<PAGE> 1
[PHOTO]
SEMIANNUAL REPORT MARCH 31, 2000
OPPENHEIMER
CHAMPION INCOME FUND
[OPPENHEIMER LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
1 President's Letter
3 An Interview
with your Fund's
Managers
8 Financial
Statements
43 Officers and Trustees
REPORT HIGHLIGHTS
--------------------------------------------------------------------------------
FOR THE SIX MONTHS THAT ENDED MARCH 31, 2000, THE FUND PERFORMED RELATIVELY
WELL, despite volatility in the fixed income markets.
AN EMPHASIS ON GROWTH-ORIENTED SECTORS OF THE HIGH YIELD MARKET, such as
telecommunications, media and technology, was a key contributor to the Fund's
performance.
THE EUROPEAN SECTOR OF THE HIGH YIELD MARKET HAS OUTPERFORMED THE U.S. SECTOR by
a sizable margin over the reporting period.
CUMULATIVE TOTAL RETURNS
For the 6-Month Period
Ended 3/31/00 *
Class A
Without With
Sales Chg. Sales Chg.
----------------------
1.40% -3.42%
Class B
Without With
Sales Chg. Sales Chg.
----------------------
1.01% -3.78%
Class C
Without With
Sales Chg. Sales Chg.
----------------------
1.01% 0.05%
* See Notes, page 7, for further details.
<PAGE> 3
[PHOTO] [PHOTO]
JAMES C. SWAIN BRIDGET A. MACASKILL
Chairman President
Oppenheimer Oppenheimer
Champion Champion
Income Fund Income Fund
PRESIDENT'S LETTER
--------------------------------------------------------------------------------
DEAR SHAREHOLDER,
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher inflation. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting to
slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term
market volatility. In the bond market, higher interest rates usually lead to
lower bond prices. In the stock market, slower economic growth could reduce
corporate earnings and put downward pressure on stock prices. Highly valued
stocks may be particularly vulnerable to a correction. The Securities and
Exchange Commission Chairman, Arthur Levitt, has cautioned investors against the
expectation that the types of returns seen in the recent bull market will last
forever. We agree.
1 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 4
PRESIDENT'S LETTER
--------------------------------------------------------------------------------
Because of the prospect of continued market volatility, we encourage you
to consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many
"old economy" stocks are selling at unusually low prices. In the bond market,
higher interest rates over the short term may reduce inflation concerns, which
should be beneficial over the long term. By buying out-of-favor investments, you
may be able to profit when and if they return to favor in the future. Of course,
there is no assurance that value investing will return to favor in the market,
but it may be a diversification strategy to consider for part of your portfolio.
What specific investments should you consider today so that you are
prepared for tomorrow? The answer depends on your individual investing goals,
risk tolerance and financial circumstances. We urge you to talk with your
financial advisor about ways to diversify your portfolio. This may include
considering global diversification as part of your strategy. While investing
abroad has special risks, such as the effects of foreign currency fluctuation,
it also offers opportunities to participate in global economic growth and to
hedge against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
April 24, 2000
2 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 5
AN INTERVIEW WITH YOUR FUNDS'S MANAGERS
--------------------------------------------------------------------------------
[PHOTO] [PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
David Negri
Thomas Reedy
HOW WOULD YOU DESCRIBE THE FUND'S PERFORMANCE OVER THE SIX-MONTH PERIOD
THAT ENDED MARCH 31, 2000?
A. Oppenheimer Champion Income Fund performed well within its peer group. We are
pleased with the Fund's Lipper ranking which places the Fund's Class A shares in
the top half of the high current yield funds category for the 1-year period that
ended March 31, 2000(1). In addition, the Fund provided shareholders with a
positive rate of return(2) amid the high volatility that has characterized the
fixed income markets for several months.
WHY HAVE FIXED INCOME INVESTMENTS EXPERIENCED VOLATILITY IN RECENT MONTHS?
There are both fundamental and technical reasons. In general, the volatility
affecting fixed income investments has been largely a function of tighter
monetary policy adopted by the Federal Reserve Board (the Fed). The Fed's
decision to repeatedly raise short-term interest rates was a major reason that
fixed income investments fell out of favor among investors. What's more, this
occurred as momentum investing took hold in the equity markets. Investors moved
away from bonds and flocked to a narrow list of growth-oriented stocks that
dominated the stock market.
1. Source: Lipper Analytical Services, Inc., 3/31/00. Based on the comparisons
of changes in net asset value without considering sales charges, and with
dividends and capital gains distributions reinvested. The Fund's Class A shares
were ranked 134 of 349 (1-year), 57 of 189 (3-year), 41 of 121 (5-year) and 9 of
54 (10-year) among high current yield funds for the periods ended 3/31/00.
2. Based on changes in share prices during the fiscal period, without
considering sales charges, and reinvestment of distributions.
3 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 6
AN INTERVIEW WITH YOUR FUNDS'S MANAGERS
--------------------------------------------------------------------------------
"WE BELIEVE MAINTAINING our research-based, value-oriented investment approach
throughout this challenging period has paid off FOR THE FUND."
The increased default rate in the high yield bond market only exacerbated the
volatility. Default rates have crept above 5% annually--rates we haven't seen in
years. The precipitous drop in oil prices that occurred in the second half of
1999 and government price regulation in the healthcare industry were major
factors in the increased default rate. These isolated industry-specific events,
in conjunction with the flow of money out of fixed income and into equities,
kept high yield returns very low.
HOW DID YOU MANAGE THE PORTFOLIO IN THIS CHALLENGING ENVIRONMENT?
Since interest rates affect high yield bonds differently than they do most other
fixed income investments, interest rate risk is not the most important of the
major factors we watch. We did however continue to seek high performance by
focusing relatively large amounts of our investments on particular sectors and
industries. Most importantly, we maintained our research-based, value-oriented
investment approach throughout this difficult environment.
WHAT DECISIONS MOST IMPACTED THE FUND'S PERFORMANCE DURING THE PERIOD?
We've remained focused on growth-oriented sectors of the high yield market.
Within the telecommunications, media and technology sectors, positive events
such as common stock offerings and mergers have benefited the Fund's
performance. Our decision to avoid much of the healthcare sector has also
helped, as healthcare providers have been experiencing high default rates for
some time.
