+ Index 6/1/08 1,844,351
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus Index plus
11,500,000 25 basis points 25 basis points 2/1/09 155,118
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
13,900,000 40 basis points 40 basis points 6/1/08 440,522
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
22,260,000 15 basis points 15 basis points 8/1/09 709,643
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus Index plus
11,815,000 55 basis points 55 basis points 5/1/08 382,862
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
57,650,000 8.5+ Index 8.5+ Index 6/1/08 1,844,351
38 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc.:
Continued
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
$ 3,700,000 8.5+ Index 8.5+ Index 3/1/09 $ 118,372
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus Index plus
15,662,000 45 basis points 45 basis points 5/1/08 506,349
- ------------------ --------------------------------------------------------------------------------
Morgan Stanley:
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
30,130,000 30 basis points 30 basis points 8/1/08 731,342
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index minus Index plus
47,830,000 225 basis points 225 basis points 8/1/08 1,160,666
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
57,635,000 Index Index 6/1/08 1,596,679
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA 8.5+
Index plus Index minus
9,900,000 40 basis points 40 basis points 6/1/08 274,233
39 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley:
Continued
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
$ 11,860,000 90 basis points 90 basis points 6/1/08 $ 328,640
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
11,500,000 Index Index 2/1/09 257,135
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
19,300,000 Index Index 3/1/09 447,194
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
38,230,000 250 basis points 250 basis points 3/1/09 4,520,866
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
6,640,000 350 basis points 350 basis points 3/1/09 792,047
- ----------------------------------------------------------------------------------------------------------
The Goldman
Sachs Group, Inc.:
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
56,030,000 50 basis points 50 basis points 8/1/08 1,640,411
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA CMBS AAA
55,270,000 8.5+ Index 8.5+ Index 3/1/09 1,511,696
40 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS: Continued
- --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION
COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ------------------------------------------------------------------------------------------------------------
The Goldman
Sachs Group, Inc.:
Continued
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
$19,400,000 50 basis points 50 basis points 3/1/09 $ 626,490
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
11,400,000 250 basis points 250 basis points 3/1/09 788,352
If positive, the If negative, the
Total Return of Total Return of
the Lehman the Lehman
Brothers U.S. Brothers U.S.
CMBS AAA 8.5+ CMBS AAA
Index minus 8.5+ Index plus
42,460,000 200 basis points 200 basis points 3/1/09 4,228,873
-------------
$35,327,506
=============
Abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
41 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
March 31, 2008
- --------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,336,272,698) $ 2,102,989,418
Affiliated companies (cost $50,105,512) 50,105,512
-----------------
2,153,094,930
- --------------------------------------------------------------------------------------------------------
Cash 2,285,131
- --------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $8,288,896) 37,328,928
- --------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 43,145,694
Investments sold 11,307,661
Shares of beneficial interest sold 886,788
Other 673,372
-----------------
Total assets 2,248,722,504
- --------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------
Swaps, at value (premiums received $28,220,811) 174,232,936
- --------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $1,677,569 purchased on a when-issued or delayed
delivery basis) 14,027,252
Shares of beneficial interest redeemed 4,353,585
Dividends 3,079,529
Distribution and service plan fees 1,025,391
Transfer and shareholder servicing agent fees 295,518
Futures margins 146,025
Trustees' compensation 52,799
Shareholder communications 45,719
Other 37,554
-----------------
Total liabilities 197,296,308
- --------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,051,426,196
=================
- --------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 259,544
- --------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,920,984,393
- --------------------------------------------------------------------------------------------------------
Accumulated net investment income 16,491,692
- --------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (551,729,637)
- --------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and liabilities
denominated in foreign currencies (334,579,796)
-----------------
NET ASSETS $ 2,051,426,196
=================
42 | OPPENHEIMER CHAMPION INCOME FUND
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $1,358,158,801 and 171,802,566 shares of beneficial interest outstanding) $ 7.91
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $ 8.30
- -------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets
of $147,421,708 and 18,669,193 shares of beneficial interest outstanding) $ 7.90
