<PAGE>
OPPENHEIMER HIGH YIELD FUND
ANNUAL REPORT JUNE 30, 1994
[Logo] OPPENHEIMER FUNDS
"We have more that we want to do now than ever before, so we need the kind of
investment income that will help us reach those goals.
"This Fund has given us a level of income that has improved our quality of life
and helped pay for some special extras."
<PAGE>
FUND FACTS
IN THIS REPORT:
ANSWERS TO TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
- - DID THE FEDERAL RESERVE'S MOVES TO RAISE SHORT-TERM INTEREST RATES AFFECT THE
FUND'S INVESTMENT STRATEGY?
- - WHY DID THE FUND INCREASE ITS POSITION IN LOWER-RATED BONDS IN CYCLICAL
INDUSTRIES?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT OPPENHEIMER HIGH YIELD FUND
1 The Fund seeks high current income, primarily from a diversified portfolio
of lower-rated, higher-yielding, fixed income securities.
2 The Fund's standardized yield for Class A shares was 8.87% for the 30 days
ended June 30, 1994. For Class B shares, standardized yield was 8.40% for
the 30 days ended June 30, 1994.(1)
3 In recognition of the Fund's excellent performance, Class A shares were
awarded STAR STAR STAR STAR by Morningstar, Inc. on June 30, 1994. The
Fund was ranked among 582 taxable bond funds.(2)
4 Total return at net asset value for Class A shares was 6.27% for the 12
months ended June 30, 1994. For Class B shares, total return at net asset
value was 5.31% for the same period.(3)
5 Average annual total returns for Class A shares for the 1-, 5-, and 10-year
periods ended June 30, 1994 were 1.22%, 9.60%, and 10.93%, respectively.
For Class B shares, total returns for the 1-year period and since inception
on May 3, 1993 were 0.31% and 4.34%, respectively.(4)
6 "Our goal in managing the Fund is to combine above-average returns with
less risk than the average high yield corporate bond fund. Instead of
chasing the highest yield, we look for opportunities to buy solid value--
bonds issued by companies whose financial condition is stronger than their
credit ratings and current yields might suggest."
PORTFOLIO MANAGER RALPH STELLMACHER, JUNE 30, 1994
(1) Standardized yield is net investment income calculated on a yield to
maturity basis for the 30-day period ended 6/30/94, divided by the maximum
offering price at the end of the period, compounded semi-annually and then
annualized. Falling net assets values will tend to artificially raise yields.
(2) Source: MORNINGSTAR MUTUAL FUNDS, 6/30/94. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"hybrid") that reflect historical risk-adjusted performance based on a fund's
3-, 5-, and 10-year average annual total returns in excess of 90-day Treasury
bill returns, after considering expenses and sales charges. Risk is calculated
by a factor that reflects fund performance below 3-month U.S. Treasury bill
returns. Risk and returns are combined to produce star rankings, reflecting risk
adjusted performance relative to the average fund in a category. The highest
ranking is 5 stars, the lowest, 1 star. Within each category, 10% of funds
receive 5 stars, 22.5% receive 4 stars. The Fund was ranked among 582 taxable
bond funds. Rankings are subject to change. The Fund's Class A and Class B
shares have the same portfolio.
(3) Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
(4) Average annual total returns are based on a hypothetical investment held
until 6/30/94, after deducting the maximum initial sales charge of 4.75% for
Class A shares and the contingent deferred sales charge of 5% (1 year) and 4%
(since inception) for Class B shares. The Fund's maximum sales charge rate for
Class A shares was higher during a portion of some of the periods shown, and
actual investment results will be different as a result of the change.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment return and
principal value on an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost.
2 Oppenheimer High Yield Fund
<PAGE>
REPORT TO SHAREHOLDERS
ABOVE-AVERAGE TOTAL RETURN
TOTAL RETURN FOR THE PERIOD ENDING JUNE 30, 1994
OPPENHEIMER HIGH YIELD FUND A6 (AT NAV) 6.27%
OPPENHEIMER HIGH YIELD FUND B6 (AT NAV) 5.31%
LIPPER HIGH CURRENT YIELD FUNDS AVERAGE7 4.31%
We are pleased to bring you the annual report for Oppenheimer High Yield Fund.
In recognition of the Fund's excellent performance, Morningstar, Inc., an
independent and influential mutual fund monitoring service, awarded the Fund's
Class A shares a STAR STAR STAR STAR ranking.(5)
The past six months have been a challenging time for investors. After
a long period of declining interest rates, the Federal Reserve Board raised
short-term interest rates four times from February through mid-May. This caused
the U.S. bond markets to experience volatility because bond prices tend to
decline when interest rates rise.
The Fed raised rates as a preemptive strike against the possibility of
increased inflation, following strong economic growth in late 1993. That concern
now seems to be overstated as current economic data indicates the U.S. economy
is growing at a modest, gradual pace and inflation remains subdued.
Your Fund weathered this period well, and outperformed the average
corporate bond fund for the year ended June 30, 1994.(7) Fund managers were able
to deliver this return because they began preparing for a stable or rising rate
environment late last year. Recognizing that interest rates weren't likely to
decline further, they began shortening the portfolio's average maturity, because
shorter-term bonds are less sensitive to interest changes than longer-term
bonds. This helped the Fund reduce share price declines at the time of the Fed's
rate increases.
In addition, your managers invested in attractive, lower-rated bonds
in cyclical industries, which are also less sensitive to interest rate changes
and usually perform well as the economy grows.
Looking to the months ahead, we believe the prospects for high yield
corporate bonds are fundamentally positive. The U.S. economy should continue to
grow at a modest and sustainable pace. This is good news for high yield bond
issuers because their cash flow, earnings, and credit quality will continue to
improve, and should result in good performance for high yield bonds relative to
other types of fixed income securities. These bonds, of course, are subject to
greater risks of loss of principal and interest than higher-rated securities.
However, the Fund's portfolio diversification may help reduce some of those
risks.
Thank you for your continued trust in Oppenheimer High Yield Fund. We look
forward to helping you seek your investment goals in the years to come.
James C. Swain Jon S. Fossel
Chairman, Oppenheimer High Yield Fund President, Oppenheimer High Yield Fund
July 22, 1994
(5) See footnote 2, page 2.
(6) See footnote 3, page 2.
(7) Source: Lipper Analytical Services, an independent mutual fund monitoring
service, 6/30/94. The Lipper total return average for the 1-year period ended
June 30, 1994 was for 78 high current yield funds. The average includes
reinvestment of dividends and capital gains distributions. Averages are shown
for comparative purposes only. Lipper performance does not take sales charges
into consideration.
3 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Investments June 30, 1994
Face Market Value
Amount See Note 1
- ------
Repurchase Agreements--11.1%
- ------
Repurchase agreement with First Chicago Capital Markets, 4.22%, dated 6/30/94,
to be repurchased at $126,414,817 on 7/1/94, collateralized by U.S. Treasury
Nts., 3.875%--9.25%, 12/31/94--11/30/98, with a value of $91,885,422 and by U.S.