4 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 7
AVERAGE ANNUAL TOTAL RETURNS
For the Periods Ended 3/31/00(3)
Class A
1-Year 5-Year 10-Year
--------------------------
-3.83% 7.29% 10.62%
Class B Since
1-Year 5-Year Inception
--------------------------
-4.35% N/A 6.52%
Class C Since
1-Year 5-Year Inception
--------------------------
-0.71% 7.53% 6.49%
Because of ongoing market volatility, the Fund's returns may fluctuate and may
be less than the results shown.
We also made substantial investments in bonds issued throughout Western Europe.
We did this not only for the geographic tilt, but because the issuers of
European high yield debt include many successful telecommunications companies.
The European sector of the high yield market has also outperformed the U.S.
sector by a sizable margin in recent periods. We're just now seeing the
deregulation, merger activity, and higher demand that we saw in the U.S. high
yield market a few years ago. We're pleased to have been able to capture some of
these returns and currently plan to continue to place an emphasis on these
securities.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
We are optimistic about the areas that we've emphasized in the portfolio:
telecommunications and technology, in particular. We expect the demand for data
delivery via the telecommunications infrastructure to grow at an accelerated
pace. We're also very optimistic about wireless communications, which we expect
will expand far beyond voice transmissions and cellular phones. We've reduced
our emphasis on cable and maintain caution regarding companies in the basic
materials, paper, metals, and steel industries. We don't foresee any near-term
upside potential in those industries.
3. See notes on page 7 for further details.
5 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 8
STANDARDIZED YIELDS(4)
For the 30 Days Ended 3/31/00
-----------------------------
Class A 10.18%
-----------------------------
Class B 9.90
-----------------------------
Class C 9.90
-----------------------------
[CREDIT ALLOCATION PIE CHART]
CREDIT ALLOCATION(5)
- AA 1.6%
- A 0.1
- BBB 2.2
- BB 11.9
- B 66.1
- CCC 6.9
- CC 0.5
- C 0.1
- Other Securities 10.6
We stand firm in our commitment to seek consistent returns for investors while
managing volatility. We believe that providing relatively stable, yet
attractive, performance over the long term is an approach that best serves our
shareholders. By remaining dedicated to our strict investment discipline, and
striving to provide high income and growth potential from a portfolio of
diversified securities, we believe many investors will find Oppenheimer Champion
Income Fund to be an important part of The Right Way to Invest.
TOP FIVE HOLDINGS BY ISSUER(6)
............................................
U.S. Treasury Repurchase 3.0%
............................................
NTL, Inc. 2.5
............................................
Omnipoint Corp. 1.9
............................................
Intermedia Communications, Inc. 1.8
............................................
Deutsche Bank AG 1.6
............................................
4. Standardized yield is based on net investment income for the 30-day period
ended March 31, 2000. Falling share prices will tend to artificially raise
yields.
5. Portfolio data is subject to change. Percentages are as of March 31, 2000,
and are dollar-weighted based on total value of investments. Securities rated by
any rating organization are included in the equivalent Standard & Poor's rating
category. Average credit quality and allocation include rated securities and
those not rated by a national rating organization (currently 7.15% of total
investments) but for which the ratings given above have been assigned by the
Fund's investment advisor in categories equivalent to those of ratings
organizations.
6. Portfolio data is subject to change. Percentages are as of March 31, 2000,
and are based on total market value of investments.
6 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 9
NOTES
--------------------------------------------------------------------------------
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. FOR QUARTERLY
UPDATES ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL
US AT 1.800.525.7048 OR VISIT OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns and yields
shown do not show the effects of income taxes on an individual's investment.
Taxes may reduce your actual investment returns on income or gains paid by the
Fund or any gains you may realize if you sell your shares.
CLASS A shares were first publicly offered on 11/16/87. Unless otherwise noted,
Class A returns include the current maximum initial sales charge of 4.75%.
CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 12/1/93. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
7 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 10
STATEMENT OF INVESTMENTS MARCH 31, 2000 / UNAUDITED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
=================================================================================================================
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--1.9%
-----------------------------------------------------------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp., Multiclass Mtg.
Pass-Through Certificates, Series 1997-C1, Cl. H, 7%, 6/17/29(2) $ 360,000 $ 264,094
-----------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(3) 1,500,000 1,003,359
Series 1997-D5, Cl. B2, 6.93%, 2/14/41 3,800,000 2,549,562
-----------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates, Series 1993-C1,
Cl. E, 6.72%, 12/25/03(2),(3) 622,000 549,692
-----------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997, Cl. E, 8.09%, 2/25/11(2),(3) 4,000,000 2,916,250
-----------------------------------------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 7.50%, 9/18/15 3,400,000 2,591,437
-----------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg. Obligations,
Series 1997-C2, Cl. F, 6.75%, 4/16/29 2,000,000 1,244,375
-----------------------------------------------------------------------------------------------------------------
Goldman Sachs Asset Management, Sub. Collateralized Bond Obligations,
Series 1A, Cl. D, 12.54%, 6/13/11(2) 2,000,000 1,920,000
-----------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates:
Series 1997-RR, Cl. D, 7.671%, 4/30/39(2) 2,000,107 1,522,895
Series 1997-RR, Cl. F, 7.649%, 4/30/39(2) 5,000,269 2,778,275
Series 1997-XL1, Cl. G, 7.695%, 10/3/30(2) 1,200,000 1,003,500
-----------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 600,000 450,000
-----------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I, Cl.
ECFD, 8.75%, 12/25/28 1,774,138 1,706,499
-----------------------------------------------------------------------------------------------------------------
Project Orange Funding LP/Project Orange Capital Corp., Sr. Sec. Nts.,
10.50%, 9/15/07(2) 1,451,250 1,440,366
-----------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 414,788 407,595
Series 1995-C1, Cl. F, 6.90%, 2/25/27 168,328 152,929
-----------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Commercial Mtg.