- -------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets
of $209,982,732 and 26,590,727 shares of beneficial interest outstanding) $ 7.90
- -------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $37,547,183 and 4,748,471 shares of beneficial interest outstanding) $ 7.91
- -------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $298,315,772 and 37,733,222 shares of beneficial interest outstanding) $ 7.91
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended March 31, 2008
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------
Interest $ 93,006,547
- -------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $32,836) 1,682,045
Affiliated companies 2,492,174
- -------------------------------------------------------------------------------------
Fee income 136,008
- -------------------------------------------------------------------------------------
Portfolio lending fees 287
--------------
Total investment income 97,317,061
- -------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------
Management fees 6,656,881
- -------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,777,169
Class B 949,490
Class C 1,217,515
Class N 104,549
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,433,554
Class B 219,180
Class C 257,671
Class N 84,566
Class Y 49,690
- -------------------------------------------------------------------------------------
Shareholder communications:
Class A 104,806
Class B 24,713
Class C 17,039
Class N 2,232
Class Y 35
- -------------------------------------------------------------------------------------
Trustees' compensation 21,063
- -------------------------------------------------------------------------------------
Custodian fees and expenses 7,270
- -------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------
Other 19,342
--------------
Total expenses 12,947,515
Less reduction to custodian expenses (3,830)
Less waivers and reimbursements of expenses (66,177)
--------------
Net expenses 12,877,508
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 84,439,553
44 | OPPENHEIMER CHAMPION INCOME FUND
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies $ (30,942,020)
Closing and expiration of futures contracts (24,909,700)
Foreign currency transactions 1,306,022
Short positions 73,020
Swap contracts (83,760,511)
---------------
Net realized loss (138,233,189)
- -----------------------------------------------------------------------------------------
Net change in unrealized depreciation on:
Investments (174,057,212)
Translation of assets and liabilities denominated in foreign currencies (27,895)
Futures contracts (768,202)
Short positions (119,843)
Swap contracts (79,548,089)
---------------
Net change in unrealized depreciation (254,521,241)
- -----------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(308,314,877)
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45 | OPPENHEIMER CHAMPION INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2008 SEPTEMBER 30,
(UNAUDITED) 2007
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income $ 84,439,553 $ 178,607,214
- --------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (138,233,189) 41,046,329
- --------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (254,521,241) (35,884,395)
-------------------------------------
Net increase (decrease) in net assets resulting from operations (308,314,877) 183,769,148
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (57,599,497) (126,986,094)
Class B (6,136,877) (18,135,514)
Class C (7,955,016) (17,968,771)
Class N (1,454,575) (3,158,921)
Class Y (11,299,472) (12,401,572)
-------------------------------------
(84,445,437) (178,650,872)
- --------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A (151,504,458) 883,276,106
Class B (60,917,756) 35,082,464
Class C (24,616,456) 86,663,279
Class N (3,789,904) 16,601,704
Class Y 131,731,137 215,751,297
-------------------------------------
(109,097,437) 1,237,374,850
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (501,857,751) 1,242,493,126
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 2,553,283,947 1,310,790,821
-------------------------------------
End of period (including accumulated net investment income
of $16,491,692 and $16,497,576, respectively) $ 2,051,426,196 $ 2,553,283,947
=====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46 | OPPENHEIMER CHAMPION INCOME FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $ 9.36 $ 9.32 $ 9.40 $ 9.50 $ 9.17 $ 8.05
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .32 1 .65 1 .64 1 .62 1 .69 .78
Net realized and
unrealized gain (loss) (1.45) .04 (.08) (.09) .33 1.12
-----------------------------------------------------------------------------------------------
Total from investment
operations (1.13) .69 .56 .53 1.02 1.90
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.32) (.65) (.64) (.63) (.69) (.78)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 7.91 $ 9.36 $ 9.32 $ 9.40 $ 9.50 $ 9.17
==============================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 2 (12.30)% 7.51% 6.12% 5.65% 11.40% 24.62%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 1,358,159 $ 1,772,880 $ 886,223 $ 936,925 $ 1,003,748 $ 876,600
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 1,567,007 $ 1,851,296 $ 904,474 $ 992,935 $ 953,063 $ 783,469
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 7.35% 6.86% 6.84% 6.52% 7.28% 8.98%
Total expenses 1.00% 4 1.00% 4 1.11% 1.08% 1.07% 1.08%
Expenses after payments,
waivers and/or
reimbursements and
reduction to custodian expenses 1.00% 0.99% 1.11% 1.08% 1.07% 1.08%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 5 49% 5 64% 53% 58% 68%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.00%
