<PAGE>
================================
Annual Report September 30, 1998
================================
OPPENHEIMER
Champion
Income Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's
Manager
8 Fund Performance
- ---------------------
13 Financial
Statements
48 Independent
Auditors' Report
- ---------------------
49 Federal
Income Tax
Information
50 Officers and
Trustees
52 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o Four-star Morningstar: The Fund's Class A shares have earned an overall 4-star
ranking (****) from Morningstar for the combined 3-, 5- and 10-year periods
ended September 30, 1998, among 1,491 (3-year), 940 (5-year), and 346 (10-year)
fixed income funds./1/
o High-yield bonds declined in August when investors expressed their preference
for only the highest-quality securities amid global economic and political
uncertainty.
Avg Annual Total Returns
For the 1-Year Period
Ended 9/30/98
Class A
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
- -0.49% -5.22%
- --------------------------------------------------------------------------------
Class B
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
- -1.25% -5.76%
- --------------------------------------------------------------------------------
Class C
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
- -1.25% -2.15%
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Source: Morningstar, Inc., 9/30/98. Morningstar ranks mutual funds in broad
investment classes, based on risk-adjusted returns after considering sales
charges and expenses. Return and risk are measured as performance above and
below 90 day U.S. Treasury bill returns, respectively. Current star rankings are
based on the weighted average of 3-, 5- and 10-year (if applicable) rankings for
a fund or class and are subject to change monthly. Top 10%: 5 stars. Next 22.5%:
4 stars. Middle 35%: 3 stars. Next 22.5%: 2 stars. Bottom 10%: 1 star. The
Fund's Class A shares were ranked 3 stars (3-year), 4 stars (5-year) and 5 stars
(10-year) weighted 20%/30%/50%, respectively.
2. Includes changes in net asset value per share without deducting any sales
charges.
3. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class B and
C shares are subject to a 0.75% asset-based sales charge. An explanation of the
different performance calculations is in the Fund's prospectus.
2 Oppenheimer Champion Income Fund
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Champion Income Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Champion Income Fund
Dear shareholder,
- --------------------------------------------------------------------------------
The performance of the financial markets over the past several months could be
viewed as "A Tale of Two Markets." Until mid-July, the excitement surrounding
the stock market's continued ascent to new record highs overshadowed the
favorable economic environment that existed for bonds: low inflation and
declining interest rates. However, since late summer, amid heightened global
concern, stocks declined sharply. Yet, despite continued economic concerns
worldwide, the bond market appeared ready to benefit.
Why have the stock and bond markets responded differently? The financial
crises in Asia and Russia have weakened the earnings of some large U.S.
corporations and have contributed to a slowdown in U.S. economic growth.
Although this slowing economic growth has negatively impacted stocks, it created
a positive environment for bonds. That's because slowing economic growth
generally means fewer inflationary pressures and, as we've recently seen,
interest rates also tend to decline.
What should you do during this period of relative uncertainty? If you have
well-defined, long-term financial goals and an investment strategy designed to
achieve them, we encourage you to stay the course. However, if you feel your
financial plan is out-of-date or incomplete, now is the time to make
improvements. The best way to cope with short-term volatility is to adhere to a
long-term plan that contains proven strategies, such as diversification among
various financial markets, geographic regions, investment styles and individual
securities. A long-term plan will give you the focus and perspective you need to
put short-term volatility in its proper context.
As longstanding advocates of financial planning, we have been encouraged
by our shareholders' rational responses to the latest market events. Many of you
tell us that you have a long-term strategy in place, which includes diversifying
your investment portfolio among a number of different asset classes in
accordance with your tolerance for risk. At Oppenheimer Funds, our portfolio
management teams include seasoned professionals who have encountered extreme
market volatility in the past, giving them the perspective required to address
risks and take advantage of opportunities in turbulent markets. In our view,
having a well-defined set of financial goals, a disciplined long-term strategy
and the help of experienced investment professionals are all fundamental parts
of The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
October 21, 1998
3 Oppenheimer Champion Income Fund
<PAGE>
"We believe that
high yield bonds
currently represent
excellent values."
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How did the Fund perform over the 12-month period that ended September 30, 1998?
We are generally pleased with the Fund's performance, especially in light of the
extremely difficult conditions that developed in the high yield bond market at
the end of this period. In fact, August 1998 was the worst single month for high
yield corporate bonds since 1990.
Why did prices of high yield corporate bonds decline so precipitously in August?
High yield bonds responded to many of the same influences that drove the U.S.
stock market lower during the third quarter of 1998. For the past several years,
large, well-established companies providing consistent earnings growth fueled
the corporate debt and equity markets' rise. In the wake of the Asian crisis,
some U.S. companies revealed that their earnings would not meet analyst's
expectations because of reduced overseas demand and increased competitive
pressures domestically.
In view of the likelihood of lower corporate earnings--as well as economic
and political turmoil in Southeast Asia, Latin America and Russia--risk-averse
investors attempted to sell all but the most creditworthy securities. In our
opinion, they did so without regard to the fundamental soundness of the
individual issuers or business conditions. Investors sold even relatively high
quality, fixed income investments such as U.S. agency securities, as these
securities are generally not guaranteed by the full faith and credit of the U.S.
government. Only U.S. Treasury securities--considered the most secure
investments in the world--prospered in this environment.
How was the Fund managed in this environment?
We maintained the same disciplined investment approach that has guided our
decisions in good markets and bad: we emphasize a long-term investment horizon
that favors strong companies in growth sectors of the U.S. economy.
4 Oppenheimer Champion Income Fund
<PAGE>
[PHOTO]
Portfolio Management Team (l to r)
David Negri (Portfolio Manager)
Ralph Stellmacher
However, during periods of high market volatility we pay extra attention to
transaction costs, which can have a significant impact on investment returns.
Thus we trimmed positions in industries that had held up reasonably well during
the August correction and that we could trade at low costs. This included
positions in the retail, consumer durable, and capital equipment industries.
Perhaps most important was the position of the Fund before the correction.
Last winter and spring, we reduced our exposure to those industries that we
regarded as most vulnerable to slowing global growth. For example, after the
Asian currency crisis, we reduced our holdings of bonds issued by companies
whose earnings are sensitive to changes in commodity prices. This was
particularly true of basic industries such as paper companies, chemical
companies, and metal producers. We have been holding a smaller-than-average
position in these industries most of the last year and therefore we did not have
to incur high transaction costs in August to reduce exposure. We also maintained
a smaller-than-average position in the healthcare sector, which came under
pressure because of the potential for renewed government regulation.
Similarly, because of concerns over slowing growth, we had dramatically
reduced our exposure to the emerging markets of Southeast Asia and Latin America
before those markets sold-off during the third quarter of 1998. Rather than
redeploy those assets through the purchase of other securities, we chose instead
to maintain a larger-than-normal cash reserve.
5 Oppenheimer Champion Income Fund
<PAGE>
================================
Avg Annual Total Returns
For the Periods Ended 9/30/98/1/
================================
Class A
1 year 5 year 10 year
======================================
- -5.22% 7.31% 10.77%
======================================
Class B
Since
1 year 5 year Inception
======================================
- -5.76% N/A 6.98%
======================================
Class C
Since
1 year 5 year Inception
======================================
- -2.15% N/A 7.00%
======================================
An interview with your Fund's manager
- --------------------------------------------------------------------------------
Our strategy was to keep that cash available to take advantage of compelling
opportunities when valuations returned to more attractive levels.
What industries or companies contributed most to the Fund's performance?
Cable television and telecommunications issues continued to benefit from strong
underlying business growth, which made them attractive candidates for
acquisition by larger companies. For example, the Fund benefited when one of our
cable TV company holdings was acquired by a telecommunications giant. The bonds
of other cable companies also strengthened in the wake of this corporate
marriage.
The air travel industry has also performed well, primarily because of the
positive effects of low energy prices on airline companies' profit margins. Fuel
prices have declined to the low end of their historical range, yet the growing
U.S. economy provided positive conditions for both business and pleasure travel.
What is your outlook for the high yield corporate bond market?
We are optimistic. In our view, the U.S. economy remains sound. We continue to
expect slow-to-moderate economic growth in an environment of low inflation.
These conditions have historically been very favorable for the high yield bond
market because companies are generally able to earn decent returns, maintain
positive cash flows, and pay their debt obligations.
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 11/16/87. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 3%
(since inception on 10/2/95). Class C returns for the one-year result include
the contingent deferred sales charge of 1%. Class C shares have an inception
date of 12/1/93. Class B and C shares are subject to an annual 0.75% asset-based
sales charge. An explanation of the different performance calculations is in the
Fund's prospectus.
6 Oppenheimer Champion Income Fund
<PAGE>
Credit Allocation/2/
[PIE CHART]
* AAA 14.0%
* AA 0.2
* A 6.8
* BBB 2.1
* BB 14.4
* B 50.1
* CCC 9.1
* CC 0.5
* C 0.3
* Other 2.5
Standardized Yields/3/
For the 30 Days Ended 9/30/98
- ------------------------------
Class A 8.53%
- ------------------------------
Class B 8.18
- ------------------------------
Class C 8.18
- ------------------------------
We believe that high yield bonds currently represent excellent values. Many bond
prices have declined to levels that appear to reflect a worst-case scenario,
such as recession. If and when it becomes clear to fixed income investors that a
recession is unlikely, we believe that bond prices will rise to more normal
valuations. In our opinion, investors are waiting for evidence that Japan has
its fiscal house in order and that Latin America will not implode as Asia did
last year.
As these factors begin to be resolved over the next several months, we
intend to use some of our cash reserves to acquire relatively high-quality
securities at attractive prices. Exercising the discipline required to capture
attractive values in changing markets is an important part of The Right Way to
Invest.
Top 5 Holdings by Issuer/4/
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. 3.9%
- --------------------------------------------------------------------------------
Bankers Trust NY Corp. 1.8
- --------------------------------------------------------------------------------
Intermedia Communications, Inc. 1.6
- --------------------------------------------------------------------------------
Echostar Communications, Inc. 1.4
- --------------------------------------------------------------------------------
Shoshone Partners Trust 1.3
- --------------------------------------------------------------------------------
2. Portfolio is subject to change. Percentages are as of September 30, 1998 and
are dollar-weighted based on total market value of investments. Securities rated
by any rating organization are included in the equivalent Standard & Poor's
rating category. Average credit quality includes securities rated by national
ratings organizations as well as unrated securities (21.1% of total investments
as of September 30, 1998) which have ratings assigned by the manager in
categories equivalent to those of ratings organizations.
3. Standardized yield is based on net investment income for the 30-day period
ended September 30, 1998. Falling share prices will tend to artificially raise
yields.
4. Portfolio is subject to change. Percentages are as of September 30, 1998 and
are based on total market value of investments.