Treasury Bills, 0%, 6/29/95, with a value of $37,090,121 (Cost $126,400,000)
$126,400,000 $126,400,000
- ------
Long-Term Government Obligations--8.3%
- ------
Argentina (Republic of):
Bonds, Bonos de Consolidacion de Deudas:
Series I, 3.704%, 4/1/01(4)(6) 21,319,700(1) 11,689,853
Series I, 4.375%, 4/1/01(4)(6) 6,821,400 4,687,018
Series I, 4.375%, 4/1/07(4)(6) 12,505,900 6,894,740
Past Due Interest Bonds, 5%, 3/31/05(4) 17,500,000 12,654,688
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security,
Trust 240, Class 2,
7%, 9/25/23(9) 53,974,161 19,877,672
- ------
Italy (Republic of) Treasury Bonds, Buoni Poliennali del Tes:
12%, 5/1/97 8,250,000,000(1) 5,399,066
12%, 1/1/98(8) 5,250,000,000(1) 3,422,504
- ------
Morocco (Kingdom of) Loan Participation Agreement, Tranche A,
4.50%, 1/1/09(4)(5) 15,000,000 10,494,375
- ------
Polish People's Republic Loan Participation Agreement:
5.0625%, 2/3/24(2) 8,000,000 2,920,000
7.9375%, 2/8/24(2) 7,000,000(1) 1,594,460
7.9375%, 2/8/24(2) 3,000,000(1) 807,215
- ------
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado:
9%, 2/28/97 600,000,000(1) 4,510,460
12.25%, 3/25/00 1,000,000,000(1) 8,178,143
- ------
United Kingdom Treasury Nts. (Gilt), 12.25%, 3/26/99 500,000(1) 880,519
- ------
Total Long-Term Government Obligations (Cost $99,978,774) 94,010,713
- ------
Municipal Bonds and Notes--0.7%
- ------
San Joaquin Hills, California Transportation Corridor Agency Toll Road Capital
Appreciation Revenue Bonds, Jr. Lien, 0%:
1/1/12 15,000,000 3,529,424
1/1/28 74,000,000 4,226,214
- ------
Total Municipal Bonds and Notes (Cost $7,229,399) 7,755,638
- ------
Corporate Bonds and Notes--75.5%
- ------
Basic Materials--11.6%
- ------
Chemicals--3.8%
Atlantis Group, Inc., 11% Sr. Nts., 2/15/03
5,400,000 5,454,000
- ------
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03
9,000,000 9,247,500
- ------
Envirodyne Industries, Inc., 10.25% Sr. Nts., 12/1/01
876,000 766,500
- ------
Georgia Gulf Co., 15% Sr. Sub. Nts., 4/15/00
1,700,000 1,807,440
- ------
NL Industries, Inc., 0%/13% Sr. Sec. Disc. Nts., 10/15/05(3)
8,280,000 5,092,200
- ------
OSI Specialities Holding Co., Units(5)
1,969,000 1,191,245
4 Oppenheimer High Yield Fund
<PAGE>
- ------
Face Market Value
Amount See Note 1
- ------
Chemicals
(continued)
Rexene Corp.:
9% Fst. Priority Nts., 11/15/99(4) $3,675,000 $3,583,125
10% 2nd Priority Nts., 11/15/02(6) 5,171,000 4,794,665
- ------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02
11,000,000 12,017,500
- ------
43,954,175
- ------
Metals--4.1% Armco, Inc., 8.50% SF Debs., 9/1/01
26,985,000 25,264,706
- ------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03
10,285,000 10,490,700
- ------
Stelco, Inc.:
9.75% Debs., 4/1/95 4,000,000(1) 2,855,519
10.25% Debs., 4/30/96 3,700,000(1) 2,624,617
10.40% Debs., 11/30/09 7,700,000(1) 5,239,100
- ------
46,474,642
- ------
Paper and Forest Products--3.7%
Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02(2)
870,000 613,350
- ------
Gaylord Container Corp., 0%/12.75% Sr. Sub. Disc. Debs., 5/15/05(3)
12,550,000 10,636,125
- ------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 12,050,000 11,628,250
- ------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 3,975,000 3,438,375
- ------
Riverwood International Corp.:
11.25% Sr. Sub. Nts., 6/15/02 9,000,000 9,382,500
10.375% Sr. Sub. Nts., 6/30/04 2,700,000 2,706,750
- ------
Stone Container Corp.:
10.75% Sr. Sub. Nts., 6/15/97 1,300,000 1,300,000
9.875% Sr. Nts., 2/1/01 2,450,000 2,290,750
- ------
41,996,100
- ------
Consumer Cyclicals--27.2%
- ------
Automotive--2.9%
Envirotest Systems Corp.:
9.125% Sr. Nts., 3/15/01 4,500,000 4,286,250
9.625% Sr. Sub. Nts., 4/1/03 11,625,000 11,072,812
- ------
Foamex LP/Foamex Capital Corp.:
11.25% Sr. Nts., 10/1/02 6,600,000 6,732,000
11.875% Sr. Sub. Debs., 10/1/04 4,000,000 4,140,000
- ------
Foamex LP/JPS Automotive Corp., Units(5) 6,750,000 3,510,000
- ------
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01
2,500,000 2,512,500
- ------
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02 250,000 256,250
- ------
32,509,812
- ------
Construction Supplies and Development--1.8%
Baldwin Co., 10.375% Sr. Nts., Series B, 8/1/03 2,500,000 2,262,500
- ------
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 2,760,000 2,718,600
- ------
Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 5,000,000 4,975,000
- ------
USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 10,650,000 10,703,250
- ------
20,659,350
- ------
Consumer Goods and Services--7.3%
Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98
14,500,000 9,715,000
- ------
Collins & Aikman Group, Inc., 11.875% Sr. Sub. Debs., 6/1/01
10,706,000 10,866,590
- ------
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series A, 10/1/03
9,050,000 8,869,000
- ------
Genesco, Inc., 10.375% Sr. Nts., 2/1/03 3,500,000 2,878,750
- ------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02
12,000,000 13,020,000
5 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
- ------
Consumer Goods and Services (continued)
Insilco Corp., 10.375% Sr. Sec. Nts., 7/1/97 $9,736,000 $9,784,680
- ------
Interco, Inc.:
9% Sec. Nts., Series B, 6/1/04 4,873,000 4,531,890
9% Sec. Nts., Series B, 6/1/04(5) 7,500,000 7,162,500
- ------
Pope, Evans & Robbins, Inc., 7% Sr. Nts., 5/15/98(6)(10)
6,163,620 277,363
- ------
Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., 11/1/03
6,500,000 6,207,500
- ------
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01 4,400,000 4,384,112
- ------
Revlon, Inc., 10.875% Debs., 7/15/10 5,150,000 5,014,812
- ------
82,712,197
- ------
Entertainment--6.3% Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A,
11/15/00(5)
2,750,000 2,763,750
- ------
Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 4,600,000 4,347,000
- ------
Aztar Mortgage Funding, Inc., 13.50% Gtd. Fst. Mtg. Nts., 9/15/96
4,900,000 4,973,500
- ------
Capital Gaming International, Inc., Units(5) 2,250,000 2,306,250
- ------
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(5)
2,000,000 1,720,000
- ------
Casino America, Inc., 11.50% Fst. Mtg. Nts., 11/15/01
1,150,000 1,098,250
- ------
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02
400,000 386,000
- ------
Gillett Holdings, Inc.:
0% Sr. Sec. Nts., 6/30/95 2,452 2,415
12.25% Sr. Sub. Nts., Series A, 6/30/02 12,075,200 12,860,088
- ------
GNF Corp., 10.625% Gtd. Fst. Mtg. Nts., Series B, 4/1/03 6,000,000
4,440,000
- ------
MGM Grand Hotel Finance Corp.:
11.75% Fst. Mtg. Nts., Series A, 5/1/99 2,500,000 2,656,250
12% Fst. Mtg. Nts., 5/1/02 3,500,000 3,841,250
- ------
Maritime Group Ltd., Units(5) 2,066,000 1,989,042
- ------
Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 2,750,000
1,705,000
- ------
Resorts International, Inc., 0% Sec. Fst. Mtg.