Year Ended September 30, 2007 1.01%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 110,065,149 $ 100,690,917
Year Ended September 30, 2007 $ 132,979,285 $ 140,757,346
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
47 | OPPENHEIMER CHAMPION INCOME FUND
FINANCIAL HIGHLIGHTS Continued
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.34 $ 9.31 $ 9.39 $ 9.49 $ 9.16 $ 8.04
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .28 1 .58 1 .57 1 .55 1 .61 .71
Net realized and unrealized gain (loss) (1.44) .02 (.09) (.10) .34 1.12
---------------------------------------------------------------------------------------
Total from investment operations (1.16) .60 .48 .45 .95 1.83
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.28) (.57) (.56) (.55) (.62) (.71)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.90 $ 9.34 $ 9.31 $ 9.39 $ 9.49 $ 9.16
=======================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (12.59)% 6.57% 5.33% 4.87% 10.58% 23.71%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 147,422 $ 239,673 $ 202,567 $ 297,056 $ 425,072 $ 479,887
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 189,556 $ 298,233 $ 242,063 $ 362,813 $ 463,835 $ 449,354
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.47% 6.08% 6.09% 5.75% 6.57% 8.27%
Total expenses 1.83% 4 1.79% 4 1.87% 1.82% 1.81% 1.84%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.83% 1.78% 1.87% 1.82% 1.81% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 5 49% 1 64% 53% 58% 68%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.83%
Year Ended September 30, 2007 1.80%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 110,065,149 $ 100,690,917
Year Ended September 30, 2007 $ 132,979,285 $ 140,757,346
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48 | OPPENHEIMER CHAMPION INCOME FUND
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.35 $ 9.31 $ 9.39 $ 9.49 $ 9.16 $ 8.04
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .28 1 .57 1 .57 1 .55 1 .62 .71
Net realized and unrealized gain (loss) (1.45) .04 (.08) (.10) .33 1.12
---------------------------------------------------------------------------
Total from investment operations (1.17) .61 .49 .45 .95 1.83
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.28) (.57) (.57) (.55) (.62) (.71)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.90 $ 9.35 $ 9.31 $ 9.39 $ 9.49 $ 9.16
===========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (12.67)% 6.69% 5.34% 4.86% 10.59% 23.71%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 209,982 $ 275,373 $ 187,917 $ 218,850 $ 246,301 $ 240,077
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 243,038 $ 295,414 $ 199,183 $ 237,000 $ 249,356 $ 208,876
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.55% 6.08% 6.09% 5.77% 6.55% 8.23%
Total expenses 1.80% 4 1.78% 4 1.86% 1.82% 1.82% 1.84%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.80% 1.77% 1.86% 1.82% 1.82% 1.84%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 5 49% 5 64% 53% 58% 68%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.80%
Year Ended September 30, 2007 1.79%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 110,065,149 $ 100,690,917
Year Ended September 30, 2007 $ 132,979,285 $ 140,757,346
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49 | OPPENHEIMER CHAMPION INCOME FUND
FINANCIAL HIGHLIGHTS Continued
- -------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.36 $ 9.32 $ 9.41 $ 9.51 $ 9.17 $ 8.05
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .30 1 .61 1 .60 1 .58 1 .67 .75
Net realized and unrealized gain (loss) (1.45) .04 (.09) (.09) .32 1.11
--------------------------------------------------------------------------
Total from investment operations (1.15) .65 .51 .49 .99 1.86
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.30) (.61) (.60) (.59) (.65) (.74)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.91 $ 9.36 $ 9.32 $ 9.41 $ 9.51 $ 9.17
==========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (12.48)% 7.05% 5.62% 5.23% 11.07% 24.10%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 37,547 $ 48,347 $ 31,626 $ 30,491 $ 29,008 $ 13,658
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 41,950 $ 49,180 $ 30,578 $ 30,252 $ 22,249 $ 9,534
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.93% 6.42% 6.46% 6.12% 6.78% 8.47%
Total expenses 1.49% 4 1.45% 4 1.57% 1.55% 1.54% 1.71%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.42% 1.42% 1.48% 1.48% 1.48% 1.50%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 5 49% 5 64% 53% 58% 68%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 1.49%
Year Ended September 30, 2007 1.46%
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 110,065,149 $ 100,690,917
Year Ended September 30, 2007 $ 132,979,285 $ 140,757,346
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50 | OPPENHEIMER CHAMPION INCOME FUND
SIX MONTHS
ENDED
MARCH 31, 2008 YEAR ENDED SEPTEMBER 30,
CLASS Y (UNAUDITED) 2007 2006 1
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.36 $ 9.32 $ 9.28
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .33 .68 .05
Net realized and unrealized gain (loss) (1.45) .04 .05
---------------------------------------
Total from investment operations (1.12) .72 .10
- ---------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.33) (.68) (.06)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.91 $ 9.36 $ 9.32
=======================================
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (12.13)% 7.90% 1.04%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 298,316 $ 217,011 $ 2,458