7 Oppenheimer Champion Income Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its fiscal year ended September 30, 1998, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index and a narrower market index.
o Management's Discussion of Performance
The Fund's fiscal year ended September 30, 1998, proved to be a volatile year
for high yield investors. During the first three-quarters of that period, U.S.
economic growth remained strong and inflation remained low. At the same time,
corporate profits continued to expand. These influences were good for the U.S.
bond market in general and especially so for high yield corporate bonds.
However, the Fund's performance was adversely affected by the economic and
political turmoil in Southeast Asia, Latin America and Russia, particularly in
the third quarter of 1998. The Manager reduced the Fund's exposure to those
industries that it regarded as most vulnerable to slowing global growth, and
reduced the Fund's exposure to the emerging markets of Southeast Asia and Latin
America before the markets sold-off during the third calendar quarter of 1998.
The Manager also maintained a smaller-than-average position in the healthcare
sector, which came under pressure because of the potential for renewed
government regulation. In turn, the Manager maintained a larger-than-normal cash
position to take advantage of compelling opportunities when valuations returned
to more attractive levels. The Fund's portfolio holdings, allocations and
strategies are subject to change.
o Comparing the Fund's Performance to the Market
The graphs that follow show the performance of a hypothetical $10,000 investment
in Class A, Class B and Class C shares of the Fund held until September 30,
1998.
8 Oppenheimer Champion Income Fund
<PAGE>
In the case of Class A shares, performance is measured over a ten-year period.
In the case of Class B shares, performance is measured from inception of the
Class on October 2, 1995. In the case of Class C shares, performance is measured
from inception of the Class on December 1, 1993. The Fund's performance reflects
the deduction of the 4.75% maximum initial sales charge on Class A shares, the
5% (1-year) and 3% (since inception) applicable contingent deferred sales charge
for Class B, and the 1% (1-year) contingent deferred sales charge for Class C
shares. The graphs assume that all dividends and capital gains distributions
were reinvested in additional shares.
The Fund's performance is compared to the performance of Lehman Brothers
Corporate Bond Index and the Merrill Lynch High Yield Master Index. The Lehman
Brothers Corporate Bond Index is an unmanaged index of publicly-issued
nonconvertible investment grade corporate debt of U.S. issuers, widely
recognized as a measure of the U.S. fixed-rate corporate bond market. The
Merrill Lynch High Yield Master Index is an index of below-investment-grade U.S.
corporate issuers (ratings are generally comparable to below BBB of S&P). It is
widely recognized as a measure of the U.S. corporate high yield bond market.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of the Fund's business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the securities in
the indices.
9 Oppenheimer Champion Income Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Champion Income Fund (Class A), Lehman Brothers Corporate Bond
Index, and Merrill Lynch High Yield Master Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
9.30.88 9.30.89 9.30.90 9.30.91 9.30.92 9.30.93 9.30.94 9.30.95 9.30.96 9.30.97 9.30.98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oppenheimer Champion
Income Fund Class A 9,525 10,337 10,661 13,392 16,061 18,620 19,664 21,649 24,524 27,948 27,813
Lehman Brothers
Corporate Bond Index 10,000 11,179 11,871 13,893 15,916 17,855 17,054 19,952 20,899 23,162 25,727
Merrill Lynch
High Yield Master Index 10,000 10,823 10,229 13,035 16,001 18,381 19,044 21,814 24,085 27,532 28,461
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 9/30/98(1)
1 Year 5 Year 10 Year
-5.22% 7.31% 10.77%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Champion Income Fund (Class B), Lehman Brothers Corporate Bond
Index, and Merrill Lynch High Yield Master Index
[The following table was originally a line graph in the printed materials.]
10.02.95 9.30.96 9.30.97 9.30.98
Oppenheimer Champion
Income Fund Class A 10,000 11,220 12,690 12,239
Lehman Brothers
Corporate Bond Index 10,000 10,475 11,609 12,894
Merrill Lynch
High Yield Master Index 10,000 11,041 12,622 13,047
Average Annual Total Return of Class A Shares of the Fund at 9/30/98(1)
1 Year Life
-5.76% 6.98%
10 Oppenheimer Champion Income Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Champion Income Fund (Class C), Lehman Brothers Corporate Bond
Index, and Merrill Lynch High Yield Master Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
9.30.93 9.30.94 9.30.95 9.30.96 9.30.97 9.30.98
<S> <C> <C> <C> <C> <C> <C>
Oppenheimer Champion
Income Fund Class A 10,000 10,112 11,038 12,410 14,039 13,864
Lehman Brothers
Corporate Bond Index 10,000 9,622 11,256 11,791 13,068 14,514
Merrill Lynch
High Yield Master Index 10,000 10,114 11,585 12,791 14,622 15,115
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 9/30/98(1)
1 Year Life
-2.15% 7.00%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for both indices in the graphs for Class B begins on
9/29/95 and Class C begins on 11/30/93.
1. The average annual total returns are shown net of the applicable 4.75%
maximum initial sales charge.
2. Class B shares of the Fund were first publicly offered on 10/2/95. The
average annual total returns are shown net of the applicable 5% and 3%
contingent deferred sales charges, respectively, for the one-year period and the
life of the class. The ending account value in the graph is net of the
applicable 3% contingent deferred sales charge.
3. Class C shares of the Fund were first publicly offered on 12/1/93. The
average annual total returns are shown net of the applicable 1% contingent
deferred sales charge for the one-year period.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
11 Oppenheimer Champion Income Fund
<PAGE>
Financials
------------------------------------
12 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments September 30, 1998
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=======================================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--2.5%
- -------------------------------------------------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp., Multiclass
Mtg. Pass-Through Certificates, Series 1997-C1, Cl. H, 7%,
6/17/29(2) $ 360,000 $ 259,537
- -------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial
Mtg. Pass-Through Certificates:
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(3) 1,500,000 1,375,078
Series 1997-D5, Cl. B2, 6.93%, 2/14/41 3,800,000 3,417,625
- -------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 7.76%, 12/25/03(2)(3) 622,000 606,839
- -------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp.,
Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. F, 7.50%, 6/20/13(2) 600,000 499,875
Series 1997-C1, Cl. G, 7.50%, 6/20/14(2) 810,000 626,231
Series 1997-C1, Cl. H, 7.50%, 8/20/14(2) 600,000 445,500
Series 1997-C2, Cl. F, 7.46%, 5/17/14 2,000,000 1,784,375
Series 1997-C2, Cl. H, 7.46%, 1/17/35 1,400,000 1,040,375
Series 1998-C1, Cl. F, 6%, 5/17/40(2) 3,000,000 2,158,125
- -------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, 8.132%, 2/28/11(2)(3) 4,000,000 3,275,000
- -------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
Collateralized Mtg. Obligations, Series 1997-C2,
Cl. F, 6.75%, 4/16/29 2,000,000 1,588,750
Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1,
Cl. X, 2.077%, 7/15/27(4) 43,131 4,057
- -------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 1997-RR, Cl. D, 7.769%, 4/30/39(2) 2,000,000 1,991,875
Series 1997-RR, Cl. F, 7.769%, 4/30/39(2) 5,000,000 4,017,969
Series 1997-XL1, Cl. G, 7.695%, 10/3/30(2)(3) 1,200,000 1,193,437
- -------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 600,000 565,688
- -------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 430,663 434,095
Series 1995-C1, Cl. F, 6.90%, 2/25/27 244,006 231,463
- -------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Series 1996-C1,
Cl. E, 9.184%, 1/20/06 704,000 756,140
- -------------------------------------------------------------------------------------------------------
Salomon, Inc., Commercial Mtg. Pass-Through Certificates,
Series 1998-A1, 5%, 12/25/00(2) 316,461 303,803
- -------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Commercial Mtg. Pass-Through
Certificates, Series 1997-LLI, Cl. F, 7.30%, 4/12/12(2) 3,000,000 3,021,563
-----------
Total Mortgage-Backed Obligations (Cost $29,609,211) 29,597,400
</TABLE>
13 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Foreign Government Obligations--4.0%
- -------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de
Deudas, Series I, 2.974%, 4/1/07(3)ARP $ 8,393,320 $ 4,817,789
- -------------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07ARP 2,340,000 1,702,551
- -------------------------------------------------------------------------------------------------------
Banco Hipotecario Nacional (Argentina) Medium-Term Nts.,
10.625%, 8/7/06 1,000,000 870,000
- -------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.688%, 7/28/24(3) 3,795,000 2,443,031
- -------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 6.688%, 7/28/11(3) 4,400,000 2,618,000
- -------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Debs., 6.625%, 2/27/15(3) 1,697,490 577,146
- -------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Disc. Bonds, 6.625%, 2/28/25(3) 7,035,000 3,372,403
- -------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Past Due Interest Bonds, 6.625%, 2/27/15(3) 4,526,640 1,539,058
- -------------------------------------------------------------------------------------------------------
Germany (Republic of) Treasury Bills, Zero Coupon,
3.418%, 1/15/99(5)DEM 25,000,000 14,814,000
- -------------------------------------------------------------------------------------------------------
Perusahaan Listr, 17%, 8/21/01(2)IDR 1,000,000,000 52,570
- -------------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts., Zero Coupon, 3/17/99(2)(12)IDR 1,000,000,000 23,364
- -------------------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Collateralized Par Bonds,
Series DEF, 5%, 12/23/23(7)(8) 1,750,000 914,375
- -------------------------------------------------------------------------------------------------------
Nigeria (Federal Republic of) Promissory Nts., Series RC,
5.092%, 1/5/10 2,079,297 1,103,924
- -------------------------------------------------------------------------------------------------------
Panama (Government of) Bonds, 8.875%, 9/30/27 885,000 746,719
- -------------------------------------------------------------------------------------------------------
Panama (Government of) Past Due Interest Debs.,
6.688%, 7/17/16(3) 1,139,032 803,018
- -------------------------------------------------------------------------------------------------------
Peru (Republic of) Front-Loaded Interest Reduction Bonds,
3.25%, 3/7/17(3) 5,000,000 2,262,500
- -------------------------------------------------------------------------------------------------------
Russia (Government of) Federal Loan Bonds, Series 5022,
15%, 2/23/00(2)RUR 20,402,000 496,903
- -------------------------------------------------------------------------------------------------------
Russia (Government of) Principal Loan Debs., Series 24 yr.,
6.625%, 12/15/20(3) 4,500,000 289,687
- -------------------------------------------------------------------------------------------------------
United Mexican States Sr. Nts., 8.625%, 3/12/08 2,000,000 1,716,250
- -------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 6.625%, 12/18/07(3) 8,595,238 4,942,262
- -------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.625%, 3/31/07(3) 1,500,009 827,818
-----------
Total Foreign Government Obligations (Cost $50,130,876) 46,933,368
=======================================================================================================
Loan Participations--0.1%
- -------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.,
Tranche 1, 6.375%, 9/4/06(3) 1,561,090 741,518
- -------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.563%, 1/1/09(2)(3) 1,075,000 782,063
-----------
Total Loan Participations (Cost $2,040,734) 1,523,581
</TABLE>
14 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Corporate Bonds and Notes--64.5%
- -------------------------------------------------------------------------------------------------------
Aerospace/Defense--2.1%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 $ 2,000,000 $ 2,010,000
- -------------------------------------------------------------------------------------------------------
Amtran, Inc., 10.50% Sr. Nts., 8/1/04 3,400,000 3,417,000
- -------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
10.75% Sr. Nts., 8/1/05 60,000 60,300
12.25% Pass-Through Certificates, 12/1/02 2,750,000 2,970,000
- -------------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable
Asset-Backed Nts., Series 1997-1, 1/1/01(2) 3,500,000 3,508,750
- -------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., 12% Sr. Sub. Nts., 9/30/08(7)(9) 3,450,000 3,467,250
- -------------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts.,
Cl. B, 6/15/04(2) 1,828,818 1,972,564
- -------------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts.,
Series B, 9/1/07 1,000,000 977,500
- -------------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 1,080,391 1,112,804
- -------------------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 5,775,000 5,515,125
-----------
25,011,293
- -------------------------------------------------------------------------------------------------------
Chemicals--2.3%
Brunner Mond Group plc, 12.50% Sr. Sub. Nts., 7/15/08(7)GBP 5,150,000 7,789,213
- -------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 2,020,000 1,949,300
- -------------------------------------------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts., 6/1/07 600,000 570,000
- -------------------------------------------------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 1,615,000 1,413,125
- -------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 9,205,000 9,941,400
- -------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07 50,000 40,000
- -------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 1,900,000 1,539,000
- -------------------------------------------------------------------------------------------------------
Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 3,925,000 3,807,250
- -------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc., 11.25% Sr. Sub. Nts., 4/1/07 170,000 146,200
-----------
27,195,488
- -------------------------------------------------------------------------------------------------------
Consumer Durables--0.4%
Holmes Products Corp., 9.875% Sr. Unsec. Sub. Nts.,
Series B, 11/15/07 2,575,000 2,356,125
- -------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 1,865,000 2,199,581
-----------
4,555,706
- -------------------------------------------------------------------------------------------------------
Consumer Non-Durables--2.0%
AKI Holdings, Inc.:
0%/13.50% Sr. Disc. Debs., 7/1/09(7)(10) 1,350,000 627,750
10.50% Sr. Nts., 7/1/08(7) 1,250,000 1,206,250
- -------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 1,500,000 832,500
- -------------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Sub. Nts., 8/15/08(7) 3,020,000 2,974,700
</TABLE>
15 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Non-Durables (continued)
Globe Manufacturing, Inc., 10% Sr. Sub. Nts., 8/1/08(7) $ 4,300,000 $ 4,063,500
- -------------------------------------------------------------------------------------------------------
Phillips-Van Heusen Corp., 9.50% Sr. Sub. Nts., 5/1/08(7) 1,100,000 1,056,000
- -------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 8.625% Sr. Unsec.