Non-Recourse Pass-Through Nts., 6/30/00 6,785,000 6,377,900
- ------
Station Casinos, Inc.:
9.625% Sr. Sub. Nts., Series A, 6/1/03 12,050,000 11,025,750
9.625% Sr. Sub. Nts., Series B, 6/1/03 2,800,000 2,520,000
- ------
Treasure Bay Gaming & Resorts, Inc.:
Units(5) 2,725,000 2,629,625
12.25% Fst Mtg. Nts., 11/15/00(5) 1,150,000 1,040,750
- ------
Trump's Castle Funding, Inc.:
11.75% Mtg. Nts., 11/15/03 634 485
7% Sub. Nts., 11/15/05(6) 572 420
- ------
United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 4,250,000 3,410,625
- ------
72,094,350
- ------
Media--2.4% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A,
10/1/03
8,700,000 8,656,500
- ------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 7,550,000 7,474,500
- ------
News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 2,000,000
2,110,438
- ------
SCI Television, Inc.:
7.50% Fst. Sec. Loan Nts., 6/30/98 3,951,443 3,892,171
11% Sr. Sec. Nts., Series 1, 6/30/05 4,095,986 4,198,386
- ------
Turner Broadcasting System, Inc., 12% Sr. Sub. Debs., 10/15/01
450,000 475,875
- ------
26,807,870
6 Oppenheimer High Yield Fund
<PAGE>
- ------
Face Market Value
Amount See Note 1
- ------
Real Estate Development--1.4% Hees International Corp., 10% Sr. Nts.,
8/23/99 $6,300,000(1) $4,161,132
- ------
Olympia & York First Canadian Place Ltd., 11% Debs., Series 3, 11/4/49(2)
4,875,000(1) 2,227,482
- ------
Trizec Corp. Ltd.:
6.125% Debs., 10/21/93(2) 4,000,000(1) 2,630,924
10% Debs., 10/1/96(2) 7,850,000(1) 5,227,519
10.25% Sr. Debs., 6/22/99(2) 2,500,000(1) 1,615,051
- ------
15,862,108
- ------
Retail--5.1% Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B,
9/1/03
10,250,000 10,147,500
- ------
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01
11,450,000 11,621,750
- ------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03
7,700,000 7,584,500
- ------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 6,270,000 6,285,675
- ------
International Semi-Tech Microelectronics, Inc., 0%/11.50%
Sr. Sec. Disc. Nts., 8/15/03(3) 12,000,000 6,060,000
- ------
Pay 'N Pak Stores, Inc., 13.50% Sr. Sub. Debs., 6/1/98(2)
7,700,000 77,000
- ------
R.H. Macy & Co., Inc., 14.50% Sr. Sub. Debs., 10/15/98(2)
6,670,000 4,168,750
- ------
Speciality Retailers, Inc., 10% Sr. Nts., Series B, 8/15/00
6,500,000 6,451,250
- ------
Waban, Inc., 11% Sr. Sub. Nts., 5/15/04 4,000,000 4,010,000
- ------
Zale Delaware, Inc., 11% Gtd. 2nd Priority Sr. Sec. Nts., 6/1/00
2,000,000 2,010,000
- ------
58,416,425
- ------
Consumer Non-Cylicals--10.7%
- ------
Food--2.7% ARA Group, Inc. (The):
12% Sub. Debs., 4/15/00 3,200,000 3,444,000
12.50% Sub. Debs., 7/15/01 8,800,000 9,284,000
- ------
Heileman Acquisition Corp., 9.625% Sr. Sub. Nts., 1/31/04
7,150,000 6,381,375
- ------
Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01
2,400,000 876,000
- ------
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00 10,750,000 10,266,250
- ------
30,251,625
- ------
Food and Drug Distribution--6.1%
Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05(6)
6,343,000 6,297,413
- ------
Di Giorgio Corp., 12% Sr. Nts., 2/15/03 12,500,000 12,875,000
- ------
Duane Reade, 12% Sr. Nts., Series B, 9/15/02 3,250,000 3,380,000
- ------
Grand Union Co., 11.25% Sr. Nts., 7/15/00 11,950,000 11,800,625
- ------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99
9,800,000 9,604,000
- ------
Revco D.S., Inc., 9.125% Sr. Nts., 1/15/00 13,800,000 13,869,000
- ------
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 11,600,000 11,832,000
- ------
69,658,038
- ------
Healthcare--1.9% American Medical International, Inc., 11.375% Sr. Sub.