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 289,563 $ 171,898 $ 1,058
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 7.80% 7.21% 7.65%
Total expenses 0.61% 5 0.63% 5 0.63%
Expenses after payments, waivers and/or reimbursements and
reduction to custodian expenses 0.61% 0.62% 0.63%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 6 49% 6 64%
1. For the period from September 1, 2006 (inception of offering) to September
30, 2006.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculatedon 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.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended March 31, 2008 0.61%
Year Ended September 30, 2007 0.64%
6. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ---------------------------------------------------------------------------
Six Months Ended March 31, 2008 $ 110,065,149 $ 100,690,917
Year Ended September 30, 2007 $ 132,979,285 $ 140,757,346
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
51 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Champion Income 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 a high level of current income by
investing mainly in a diversified portfolio of high-yield, lower-grade,
fixed-income securities that the Fund's investment manager, OppenheimerFunds,
Inc. (the "Manager"), believes does not involve undue risk. The Fund's secondary
objective is to seek capital growth when consistent with its primary objective.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC"). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares 72
months after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange are valued based on the last sale price of the security
traded on that exchange prior to the time when the Fund's assets are valued.
Securities whose principal exchange is NASDAQ(R) are valued based on the closing
price reported by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
52 | OPPENHEIMER CHAMPION INCOME FUND
the security is valued at the official closing price on the principal exchange.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities, collateralized
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair value. Securities
whose values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Shares of a registered investment company
that are not traded on an exchange are valued at the acquired investment
company's net asset value per share. "Money market-type" debt instruments with
remaining maturities of sixty days or less are valued at cost adjusted by the
amortization of discount or premium to maturity (amortized cost), which
approximates market value.
- --------------------------------------------------------------------------------
SECURITIES SOLD SHORT. The Fund may short sale when-issued securities for future
settlement. The value of the open short position is recorded as a liability, and
the Fund records an unrealized gain or loss for the value of the open short
position. The Fund records a realized gain or loss when the short position is
closed out.
As of March 31, 2008, the Fund held no securities sold short.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. The Fund may purchase
securities on a "when-issued" basis, and may purchase or sell securities on a
"delayed delivery" basis. "When-issued" or "delayed delivery" refers to
securities whose terms and indenture are available and for which a market
exists, but which are not available for immediate delivery. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis
normally takes place within six months and possibly as long as two years or more
after the trade date. During this period, such securities do not earn interest,
are subject to market fluctuation and may increase or decrease in value prior to
their delivery. The purchase of securities on a when-issued basis may increase
the volatility of the Fund's net asset value to the extent the Fund executes
such transactions while remaining substantially fully invested. When the Fund
engages in when-issued or delayed delivery transactions, it relies on the buyer
or seller, as the case may be, to complete the transaction. Their failure to do
so may cause the Fund to lose the opportunity to obtain or dispose of the
security at a price and yield it considers advantageous. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase.
As of March 31, 2008, the Fund had purchased securities issued on a when-issued
or delayed delivery basis and sold securities issued on a delayed delivery basis
as follows:
WHEN-ISSUED OR DELAYED
DELIVERY BASIS TRANSACTIONS
-----------------------------------------------------------
Purchased securities $ 1,677,569
53 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
The Fund may enter into "forward roll" transactions with respect to
mortgage-related securities. In this type of transaction, the Fund sells a
mortgage-related security to a buyer and simultaneously agrees to repurchase a
similar security (same type, coupon and maturity) at a later date at a set
price. During the period between the sale and the repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities that
have been sold. The Fund records the incremental difference between the forward
purchase and sale of each forward roll as realized gain (loss) on investments or
as fee income in the case of such transactions that have an associated fee in
lieu of a difference in the forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk. To assure its
future payment of the purchase price, the Fund maintains internally designated
assets with a market value equal to or greater than the payment obligation under
the roll.