Pass-Through Certificates:
Series 1996-C1, Cl. E1, 9%, 1/20/06 704,000 642,620
Series 1998-1A, 5%, 12/25/00 145,726 139,032
-----------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through Certificates,
Series 1999-1, 10%, 8/25/28 3,606,838 3,559,499
-----------
Total Mortgage-Backed Obligations (Cost $31,001,068) 26,841,979
=================================================================================================================
FOREIGN GOVERNMENT OBLIGATIONS--0.8%
-----------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas,
Series I, 3.013%, 4/1/07(3) [ARP] 5,793,293 4,285,356
-----------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 3.013%, 4/1/07(3) [ARP] 2,639,981 1,893,022
-----------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 7.063%, 7/28/11(3) 2,400,000 1,911,000
-----------------------------------------------------------------------------------------------------------------
Panama (Republic of) Interest Reduction Bonds, 4.25%, 7/17/14(3) 1,000,000 805,000
-----------------------------------------------------------------------------------------------------------------
Panama (Republic of) Past Due Interest Debs., 6.381%, 7/17/16(3) 2,274,376 1,930,377
</TABLE>
8 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
=================================================================================================================
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS Continued
Perusahaan Listr, 17% Nts., 8/21/01 [IDR] 1,000,000,000 $ 131,605
-----------------------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts., Zero Coupon, 3/17/1999(2),(4),(5) [IDR] 1,000,000,000 36,328
-----------
Total Foreign Government Obligations (Cost $10,175,633) 10,992,688
=================================================================================================================
LOAN PARTICIPATIONS--1.4%
-----------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.,
Tranche 1, 7.188%, 9/4/06(2),(3) 1,561,090 1,272,289
-----------------------------------------------------------------------------------------------------------------
Central Bank of Indonesia Gtd. Nts.:
Series 2 yr., 9.375%, 8/25/00(2),(3) 1,250,000 1,193,750
Series 2 yr., 9.375%, 8/25/00(2),(3) 1,000,000 955,000
Series 3 yr., 9.625%, 8/25/01(2),(3) 2,000,000 1,820,000
Series 4 yr., 9.875%, 8/25/02(2),(3) 500,000 437,500
-----------------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 7.799%, 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 14,061,435
-----------
Total Loan Participations (Cost $21,972,340) 19,739,974
=================================================================================================================
CORPORATE BONDS AND NOTES--81.8%
-----------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.3%
BE Aerospace, Inc., 9.50% Sr. Unsec. Sub. Nts., 11/1/08 4,000,000 3,460,000
-----------------------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed
Nts., Series 1997-1, 9.80%, 1/1/01(2) 3,500,000 3,290,000
-----------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 9/30/08 3,450,000 3,053,250
-----------------------------------------------------------------------------------------------------------------
Fairchild Corp., 10.75% Sr. Unsec. Sub. Nts., 4/15/09 5,750,000 2,903,750
-----------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 4,000,000 2,580,000
-----------------------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts.,
Series 1997-A, Cl. B, 6/15/04(2) 1,602,476 1,628,277
-----------------------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07 1,000,000 927,500
-----------
17,842,777
-----------------------------------------------------------------------------------------------------------------
CHEMICALS--3.3%
Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 4,000,000 3,970,000
-----------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 2,520,000 384,300
-----------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp., 10.375% Sr. Sub. Nts., 11/1/07(7) 2,400,000 2,421,000
-----------------------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc:
10.125% Sr. Unsec. Sub. Nts., 7/1/09 3,000,000 2,910,000
10.125% Sr. Unsec. Sub. Nts., 7/1/09 [EUR] 4,000,000 3,975,920
Zero Coupon Sr. Unsec. Disc. Nts., 13.09%, 12/31/09(8) 10,750,000 3,171,250
-----------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.875% Sec. Nts., Series B, 5/1/07 4,000,000 3,830,000
10.875% Sr. Sub. Nts., 5/1/09 2,350,000 2,226,625
-----------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 8,000,000 8,240,000
</TABLE>
9 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 12
STATEMENT OF INVESTMENTS UNAUDITED/CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS Continued
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07(2) $ 50,000 $ 41,250
-----------------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 4,000,000 3,400,000
-----------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 960,000 840,000
-----------------------------------------------------------------------------------------------------------------
Royster-Clark, Inc., 10.25% First Mtg. Nts., 4/1/09(7) 3,250,000 2,778,750
-----------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.75% Sr. Unsec. Sub. Nts., 8/15/06 7,000,000 5,950,000
12.375% Sr. Sec. Nts., Series B, 7/15/06 2,700,000 2,767,500
-----------
46,906,595
-----------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES--0.5%
Boyds Collection Ltd. (The), 9% Sr. Unsec. Sub. Nts., Series B, 5/15/08 2,288,000 2,070,640
-----------------------------------------------------------------------------------------------------------------
Holmes Products Corp.:
9.875% Sr. Sub. Nts., Series C, 11/15/07 1,000,000 705,000
9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07 2,575,000 1,815,375
-----------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 1,865,000 2,024,118
-----------
6,615,133
-----------------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.5%
AKI Holdings, Inc.:
0%/13.50% Sr. Disc. Debs., 7/1/09(6) 1,350,000 644,625
10.50% Sr. Unsec. Nts., 7/1/08 2,800,000 2,401,000
-----------------------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 8/15/08 4,400,000 4,334,000
-----------------------------------------------------------------------------------------------------------------
Fruit of the Loom, Inc., 8.875% Sr. Unsec. Nts., 4/15/06 3,500,000 166,250
-----------------------------------------------------------------------------------------------------------------
Globe Manufacturing Corp., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/08 4,300,000 1,655,500
-----------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp.:
8.625% Sr. Unsec. Sub. Nts., 2/1/08 1,000,000 445,000
9% Sr. Nts., 11/1/06 5,800,000 4,147,000
-----------------------------------------------------------------------------------------------------------------
Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 6,000,000 5,940,000
-----------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 2,815,000 858,575
-----------
20,591,950
-----------------------------------------------------------------------------------------------------------------
ENERGY--4.4%
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06 3,330,000 2,963,700
9.625% Sr. Unsec. Nts., Series B, 5/1/05 4,700,000 4,382,750