Nts., 2/1/95
900,000 922,662
- ------
Healthtrust, Inc.-The Hospital Co., 10.75% Sub. Nts., 5/1/02
8,575,000 8,810,813
- ------
Multicare Cos., Inc. (The), 12.50% Sr. Sub. Nts., 7/1/02
6,790,000 7,452,025
- ------
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02
4,250,000 4,653,750
- ------
21,839,250
- ------
Energy--9.2%
- ------
Bridge Oil (USA), Inc., 9.50% Sr. Nts., 8/15/00 11,500,000 11,097,500
7 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
- ------
Energy (continued)
Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01
$5,700,000 $5,728,500
- ------
HS Resources, Inc., 9.875% Sr. Sub. Nts., 12/1/03 3,250,000 3,055,000
- ------
Maxus Energy Corp.:
9.875% Nts., 10/15/02 2,200,000 2,117,500
8.50% Debs., 4/1/08 5,000,000 4,350,000
11.50% Debs., 11/15/15 7,700,000 7,834,750
- ------
Mesa Capital Corp.:
0%/12.75% Disc. Nts., 6/30/96(3) 1,000 890
0%/12.75% Sec. Disc. Nts., 6/30/98(3) 11,766,000 10,707,060
- ------
Nuevo Energy Co., 12.50% Sr. Sub. Nts., 6/15/02 5,000,000 5,325,000
- ------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02
11,765,000 13,706,225
- ------
Presidio Oil Co.:
11.50% Sr. Sec. Nts., Series B, 9/15/00 6,162,000 6,162,000
14.125% Sr. Sub. Gas Indexed Nts., 7/15/02(4) 7,000,000 7,000,000
- ------
Sante Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04 8,080,000
8,241,600
- ------
Transco Energy Co., 9.375% Nts., 8/15/01 7,000,000 6,890,960
- ------
Wainoco Oil Corp., 12% Sr. Nts., 8/1/02 11,775,000 12,128,250
- ------
104,345,235
- ------
Financial--2.2%
- ------
Acme Holdings, Inc., 11.75% Sr. Nts., 6/1/00 1,100,000 709,500
- ------
Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03
8,475,000 8,093,625
- ------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(5) 3,601,924 3,962,116
- ------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03 8,802,000 7,195,635
- ------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5)
6,000,000 5,415,000
- ------
25,375,876
- ------
Industrial--5.6%
- ------
Containers--1.5% Owens-Illinois, Inc.:
10.50% Sr. Sub. Nts., 6/15/02 1,300,000 1,326,000
10% Sr. Sub. Nts., 8/1/02 6,700,000 6,708,375
11% Sr. Debs., 12/1/03 3,305,000 3,511,563
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04
5,500,000 5,527,500
- ------
17,073,438
- ------
General Industrial--2.1% American Standard, Inc.:
9.875% Sr. Sub. Nts., 6/1/01 2,200,000 2,128,500
0%/10.50% Sr. Sub. Disc. Debs., 6/1/05(3) 7,150,000 4,433,000
- ------
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 9,800,000 8,918,000
- ------
Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97 5,125,000 5,035,313
- ------
Mosler, Inc., 11% Sr. Nts., Series A, 4/15/03 4,550,000 3,071,250
- ------
23,586,063
- ------
Transportation--2.0% Sea Containers Ltd.:
9.50% Sr. Nts., 7/1/03 4,000,000 3,685,000
12.50% Sr. Sub. Debs., Series A, 12/1/04 1,250,000 1,309,375
12.50% Sr. Sub. Debs., Series B, 12/1/04 3,050,000 3,255,875
8 Oppenheimer High Yield Fund
<PAGE>
- ------
Face Market Value
Amount See Note 1
- ------
Transportation (continued) Tiphook Financial Corp.:
7.125% Gtd. Nts., 5/1/98 $500,000 $375,000
8% Gtd. Nts., 3/15/00 2,499,000 1,824,270
10.75% Sr. Nts., 11/1/02 3,899,000 3,060,715
- ------
Transportacion Maritima Mexicana SA:
8.50% Nts., 10/15/00 2,000,000 1,755,000
9.25% Nts., 5/15/03 2,000,000 1,750,000
- ------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr.
Disc. Nts., Series B, 12/15/03(3) 10,965,000 6,003,338
- ------
23,018,573
- ------
Technology--8.2%
- ------
Aerospace/Defense--1.1% GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98
4,700,000 3,783,500
- ------
GPA Holland BV:
8.50% Med.-Term Nts., 2/10/97(5) 2,000,000 1,760,000
8.94% Med.-Term Nts., 2/16/99 7,300,000 5,839,582
- ------
GPA Investment BV, 6.40% Nts., 11/19/98 2,000,000 1,480,000
- ------
12,863,082
- ------
Cable Television--3.2% Cablevision Systems Corp.:
14% Sr. Sub. Reset Debs., 11/15/03 5,000,000 5,087,500
10.75% Sr. Sub. Debs., 4/1/04 7,800,000 7,936,500
- ------
Echostar Communications Corp., Units 14,200,000 7,561,500
- ------
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., 11/1/03(4)
8,500,000 7,777,500
- ------
International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03(3)
4,000,000 2,400,000
- ------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 5,000,000 5,450,000
- ------
36,213,000
- ------
Communications--2.4% Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01
5,000,000 4,625,000
- ------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(3) 10,456,000 7,162,360
- ------
Panamsat LP/Panamsat Capital Corp.:
9.75% Sr. Sec. Nts., 8/1/00 2,500,000 2,487,500
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(3) 14,600,000 9,417,000
- ------
Rogers Communications, Inc., 10.875% Sr. Debs., 4/15/04
4,200,000 4,347,000
- ------
28,038,860
- ------
Technology--1.5% Bell & Howell Holdings Co., 0%/10.75% Sr. Disc. Debs.,
Series B, 3/1/05 (3)
23,200,000 12,644,000
- ------
Berg Electronics Holdings Corp., 11.375%, Sr. Sub. Debs., 5/1/03
2,900,000 3,016,000
- ------
Businessland, Inc., 5.50% Sub. Debs., 3/1/07 3,850,000 1,106,875
- ------
16,766,875
- ------
Utilities--1.4% California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(3)
12,955,000 9,445,606
- ------
EUA Power Corp.:
17.50% Sec. Debs., Series C, 11/15/92(2) 1,107,000 127,305
17.50% Mtg. Nts., Series B, 5/15/93(2) 2,960,000 784,400
- ------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(5)
6,000,000 5,610,000
- ------
15,967,311
- ------
Total Corporate Bonds and Notes (Cost $885,722,010) 866,484,255
9 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
- ------
Indexed Instruments--1.2%
- ------
Citibank, 17.30% CD, 7/29/94(7) 1,219,800,000(1) $2,918,276
- ------
Goldman Sachs Group, LP, 4.40% Standard & Poor's 500
Index-Linked Nts., 8/17/94(5) 1,250,000 1,687,500
- ------
Lehman Brothers Holdings, Inc., Standard & Poor's 500 Index-Linked Nts.:
3.7875%, 7/5/94(5) 1,000,000 1,103,800
3.7875%, 7/5/94(5) 2,000,000 2,047,980
4.50%, 8/16/94(5) 1,250,000 1,687,500
- ------
Salomon, Inc., 4.65625% Standard & Poor's 500 Index-Linked Nts., 8/15/94(5)
2,500,000 3,225,000
- ------
Total Indexed Instruments (Cost $14,100,225) 12,670,056
Units
- ------
Rights, Warrants and Certificates--0.4%
- ------
ALC Communications Corp. Wts., Exp. 12/95 275,000 2,750
- ------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Ctfs., Series AG-7A 326,800 3,268
Litigation Trust Units 1,045,990 10,460
- ------
Becker Gaming, Inc. Wts., Exp. 11/00(5) 125,000 312,500
- ------
Capital Gaming International, Inc. Wts., Exp. 2/99(5) 5,625 2,812
- ------
Casino America, Inc. Wts., Exp. 11/96 13,052 3,263
- ------
Digicon, Inc. Wts., Exp. 7/96 4,972 932
- ------
Gaylord Container Corp. Wts., Exp. 7/96 763,878 2,912,285
- ------
Hollywood Casino Corp. Wts., Exp. 4/98 9,524 950,019
- ------
Interco, Inc. Wts., Series 1, Exp. 8/99 19,474 80,330
- ------
Protection One, Inc. Wts., Exp. 11/03 182,000 584,220
- ------
Purity Supreme, Inc. Wts., Exp. 8/97(5) 22,525 450
- ------
Southland Corp. Wts., Exp. 3/96 5,800 24,650
- ------
Terex Corp. Rts., Exp. 7/96(5) 534 801
- ------
UGI Corp. Wts., Exp. 3/98 63,583 222,540
- ------
Total Rights, Warrants and Certificates (Cost $3,698,708) 5,111,280
Shares
- ------
Preferred Stocks--1.1%
- ------
Algoma Finance Corp., 5.50% Exch., Series A 65,820 1,000,496
- ------
Dell Computer Corp., $7.00 Cv., Series A(2)(5) 17,500 1,995,000
- ------
Finlay Enterprises, Inc., Cl. A(2) 6,400 80,000
- ------
K-III Communications Corp., $11.625 Exch., Series B(6) 12,650 1,252,362
- ------
Navistar International Corp., $6.00 Cv., Series G 8,200 414,100
- ------
Trizec Ltd., Sr. Cl. B, Series 3(2) 205,000 81,612
- ------
Unisys Corp., $3.75 Cv., Series A 233,400 8,023,125
- ------
Total Preferred Stocks (Cost $13,025,262) 12,846,695
- ------
Common Stocks--1.3%
- ------
Digicon, Inc.(2) 14,790 17,563
- ------
ECM Fund L.P.I.(5) 1,350 1,350,000
- ------
Hillsborough Holdings Corp.(2)(5) 34,280 343
- ------
Leaseway Transportation Corp.(2) 117,635 1,146,941
10 Oppenheimer High Yield Fund
<PAGE>
- ------
Market Value
Shares See Note 1
- ------
Common Stocks (continued) Marriott International, Inc.