Sub. Nts., 2/1/08 2,800,000 2,751,000
- -------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 11.431%, 3/15/01(5) 9,165,000 7,057,050
- -------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08(7) 2,320,000 2,180,800
- -------------------------------------------------------------------------------------------------------
William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 805,000 845,250
-----------
23,594,800
- -------------------------------------------------------------------------------------------------------
Energy--5.1%
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06 2,530,000 2,188,450
9.625% Sr. Unsec. Nts., Series B, 5/1/05 3,110,000 2,752,350
- -------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875%
Sr. Sub. Nts., 11/15/07 3,625,000 3,135,625
- -------------------------------------------------------------------------------------------------------
Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 825,000 771,375
- -------------------------------------------------------------------------------------------------------
Dailey International, Inc., 9.50% Sr. Unsec. Nts.,
Series B, 2/15/08 1,750,000 1,023,750
- -------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 1,250,000 1,043,750
- -------------------------------------------------------------------------------------------------------
Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(2) 3,800,000 2,603,000
- -------------------------------------------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., Series B, 2/15/07 2,800,000 1,974,000
9.50% Sr. Sub. Nts., 11/1/06 4,965,000 3,649,275
- -------------------------------------------------------------------------------------------------------
Gothic Energy Corp., 0%/14.125% Sr. Disc. Nts., 5/1/06(10) 8,775,000 3,553,875
- -------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts.,
Series B, 5/1/05(7) 3,000,000 2,175,000
- -------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts.,
Series B, 2/15/08(11) 1,985,000 1,597,925
- -------------------------------------------------------------------------------------------------------
Grey Wolf, Inc., 8.875% Sr. Unsec. Nts., Series C, 7/1/07 900,000 688,500
- -------------------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., Series D, 11/1/06 2,800,000 1,190,000
- -------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08(7) 3,150,000 2,346,750
- -------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 10,125,000 10,175,625
- -------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 4,855,000 4,442,325
- -------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 1,330,000 1,270,150
- -------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 6,000,000 5,130,000
- -------------------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals (Canada), Inc.,
11.75% First Mtg. Nts., Series B, 11/15/03 1,050,000 1,013,250
- -------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 5,665,000 5,410,075
- -------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc.:
0%/9.875% Sr. Disc. Nts., 2/15/08(7)(10) 2,350,000 1,363,000
0%/11.375% Sr. Disc. Nts., 2/15/09(7)(10) 800,000 448,000
-----------
59,946,050
</TABLE>
16 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial--0.8%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 $165,000 $ 132,825
- -------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 578,000 615,570
- -------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 133,140 133,473
- -------------------------------------------------------------------------------------------------------
Emergent Group, Inc., 10.75% Sr. Nts., Series B, 9/15/04 1,220,000 616,100
- -------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(2)(12) 600,000 --
- -------------------------------------------------------------------------------------------------------
Ocwen Financial Corp., 11.875% Nts., 10/1/03 625,000 612,500
- -------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 10.206% Nts., 11/15/07(2)(3) 600,000 612,000
- -------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, Zero Coupon Nts.,
Series 2, 7/15/98(2)(12)IDR 6,314,400,000 59,013
- -------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts.,
Series B, 4/1/08 4,930,000 4,363,050
- -------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28(2) 1,700,000 1,653,250
-----------
8,797,781
- -------------------------------------------------------------------------------------------------------
Food & Drug--1.9%
Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 3,101,000 3,194,030
- -------------------------------------------------------------------------------------------------------
Fleming Cos., Inc.:
10.50% Sr. Sub. Nts., Series B, 12/1/04 1,885,000 1,837,875
10.625% Sr. Sub. Nts., Series B, 7/31/07 6,200,000 6,169,000
- -------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(10) 4,975,000 3,706,375
12.625% Sub. Nts., 6/15/02 2,500,000 2,337,500
- -------------------------------------------------------------------------------------------------------
Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts.,
Series B, 7/1/07 3,970,000 4,108,950
- -------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 1,260,000 1,345,050
-----------
22,698,780
- -------------------------------------------------------------------------------------------------------
Food/Tobacco--2.1%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 900,000 931,500
- -------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 3,885,000 3,826,725
- -------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(7)(10) 3,450,000 1,983,750
- -------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 4,655,000 4,957,575
- -------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 8,065,000 7,621,425
- -------------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec.
Sub. Nts., 11/15/07 4,025,000 3,964,625
- -------------------------------------------------------------------------------------------------------
Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 860,000 872,900
-----------
25,158,500
</TABLE>
17 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Forest Products/Containers--1.5%
Ball Corp.:
7.75% Sr. Nts., 8/1/06(7) $ 3,000,000 $ 3,097,500
8.25% Sr. Sub. Nts., 8/1/08(7) 2,100,000 2,168,250
- -------------------------------------------------------------------------------------------------------
Four M Corp., 12% Sr. Sec. Nts., Series B, 6/1/06 645,000 635,325
- -------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 3,660,000 3,385,500
- -------------------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 3,450,000 3,777,750
- -------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 0%/12.75% Sr. Disc. Nts., 3/15/08(10) 700,000 311,500
- -------------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 800,000 812,000
- -------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 4,085,000 4,023,725
-----------
18,211,550
- -------------------------------------------------------------------------------------------------------
Gaming/Leisure--4.6%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(7)(10) 750,000 367,500
- -------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1,675,000 1,499,125
- -------------------------------------------------------------------------------------------------------
Arizona Charlie's, Inc., 12% First Mtg. Nts.,
Series B, 11/15/00(2)(12) 275,000 265,375
- -------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts.,
8/1/95(12) 7,500 --
- -------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A,
11/15/00(2)(12) 100,000 6,000
- -------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 2,100,000 2,021,250
- -------------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B,
8/15/03 2,030,000 2,263,450
- -------------------------------------------------------------------------------------------------------
Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06(7) 1,200,000 1,188,000
- -------------------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Sr. Nts., 4/1/02 2,705,000 2,779,387
- -------------------------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% First Mtg. Sec. Nts., 12/1/03 4,500,000 4,747,500
- -------------------------------------------------------------------------------------------------------
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(7) 2,800,000 2,786,000
- -------------------------------------------------------------------------------------------------------
Harveys Casino Resorts, 10.625% Sr. Unsec. Sub. Nts., 6/1/06 150,000 159,750
- -------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 5,895,000 5,777,100
- -------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 3,295,000 3,295,000
- -------------------------------------------------------------------------------------------------------
Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 1,400,000 1,442,000
- -------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority (Connecticut),
13.50% Sr. Sec. Nts., Series B, 11/15/02 2,340,000 2,925,000
- -------------------------------------------------------------------------------------------------------
Outboard Marine Corp., 10.75% Sr. Nts., 6/1/08(7) 1,355,000 1,280,475
- -------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08(7) 3,900,000 2,418,000
- -------------------------------------------------------------------------------------------------------
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(10) 1,970,000 1,231,250
9.25% Sr. Nts., 4/1/06 1,595,000 1,579,050
- -------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.:
10.625% Sr. Sub. Nts., 7/15/05 1,825,000 1,980,125
9.50% Sr. Sub. Nts., 4/15/07 4,490,000 4,894,100
</TABLE>
18 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gaming/Leisure (continued)
Showboat Marina Casino Partnership/Showboat Marina
Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 $ 5,240,000 $ 5,921,200
- -------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.75% Sr. Nts., 4/1/06 1,900,000 1,890,500
- -------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 300,000 297,000
- -------------------------------------------------------------------------------------------------------
Venetian Casino Resort LLC/Las Vegas Sands, Inc.,
12.25% Mtg. Nts., 11/15/04 1,495,000 1,352,975
-----------
54,367,112
- -------------------------------------------------------------------------------------------------------
Healthcare--1.6%
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 4,050,000 3,746,250
- -------------------------------------------------------------------------------------------------------
ICN Pharmaceutical, Inc., 8.75% Sr. Nts., 11/15/08(7) 2,715,000 2,660,700
- -------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc.:
10.25% Sr. Sub. Nts., 4/30/06 2,850,000 2,807,250
9.50% Sr. Sub. Nts., 9/15/07 5,985,000 5,595,975
- -------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(7) 3,100,000 2,635,000
- -------------------------------------------------------------------------------------------------------
Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07 1,925,000 1,761,375
-----------
19,206,550
- -------------------------------------------------------------------------------------------------------
Housing--1.3%
Building Materials Corp. of America, 8.625% Sr. Nts.,
Series B, 12/15/06 200,000 202,000
- -------------------------------------------------------------------------------------------------------
Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 675,000 570,375
- -------------------------------------------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Sr. Nts., 3/1/04 830,000 871,500
- -------------------------------------------------------------------------------------------------------
Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 3,180,000 3,172,050
- -------------------------------------------------------------------------------------------------------
Nortek, Inc.:
8.875% Sr. Nts., 8/1/08(7) 2,000,000 1,940,000
9.125% Sr. Nts., Series B, 9/1/07(13) 5,040,000 4,964,400
9.25% Sr. Nts., Series B, 3/15/07 4,070,000 4,110,700
-----------
15,831,025
- -------------------------------------------------------------------------------------------------------
Information Technology--1.5%
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(2) 770,000 550,550
- -------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc., 0%/13.50% Sr. Disc. Nts.,
Series B, 3/15/08(10) 7,310,000 2,960,550
- -------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 2,800,000 2,674,000
- -------------------------------------------------------------------------------------------------------
Dialog Corp. plc, 11% Sr. Sub. Nts., Series B, 11/15/07 1,750,000 1,820,000
- -------------------------------------------------------------------------------------------------------
DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 1,200,000 1,110,000
- -------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,150,000 1,988,750
- -------------------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 2,275,000 2,559,375
- -------------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Disc. Unsec. Nts.,
Series B, 3/1/05(10) 5,745,000 3,073,575
- -------------------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 1,440,000 1,332,000
-----------
18,068,800
</TABLE>
19 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing--2.0%
Axia, Inc., 10.75% Sr. Sub. Nts., 7/15/08(7) $ 1,560,000 $ 1,513,200
- -------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 1,125,000 1,125,000
- -------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05 802,000 872,175
- -------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec.