- --------------------------------------------------------------------------------
CREDIT RISK. The Fund invests in high-yield, non-investment-grade bonds, which
may be subject to a greater degree of credit risk. Credit risk relates to the
ability of the issuer to meet interest or principal payments or both as they
become due. The Fund may acquire securities in default, and is not obligated to
dispose of securities whose issuers subsequently default. As of March 31, 2008,
securities with an aggregate market value of $3,897,686, representing 0.19% of
the Fund's net assets, were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
54 | OPPENHEIMER CHAMPION INCOME 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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders. Therefore, no federal income or excise tax provision is
required. The Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
generally remain open for the three preceding fiscal reporting period ends.
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.
During the fiscal year ended September 30, 2007, the Fund utilized $19,556,559
of capital loss carryforward to offset capital gains realized in that fiscal
year. As of September 30, 2007, the Fund had available for federal income tax
purposes straddle losses of $16,420 and unused capital loss carryforwards as
follows:
55 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
EXPIRING
------------------------
2009 $ 18,608,810
2010 94,306,197
2011 235,839,091
2012 63,585,840
-------------
Total $ 412,339,938
=============
As of March 31, 2008, the Fund had available for federal income tax purposes an
estimated capital loss carryforward of $550,589,547 expiring by 2016. This
estimated capital loss carryforward represents carryforward as of the end of the
last fiscal year, increased for losses deferred under tax accounting rules to
the current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended March 31, 2008, it is estimated that the Fund will not utilize any
capital loss carryforward to offset realized capital gains.
The approximate 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 March 31, 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.
Federal tax cost of securities $ 2,387,512,257
Federal tax cost of other investments 14,341,691
----------------
Total federal tax cost $ 2,401,853,948
================
Gross unrealized appreciation $ 60,354,328
Gross unrealized depreciation (396,064,558)
----------------
Net unrealized depreciation $ (335,710,230)
================
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral plan for independent trustees that enables trustees to elect to defer
receipt of all or a portion of the annual compensation they are entitled to
receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the compensation deferral plan.
56 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income distributions, if any, are declared daily and paid
monthly. Capital gain distributions, if any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income is recognized on an accrual basis. 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.
- --------------------------------------------------------------------------------
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.
57 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED MARCH 31, 2008 YEAR ENDED SEPTEMBER 30, 2007
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
CLASS A
Sold 14,528,587 $ 127,894,821 35,466,580 $ 336,327,620
Dividends and/or
distributions reinvested 4,831,357 41,405,859 9,698,105 91,723,787
Acquisition-Note 11 -- -- 108,025,333 1,011,117,121
Redeemed (37,062,502) (320,805,138) 1 (58,772,157) (555,892,422) 2
----------------------------------------------------------------------------
Net increase (decrease) (17,702,558) $ (151,504,458) 94,417,861 $ 883,276,106
============================================================================
- -------------------------------------------------------------------------------------------------------
CLASS B
Sold 1,005,517 $ 8,798,154 3,336,652 $ 31,635,011
Dividends and/or
distributions reinvested 512,463 4,397,955 1,320,438 12,483,718
Acquisition-Note 11 -- -- 17,042,821 159,350,375
Redeemed (8,496,062) (74,113,865) 1 (17,812,677) (168,386,640) 2
----------------------------------------------------------------------------
Net increase (decrease) (6,978,082) $ (60,917,756) 3,887,234 $ 35,082,464
============================================================================
- -------------------------------------------------------------------------------------------------------
CLASS C
Sold 1,657,934 $ 14,385,437 5,098,017 $ 48,283,058
Dividends and/or
distributions reinvested 684,856 5,859,559 1,382,307 13,060,621
Acquisition-Note 11 -- -- 12,784,836 119,538,213
Redeemed (5,218,741) (44,861,452) 1 (9,983,124) (94,218,613) 2
----------------------------------------------------------------------------
Net increase (decrease) (2,875,951) $ (24,616,456) 9,282,036 $ 86,663,279
============================================================================
- -------------------------------------------------------------------------------------------------------
CLASS N
Sold 549,289 $ 4,752,887 1,638,491 $ 15,529,357
Dividends and/or
distributions reinvested 156,106 1,336,268 312,180 2,952,879
Acquisition-Note 11 -- -- 1,906,127 17,841,351
Redeemed (1,123,419) (9,879,059) 1 (2,082,370) (19,721,883) 2
----------------------------------------------------------------------------
Net increase (decrease) (418,024) $ (3,789,904) 1,774,428 $ 16,601,704
============================================================================
- -------------------------------------------------------------------------------------------------------
CLASS Y
Sold 15,213,462 $ 137,681,593 10,278,556 $ 97,425,003
Dividends and/or
distributions reinvested 1,327,921 11,299,328 1,313,480 12,401,000
Acquisition-Note 11 -- -- 14,000,558 131,045,225
Redeemed (2,005,308) (17,249,784) 1 (2,659,205) (25,119,931) 2
----------------------------------------------------------------------------
Net increase 14,536,075 $ 131,731,137 22,933,389 $ 215,751,297
============================================================================
1. Net of redemption fees of $10,916, $1,320, $1,693, $292 and $2,017 for Class
A, Class B, Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $30,961, $4,987, $4,940, $822 and $2,875 for Class
A, Class B, Class C, Class N and Class Y, respectively.