10,678 $284,302
- ------
Petrolane, Inc., Cl. B(10) 457,515 4,918,286
- ------
Pope, Evans & Robbins, Inc.(2)(10) 1,688,400 52,762
- ------
Resorts International, Inc.(2) 282,691 265,023
- ------
New World Communications Group, Inc., Cl. A(2) 40,292 493,577
- ------
Triangle Wire & Cable, Inc.(2)(5) 370,500 3,705,000
- ------
Zale Corp.(2) 243,419 2,251,626
- ------
Total Common Stocks (Cost $15,774,383) 14,485,423
- ------
Total Investments, at Value (Cost $1,165,928,761) 100.2% $1,139,764,060
- ------
Liabilities in Excess of Other Assets (0.2) (2,808,849)
- ------ ------
Net Assets 100.0% $1,136,955,211
- ------ ------
- ------ ------
1. Face amount is reported in foreign currency.
2. Non-income producing security.
3. Represents a zero coupon bond that converts to a fixed rate of interest at a
designated future date.
4. Represents the current interest rate for a variable rate security.
5. Restricted security--See Note 5 of Notes to Financial Statements.
6. Interest or dividend is paid in kind.
7. Indexed instrument for which the principal amount due at maturity is affected
by the relative value of a foreign security.
8. Securities with an aggregate market value of $3,422,504 are segregated to
collateralize outstanding forward foreign currency exchange contracts. See Note
6 of Notes to Financial Statements.
9. Interest-Only Strips represent the right to receive the monthly interest
payment on an underlying pool of mortgage loans. These securities are subject to
the risk of accelerated principal paydowns as interest rates decline. The
principal amount represents the notional amount on which current interest is
calculated.
10. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the year ended June 30, 1994. The
aggregate fair value of all securities of affiliated companies as of June 30,
1994 amounted to $330,125. Transactions during the period in which the issuer
was an affiliate are as follows:
Balance June 30, 1993 Gross Additions Gross Redemptions Balance June
30, 1994
- ------ ------ ------ ------
Interest
Stocks Shares/Face Cost Shares/Face Cost Shares/Face
Cost Shares/Face Cost Income
- ------
Pope, Evans & Robbins, Inc. 1,688,400 $1,114,384 -- -- --
- -- 1,688,400 $1,114,384 --
- ------
Petrolane, Inc. Cl. B* -- -- 480,690 $4,806,900 23,175
$231,750 457,515 4,575,150 $73,202
Bonds and Notes
- ------
Pope, Evans & Robbins, Inc.
7% Sr. Nts., 5/15/98, 5,743,583 4,046,595 420,037 402,499 --
-- 6,163,620 4,449,094 19,104(6)
- ------ ------ ------ ------ ------
$5,160,979 $5,209,399 $231,750 $10,138,628 $92,306
- ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
*Not an affiliate as of June 30, 1994.
See accompanying Notes to Financial Statements.
11 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Assets and Liabilities June 30, 1994
- ------
Assets Investments, at value (cost $1,165,928,761)--see accompanying
statement $1,139,764,060
- ------
Receivables:
Interest and dividends 25,602,517
Investments sold 11,573,888
Shares of beneficial interest sold 5,326,260
- ------
Other 74,068
- ------
Total assets 1,182,340,793
- ------
Liabilities Bank overdraft 123,338
Unrealized depreciation on forward foreign currency exchange contracts--Note 6
176,595
Payables and other liabilities:
Investments purchased 34,104,187
Shares of beneficial interest redeemed 5,874,855
Dividends 4,206,331
Distribution and service plan fees--Note 4 381,786
Other 518,490
- ------
Total liabilities 45,385,582
- ------
Net Assets $1,136,955,211
- ------
- ------
- ------
Composition of
Net Assets
Paid-in capital $1,331,076,714
- ------
Distributions in excess of net investment income (3,538,462)
- ------
Accumulated net realized loss from investment and foreign currency transactions
(164,324,438)
- ------
Net unrealized depreciation on investments and translation of assets and
liabilities
denominated in foreign currencies (26,258,603)
- ------
Net assets $1,136,955,211
- ------
- ------
- ------
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,049,446,111
and 77,002,162 shares of beneficial interest outstanding) $13.63
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $14.31
- ------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $87,509,100 and 6,449,125 shares of beneficial interest outstanding)
$13.57
See accompanying Notes to Financial Statements.