Sub. Nts., 3/1/08 1,500,000 1,380,000
- -------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(7) 1,150,000 1,006,250
- -------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr.
Sub. Nts., 8/1/07 2,275,000 2,127,125
- -------------------------------------------------------------------------------------------------------
Insilco Corp., 10.25% Sr. Sub. Nts., 8/15/07 3,770,000 3,788,850
- -------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts.,
Series B, 6/1/05 3,720,000 3,831,600
- -------------------------------------------------------------------------------------------------------
Moll Industries, Inc., 10.50% Sr. Sub. Nts., 7/1/08(7) 1,000,000 925,000
- -------------------------------------------------------------------------------------------------------
Paragon Corp. Holdings, Inc., 9.625% Sr. Unsec. Nts.,
Series B, 4/1/08 355,000 253,825
- -------------------------------------------------------------------------------------------------------
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07 2,100,000 2,121,000
- -------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 960,000 921,600
- -------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts.,
Series B, 6/15/07 2,285,000 2,227,875
- -------------------------------------------------------------------------------------------------------
Terex Corp., 8.875% Sr. Unsec. Sub. Nts., 4/1/08 1,000,000 937,500
- -------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(2) 1,075,000 1,080,375
-----------
24,111,375
- -------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--2.3%
Allbritton Communications Co., 8.875% Sr. Sub. Nts.,
Series B, 2/1/08 1,000,000 980,000
- -------------------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 1,990,000 2,019,850
- -------------------------------------------------------------------------------------------------------
CBS Radio, Inc., 11.375% Exchangeable Unsec. Sub. Debs.,
1/15/09(14) 1,174,400 1,344,688
- -------------------------------------------------------------------------------------------------------
Chancellor Media Corp., 9% Sr. Sub. Nts., 10/1/08(2) 10,000,000 10,125,000
- -------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 4,665,000 4,734,975
- -------------------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(8) 1,000,000 945,000
- -------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 9% Sr. Unsec. Sub. Nts., 7/15/07 4,000,000 4,000,000
- -------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc.:
11% Sr. Nts., 3/15/04 650,000 653,250
12.50% Sr. Nts., 6/15/02 300,000 328,500
- -------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 1,650,000 1,645,875
-----------
26,777,138
- -------------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--2.5%
Adelphia Communications Corp., 8.125% Sr. Nts., 7/15/03(7) 6,000,000 6,030,000
- -------------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
9.875% Sr. Sub. Debs., 2/15/13 215,000 236,500
9.875% Sr. Sub. Debs., 4/1/23 1,100,000 1,199,000
9.875% Sr. Sub. Nts., 5/15/06 1,710,000 1,863,900
</TABLE>
20 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Cable/Wireless Video (continued)
EchoStar DBS Corp., 12.50% Sr. Sec. Nts., 7/1/02 $ 6,425,000 $ 6,810,500
- -------------------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(2) 1,114,930 1,081,482
- -------------------------------------------------------------------------------------------------------
EchoStar II, 8.25% Bonds, 11/9/01(2) 1,104,705 1,071,564
- -------------------------------------------------------------------------------------------------------
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec.
Disc. Nts., 3/15/04(10) 4,475,000 3,982,750
- -------------------------------------------------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs.,
Series B, 4/15/10(10) 1,000,000 685,000
- -------------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 4,640,000 4,732,800
- -------------------------------------------------------------------------------------------------------
TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07 185,000 172,050
- -------------------------------------------------------------------------------------------------------
United International Holdings, Inc.:
0%/10.75% Sr. Disc. Nts., Series B, 2/15/08(10) 1,260,000 623,700
0%/14% Sr. Disc. Nts., Series B, 5/15/06(10) 1,350,000 573,750
-----------
29,062,996
- -------------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--1.4%
Hollinger International Publishing, Inc., 9.25% Sr. Unsec.
Sub. Nts., 2/1/06 1,000,000 1,032,500
- -------------------------------------------------------------------------------------------------------
Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 700,000 640,500
- -------------------------------------------------------------------------------------------------------
Imax Corp., 10% Sr. Nts., 3/1/01(3) 1,700,000 1,759,500
- -------------------------------------------------------------------------------------------------------
IPC Magazines Group plc, 9.625% Bonds, 3/15/08(2)GBP 3,000,000 4,206,022
- -------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 3,270,000 3,482,550
- -------------------------------------------------------------------------------------------------------
Outdoor Systems, Inc., 8.875% Sr. Sub. Nts., 6/15/07 2,000,000 2,075,000
- -------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc., 9.125% Sr. Unsec. Sub. Nts.,
Series B, 2/1/08 3,900,000 3,666,000
-----------
16,862,072
- -------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--11.0%
Amazon.Com, Inc., 0%/10% Sr. Disc. Nts., 5/1/08(10) 6,600,000 3,993,000
- -------------------------------------------------------------------------------------------------------
Call-Net Enterprises, Inc., 0%/9.27% Sr. Disc. Nts., 8/15/07(10) 1,440,000 943,200
- -------------------------------------------------------------------------------------------------------
COLT Telecom Group plc:
0%/12% Sr. Unsec. Disc. Nts., 12/15/06(10) 900,000 697,500
7.625% Bonds, 7/31/08DEM 9,725,000 5,218,589
8.875% Sr. Nts., 11/30/07DEM 1,880,000 1,095,310
10.125% Sr. Nts., 11/30/07GBP 2,330,000 3,722,032
Units (each unit consists of $1,000 principal amount of 0%/12%
sr. disc. nts., 12/15/06 and one warrant to purchase 7.8 ordinary
shares)(10)(15) 3,185,000 2,452,450
- -------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs.,
11/15/07(10) 1,350,000 1,100,250
- -------------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 2,225,000 2,102,625
- -------------------------------------------------------------------------------------------------------
Convergent Communications, Inc., Units (each unit consists of
$1,000 principal amount of 13% sr. nts., 4/1/08 and four warrants
to purchase 10.8 shares of common stock)(7)(15) 1,600,000 1,288,000
</TABLE>
21 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
Diamond Cable Communications plc:
0%/10.75% Sr. Disc. Nts., 2/15/07(10) $ 1,800,000 $ 1,251,000
0%/11.75% Sr. Disc. Nts., 12/15/05(10) 9,665,000 7,732,000
9.125% Sr. Nts., 2/1/08 800,000 772,000
- -------------------------------------------------------------------------------------------------------
e.spire Communications, Inc.:
0%/10.625% Sr. Disc. Nts., 7/1/08(7)(10) 1,690,000 870,350
13.75% Sr. Nts., 7/15/07 1,400,000 1,519,000
- -------------------------------------------------------------------------------------------------------
Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08(7) 1,155,000 1,056,825
- -------------------------------------------------------------------------------------------------------
FaciliCom International, Inc., 10.50% Sr. Nts., Series B, 1/15/08 2,700,000 2,362,500
- -------------------------------------------------------------------------------------------------------
Firstworld Communications, Inc., Units (each unit consists of
$1,000 principal amount of 0%/13% sr. disc. nts., 4/15/08 and
one warrant to purchase 7.9002 shares of series B common
stock)(7)(10)(15) 1,985,000 615,350
- -------------------------------------------------------------------------------------------------------
Focal Communications Corp., 0%/12.125% Sr. Disc. Nts.,
Series B, 2/15/08(10) 5,675,000 2,894,250
- -------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08(7) 2,760,000 2,684,100
- -------------------------------------------------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts., 5/1/05(2) 4,175,000 3,381,750
- -------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub.
Disc. Nts., 12/15/05(7)(10) 407,000 354,090
- -------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc./GST Network Funding Corp., Inc.,
0%/10.50% Sr. Disc. Nts., 5/1/08(7)(10) 1,980,000 960,300
- -------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(10) 3,715,000 2,693,375
- -------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 0%/12.50% Sr. Sec. Disc. Nts., 5/1/06(10) 400,000 286,000
- -------------------------------------------------------------------------------------------------------
ICG Services, Inc., 0%/10% Sr. Unsec. Disc. Nts., 2/15/08(10) 690,000 348,450
- -------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
8.50% Sr. Nts., Series B, 1/15/08 4,540,000 4,505,950
8.60% Sr. Unsec. Nts., Series B, 6/1/08 3,000,000 2,992,500
8.875% Sr. Nts., 11/1/07 2,690,000 2,716,900
- -------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc., 0%/12.50% Sr. Unsec.