58 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
March 31, 2008, were as follows:
PURCHASES SALES
-------------------------------------------------------------
Investment securities $ 864,493,985 $ 939,683,594
U.S. government and
government agency obligations 858,047 2,404,715
To Be Announced (TBA)
mortgage-related securities 110,065,149 100,690,917
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate as shown in the following table:
FEE SCHEDULE
--------------------------
Up to $250 million 0.70%
Next $250 million 0.65
Next $500 million 0.60
Next $500 million 0.55
Over $1.5 billion 0.50
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended March 31, 2008, the
Fund paid $2,134,974 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event that the per account fee does not equal or exceed
the applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made periodically at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Fund. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal service and
maintenance of
59 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 March 31, 2008 for Class B, Class C and Class N
shares were $34,580,753, $15,142,156 and $937,052, respectively. Fees incurred
by the Fund under the Plans are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
("CDSC") do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------
March 31, 2008 $ 171,313 $ 11,011 $ 229,392 $ 8,846 $ 569
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended March 31, 2008,
OFS waived $14,718, for Class N. This undertaking may be amended or withdrawn at
any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended March 31, 2008, the Manager waived $51,459 for
IMMF management fees.
60 | OPPENHEIMER CHAMPION INCOME FUND
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.
Forward contracts are reported on a schedule following the Statement of
Investments. Forward contracts will be valued daily based upon the closing
prices of the forward currency rates determined at the close of the Exchange as
provided by a bank, dealer or pricing service. The resulting unrealized
appreciation (depreciation) is reported in the Statement of Assets and
Liabilities as a receivable or payable and in the Statement of Operations within
the change in unrealized appreciation (depreciation). At contract close, the
difference between the original cost of the contract and the value at the close
date is recorded as a realized gain (loss) in the Statement of Operations.
Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.
As of March 31, 2008, the Fund did not hold any forward contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
financial instrument at a negotiated price on a stipulated future date. The Fund
may buy and sell futures contracts and may also buy or write put or call options
on these futures contracts.
Futures contracts traded on a commodities or futures exchange will be
valued at the final settlement price or official closing price on the principal
exchange as reported by such principal exchange at its trading session ending
at, or most recently prior to, the time when the Fund's assets are valued.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses.
Futures contracts are reported on a schedule following the Statement of
Investments. Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. Cash held by the broker to cover initial margin requirements on
open futures contracts and the receivable and/or payable for the daily mark to
market for the variation margin are noted in the Statement of Assets and
Liabilities. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations. Realized gains (losses) are reported in
the Statement of Operations at the closing or expiration of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market where the Fund is unable to
liquidate the contract
61 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
or enter into an offsetting position and, if used for hedging purposes, the risk
that the price of the contract will correlate imperfectly with the prices of the
Fund's securities.
- --------------------------------------------------------------------------------
7. SWAP CONTRACTS
The Fund may enter into swap contract agreements with a counterparty to exchange
a series of cash flows based on either specified reference rates, or the
occurrence of a credit event, over a specified period. Such contracts may
include interest rate, equity, debt, index, total return, credit and currency
swaps.
Swaps are marked to market daily using primarily quotations from pricing
services, counterparties and brokers. Swap contracts are reported on a schedule
following the Statement of Investments. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations.
Risks of entering into swap contracts include credit, market and liquidity
risk. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Fund's loss will consist of the net
amount of contractual payments that the Fund has not yet received. Market risk
is the risk that the value of the contract will depreciate due to unfavorable
changes in the reference asset. If there is an illiquid market for the
agreement, the Fund may be unable to close the contract prior to contract
termination.