-----------------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 3,625,000 2,193,125
-----------------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 1,250,000 1,125,000
-----------------------------------------------------------------------------------------------------------------
Empresa Electric del Norte Grande SA, 10.50% Sr. Debs., 6/15/05(7) 3,800,000 1,643,500
-----------------------------------------------------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., Series B, 2/15/07(4),(5) 2,550,000 2,027,250
9.50% Sr. Sub. Nts., 11/1/06 (2),(4),(5) 1,000,000 795,000
-----------------------------------------------------------------------------------------------------------------
Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 5,500,000 5,087,500
</TABLE>
10 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY Continued
Gothic Energy Corp., 0%/14.125% Sr. Disc. Nts., 5/1/06(6) $ 8,775,000 $ 3,115,125
-----------------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(7) 6,750,000 5,771,250
-----------------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08(2) 1,985,000 1,260,475
-----------------------------------------------------------------------------------------------------------------
Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp., 10.375%
Sr. Unsec. Sub. Nts., Series B, 6/1/09(2) 2,150,000 2,214,500
-----------------------------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., Series D, 11/1/06(4),(5) 2,500,000 1,587,500
-----------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 3,650,000 3,047,750
-----------------------------------------------------------------------------------------------------------------
Parker Drilling Co., 9.75% Sr. Unsec. Nts., Series D, 11/15/06 1,500,000 1,428,750
-----------------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 1,330,000 1,253,525
-----------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 12.25% Sr. Unsec. Nts., 3/15/06 5,750,000 6,210,000
-----------------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 6,300,000 3,244,500
-----------------------------------------------------------------------------------------------------------------
RBF Finance Co.:
11% Sr. Sec. Nts., 3/15/06 5,000,000 5,250,000
11.375% Sr. Sec. Nts., 3/15/09 2,000,000 2,130,000
-----------------------------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals (Canada), Inc., 11.75%
First Mtg. Nts., Series B, 11/15/03 1,050,000 1,057,875
-----------------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 2,905,000 2,708,912
-----------------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc.:
0%/9.875% Sr. Disc. Nts., 2/15/08(6) 2,350,000 1,351,250
0%/11.375% Sr. Disc. Nts., 2/15/09(6) 800,000 396,000
-----------
62,245,237
-----------------------------------------------------------------------------------------------------------------
FINANCIAL--1.6%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 4,000,000 2,980,000
-----------------------------------------------------------------------------------------------------------------
ASAT Finance LLC, Units (each unit consists of $1,000 principal
amount of 12.50% sr. nts., 11/1/06 and one warrant to purchase shares of
common stock)(7),(9) 2,000,000 2,390,000
-----------------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 578,000 439,280
-----------------------------------------------------------------------------------------------------------------
LaBranche & Company, Inc., 12% Sr. Sub. Nts., 3/1/07(7) 2,500,000 2,475,000
-----------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(2),(4),(5) 600,000 --
-----------------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 10.331% Nts., 11/19/07(3),(7) 600,000 614,250
-----------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 24% Nts., 6/19/03(4),(5) [IDR] 6,314,400,000 108,438
-----------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts.,
Series B, 4/1/08 8,995,000 7,848,137
-----------------------------------------------------------------------------------------------------------------
Sovereign Bancorp, Inc., 10.50% Sr. Unsec. Nts., 11/15/06 4,900,000 4,869,375
-----------------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28 1,700,000 1,024,250
-----------
22,748,730
</TABLE>
11 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 14
STATEMENT OF INVESTMENTS UNAUDITED/CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOOD & DRUG--0.9%
AmeriKing, Inc., 10.75% Sr. Nts., 12/1/06 $3,101,000 $ 2,651,355
-----------------------------------------------------------------------------------------------------------------
Family Restaurants, Inc.:
9.75% Sr. Nts., 2/1/02 6,690,000 2,843,250
10.875% Sr. Sub. Disc. Nts., 2/1/04 400,000 168,000
-----------------------------------------------------------------------------------------------------------------
Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 5,000,000 4,400,000
-----------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03 1,000,000 85,000
12.625% Sub. Nts., 6/15/02 5,210,000 1,589,050
-----------------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 1,260,000 1,323,000
-----------
13,059,655
-----------------------------------------------------------------------------------------------------------------
FOOD/TOBACCO--2.1%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08(10) 900,000 319,500
-----------------------------------------------------------------------------------------------------------------
Canandaigua Brands, Inc., 8.50% Sr. Unsec. Sub. Nts., 3/1/09 1,500,000 1,391,250
-----------------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 3,885,000 3,632,475
-----------------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., Series B, 12/15/07(6) 2,251,000 1,688,250
-----------------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 4,655,000 4,561,900
-----------------------------------------------------------------------------------------------------------------
New World Pasta Co., 9.25% Sr. Nts., 2/15/09 4,800,000 4,296,000
-----------------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 8,065,000 6,814,925
-----------------------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10(2),(4),(5) 1,000,000 255,000
-----------------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 4,025,000 3,240,125
-----------------------------------------------------------------------------------------------------------------
Triarc Consumer Products Group LLC, 10.25% Sr. Sub. Nts., 2/15/09 3,250,000 3,087,500
-----------
29,286,925
-----------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS/CONTAINERS--2.2%
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05(4),(5) 3,000,000 251,250
-----------------------------------------------------------------------------------------------------------------
Ball Corp.:
7.75% Sr. Unsec. Nts., 8/1/06 3,000,000 2,827,500
8.25% Sr. Unsec. Sub. Nts., 8/1/08 2,100,000 1,942,500
-----------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07 2,050,000 1,855,250
-----------------------------------------------------------------------------------------------------------------
Packaging Corp. of America, 9.625% Sr. Unsec. Sub. Nts., 4/1/09 1,750,000 1,732,500
-----------------------------------------------------------------------------------------------------------------