Disc. Nts., 2/15/08(10) 7,885,000 3,666,525
- -------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc., 9.125% Sr. Unsec. Nts., 5/1/08 6,385,000 6,033,825
- -------------------------------------------------------------------------------------------------------
Long Distance International, Inc., Units (each unit consists of
$1,000 principal amount of 12.25% sr. nts., 4/15/08 and one
warrant to purchase 15.0875 shares of common stock)(7)(15) 1,390,000 1,216,250
- -------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(10)DEM 2,250,000 609,162
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(10) 3,600,000 1,611,000
- -------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Unsec. Nts., 4/15/08(10) 3,300,000 1,897,500
9.625% Sr. Nts., 10/1/07 6,205,000 6,049,875
- -------------------------------------------------------------------------------------------------------
NorthEast Optic Network, Inc., 12.75% Sr. Nts., 8/15/08 1,950,000 1,823,250
</TABLE>
22 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
NTL, Inc.:
0%/10.75% Sr. Unsec. Unsub. Nts., Series REGS, 4/1/08(10)GBP $ 6,700,000 $ 5,522,209
10% Sr. Nts., Series B, 2/15/07 2,440,000 2,476,600
- -------------------------------------------------------------------------------------------------------
Onepoint Communications Corp., Units (each unit consists of
$1,000 principal amount of 14.50% sr. nts., 6/1/08 and one warrant
to purchase one share of common stock at $.01 per share)(7)(15) 4,800,000 3,528,000
- -------------------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc., 9% Cv. Sub. Nts., 6/1/06(7) 200,000 54,500
- -------------------------------------------------------------------------------------------------------
PLD Telekom, Inc., Units (each unit consists of $1,000 principal
amount 0%/14% sr. disc. nts., 6/1/04 and one warrant to
purchase 34 shares of common stock)(7)(10)(15) 3,500,000 2,957,500
- -------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(7) 4,000,000 970,000
- -------------------------------------------------------------------------------------------------------
PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 10,050,000 10,125,375
- -------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.:
0%/8.29% Sr. Unsec. Disc. Nts., Series B, 2/1/08(10) 830,000 622,500
0%/9.47% Sr. Disc. Nts., 10/15/07(10)(13) 7,845,000 6,079,875
- -------------------------------------------------------------------------------------------------------
RSL Communications plc:
0%/10% Bonds, 3/15/08(10)DEM 4,200,000 1,174,796
0%/10.125% Sr. Disc. Nts., 3/1/08(10) 1,300,000 669,500
- -------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 3,650,000 3,686,500
- -------------------------------------------------------------------------------------------------------
US Xchange LLC, 15% Sr. Nts., 7/1/08(7) 1,485,000 1,425,600
- -------------------------------------------------------------------------------------------------------
Verio, Inc.:
10.375% Sr. Unsec. Nts., 4/1/05 2,735,000 2,721,325
13.50% Sr. Unsec. Nts., 6/15/04 700,000 780,500
- -------------------------------------------------------------------------------------------------------
Viatel, Inc., 11.25% Sr. Nts., 4/15/08(7) 2,700,000 2,430,000
-----------
130,741,813
- -------------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications--7.0%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(7) 700,000 696,500
- -------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(10) 5,999,000 2,399,600
- -------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.:
0%/9.50% Bonds, 4/1/05(10)XEU 10,825,000 9,241,351
6% Cv. Sub. Nts., 4/1/05(7) 800,000 1,227,000
- -------------------------------------------------------------------------------------------------------
Crown Castle International Corp., 0%/10.625% Sr. Unsec.
Disc. Nts., 11/15/07(10) 5,385,000 3,257,925
- -------------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(7)(10) 2,525,000 984,750
- -------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 400,000 406,000
- -------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(12) 1,665,000 10,406
- -------------------------------------------------------------------------------------------------------
ICO Global Communications (Holdings) Ltd., Units (each unit
consists of $1,000 principal amount of 15% sr. nts., 8/1/05 and
one warrant to purchase 19.85 shares of common stock)(15) 1,325,000 1,033,500
</TABLE>
23 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Wireless Communications (continued)
Microcell Telecommunications, Inc., 0%/11.125% Sr. Disc. Nts.,
Series B, 10/15/07(10)CAD $ 4,405,000 $ 1,519,909
- -------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
0%/10.65% Sr. Disc. Nts., 9/15/07(10) 5,805,000 3,686,175
0%/9.75% Sr. Disc. Nts., 10/31/07(10) 8,350,000 5,051,750
0%/9.95% Sr. Disc. Nts., 2/15/08(10) 1,650,000 977,625
- -------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 2,750,000 1,911,250
11.625% Sr. Nts., Series A, 8/15/06 5,600,000 3,892,000
- -------------------------------------------------------------------------------------------------------
Orange plc:
7.625% Sr. Nts., 8/1/08XEU 2,600,000 2,898,915
8% Sr. Nts., 8/1/08 12,500,000 12,187,500
- -------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp.,
14% Sr. Nts., 8/15/04 2,890,000 2,557,650
- -------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(10) 3,315,000 2,204,475
- -------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(10) 3,775,000 2,019,625
- -------------------------------------------------------------------------------------------------------
Price Communications Cellular Holdings, Inc., 11.25% Sr. Nts.,
8/15/08(14) 2,775,000 2,566,875
- -------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., 12/15/06(7) 4,100,000 4,018,000
11.75% Sr. Sub. Nts., 7/15/07 3,650,000 3,832,500
- -------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 3,000,000 2,880,000
- -------------------------------------------------------------------------------------------------------
Satelites Mexicanos SA, 10.125% Sr. Nts., 11/1/04(7) 875,000 614,688
- -------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(10) 8,955,000 4,701,375
- -------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(7)(10) 4,100,000 1,947,500
- -------------------------------------------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum Finance Corp., 0%/12.50%
Sr. Disc. Nts., 8/15/06(10) 3,778,000 3,192,410
- -------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II:
9.50% Sr. Nts., 2/1/04 300,000 274,500
14% Sr. Nts., 11/1/04 655,000 697,575
-----------
82,889,329
- -------------------------------------------------------------------------------------------------------
Metals/Minerals--2.1%
Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 8,783,000 7,070,315
- -------------------------------------------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 1,965,000 2,112,375
- -------------------------------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 2,325,000 2,011,125
- -------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp.:
10.25% Sr. Sub. Nts., 5/15/08(7) 1,700,000 1,632,000
10.25% Sr. Sub. Nts., 5/15/08 1,000,000 960,000
- -------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 750,000 667,500
- -------------------------------------------------------------------------------------------------------
Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 2,035,000 1,841,675
- -------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(7)(10) 6,100,000 2,165,500
</TABLE>
24 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Metals/Minerals (continued)
Metallurg, Inc., 11% Sr. Nts., 12/1/07 $ 3,945,000 $ 3,767,475
- -------------------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 2,450,000 2,388,750
-----------
24,616,715
- -------------------------------------------------------------------------------------------------------
Retail--1.4%
Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(7) 3,870,000 3,715,200
- -------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc.:
9.125% Sr. Sub. Nts., 5/1/08(7) 6,470,000 5,661,250
12% Sr. Nts., 10/1/03 900,000 958,500
- -------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 900,000 814,500
- -------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1,025,000 948,125
- -------------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(7) 2,850,000 2,686,125
- -------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,560,000
-----------
16,343,700
- -------------------------------------------------------------------------------------------------------
Service--3.1%
Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(10) 8,100,000 6,034,500
- -------------------------------------------------------------------------------------------------------
Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 2,570,000 2,839,850
- -------------------------------------------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(10) 2,025,000 1,478,250
- -------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 1,080,000 1,063,800
- -------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc., 9% Sr. Unsec.
Sub. Nts., 2/1/08 5,065,000 4,862,400
- -------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Sub. Nts., 8/15/08(7) 2,900,000 2,856,500
- -------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 3,550,000 3,425,750
- -------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bond, Series 1A, Cl. C2, 8/13/10(2) 7,500,000 7,500,000
- -------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc.:
6.75% Cv. Sr. Sub. Nts., 9/15/03 2,868,000 3,226,500
13.625% Sr. Sub. Disc. Nts., 6/30/05 2,700,000 3,091,500
- -------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 692,000 775,040
-----------
37,154,090
- -------------------------------------------------------------------------------------------------------
Transportation--3.0%
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 2,440,000 2,257,000
- -------------------------------------------------------------------------------------------------------
Coach USA, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 1,930,000 1,920,350
- -------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Sr. Unsec. Sub. Nts., 4/15/06 6,480,000 6,804,000
- -------------------------------------------------------------------------------------------------------
Golden Ocean Group Ltd., 10% Sr. Unsec. Nts., 8/31/01 1,200,000 588,000
- -------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 4,160,000 4,581,200
- -------------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05(7) 2,300,000 2,093,000
- -------------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 2,405,000 2,308,800
- -------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000
principal amount of 12% priority ship mtg. nts., 7/15/05 and
one warrant to purchase 5 shares of common stock)(7)(15) 3,200,000 2,896,000
</TABLE>
25 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Transportation (continued)
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(7) $ 3,715,000 $ 3,529,250
Units (each unit consists of $1,000 principal amount of 12%
second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(7)(15) 2,605,000 2,735,250
- -------------------------------------------------------------------------------------------------------
TFM SA de CV, 10.25% Sr. Nts., 6/15/07 1,440,000 1,198,800
- -------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(10) 4,391,000 3,842,125
- -------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust,
10.50% Nts., Series 1993-A, 12/1/11(2) 910,560 503,085
-----------
35,256,860
- -------------------------------------------------------------------------------------------------------
Utility--1.5%
CalEnergy Co., Inc., 7.52% Sr. Unsec. Nts., 9/15/08 12,000,000 12,336,744
- -------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 2,350,000 2,711,313
- -------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp.:
0%/8.50% Sr. Unsec. Nts., Series H, 7/1/10(10) 1,000,000 718,663
7.75% Sr. Unsec. Nts., Series G, 10/1/08 2,000,000 2,121,232
-----------
17,887,952
-----------
Total Corporate Bonds and Notes (Cost $819,416,343) 764,347,475
<CAPTION>
Shares
=======================================================================================================
<S> <C> <C>
Preferred Stocks--6.1%
- -------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(14) 85,369 2,112,883
- -------------------------------------------------------------------------------------------------------
BankUnited Capital Trust, 10.25% Gtd. Bonds, 12/31/26 750,000 789,375
- -------------------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A(2)(14)(17) 130,000 3,250,000
- -------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cum. Cv.(7) 161,000 2,616,250
- -------------------------------------------------------------------------------------------------------
Clark USA, Inc., 11.50% Cum. Exchangeable(14) 2,707 2,334,787
- -------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Preferred, Series B(14) 2,268 2,001,510
- -------------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
8.50% Cum. Cv., Series I, Non-Vtg. 28,900 1,907,400
11.125% Cum., Series M(14) 5,332 586,520
- -------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(2)(16) 100,000 3,887,500
- -------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 12.25% Sr. Exchangeable(14) 2,648 2,389,820
- -------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable
Preferred Stock(2) 1,231 1,012,497
- -------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., Cum. Exchangeable, Series B,
3/1/08, Non-Vtg.(2)(16) 15,000 813,750
- -------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cum. Cv., Series C, Non-Vtg.(7)(14) 110,000 220,000
- -------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., 12.125% Sr. Redeemable
Exchangeable, Series B, Non-Vtg.(14) 3,405 3,302,850
- -------------------------------------------------------------------------------------------------------
El Paso Electric Co., 11.40% Cum., Series A, Non-Vtg.(14) 18,804 2,040,234
</TABLE>
26 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred Stocks (continued)
Fidelity Federal Bank FSB Glendale California, l2% Non-Cum.