- --------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS. A credit default swap is a bilateral contract
that enables an investor to buy or sell protection against a defined-issuer
credit event. The Fund may enter into credit default swaps on a single security,
or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security. In the
event that the credit default swap is exercised due to a credit event, the
difference between the value of the underlying security and the notional amount
is recorded as realized gain (loss) and is included on the Statement of
Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, or the cost of
selling protection (paying the notional amount) when a credit event occurs,
pricing transparency when assessing
62 | OPPENHEIMER CHAMPION INCOME FUND
the cost of a credit default swap, and the need to fund the delivery obligation
(either cash or defaulted securities).
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS. An interest rate swap is an agreement between
counterparties to exchange periodic interest payments on the notional amount of
the contract. One cash flow stream will typically be a floating rate payment
based upon a specified index while the other is typically a fixed rate.
Interest rate swap agreements include interest rate risk. There is a risk,
based on future movements of interest rates where the payments made by the Fund
under a swap agreement will be greater than the payments it received.
- --------------------------------------------------------------------------------
TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between
counterparties to exchange a set of future cash flows on the notional amount of
the contract. One cash flow is typically based on a reference interest rate or
index and the other on the total return of a reference asset such as a security,
a basket of securities, or an index. The total return includes appreciation or
depreciation on the reference asset, plus any interest or dividend payments.
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of March 31, 2008, investments in securities included issues that are
illiquid. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or dispose of them promptly at an
acceptable price. The Fund will not invest more than 10% of its net assets
(determined at the time of purchase and reviewed periodically) in illiquid
securities. Securities that are illiquid are marked with an applicable footnote
on the Statement of Investments.
- --------------------------------------------------------------------------------
9. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income in the form of fees or interest on securities received as
collateral or the investment of any cash received as collateral. The loans are
secured by collateral (either securities, letters of credit, or cash) in an
amount not less than 100% of the market value of the loaned securities during
the period of the loan. The market value of the loaned securities is determined
at the close of each business day and any additional required collateral is
delivered to the Fund on the next business day. If the borrower defaults on its
obligation to return the securities loaned because of insolvency or other
reasons, the Fund could experience delays and cost in recovering the securities
loaned or in gaining access to the collateral. The Fund continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower and recognizes the gain
or loss in the fair value of the securities loaned that may occur during the
term of the loan. The Fund has the right under the lending agreement to recover
the securities from the borrower on demand.
As of March 31, 2008, the Fund had no securities on loan.
63 | OPPENHEIMER CHAMPION INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, Fair Value
Measurements. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of March
31, 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.
- --------------------------------------------------------------------------------
11. ACQUISITION OF OPPENHEIMER HIGH YIELD FUND
On October 12, 2006, the Fund acquired all of the net assets of Oppenheimer High
Yield Fund, pursuant to an Agreement and Plan of Reorganization approved by the
Oppenheimer High Yield Fund shareholders on October 6, 2006. The Fund issued (at
an exchange ratio of 1.002190 for Class A, 0.987734 for Class B, 1.000555 for
Class C, 1.004023 for Class N and 0.994003 for Class Y of the Fund to one share
of Oppenheimer High Yield Fund) 108,025,333; 17,042,821; 12,784,836; 1,906,127
and 14,000,558 shares of beneficial interest for Class A, Class B, Class C,
Class N and Class Y, respectively, valued at $1,011,117,121, $159,350,375,
$119,538,213, $17,841,351 and $131,045,225 in exchange for the net assets,
resulting in combined Class A net assets of $1,902,537,798, Class B net assets
of $357,014,957, Class C net assets of $307,592,608, Class N net assets of
$49,937,524 and Class Y net assets of $133,635,056 on October 12, 2006. The net
assets acquired included net unrealized depreciation of $16,053,542 and an
unused capital loss carryforward of $602,679,762, potential utilization subject
to tax limitations. The exchange qualified as a tax-free reorganization for
federal income tax purposes.
64 | OPPENHEIMER CHAMPION INCOME FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF
INVESTMENTS Unaudited
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The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
65 | OPPENHEIMER CHAMPION INCOME FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are
no differences in the manner in which the Committee evaluates nominees for
trustees based on whether the nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of 03/31/2008, 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) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Champion Income Fund
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: 05/14/2008
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: 05/14/2008
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 05/14/2008