Repap New Brunswick, Inc.:
9% First Priority Sr. Sec. Nts., 6/1/04 600,000 568,500
10.625% Second Priority Sr. Sec. Nts., 4/15/05 3,000,000 2,685,000
-----------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.625% Sr. Unsec. Nts., 8/1/07 4,550,000 4,481,750
10.875% Sr. Sub. Nts., 4/1/08 4,000,000 3,780,000
-----------------------------------------------------------------------------------------------------------------
SD Warren Co., 14% Unsec. Nts., 12/15/06(11) 5,946,703 6,600,840
-----------------------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 800,000 860,000
-----------------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07(2) 4,085,000 3,615,225
-----------
31,200,315
</TABLE>
12 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 15
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GAMING/LEISURE--4.6%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(6) $ 750,000 $ 153,750
-----------------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1,675,000 931,719
-----------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995(4),(5) 7,500 --
-----------------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 2,100,000 1,837,500
-----------------------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B, 8/15/03 2,030,000 2,192,400
-----------------------------------------------------------------------------------------------------------------
Coast Hotel & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/09 1,750,000 1,596,875
-----------------------------------------------------------------------------------------------------------------
Florida Panthers Holdings, Inc., 9.875% Sr. Sub. Nts., 4/15/09 4,000,000 3,660,000
-----------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.45% Sr. Nts., Series C, 12/1/08 5,000,000 4,368,750
-----------------------------------------------------------------------------------------------------------------
Hollywood Casino Corp., 11.25% Sr. Sec. Nts., 5/1/07 3,600,000 3,618,000
-----------------------------------------------------------------------------------------------------------------
Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 4,500,000 4,365,000
-----------------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 5,895,000 5,659,200
-----------------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 6,995,000 6,680,225
-----------------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc., 8.75% Sr. Unsec. Nts., 4/15/09 3,500,000 3,080,000
-----------------------------------------------------------------------------------------------------------------
Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 3,725,000 3,473,562
-----------------------------------------------------------------------------------------------------------------
Meristar Hospitality Corp., 8.75% Sr. Unsec. Sub. Nts., 8/15/07(2) 2,000,000 1,795,000
-----------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 8.75% Sr. Unsec. Sub. Nts., 1/1/09 4,800,000 4,548,000
-----------------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., Sr. Nts., 3/15/08(2),(4),(5) 3,900,000 936,000
-----------------------------------------------------------------------------------------------------------------
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(6) 1,970,000 1,258,337
9.25% Sr. Nts., 4/1/06 1,595,000 1,483,350
9.75% Sr. Nts., 6/15/07 5,000,000 4,706,250
-----------------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06 1,900,000 1,781,250
-----------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
9.75% Sr. Sub. Nts., 4/15/07 3,400,000 3,340,500
10.125% Sr. Sub. Nts., 3/15/06 3,000,000 3,022,500
-----------
64,488,168
-----------------------------------------------------------------------------------------------------------------
HEALTHCARE--1.4%
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 4,350,000 3,876,937
-----------------------------------------------------------------------------------------------------------------
ICN Pharmaceutical, Inc.:
8.75% Sr. Nts., 11/15/08(7) 3,000,000 2,805,000
8.75% Sr. Nts., 11/15/08(7) 3,345,000 3,127,575
-----------------------------------------------------------------------------------------------------------------
King Pharmaceuticals, Inc., 10.75% Sr. Unsec. Sub. Nts., 2/15/09(2) 4,500,000 4,477,500
-----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Unsec. Nts., 5/15/05 1,750,000 1,741,250
-----------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.625% Sr. Sub. Nts., 1/15/07 2,500,000 2,375,000
-----------------------------------------------------------------------------------------------------------------
Unilab Finance Corp., 12.75% Sr. Sub. Nts., 10/1/09 2,000,000 1,985,000
-----------
20,388,262
</TABLE>
13 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 16
STATEMENT OF INVESTMENTS UNAUDITED/CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HOUSING--1.3%
Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 $ 200,000 $ 181,000
-----------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 3,500,000 2,887,500
-----------------------------------------------------------------------------------------------------------------
Del Webb Corp., 10.25% Sr. Unsec. Sub. Nts., 2/15/10 2,000,000 1,670,000
-----------------------------------------------------------------------------------------------------------------
Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09 5,000,000 4,375,000
-----------------------------------------------------------------------------------------------------------------
Nortek, Inc.:
9.125% Sr. Nts., Series B, 9/1/07 5,840,000 5,343,600
9.25% Sr. Nts., Series B, 3/15/07 4,070,000 3,764,750
-----------
18,221,850
-----------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--2.7%
Amkor Technologies, Inc.:
9.25% Sr. Unsec. Nts., 5/1/06 6,000,000 5,820,000
10.50% Sr. Unsec. Sub. Nts., 5/1/09 5,000,000 4,912,500
-----------------------------------------------------------------------------------------------------------------
Cherokee International LLC, 10.50% Sr. Unsec. Sub. Nts., Series B, 5/1/09 5,000,000 4,137,500
-----------------------------------------------------------------------------------------------------------------
Chippac International Ltd., 12.75% Sr. Sub. Nts., 8/1/09(7) 2,750,000 2,908,125
-----------------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 1,925,000 1,799,875
-----------------------------------------------------------------------------------------------------------------
Dialog Corp. plc, 11% Sr. Sub. Nts., Series B, 11/15/07 1,750,000 1,706,250
-----------------------------------------------------------------------------------------------------------------
DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 1,200,000 1,204,500
-----------------------------------------------------------------------------------------------------------------
Fairchild Semiconductor International, Inc., 10.375% Sr. Unsec. Nts., 10/1/07 5,900,000 5,826,250
-----------------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Unsec. Sub. Nts., 2/1/08 4,190,000 3,833,850
9% Sr. Unsec. Sub. Nts., 2/1/08 910,000 832,650
-----------------------------------------------------------------------------------------------------------------