Exchangeable Perpetual Preferred Stock, Series A 30 $ 772
- -------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable(14) 2,814 3,243,135
- -------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
7% Cv. Preferred Securities(7)(16) 200,000 3,900,000
13.50% Exchangeable, Series B(14) 2,131 2,386,720
Depositary Shares Representing one one-hundredth 7% Cum.
Cv. Jr. Preferred Stock, Series E, Non-Vtg.(7) 61,150 1,475,244
- -------------------------------------------------------------------------------------------------------
International Utility Structures, Inc.:
13% Preferred(2)(14) 19 20,187
Units (each unit consists of $1,000 principal amount of 13% sr.
exchangeable preferred stock and one warrant to purchase
30 shares of common stock)(2)(14)(15) 300 301,500
- -------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Cum. Exchangeable(14) 26,384 1,721,556
- -------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 11.125% Exchangeable, Series E(14) 1,188 1,072,170
- -------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum. Exchangeable, Vtg.(14) 65,798 3,470,844
- -------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable,
Non-Vtg.(7)(14) 285 2,429,625
- -------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable 54,950 5,014,188
9.20% Exchangeable, Series F 22,500 2,165,625
- -------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Sr. Exchangeable(2)(14) 4,098 3,718,935
- -------------------------------------------------------------------------------------------------------
SD Warren Co., 14% Cum. Exchangeable, Series B, Non-Vtg.(16) 118,300 5,634,038
- -------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 13.75% Cum. Nts., Series B, 3/15/09,
Non-Vtg.(2)(14) 100 722,500
- -------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc./Capstar Broadcasting Corp., 12.625%
Cum., Series E, Non-Vtg.(14) 4,104 481,194
- -------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc., 14.25% Cum. Exchangeable,
Non-Vtg.(2)(14) 3,809 3,742,343
- -------------------------------------------------------------------------------------------------------
Viatel, Inc., 10% Cv., Series A(2)(14) 1,339 66,950
- -------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc.:
9.16% Cv., Series B 3,250 87,750
9.20% Preferred 83,700 1,961,719
----------
Total Preferred Stocks (Cost $83,620,546) 72,882,371
=======================================================================================================
Common Stocks--2.8%
- -------------------------------------------------------------------------------------------------------
Airtouch Communications, Inc.(16) 55,000 3,135,000
- -------------------------------------------------------------------------------------------------------
American Tower Corp.(16) 65,000 1,657,500
- -------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.(16) 45,000 2,441,250
- -------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(2) 75 66,375
- -------------------------------------------------------------------------------------------------------
El Paso Electric Co.(16) 56,400 546,375
</TABLE>
27 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statements of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks (continued)
Equitable Bag, Inc.(2)(16) 2,261 $ 3,392
- -------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc.(16) 58,176 1,159,884
- -------------------------------------------------------------------------------------------------------
Grand Casinos, Inc.(16) 60,000 476,250
- -------------------------------------------------------------------------------------------------------
Greate Bay Casino Corp.(16) 1,678 419
- -------------------------------------------------------------------------------------------------------
Grupo Iusacell SA, ADR(16) 45,000 222,188
- -------------------------------------------------------------------------------------------------------
Harveys Casino Resorts 50,000 1,196,875
- -------------------------------------------------------------------------------------------------------
Hilton Hotels Corp. 50,000 853,125
- -------------------------------------------------------------------------------------------------------
Hollywood Casino Corp., Cl. A(16) 10,000 14,375
- -------------------------------------------------------------------------------------------------------
Horizon Group Properties, Inc.(16) 1,880 4,465
- -------------------------------------------------------------------------------------------------------
Host Marriott Corp.(16) 10,000 126,875
- -------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(16) 42,243 1,037,594
- -------------------------------------------------------------------------------------------------------
Omnipoint Corp.(16) 60,000 446,250
- -------------------------------------------------------------------------------------------------------
Optel, Inc.(16) 3,815 38
- -------------------------------------------------------------------------------------------------------
Orbital Sciences Corp.(16) 5,000 140,312
- -------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.(16) 75,000 778,125
- -------------------------------------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 35,000 623,437
- -------------------------------------------------------------------------------------------------------
Protection One, Inc.(16) 55,000 536,250
- -------------------------------------------------------------------------------------------------------
PsiNet, Inc.(16) 132,000 1,839,750
- -------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.(16) 108,305 3,391,300
- -------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.(16) 20,000 276,250
- -------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., Cl. C(16) 5,100 10,200
- -------------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(2)(16) 16,299 21,393
- -------------------------------------------------------------------------------------------------------
Southwest Airlines Co. 6,975 139,500
- -------------------------------------------------------------------------------------------------------
Sovereign Bancorp, Inc. 46,000 612,375
- -------------------------------------------------------------------------------------------------------
Sprint Corp. 37,000 2,664,000
- -------------------------------------------------------------------------------------------------------
Station Casinos, Inc.(16) 65,000 345,312
- -------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), Liberty Media Group,
A Shares(16) 20,000 733,750
- -------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), TCI Group, A Shares(16) 65,000 2,543,125
- -------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), TCI Ventures Group,
A Shares(16) 35,000 627,813
- -------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Sponsored ADR 5,000 345,000
- -------------------------------------------------------------------------------------------------------
Time Warner, Inc. 20,000 1,751,250
- -------------------------------------------------------------------------------------------------------
Tricon Global Restaurants, Inc.(16) 45,000 1,755,000
- -------------------------------------------------------------------------------------------------------
Verio, Inc.(16) 25,000 618,750
- -------------------------------------------------------------------------------------------------------
Vimpel-Communications, Sponsored ADR(16) 10,000 52,500
- -------------------------------------------------------------------------------------------------------
Western Wireless Corp.(16) 10,000 178,750
- -------------------------------------------------------------------------------------------------------
Ziff-Davis, Inc.(16) 20,000 145,000
-----------
Total Common Stocks (Cost $36,630,324) 33,517,372
</TABLE>
28 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Market Value
Units See Note 1
=======================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.2%
- -------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts.:
Exp. 6/99(2) 5,500 $ 55
Exp. 8/00(2) 850 8
- -------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc., Litigation Trust(2) 19,829 198
- -------------------------------------------------------------------------------------------------------
Australis Holdings PTY Ltd./ Australia Media Ltd. Wts., Exp. 5/00(2) 190 1
- -------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(2) 12,500 3,125
- -------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/07(7) 2,899 9,784
- -------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(2)(17) 130,000 52,000
- -------------------------------------------------------------------------------------------------------
Clearnet Communications, Inc. Wts., Exp. 9/05 1,320 3,074
- -------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/07(2) 2,320 208,800
- -------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc. Wts., Exp. 3/08(2) 7,310 73,100
- -------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/05 725 38,496
- -------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/02 1,174 3,522
- -------------------------------------------------------------------------------------------------------
Globix Corp. Wts., Exp. 5/05 4,175 41,750
- -------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/01 58,176 245,430
- -------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/03(7) 89,486 895
Exp. 5/05(2) 69,612 80,750
Exp. 9/04(2) 91,000 102,375
- -------------------------------------------------------------------------------------------------------
Grand Union Co. Wts., Exp. 8/03 94 270
- -------------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc. Wts., Exp. 4/01 265 23,883
- -------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(2) 17,655 198,592
- -------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 1,600 --
- -------------------------------------------------------------------------------------------------------
Jewel Recovery LP, Participation Units of Limited Partners' Interest 1,985 --
- -------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/08(7) 7,885 40,411
- -------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(2) 8,000 59,500
- -------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc. Wts., Exp. 1/07(2) 2,565 36,231
- -------------------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(2) 19,178 345,204
- -------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03(2) 28,000 350,000
Exp. 6/05(2) 15,200 152,000
- -------------------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/03(2) 12,145 103,240
Trizec Hahn Corp. Wts., Exp. 7/99 1,985 3,571
- -------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts.,
Exp. 4/20 5,355 --
- -------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Wts., Exp. 1/02(2) 49,200 55,350
- -------------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/05(2) 17,235 137,880
----------
Total Rights, Warrants and Certificates (Cost $628,832) 2,369,495
</TABLE>
29 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=======================================================================================================
<S> <C> <C>
Structured Instruments--8.5%
- -------------------------------------------------------------------------------------------------------
Bankers Trust/Bear Stearns
High Yield Composite Index Linked Nts.:
8.135%, 6/1/99 $ 12,500,000 $ 12,468,750
8.55%, 4/5/99 5,000,000 4,695,650
8.55%, 5/4/99 5,000,000 4,685,350
- -------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale (New York Branch)
Lehman High Yield Index Nts., 8.50%, 3/8/99 7,000,000 6,521,200
- -------------------------------------------------------------------------------------------------------
Bear Stearns High Yield Composite Index Linked Nts.:
8.50%, 10/9/98(2) 12,500,000 11,622,500
8.50%, 4/9/99 5,000,000 4,641,150
8.50%, 4/14/99(9) 9,000,000 9,000,000
8.50%, 5/14/99(9) 12,000,000 12,000,000
9%, 2/5/99 10,000,000 9,217,700
- -------------------------------------------------------------------------------------------------------
Commerzbank International SA, Morgan Stanley Group, Inc.
Natural Gas Futures:
1999 Linked Nts., 5.225%, 9/23/99(3) 1,500,000 1,101,150
1999 Linked Nts., 5.225%, 9/8/99(3) 1,500,000 883,950
Linked Nts., 4.913%, 5/22/99(3) 500,000 510,150
- -------------------------------------------------------------------------------------------------------
J.P. Morgan & Co., Inc., The Emerging Markets Bond Index
Leveraged Nts., 9.50%, 10/29/98(6) 10,000,000 7,570,420
- -------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 7.437%, 4/28/02
(representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(2)(3) 16,600,000 16,010,184
--------------
Total Structured Instruments (Cost $108,488,950) 100,928,154
=======================================================================================================
Repurchase Agreements--12.3%
- -------------------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 5.50%, dated
9/30/98, to be repurchased at $145,522,229 on 10/1/98,
collateralized by U.S. Treasury Bonds, 7.625%, 2/15/25,
with a value of $152,043,609 (Cost $145,500,000) 145,500,000 145,500,000
- -------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,276,065,816) 101.0% 1,197,599,216
- -------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.0) (12,234,490)
------------ --------------
Net Assets 100.0% $1,185,364,726
============ ==============
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP -- Argentine Peso IDR -- Indonesian Rupiah
CAD -- Canadian Dollar RUR -- Russian Ruble
DEM -- German Mark XEU -- European Currency Units
GBP -- British Pound Sterling
2. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
3. Represents the current interest rate for a variable rate security.
30 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
6. Security is linked to the Emerging Markets Bond Index (EMBI). The EMBI tracks
total returns for currency denominated debt instruments of the emerging markets.