12 Oppenheimer High Yield Fund
<PAGE>
- ------
Statement of Operations For the Year Ended June 30, 1994
- ------
Investment Income Interest:
Unaffiliated companies $124,688,286
Affiliated companies 19,104
Dividends:
Unaffiliated companies 3,740,574
Affiliated companies 73,202
- ------
Total income 128,521,166
- ------
Expenses Management fees--Note 4 7,655,008
- ------
Distribution and service plan fees:
Class A--Note 4 1,441,211
Class B--Note 4 522,438
- ------
Transfer and shareholder servicing agent fees--Note 4 1,076,619
- ------
Shareholder reports 396,342
- ------
Custodian fees and expenses 281,078
- ------
Legal and auditing fees 65,028
- ------
Registration and filing fees:
Class A 25,400
Class B 20,659
- ------
Trustees' fees and expenses 41,245
- ------
Other 145,592
- ------
Total expenses 11,670,620
- ------
Net Investment Income 116,850,546
- ------
Realized and Unrealized
Gain (Loss) on Investments
And Foreign Currency
Transactions
Net realized gain (loss) from:
Investments 15,850,405
Foreign currency transactions (1,181,231)
- ------
Net realized gain 14,669,174
- ------
Net change in unrealized appreciation or depreciation on:
Investments (59,850,683)
Translation of assets and liabilities denominated in foreign currencies
109,560
- ------
Net change (59,741,123)
- ------
Net realized and unrealized loss on investments and foreign currency
transactions (45,071,949)
- ------
Net Increase in Net Assets Resulting From Operations $71,778,597
- ------
- ------
See accompanying Notes to Financial Statements.
13 Oppenheimer High Yield Fund
<PAGE>
- ------
Statements of Changes in Net Assets
Year Ended June 30,
1994 1993
- ------
Operations Net investment income $116,850,546 $113,492,302
- ------
Net realized gain on investments and foreign currency transactions
14,669,174 21,219,657
- ------
Net change in unrealized appreciation or depreciation on investments
and translation of assets and liabilities denominated in foreign currencies
(59,741,123) 8,066,722
- ------ ------
Net increase in net assets resulting from operations 71,778,597
142,778,681
- ------
Equalization Net change (96,177) 2,351,565
- ------
Dividends and Distributions To Shareholders
Dividends from net investment income:
Class A ($1.407 and $1.56 per share, respectively) (109,900,662)
(111,069,977)
- ------
Class B ($1.295 and $.247 per share, respectively) (4,671,944) (80,250)
- ------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from Class A beneficial
interest transactions--Note 2 (30,446,407) 182,608,161
- ------
Net increase in net assets resulting from Class B beneficial interest
transactions--Note 2 80,742,052 10,399,783
- ------ ------
- ------
Net Assets Total increase 7,405,459 226,987,963
- ------
Beginning of year 1,129,549,752 902,561,789
- ------ ------
End of year [including undistributed (overdistributed) net investment
income of $(3,538,462) and $12,282,453, respectively] $1,136,955,211
$1,129,549,752
- ------ ------
- ------ ------
See accompanying Notes to Financial Statements.
14 Oppenheimer High Yield Fund
<PAGE>
- ------
Financial Highlights
Class A Class B
- ------ ------
Year Year Year
Ended Ended Ended
June 30, June 30, June 30,
1994 1993 1992 1991 1990 1989 1988 1987
1986 1985 1994 1993(1)
- ------
Per Share Operating Data:
Net asset value, beginning of period $14.16 $13.76 $13.08 $13.60
$15.42 $16.00 $17.09 $17.54 $17.15 $16.70 $14.12
$13.87
- ------
Income (loss) from investment
operations:
Net investment income 1.42 1.60 1.79 1.91 1.89 2.02
2.06 2.18 2.28 2.41 1.35 .23
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (.54) .36 .68 (.51) (1.79) (.68)
(1.03) (.47) .47 .44 (.60) .27
- ------ ------ ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
Total income from investment
operations .88 1.96 2.47 1.40 .10 1.34 1.03 1.71
2.75 2.85 .75 .50
- ------
Dividends from net investment income (1.41) (1.56) (1.79) (1.92)
(1.92) (1.92) (2.12) (2.16) (2.36) (2.40) (1.30)
(.25)
- ------
Net asset value, end of period $13.63 $14.16 $13.76 $13.08
$13.60 $15.42 $16.00 $17.09 $17.54 $17.15 $13.57
$14.12
- ------ ------ ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------ ------ ------
- ------ ------ ------ ------ ------
- ------
Total Return, at Net Asset Value(2) 6.27% 15.31% 20.06% 11.90%
.85% 8.97% 6.75% 10.63% 17.26% 18.20% 5.31% 3.54%
- ------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $1,049,446 $1,119,056 $902,562 $657,182
$650,989 $860,588 $857,767 $760,934 $627,256 $474,972
$87,509 $10,493
- ------
Average net assets (in thousands) $1,111,103 $978,671 $768,339
$601,758 $734,703 $863,178 $791,471 $691,968 $527,731
$426,557 $51,816 $4,405
- ------
Number of shares outstanding
at end of period (in thousands) 77,002 79,047 65,581 50,258
47,870 55,810 53,617 44,531 35,767 27,690 6,449 743
- ------
Ratios to average net assets:
Net investment income 10.10% 11.59% 13.15% 14.94% 13.00%
12.88% 12.72% 12.79% 13.24% 14.13% 8.98% 10.84%(3)
Expenses .96% .97% .92% .96% .93% .88% .89% .88%
.89% .93% 1.88% 2.28%(3)
- ------
Portfolio turnover rate(4) 96.7% 87.2% 64.0% 90.4% 63.2%
57.0% 41.1% 46.2% 90.5% 113.0% 96.7% 87.2%
1. For the period from May 3, 1993 (inception of offering) to June 30, 1993.
2. Assumes a hypothetical initial 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.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a year, divided
by the monthly average of the market value of portfolio securities owned during
the year. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the year
ended June 30, 1994 were $1,072,458,797 and $1,129,551,081, respectively.
See accompanying Notes to Financial Statements.
15 Oppenheimer High Yield Fund
<PAGE>
- ------
Notes to Financial Statements
- ------
1. Significant Accounting Policies
Oppenheimer High Yield Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment advisor is Oppenheimer Management
Corporation (the Manager). The Fund offers both Class A and Class B shares.
Class A shares are sold with a front-end sales charge.
Class B shares may be subject to a contingent deferred sales charge. Both
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution and/or service plan,
expenses directly attributable to a particular class and exclusive voting rights
with respect to matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- ------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the closing bid or asked price
or the last sale price on the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities. Short-term
debt securities having a remaining maturity of 60 days or less are valued at
cost (or last determined market value) adjusted for amortization to maturity of
any premium or discount. Securities for which market quotes are not readily
available are valued under procedures established by the Board of Trustees to
determine fair value in good faith. Forward foreign currency exchange contracts
are valued at the forward rate on a daily basis.
- ------
Security Credit Risk. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At June 30, 1994, securities with an
aggregate market value of $22,793,456, representing 1.93% of the Fund's total
assets, were in default.
- ------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such contracts as a hedge against
changes in foreign currency exchange rates on portfolio positions. A forward
exchange contract is a commitment to purchase or sell a foreign currency at a
future date, at a negotiated rate.
Risks may arise from the potential inability of the counterparty to meet the
terms of the contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. 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 results of operations.
- ------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
- ------
Allocation of Income, Expenses and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily 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.
16 Oppenheimer High Yield Fund
<PAGE>
- ------
- ------
1. Significant Accounting Policies (continued)
Federal Income Taxes. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required. At June 30, 1994, the Fund had
available for federal income tax purposes an unused capital loss carryover of
approximately $152,818,000, $422,000 of which will expire in 1997, $14,942,000
in 1998, $74,080,000 in 1999, $42,206,000 in 2000 and $21,168,000 in 2001.