Integrated Electric Services, Inc., 9.375% Sr. Sub. Nts., Series B, 2/1/09 2,400,000 2,076,000
-----------------------------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 2,440,000 2,696,200
-----------
37,753,700
-----------------------------------------------------------------------------------------------------------------
MANUFACTURING--2.5%
Applied Power, Inc., 8.75% Sr. Sub. Nts., 4/1/09 2,800,000 2,877,000
-----------------------------------------------------------------------------------------------------------------
Axia, Inc., 10.75% Sr. Sub. Nts., 7/15/08 1,560,000 1,209,000
-----------------------------------------------------------------------------------------------------------------
Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 4,500,000 4,623,750
-----------------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 1,125,000 466,875
-----------------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 802,000 631,575
-----------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 1,500,000 1,282,500
-----------------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 2,250,000 1,023,750
-----------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 2,000,000 1,550,000
-----------------------------------------------------------------------------------------------------------------
Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 6,500,000 6,207,500
-----------------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 3,720,000 3,775,800
-----------------------------------------------------------------------------------------------------------------
Jordan Industries, Inc., 10.375% Sr. Unsec. Nts., Series D, 8/1/07 3,000,000 2,865,000
-----------------------------------------------------------------------------------------------------------------
Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts., 7/1/08(2) 1,000,000 405,000
</TABLE>
14 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 17
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING Continued
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07(2) $ 2,100,000 $ 1,890,000
-----------------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07 3,385,000 3,114,200
-----------------------------------------------------------------------------------------------------------------
Terex Corp., 8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08(2) 2,000,000 1,750,000
-----------------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(2) 1,075,000 1,040,062
-----------
34,712,012
-----------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: BROADCASTING--2.0%
Allbritton Communications Co., 8.875% Sr. Sub. Nts., Series B, 2/1/08 1,000,000 905,000
-----------------------------------------------------------------------------------------------------------------
AMFM Operating, Inc., 12.625% Sr. Sub. Debs., Series E, 10/31/06(11) 463,800 526,413
-----------------------------------------------------------------------------------------------------------------
Chancellor Media Corp., 9% Sr. Unsec. Sub. Nts., 10/1/08 7,400,000 7,455,500
-----------------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 5,000,000 4,675,000
-----------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 2,500,000 2,562,500
-----------------------------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(3) 1,000,000 1,070,000
-----------------------------------------------------------------------------------------------------------------
RCN Corp., 10.125% Sr. Unsec. Nts., 1/15/10 4,600,000 4,140,000
-----------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 9% Sr. Unsec. Sub. Nts., 7/15/07 1,000,000 895,000
-----------------------------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., 9.625% Sr. Sub. Nts., 11/1/09 5,000,000 4,775,000
-----------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 1,650,000 1,452,000
-----------
28,456,413
-----------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: CABLE/WIRELESS VIDEO--8.5%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 1,640,000 1,402,200
8.125% Sr. Nts., Series B, 7/15/03 6,000,000 5,745,000
9.375% Sr. Nts., 11/15/09 2,800,000 2,639,000
-----------------------------------------------------------------------------------------------------------------
Charter Communications Holdings LLC/Charter Communications
Holdings Capital Corp.:
0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(6) 10,000,000 5,600,000
8.25% Sr. Unsec. Nts., 4/1/07 2,000,000 1,797,500
8.625% Sr. Unsec. Nts., 4/1/09 1,750,000 1,553,125
-----------------------------------------------------------------------------------------------------------------
Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10(7) 2,500,000 2,490,625
-----------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07(6) 1,350,000 1,302,750
-----------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 1,000,000 1,022,500
-----------------------------------------------------------------------------------------------------------------
Diamond Cable Communications plc:
0%/10.75% Sr. Disc. Nts., 2/15/07(2),(6) 1,800,000 1,386,000
0%/11.75% Sr. Disc. Nts., 12/15/05(6) 10,665,000 10,025,100
-----------------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 800,000 768,000
-----------------------------------------------------------------------------------------------------------------
Diva Systems Corp., 0%/12.625% Sr. Disc. Nts., Series B, 3/1/08(6) 2,000,000 1,150,000
-----------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 14,500,000 14,065,000
-----------------------------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(2) 449,171 449,171
-----------------------------------------------------------------------------------------------------------------
EchoStar II, 8.25% Sinking Fund Bonds, 11/9/01(2) 617,144 617,144
-----------------------------------------------------------------------------------------------------------------
Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09(7) 2,000,000 2,005,000
</TABLE>
15 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 18
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
-----------------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: CABLE/WIRELESS VIDEO Continued
NTL Communications Corp.:
0%/12.375% Sr. Unsec. Nts., Series B, 10/1/08(6) $ 9,000,000 $ 5,827,500
9.875% Sr. Nts., 11/15/09(7) [EUR] 5,200,000 4,814,164
11.50%, Sr. Unsec. Nts., Series B, 10/1/08 5,000,000 5,150,000
-----------------------------------------------------------------------------------------------------------------
NTL, Inc.:
0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(6) 2,055,000 1,310,062
0%/9.75% Sr. Nts., Series B, 4/15/09(6) [GBP] 16,125,000 14,405,559
0%/10.75% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(6) [GBP] 3,765,000 4,039,240
7% Cv. Unsec. Sub. Nts., 12/15/08 500,000 1,238,125
10% Sr. Nts., Series B, 2/15/07 2,940,000 2,895,900
-----------------------------------------------------------------------------------------------------------------
Telewest Communications plc:
0%/9.25% Sr. Nts., 4/15/09(6),(7) 8,000,000 4,680,000
0%/9.875% Sr. Nts., 4/15/09(6),(7) [GBP] 7,200,000 6,776,834
0%/11% Sr. Disc. Debs., 10/1/07(6) 5,525,000 5,193,500
11.25% Sr. Nts., 11/1/08 4,910,000 5,032,750
-----------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(6) 5,510,000 3,829,450