Countries covered are Argentina, Brazil, Bulgaria, Ecuador, Mexico, Morocco,
Nigeria, Panama, Peru, The Philippines, Poland, Russia and Venezuela.
7. 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 $143,349,425 or 12.09% of the Fund's net
assets as of September 30, 1998.
8. Represents the current interest rate for an increasing rate security.
9. When-issued security to be delivered and settled after September 30, 1998.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
11. A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
12. Non-income producing--issuer is in default.
13. Securities with an aggregate market value of $7,020,500 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
14. Interest or dividend is paid-in-kind.
15. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
16. Non-income producing security.
17. 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 period ended September 30,
1998. The aggregate fair value of securities of affiliated companies held by the
Fund as of September 30, 1998 amounts to $3,302,000. Transactions during the
period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares Gross Gross Shares
September 30, 1997 Additions Reductions September 30, 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CGA Group Ltd.,
Preferred Stock, Series A 130,000 -- -- 130,000
- ----------------------------------------------------------------------------------------
CGA Group Ltd. Wts.,
Exp. 12/49 130,000 -- -- 130,000
</TABLE>
See accompanying Notes to Financial Statements.
31 Oppenheimer Champion Income Fund
<PAGE>
===============================================================================
Statement of Assets and Liabilities September 30, 1998
===============================================================================
===============================================================================
Assets
Investments, at value (including repurchase agreement
of $145,500,000)--see accompanying statement:
Unaffiliated companies (cost $1,272,815,816) $ 1,194,297,216
Affiliated companies (cost $3,250,000) 3,302,000
- -------------------------------------------------------------------------------
Cash 439,032
- -------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 68,682
- -------------------------------------------------------------------------------
Receivables:
Interest and dividends 19,674,570
Shares of beneficial interest sold 6,088,443
Investments sold 2,315,972
Daily variation on futures contracts--Note 6 504,000
- -------------------------------------------------------------------------------
Other 4,420
---------------
Total assets 1,226,694,335
===============================================================================
Liabilities
Unrealized depreciation on forward foreign currency
exchange contracts--Note 5 682,032
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $24,450,000
purchased on a when-issued basis)--Note 1 32,099,071
Shares of beneficial interest redeemed 3,499,927
Dividends 2,636,807
Closed forward foreign currency exchange contracts 1,205,300
Distribution and service plan fees 740,724
Transfer and shareholder servicing agent fees 160,194
Shareholder reports 126,686
Other 178,868
---------------
Total liabilities 41,329,609
===============================================================================
Net Assets $ 1,185,364,726
===============
===============================================================================
Composition of Net Assets
Paid-in capital $ 1,256,524,564
- -------------------------------------------------------------------------------
Undistributed net investment income 654,557
- -------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 7,004,267
- -------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (78,818,662)
---------------
Net assets $ 1,185,364,726
===============
32 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$572,353,689 and 46,997,413 shares of beneficial interest outstanding) $12.18
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $12.79
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $388,572,385 and 31,937,543 shares of beneficial interest
outstanding) $12.17
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $224,438,652 and 18,448,505 shares of beneficial interest
outstanding) $12.17
See accompanying Notes to Financial Statements.
33 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statement of Operations For the Year Ended September 30, 1998
================================================================================
<TABLE>
<CAPTION>
=======================================================================================
<S> <C>
Investment Income
Interest (net of foreign withholding taxes of $51,348) $ 96,447,261
- ---------------------------------------------------------------------------------------
Dividends 5,567,892
-------------
Total income 102,015,153
=======================================================================================
Expenses
Management fees--Note 4 6,943,309
- ---------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 1,384,686
Class B 3,263,947
Class C 2,102,188
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,424,014
- ---------------------------------------------------------------------------------------
Shareholder reports 343,129
- ---------------------------------------------------------------------------------------
Registration and filing fees 115,978
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 83,427
- ---------------------------------------------------------------------------------------
Legal, auditing and other professional fees 31,543
- ---------------------------------------------------------------------------------------
Insurance expenses 8,571
- ---------------------------------------------------------------------------------------
Trustees' fees and expenses 8,074
- ---------------------------------------------------------------------------------------
Other 20,370
-------------
Net expenses 15,729,236
=======================================================================================
Net Investment Income 86,285,917
=======================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 8,528,028
Closing of futures contracts 1,317,887
Closing and expiration of option contracts written--Note 7 109,323
Foreign currency transactions (3,006,731)
-------------
Net realized gain 6,948,507
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (115,426,085)
Translation of assets and liabilities denominated in foreign currencies (267,778)
-------------
Net change (115,693,863)
-------------
Net realized and unrealized loss (108,745,356)
=======================================================================================
Net Decrease in Net Assets Resulting from Operations $ (22,459,439)
=============
</TABLE>
See accompanying Notes to Financial Statements.
34 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Ended September 30,
1998 1997
======================================================================================
<S> <C> <C>
Operations
Net investment income $ 86,285,917 $ 60,589,864
- --------------------------------------------------------------------------------------
Net realized gain 6,948,507 13,385,770
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (115,693,863) 20,234,385
-------------- ------------
Net increase (decrease) in net assets resulting from
operations (22,459,439) 94,210,019
======================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (44,685,298) (37,216,010)
Class B (23,050,424) (11,933,911)
Class C (14,921,590) (11,440,006)
- --------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A (1,752,073) --
Class B (1,189,487) --
Class C (687,045) --
- --------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (8,099,904) --
Class B (4,232,404) --
Class C (2,892,893) --
======================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 131,249,208 123,701,684
Class B 189,452,940 148,822,899
Class C 66,892,330 61,390,727
======================================================================================
Net Assets
Total increase 263,623,921 367,535,402
- --------------------------------------------------------------------------------------
Beginning of period 921,740,805 554,205,403
-------------- ------------
End of period (including undistributed net investment
income of $654,557 and $175,879, respectively) $1,185,364,726 $921,740,805
============== ============
</TABLE>
See accompanying Notes to Financial Statements.
35 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------
Year Ended September 30,
1998 1997 1996 1995 1994
====================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 13.49 $ 12.92 $ 12.47 $ 12.32 $ 12.90
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.09 1.15 1.15 1.05 1.10
Net realized and unrealized gain (loss) (1.11) .57 .44 .14 (.38)
-------- -------- -------- -------- --------
Total income from investment operations (.02) 1.72 1.59 1.19 .72
- ----------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.05) (1.15) (1.14) (1.04) (1.10)
Dividends in excess of net investment income -- -- -- -- (.01)
Tax return of capital distribution (.04) -- -- -- --
Distributions from net realized gain (.20) -- -- -- --
Distributions in excess of net realized gain -- -- -- -- (.19)
-------- -------- -------- -------- --------
Total dividends and distributions
to shareholders (1.29) (1.15) (1.14) (1.04) (1.30)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.18 $ 13.49 $ 12.92 $ 12.47 $ 12.32
======== ======== ======== ======== ========
====================================================================================================
Total Return, at Net Asset Value(3) (0.49)% 13.96% 13.28% 10.09% 5.61%
====================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $572,354 $502,211 $359,208 $255,139 $160,505
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $567,689 $425,258 $305,638 $204,917 $135,431
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.18% 8.75% 8.97% 8.45% 8.49%
Expenses 1.06% 1.10% 1.17% 1.18% 1.22%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 100.2% 136.0% 95.0% 72.5% 108.0%
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to September 30,
1994.
2. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), 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 of less than one full year.
4. Annualized.
36 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Class B Class C
--------------------------------- -----------------------------------------------
Year Ended September 30, Year Ended September 30,
1998 1997 1996(2) 1998 1997 1996 1995 1994(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 13.48 $ 12.91 $ 12.47 $ 13.48 $ 12.91 $ 12.46 $ 12.32 $ 13.13
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .99 1.05 1.03 .99 1.05 1.06 .95 .75
Net realized and unrealized gain (loss) (1.11) .57 .44 (1.11) .57 .44 .13 (.60)
-------- -------- ------- -------- -------- -------- ------- -------
Total income from investment operations (.12) 1.62 1.47 (.12) 1.62 1.50 1.08 .15
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.95) (1.05) (1.03) (.95) (1.05) (1.05) (.94) (.77)
Dividends in excess of net investment income -- -- -- -- -- -- -- --
Tax return of capital distribution (.04) -- -- (.04) -- -- -- --
Distributions from net realized gain (.20) -- -- (.20) -- -- -- --
Distributions in excess of net realized gain -- -- -- -- -- -- -- (.19)
-------- -------- ------- -------- -------- -------- ------- -------
Total dividends and distributions
to shareholders (1.19) (1.05) (1.03) (1.19) (1.05) (1.05) (.94) (.96)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.17 $ 13.48 $ 12.91 $ 12.17 $ 13.48 $ 12.91 $ 12.46 $ 12.32
======== ======== ======= ======== ======== ======== ======= =======
================================================================================================================================
Total Return, at Net Asset Value(3) (1.25)% 13.10% 12.20% (1.25)% 13.12% 12.44% 9.16% 1.11%
================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $388,572 $238,505 $82,052 $224,439 $181,025 $112,945 $64,932 $27,743
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $326,804 $151,197 $33,189 $210,338 $143,363 $ 89,416 $43,584 $13,693
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 7.42% 7.89% 7.90%(4) 7.42% 7.98% 8.19% 7.63% 7.24%(4)
Expenses 1.81% 1.86% 1.97%(4) 1.81% 1.86% 1.93% 1.95% 1.94%(4)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 100.2% 136.0% 95.0% 100.2% 136.0% 95.0% 72.5% 108.0%
</TABLE>
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. 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 September 30, 1998, were $1,152,439,768 and $933,387,430, respectively.
See accompanying Notes to Financial Statements.
37 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Notes to Financial Statements
================================================================================
================================================================================
1. Significant Accounting Policies
Oppenheimer Champion Income 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 objective is to seek a high level of
current income primarily by investing in a diversified portfolio of high-yield,
lower-rated, fixed income securities (commonly known as "junk bonds") believed
by the Fund's investment manager not to involve undue risk. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers
Class A, Class B and Class C shares. Class A shares are sold with a front-end
sales charge. Class B and Class C shares may be subject to a contingent deferred
sales charge. All 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 that class and exclusive voting
rights with respect to matters affecting that 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 the close of the New
York Stock Exchange 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
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer. Options are valued based upon the last sale price on the principal
exchange on which the option is traded or, in the absence of any transactions
that day, the value is based upon the last sale price on the prior trading date
if it is within the spread between the closing bid and asked prices. If the last
sale price is outside the spread, the closing bid is used.
38 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
================================================================================
Structured Notes. The Fund invests in foreign currency-linked structured notes
whereby the market value and redemption price are linked to foreign currency
exchange rates. The Fund also invests in index-linked notes whereby the
principal and/or interest payment depend on one or more market indices.The
structured notes may be leveraged, which increases the notes' volatility
relative to the face of the security. Fluctuations in values of the securities
are recorded as unrealized gains and losses in the accompanying financial
statements. During the year ended September 30, 1998, the market value of these
securities comprised an average of 7% of the Fund's net assets, and resulted in
realized and unrealized losses of $8,900,617.