- ------
Equalization. Prior to September 30, 1993, the Fund followed the accounting
practice of equalization, by which a portion of the proceeds from sales and
costs of redemptions of Fund shares equivalent on a per share basis to the
amount of undistributed net investment income were credited or charged to
undistributed income. The cumulative effect of the change in accounting practice
resulted in a reclassification of $12,664,697 from undistributed net investment
income to paid-in capital.
- ------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A and Class B shares from net investment income each day the New York
Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- ------
Change in Accounting for Distributions to Shareholders. Effective July 1, 1993,
the Fund adopted Statement of Position 93-2: Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, subsequent to June 30,
1993, amounts have been reclassified to reflect a decrease in paid-in capital of
$24,451, a decrease in undistributed net investment income of $4,157,384, and a
decrease in undistributed capital loss on investments of $4,181,835. During the
year ended June 30, 1994, in accordance with Statement of Position 93-2,
undistributed income was decreased by $1,180,597 and undistributed capital loss
was decreased by $1,180,597.
- ------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes. Dividends in kind are recognized as income
on the ex-dividend date, at the current market value of the underlying security.
Interest on payment-in-kind debt instruments is accrued as income at the coupon
rate and a market adjustment is made on the ex-date.
- ------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
Year Ended June 30, 1994 Year Ended June 30, 1993(1)
- ------ ------
Shares Amount Shares Amount
- ------
Class A:
Sold 23,301,265 $328,422,185 26,776,418 $362,823,963
Dividends reinvested 4,259,599 60,060,363 4,419,112 59,368,501
Redeemed (29,606,189) (418,928,955) (17,728,777) (239,584,303)
------ ------ ------ ------
Net increase (decrease) (2,045,325) $(30,446,407) 13,466,753 $182,608,161
------ ------ ------ ------
------ ------ ------ ------
- ------
Class B:
Sold 7,150,795 $100,862,645 742,214 $10,390,635
Dividends reinvested 146,613 2,058,843 2,550 35,404
Redeemed (1,591,185) (22,179,436) (1,862) (26,256)
------ ------ ------ ------
Net increase 5,706,223 $80,742,052 742,902 $10,399,783
------ ------ ------ ------
------ ------ ------ ------
1. For the year ended June 30, 1993 for Class A shares and for the period from
May 3, 1993 (inception of offering) to June 30, 1993 for Class B shares.
17 Oppenheimer High Yield Fund
<PAGE>
- ------
Notes to Financial Statements (Continued)
- ------
3. Unrealized Gains And Losses on Investments
At June 30, 1994, net unrealized depreciation on investments of $26,164,701 was
composed of gross appreciation of $24,499,145, and gross depreciation of
$50,663,846.
- ------
4. Management Fees And Other Transactions With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .75% on the
first $200 million of net assets with a reduction of .03% on each $200 million
thereafter to $800 million, .60% on the next $200 million and .50% on net assets
in excess of $1 billion. The Manager has agreed to reimburse the Fund if
aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended June 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $4,185,629, of which $1,023,367
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. During the
year ended June 30, 1994, OFDI received contingent deferred sales charges of
$113,664 upon redemption of Class B shares, as reimbursement for sales
commissions advanced by OFDI at the time of sale of such shares. Oppenheimer
Shareholder Services (OSS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other registered investment
companies. OSS's total costs of providing such services are allocated ratably to
these companies.
Under separate approved plans, each class may expend up to .25% of its net
assets annually to reimburse OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
(prior to June 20, 1994, Class A reimbursements were made with respect to shares
sold subsequent to April 1, 1991), including amounts paid to brokers, dealers,
banks and other institutions. In addition, Class B shares are subject to an
asset-based sales charge of .75% of net assets annually, to reimburse OFDI for
sales commissions paid from its own resources at the time of sale and associated
financing costs. In the event of termination or discontinuance of the Class B
plan, the Board of Trustees may allow the Fund to continue payment of the
asset-based sales charge to OFDI for distribution expenses incurred on Class B
shares sold prior to termination or discontinuance of the plan. During the year
ended June 30, 1994, OFDI paid $29,748 to an affiliated broker/dealer as
reimbursement for Class A personal service and maintenance expenses and retained
$521,628 as reimbursement for Class B sales commissions and service fee
advances, as well as financing costs.
- ------
5. Restricted Securities
The Fund owns securities purchased in private placement transactions,
without registration under the Securities Act of 1933 (the Act). The securities
are valued under methods approved by the Board of Trustees as reflecting fair
value. The Fund intends to invest no more than 10% of its net assets (determined
at the time of purchase) in restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule 144A of the Act that are
determined to be liquid by the Board of Trustees or by the Manager under
Board-approved guidelines. Restricted and illiquid securities amount to
$43,531,876, or 3.82% of the Fund's net assets at June 30, 1994.
18 Oppenheimer High Yield Fund
<PAGE>
- ------
- ------
5. Restricted Securities (continued)
Valuation Per Unit as of June 30,
Security Acquisition Date Cost Per Unit 1994
- ------
Arizona Charlie's, Inc., 12%
Fst. Mtg. Nts., Series A, 11/15/00 11/18/93 $100.00 $100.50
- ------
Becker Gaming, Inc. Wts., Exp. 11/00 11/15/93 $2.00 $2.50
- ------
Capital Gaming International, Inc.:
Units 1/10/94 $113.34 $102.50
Wts., Exp. 2/99 2/4/94--2/18/94 $-- $.50
- ------
Capitol Queen & Casino, Inc., 12%
Fst. Mtg. Nts., Series A, 11/15/00 11/18/93 $87.50 $86.00
- ------
Dell Computer Corp., $7.00 Cv.,
Series A Preferred Stock(1) 1/27/94--2/2/94 $103.43 $114.00
- ------
ECM Fund L.P.I.:
Common Stock 4/14/92 $1,000.00 $1,000.00
14% Sub. Nts., 6/10/02 4/14/92 $100.00 $110.00
- ------
Foamex LP/JPS Automotive Corp., Units(1) 6/21/94 $51.39 $52.00
- ------
Goldman Sachs Group LP, 4.40% Standard & Poor's
500 Index-Linked Nts., 8/17/94 6/30/94 $135.00 $135.00
- ------
GPA Holland BV, 8.50% Med.-Term Nts., 2/10/97(1) 6/30/93 $69.50
$88.00
- ------
Hillsborough Holdings Corp. Common Stock 1/7/88 $5.00 $.01
- ------
Interco, Inc., 9% Sec. Nts., Series B, 6/1/04 10/14/92 $91.50 $95.50
- ------
Lehman Brothers Holdings, Inc.,
Standard & Poor's Index-Linked Nts.:
3.7875%, 7/5/94 3/30/94 $138.00 $110.38
3.7875%, 7/5/94 3/31/94 $142.00 $102.40
4.50%, 8/16/94 6/30/94 $135.00 $135.00
- ------
Maritime Group Ltd., Units(1) 2/16/94--4/25/94 $99.98 $96.28
- ------
Morocco (Kingdom of) Loan Participation
Agreement, Tranche A, 4.50%, 1/1/09 2/28/94--4/20/94 $71.27 $69.96
- ------
OSI Specialties Holding Co., Units(1) 4/12/94--6/28/94 $57.66 $60.50
- ------
Purity Supreme, Inc. Wts., Exp. 8/97 7/29/92 $-- $.02
- ------
Salomon, Inc., 4.65625% Standard & Poor's 500
Index-Linked Nts., 8/15/94 6/27/94 $139.40 $129.00
- ------
Subic Power Corp., 9.50% Sr. Sec. Nts.,
Series A, 12/28/08(1) 12/20/93 $99.93 $93.50
- ------
Terex Corp. Rts., Exp. 7/96(1) 4/5/94 $1.52 $1.50
- ------
Treasure Bay Gaming & Resorts, Inc.:
Units(1) 11/10/93--1/25/94 $101.06 $96.50
12.25% Fst Mtg. Nts. 11/15/00(1) 4/22/94 $92.00 $90.50
- ------
Triangle Wire & Cable, Inc. Common Stock 5/2/94 $9.50 $10.00
- ------
Tribasa Toll Road Trust, 10.50% Nts.,
Series 1993-A, 12/1/11(1) 11/8/93 $100.00 $90.25
1. Transferable under Rule 144A of the Act.
19 Oppenheimer High Yield Fund
<PAGE>
- ------
Notes to Financial Statements (Continued)
- ------
6. Forward Foreign Currency Exchange Contracts
At June 30, 1994, the Fund had outstanding forward exchange currency contracts
to purchase and sell foreign currencies as follows:
Unrealized
Expiration Valuation as of Appreciation
Date Contract Amount June 30, 1994 (Depreciation)
- ------
Contracts to Purchase:
German Deutsche Mark 7/22/94 $5,876,067 $5,909,648 $33,581
German Deutsche Mark 7/20/94 2,849,353 2,914,369 65,016
- ------
$8,725,420 $8,824,017 $98,597
- ------ ------ ------
- ------ ------ ------
Contracts to Sell:
German Deutsche Mark 7/13/94 $1,837,190 $1,935,777 (98,587)
- ------
Italian Lira 7/22/94 80,585 80,751 (166)
- ------
Spanish Peseta 7/20/94 2,849,353 2,929,253 (79,900)
- ------
Spanish Peseta 7/22/94 5,795,482 5,892,021 (96,539)
- ------ ------ ------
$10,562,610 $10,837,802 $(275,192)
- ------ ------ ------
- ------ ------ ------
- ------
Federal Income Tax Information (Unaudited)
- ------
In early 1995, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1994. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended June 30, 1994 which
are not designated as capital gain distributions should be multiplied by 2.60%
to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
20 Oppenheimer High Yield Fund
<PAGE>
- ------
Independent Auditors' Report
- ------
The Board of Trustees and Shareholders of Oppenheimer High Yield Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer High Yield Fund as of June 30,
1994, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1994 and 1993,
and the financial highlights for the period July 1, 1984 to June 30, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at June 30, 1994 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion. In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
High Yield Fund at June 30, 1994, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Denver, Colorado
July 22, 1994
21 Oppenheimer High Yield Fund
<PAGE>
- ------
Oppenheimer High Yield Fund
- ------
Officers and Trustees
James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
Ralph W. Stellmacher, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- ------
Investment Advisor Oppenheimer Management Corporation
- ------
Distributor Oppenheimer Funds Distributor, Inc.
- ------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- ------
Custodian of
Portfolio Securities
The Bank of New York
- ------
Independent Auditors Deloitte & Touche
- ------
Legal Counsel Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of Oppenheimer High Yield Fund. This
report must be preceded or accompanied by a Prospectus of Oppenheimer High Yield
Fund. For material information concerning the Fund, see the Prospectus.
22 Oppenheimer High Yield Fund
<PAGE>
- ------
The Family of OppenheimerFunds
- ------
OppenheimerFunds offers over 30 funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education, or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that
you are investing with a respected financial institution with over 30 years of
experience in helping people just like you reach their financial goals. And
you're investing with a leader in global, growth stock, and flexible fixed
income investments--with over 1.8 million shareholder accounts and more than $26
billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.1 For more information on OppenheimerFunds, please contact
your financial advisor or call us at 1-800-525-7048 for a prospectus. You may
also write us at the address shown on the back cover. As always, please read the
prospectus carefully before you invest.
- ------
Specialty Stock Fund Gold & Special Minerals Fund
- ------
Stock Funds Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
- ------
Stock and Bond Funds
Main Street Income & Growth Fund
Total Return Fund
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Equity Income Fund
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- ------
Bond Funds
High Yield Fund
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Strategic Income Fund
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Mortgage Income Fund
U.S. Government Trust
Limited-Term Government2
- ------
Tax-Exempt Funds
New York Tax-Exempt Fund3
California Tax-Exempt Fund3
Pennsylvania Tax-Exempt Fund3
Florida Tax-Exempt Fund3
New Jersey Tax-Exempt Fund3
Tax-Free Bond Fund
Insured Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
- ------
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange
privileges are subject to change or termination.
2. Formerly Government Securities Fund.
3. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management Corporation. All rights reserved.
23 Oppenheimer High Yield Fund
<PAGE>
"HOW MAY I HELP YOU?"
GENERAL INFORMATION
1-800-525-7048
Talk to a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m.
to 2:00 p.m. ET.
TELEPHONE TRANSACTIONS
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Make account transactions with a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
PHONELINK
1-800-533-3310
Get automated information or make automated transactions.
24 hours a day, 7 days a week.
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OPPENHEIMERFUNDS
INFORMATION HOTLINE
1-800-835-3104
Hear timely and insightful messages on the economy and issues that affect your
finances. 24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 30 different mutual funds designed to
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offers a variety of services to satisfy your individual needs. Whenever you
require help, we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's easy for you to redeem
shares, exchange shares, or conduct AccountLink transactions, simply by calling
our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated voice
response system is available 24 hours a day, 7 days a week. PhoneLink gives you
access to a variety of fund, account, and market information. You can even make
purchases, exchanges and redemptions using your touch-tone phone. Of course,
PhoneLink will always give you the option to speak with a Customer Service
Representative during the hours shown to the left.
"When you invest in OppenheimerFunds, you know you'll receive a high level
of customer service. The International Customer Service Association knows it,
too, as it awarded Oppenheimer Shareholder Services a 1993 Award of Excellence
for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
[Logo]
1993
AWARD OF EXCELLENCE
ICSA
International Customer Service Association
[Photo]
BARBARA HENNIGAR
CHIEF EXECUTIVE OFFICER
OPPENHEIMER SHAREHOLDER SERVICES
[Logo] OPPENHEIMER FUNDS
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