-----------
119,211,199
-----------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: DIVERSIFIED MEDIA--3.9%
Ackerley Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 1/15/09 5,250,000 4,882,500
-----------------------------------------------------------------------------------------------------------------
Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(6) 13,300,000 7,847,000
-----------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 4,500,000 2,317,500
-----------------------------------------------------------------------------------------------------------------
IPC Magazines Group plc:
0%/10.75% Bonds, 3/15/08(6) [GBP] 3,800,000 3,334,177
9.625% Bonds, 3/15/08 [GBP] 3,450,000 4,678,217
-----------------------------------------------------------------------------------------------------------------
Lamar Media Corp., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 3,270,000 3,261,825
-----------------------------------------------------------------------------------------------------------------
Mail-Well Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08 3,335,000 2,918,125
-----------------------------------------------------------------------------------------------------------------
Premier Graphics, Inc., 11.50% Sr. Unsec. Nts., 12/1/05 3,500,000 1,592,500
-----------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc., 8.875% Sr. Unsec. Sub. Nts., 12/15/10 4,250,000 1,593,750
-----------------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Unsec. Sub. Nts., 12/1/08 7,350,000 7,276,500
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 3,900,000 3,861,000
-----------------------------------------------------------------------------------------------------------------
TV Guide, Inc., 8.125% Sr. Unsec. Sub. Nts., 3/1/09 2,500,000 2,475,000
-----------------------------------------------------------------------------------------------------------------
World Color Press, Inc., 7.75% Sr. Unsec. Sub. Nts., 2/15/09 2,500,000 2,396,948
-----------------------------------------------------------------------------------------------------------------
WRC Media Corp., Units (each unit consists of $1,000 principal amount
of 12.75% sr. sub. nts., 11/15/09 and one warrant to purchase 1.353
shares of common stock)(7),(9) 6,500,000 6,370,000
-----------
54,805,042
-----------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS--17.4%
Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07 6,000,000 6,120,000
-----------------------------------------------------------------------------------------------------------------
Colo.Com, Units (each unit consists of $1,000 principal amount of
13.875% sr. nts., 3/15/10 and one warrant to purchase 19.9718 shares of
common stock)(7),(9) 3,300,000 3,382,500
</TABLE>
16 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 19
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS Continued
COLT Telecom Group plc:
7.625% Bonds, 7/31/08 [DEM] 9,725,000 $4,541,042
8.875% Sr. Nts., 11/30/07 [DEM] 1,880,000 928,998
10.125% Sr. Nts., 11/30/07 [GBP] 2,330,000 3,791,390
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)(6),(9) 3,185,000 3,790,150
-----------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 2,225,000 2,380,750
-----------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc., 0%/13.50% Sr. Disc. Nts., 3/15/08(6) 8,900,000 5,340,000
-----------------------------------------------------------------------------------------------------------------
Equinix, Inc., Units (each unit consists of $1,000 principal amount of
13% sr. nts., 12/1/07 and one warrant to purchase 11.255 shares of
common stock)(7),(9) 5,000,000 5,225,000
-----------------------------------------------------------------------------------------------------------------
ESAT Telecom Group plc, 11.875% Sr. Unsec. Unsub. Nts., 11/1/09 [EUR] 2,000,000 2,411,388
-----------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc.:
10.75% Sr. Nts., 12/15/09(7) 1,900,000 1,890,500
10.75% Sr. Nts., 12/15/09(7) [EUR] 4,000,000 3,951,997
11.25% Sr. Nts., 7/1/08 5,255,000 5,255,000
-----------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08(6) 2,750,000 1,306,250
-----------------------------------------------------------------------------------------------------------------
FLAG Telecom Holdings Ltd., 11.625% Sr. Nts., 3/30/10(7) 2,000,000 1,900,000
-----------------------------------------------------------------------------------------------------------------
Focal Communications Corp.:
0%/12.125% Sr. Unsec. Disc. Nts., 2/15/08(6) 2,745,000 1,784,250
11.875% Sr. Nts., 1/15/10(7) 5,000,000 5,025,000
-----------------------------------------------------------------------------------------------------------------
Global Crossing Ltd., 9.625% Sr. Nts., 5/15/08 4,010,000 3,889,700
-----------------------------------------------------------------------------------------------------------------
Global Telesystems Group, Inc., 10.50% Sr. Unsec. Bonds, 12/1/06(7)[EUR] 3,150,000 2,867,291
-----------------------------------------------------------------------------------------------------------------
Globix Corp. 12.50% Sr. Nts., 2/1/10(7) 6,000,000 5,550,000
-----------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(6),(7) 407,000 333,231
-----------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc./GST Network Funding Corp., Inc.,
0%/10.50% Sr. Disc. Nts., 5/1/08(6) 1,000,000 425,000
-----------------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(6) 785,000 419,975
-----------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 0%/12.50% Sr. Sec. Disc. Nts., 5/1/06(6) 400,000 327,000
-----------------------------------------------------------------------------------------------------------------
ICG Services, Inc., 0%/10% Sr. Exchangeable Unsec. Disc. Nts., 2/15/08(6) 415,000 226,175
-----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
0%/12.25% Sr. Disc. Nts., Series B, 3/1/09(6) 7,800,000 4,719,000
8.50% Sr. Nts., Series B, 1/15/08 4,320,000 3,780,000
8.60% Sr. Unsec. Nts., Series B, 6/1/08 2,000,000 1,770,000
8.875% Sr. Nts., 11/1/07 2,690,000 2,434,450
-----------------------------------------------------------------------------------------------------------------
Jazztel plc, 13.25% Sr. Nts., 12/15/09(7) [EUR] 7,000,000 6,840,639
-----------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc.:
0%/12.50% Sr. Unsec. Disc. Nts., 2/15/08(6) 8,000,000 4,200,000
13.50% Sr. Unsec. Nts., 5/15/09 1,300,000 1,300,000
-----------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08(6) 8,800,000 4,862,000
9.125% Sr. Unsec. Nts., 5/1/08 2,700,000 2,342,250
11% Sr. Nts., 3/15/08(7) 3,000,000 2,880,000
11.25% Sr. Nts., 3/15/10(7) 2,500,000 2,412,500
</TABLE>
17 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 20
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS Continued
McLeodUSA, Inc.:
8.125% Sr. Unsec. Nts., 2/15/09 $2,800,000 $2,478,000
8.375% Sr. Nts., 3/15/08 600,000 540,000
-----------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc.:
10% Sr. Nts., 12/15/09 4,750,000 4,554,063
10% Sr. Unsec. Nts., Series B, 11/15/08 6,000,000 5,730,000
-----------------------------------------------------------------------------------------------------------------
Metromedia International Group, Inc., 0%/10.50% Sr. Unsec.