- --------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of September 30,
1998, the Fund had entered into outstanding when-issued or forward commitments
of $24,450,000.
- --------------------------------------------------------------------------------
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. As of September 30, 1998, securities with an
aggregate market value of $364,158, representing 0.03% of the Fund's net 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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
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.
39 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
1. Significant Accounting Policies (continued)
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. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. 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, Gains and Losses. Income, expenses (other than
those attributable to a specific class), 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.
- --------------------------------------------------------------------------------
Federal 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 or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C 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.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders
to reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended September 30, 1998, amounts have been reclassified to reflect a
decrease in paid-in capital of $3,644,139, an increase in undistributed net
investment income of $478,678, and an increase in accumulated net realized gain
on investments of $3,165,461.
40 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
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 periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1998 Year Ended September 30, 1997
------------------------------- -----------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 19,832,167 $263,900,806 16,568,069 $217,572,287
Dividends and distributions
reinvested 2,859,050 37,768,272 1,893,564 24,892,342
Redeemed (12,908,673) (170,419,870) (9,055,154) (118,762,945)
----------- ------------ ---------- ------------
Net increase 9,782,544 $131,249,208 9,406,479 $123,701,684
=========== ============ ========== ============
- --------------------------------------------------------------------------------------------
Class B:
Sold 17,351,158 $230,121,700 12,465,577 $163,647,329
Dividends and distributions
reinvested 1,359,478 17,905,868 557,270 7,333,434
Redeemed (4,464,160) (58,574,628) (1,689,558) (22,157,864)
----------- ------------ ---------- ------------
Net increase 14,246,476 $189,452,940 11,333,289 $148,822,899
=========== ============ ========== ============
- --------------------------------------------------------------------------------------------
Class C:
Sold 8,603,599 $114,157,872 6,567,675 $ 86,149,589
Dividends and distributions
reinvested 1,025,732 13,534,307 618,611 8,129,826
Redeemed (4,608,529) (60,799,849) (2,510,331) (32,888,688)
----------- ------------ ---------- ------------
Net increase 5,020,802 $ 66,892,330 4,675,955 $ 61,390,727
=========== ============ ========== ============
</TABLE>
41 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
3. Unrealized Gains and Losses on Investments
As of September 30, 1998, net unrealized depreciation on investments of
$78,466,600 was composed of gross appreciation of $20,009,350, and gross
depreciation of $98,475,950.
================================================================================
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 a fee of 0.70% of the first
$250 million of average annual net assets, 0.65% of the next $250 million, 0.60%
of the next $500 million and 0.55% of average annual net assets in excess of $1
billion. The Fund's management fee for the year ended September 30, 1998 was
0.63% of average annual net assets for Class A, Class B and Class C shares.
For the year ended September 30, 1998, commissions (sales charges
paid by investors) on sales of Class A shares totaled $3,634,751, of which
$1,033,370 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the
Fund's Class B and Class C shares totaled $7,767,436 and $1,005,500,
respectively, of which $251,000 and $19,396, respectively, was paid to an
affiliated broker/dealer. During the year ended September 30, 1998, OFDI
received contingent deferred sales charges of $661,736 and $82,701,
respectively, upon redemption of Class B and Class C shares, as reimbursement
for sales commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and for other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the personal service
and maintenance of shareholder accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers that
hold Class A shares. During the year ended September 30, 1998, OFDI paid $75,033
to an affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
42 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
================================================================================
The Fund has adopted a Distribution and Service Plan for Class B shares to
compensate OFDI for its costs in distributing Class B shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge
of 0.75% per year on Class B shares for its services rendered in distributing
Class B. OFDI also receives a service fee of 0.25% per year to compensate
dealers for providing personal services for accounts that hold Class B shares.
Each fee is computed on the average annual net assets of Class B shares,
determined as of the close of each regular business day. During the year ended
September 30, 1998, OFDI paid $7,465 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and retained
$2,872,599 as compensation for Class B sales commissions and service fee
advances, as well as financing costs. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for distributing shares before the Plan was terminated. As
of September 30, 1998, OFDI had incurred xcess distribution and servicing costs
of $15,379,085 for Class B.
The Fund has adopted a Distribution and Service Plan for Class C
shares to reimburse OFDI for its costs in distributing Class C shares and
servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based
sales charge of 0.75% per year on Class C shares for its services rendered in
distributing Class C. OFDI also receives a service fee of 0.25% per year to
reimburse dealers for providing personal services for accounts that hold Class C
shares. Each fee is computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. During the year ended
September 30, 1998, OFDI paid $14,912 to an affiliated broker/dealer as
reimbursement for Class C personal service and maintenance expenses and retained
$1,093,459 as reimbursement for Class C sales commissions and service fee
advances, as well as financing costs. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for distributing shares before the Plan was terminated. As
of September 30, 1998, OFDI had incurred excess distribution and servicing costs
of $3,314,525 for Class C.
43 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward 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.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized gains and losses
are reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
As of September 30, 1998, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
Valuation as of
Expiration Contract Amount September 30, Unrealized Unrealized
Date (000s) 1998 Appreciation Depreciation
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Sell
British Pound Sterling(GPB) 12/15/98 12,660 GPB $21,406,877 $ -- $682,032
Canadian Dollar(CAD) 12/15/98 2,925 CAD 1,913,015 68,682 --
------- --------
Total Unrealized Appreciation and Depreciation $68,682 $682,032
======= ========
</TABLE>
44 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
================================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
and sell financial futures. The Fund may also buy or write put or call options
on these futures contracts.
The Fund generally sells futures contracts to hedge against
increases in interest rates and the resulting negative effect on the value of
fixed rate portfolio securities. The Fund may also purchase futures contracts to
gain exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to
deposit either cash or securities (initial margin) in an amount equal to a
certain percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Fund recognizes a realized gain or loss when the contract
is closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options)
include the possibility that there may be an illiquid market and that a change
in the value of the contract or option may not correlate with changes in the
value of the underlying securities.
As of September 30, 1998, the Fund had outstanding futures contracts as follows:
Expiration Number of Valuation as of Unrealized
Date Contracts September 30, 1998 Appreciation
- ------------------------------------------------------------------------------
Contracts to Sell
Standard & Poor's 500 12/17/98 87 $22,315,500 $293,938
45 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
7. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call
options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to
sell or purchase the underlying security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in
the Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are detailed
in a footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the year ended September 30, 1998 was as follows:
Call Options Put Options
----------------------- ----------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
- ---------------------------------------------------------------------------
Options outstanding as of
September 30, 1997 4,850 $ 112,278 -- $ --
Options written 1,561 109,785 980 67,950
Options closed or expired (731) (86,115) (980) (67,950)
Options exercised (5,680) (135,928) -- --
------ -------- ---- --------
Options outstanding as of
September 30, 1998 -- $ -- -- $ --
====== ======== ==== ========
===========================================================================
8. Illiquid and Restricted Securities
As of September 30, 1998, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale,
46 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
================================================================================
================================================================================
and are valued under methods approved by the Board of Trustees as reflecting
fair value. A security may be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain period of
time. The Fund intends to invest no more than 10% of its net assets (determined
at the time of purchase and reviewed periodically) in illiquid or restricted
securities. Certain restricted securities, eligible for resale to qualified
institutional investors, are not subject to that limit. The aggregate value of
illiquid or restricted securities subject to this limitation as of September 30,
1998 was $111,164,395, which represents 9.38% of the Fund's net assets, of which
$4,948,652 is considered restricted. Information concerning restricted
securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Acquisition Cost September 30,
Security Dates Per Unit 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
Arizona Charlie's, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93 100.00% 96.50%
- -----------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93 87.50 6.00
- -----------------------------------------------------------------------------------------
ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 7/28/92 100.50 100.25
- -----------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust,
7/2/08 3/19/98 101.00 103.00
Stocks and Warrants
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .25
- -----------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A 6/17/97 25.00 25.00
- -----------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .40
- -----------------------------------------------------------------------------------------
ECM Fund L.P.I. 4/14/92 1,000.00 885.00
- -----------------------------------------------------------------------------------------
Omnipoint Corp. Wts. 11/29/95 -- 7.44
</TABLE>
================================================================================
9. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended
September 30, 1998.
47 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Independent Auditors' Report
================================================================================
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Champion Income Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Champion Income Fund as of
September 30, 1998, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended September 30, 1998
and 1997, and the financial highlights for the period October 1, 1993 to
September 30, 1998. 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 includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at September 30, 1998, 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
Champion Income Fund at September 30, 1998, 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 LLP
Denver, Colorado
October 28, 1998
48 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Federal Income Tax Information (Unaudited)
================================================================================
================================================================================
In early 1999, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $0.2946, $0.2856 and $0.2857 per share were paid to
Class A, Class B and Class C shareholders, respectively, on December 31, 1997,
of which, for each class of shares, $0.0102 was designated as a capital gain
distribution in the "28% Rate Group" and $0.0403 was designated as a capital
gain distribution in the "20% Rate Group" for federal income tax purposes.
Whether received in stock or cash, the capital gain distribution should be
treated by shareholders as a gain from the sale of capital assets.
Dividends paid by the Fund during the fiscal year ended September
30, 1998, which are not designated as capital gain distributions should be
multiplied by 6.49% 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.
49 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
Oppenheimer Champion Income Fund
================================================================================
================================================================================
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Trustee, Vice President, Treasurer
and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
David P. Negri, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of
Oppenheimer Champion Income Fund. This report must
be preceded or accompanied by a Prospectus of
Oppenheimer Champion Income Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
50 Oppenheimer Champion Income Fund
<PAGE>
================================================================================
OppenheimerFunds Family
================================================================================
<TABLE>
<CAPTION>
============================================================================================
<S> <C> <C>
Real Asset Funds
- --------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
============================================================================================
Global Stock Funds
- --------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
============================================================================================
Stock Funds
- --------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
============================================================================================
Stock & Bond Funds
- --------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
============================================================================================
Taxable Bond Funds
- --------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
============================================================================================
Municipal Bond Funds
- --------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
============================================================================================
Money Market Funds(4)
- --------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
51 Oppenheimer Champion Income Fund
<PAGE>
Internet
24-hr access to account
information. Online
transactions now available
- -------------------------
www.oppenheimerfunds.com
- -------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- -------------------------
1-800-525-7048
- -------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- -------------------------
1-800-852-8457
- -------------------------
PhoneLink
24-hr automated information
and automated transactions
- -------------------------
1-800-533-3310
- -------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- -------------------------
1-800-843-4461
- -------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- -------------------------
1-800-835-3104
- -------------------------
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[LOGO] Oppenheimer Funds(R)
Distributor, Inc.
RA0190.001.0998 November 27, 1998