Disc. Nts., 9/30/07(2),(6) 5,349,602 2,541,061
-----------------------------------------------------------------------------------------------------------------
MGC Communications, Inc./Mpower Communications Corp.,
13% Sr. Nts., 4/1/10(7) 5,000,000 4,775,000
-----------------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(6) [DEM] 2,000,000 689,850
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(6) 3,600,000 2,511,000
-----------------------------------------------------------------------------------------------------------------
Netia Holdings II BV, 13.125% Sr. Nts., Series B, 6/15/09 5,220,000 5,154,750
-----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
9% Sr. Nts., 3/15/08 1,700,000 1,530,000
9.625% Sr. Nts., 10/1/07 6,673,000 6,155,843
10.75% Sr. Unsec. Nts., 11/15/08 5,700,000 5,486,250
10.75% Sr. Unsec. Nts., 6/1/09 1,400,000 1,344,000
-----------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10(7) 5,000,000 4,475,000
-----------------------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05(5) 5,000,000 4,175,000
-----------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(7) 4,000,000 530,000
-----------------------------------------------------------------------------------------------------------------
PSINet, Inc.:
10% Sr. Unsec. Nts., Series B, 2/15/05 3,000,000 2,835,000
10.50% Sr. Nts., 12/1/06(7) [EUR] 7,000,000 6,514,097
-----------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts., 10/15/07(6) 4,700,000 3,831,783
-----------------------------------------------------------------------------------------------------------------
Rhythms Net Connections, Inc., 14% Sr. Unsec. Nts., 2/15/10(7) 5,000,000 4,325,000
-----------------------------------------------------------------------------------------------------------------
RSL Communications plc:
10.50% Gtd. Sr. Nts., 11/15/08 4,000,000 3,400,000
12.875% Sr. Unsec. Nts., 3/1/10(7) 3,300,000 3,151,500
-----------------------------------------------------------------------------------------------------------------
Tele1 Europe BV, 11.875% Sr. Nts., 12/1/09(7) [EUR] 6,000,000 5,863,405
-----------------------------------------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 2,000,000 1,810,000
-----------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 3,950,000 4,009,250
-----------------------------------------------------------------------------------------------------------------
United Pan-Europe Communications NV:
0%/13.375% Sr. Disc. Nts., 11/1/09(6),(7) 5,500,000 2,832,500
10.875% Sr. Nts., 8/1/09 [EUR] 250,000 231,749
10.875% Sr. Nts., 8/1/09 9,500,000 8,787,500
10.875% Sr. Nts., 11/1/07(7) 1,000,000 935,000
11.25% Sr. Nts., 11/1/09(7) [EUR] 3,000,000 2,809,698
-----------------------------------------------------------------------------------------------------------------
Verio, Inc.:
10.375% Sr. Unsec. Nts., 4/1/05 3,135,000 3,009,600
10.625% Sr. Nts., 11/15/09(7) 6,500,000 6,337,500
11.25% Sr. Unsec. Nts., 12/1/08 5,800,000 5,771,000
13.50% Sr. Unsec. Nts., 6/15/04 700,000 738,500
</TABLE>
18 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 21
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS Continued
Versatel Telecom International NV:
11.25% Sr. Nts., 3/30/10(7) [EUR] 1,800,000 $ 1,683,666
11.875% Sr. Nts., 7/15/09 3,200,000 3,192,000
11.875% Sr. Nts., 7/15/09 [EUR] 1,000,000 976,038
-----------------------------------------------------------------------------------------------------------------
Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 3,450,000 3,191,250
-----------------------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts., Series B, 3/1/05(6) 5,745,000 3,217,200
-----------------------------------------------------------------------------------------------------------------
Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10(7),(12) 2,000,000 1,950,000
-----------------------------------------------------------------------------------------------------------------
Worldwide Fiber, Inc., 12% Sr. Unsec. Sub. Nts., 8/1/09 1,200,000 1,140,000
-------------
245,816,479
-----------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT: WIRELESS COMMUNICATIONS--8.3%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07 700,000 574,000
-----------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(4),(5),(6) 4,749,000 391,793
-----------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 10.75% Sr. Sub. Nts., 12/15/08 3,200,000 3,184,000
-----------------------------------------------------------------------------------------------------------------
Crown Castle International Corp.:
0%/10.375% Sr. Disc. Nts., 5/15/11(6) 5,800,000 3,306,000
0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(6) 5,635,000 3,916,325
9% Sr. Nts., 5/15/11 3,250,000 2,957,500
-----------------------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(6) 2,525,000 1,622,313
-----------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(4),(5) 1,665,000 --
-----------------------------------------------------------------------------------------------------------------
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)(4),(5),(9) 1,325,000 788,375
-----------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc., Units (each unit consists of 12.50% sr.
nts., 4/15/10 and one warrant to purchase 5.146 shares of common stock)(7),(9) 2,500,000 2,512,500
-----------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.:
0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(6) [CAD] 4,405,000 2,093,573
0%/12% Sr. Unsec. Disc. Nts., 6/1/09(6) 5,500,000 3,437,500
0%/14% Sr. Disc. Nts., Series B, 6/1/06(6) 3,300,000 2,937,000
-----------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(6) 2,000,000 1,700,000
-----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(6) 1,000,000 695,000
0%/9.95% Sr. Disc. Nts., 2/15/08(6) 2,650,000 1,802,000
0%/10.65% Sr. Disc. Nts., 9/15/07(6) 4,500,000 3,296,250
9.375% Sr. Unsec. Nts., 11/15/09 6,400,000 5,920,000
-----------------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.50% Sr. Nts., 9/15/09(7) 11,900,000 12,673,500
11.625% Sr. Nts., 8/15/06 7,875,000 8,347,500
11.625% Sr. Nts., Series A, 8/15/06 4,675,000 4,955,500
-----------------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 2,890,000 2,759,950
-----------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(6) 3,315,000 1,541,475
-----------------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(6) 6,445,000 4,140,913
-----------------------------------------------------------------------------------------------------------------
Polska Telefoniz Cyfrowa International Financial II SA, 11.25% Sr. Sub.
Nts., 12/1/09(7) [EUR] 2,200,000 2,168,335
</TABLE>
19 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 22
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: WIRELESS COMMUNICATIONS Continued
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., Series B, 12/15/06 $3,500,000 $ 3,412,500
11.75% Sr. Sub. Nts., 7/15/07 3,650,000 3,960,250
-----------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 3,000,000 2,895,000
-----------------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(6) 9,935,000 6,457,750
-----------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc.:
0%/11.25% Sr. Unsec. Disc. Nts., 4/15/09(6) 4,500,000 2,340,000
0%/12% Sr. Disc. Nts., 7/15/08(6) 4,100,000 2,480,500
10.75% Sr. Nts., 3/15/10(7) 2,500,000 2,381,250
-----------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 655,000 618,975
-----------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp., 10.375% Sr. Nts., 11/15/09(7) 14,400,000 14,400,000
------------
116,667,527
-----------------------------------------------------------------------------------------------------------------
METALS/MINERALS--2.2%
AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(7) 2,500,000 137,500
-----------------------------------------------------------------------------------------------------------------
AK Steel Corp.:
7.875% Sr. Unsec. Nts., 2/15/09 5,925,000 5,391,750
9.125% Sr. Nts., 12/15/06 1,000,000 980,000
-----------------------------------------------------------------------------------------------------------------
California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09 2,800,000 2,576,000
-----------------------------------------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 2,325,000 2,162,250
-----------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 2,700,000 2,484,000
-----------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 750,000 641,250
-----------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 2,065,000 1,920,450
-----------------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(6) 6,100,000 1,738,500
-----------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 3,945,000 3,215,175
-----------------------------------------------------------------------------------------------------------------
National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 4,500,000 4,421,250
-----------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08(2) 5,000,000 4,462,500
-----------------------------------------------------------------------------------------------------------------
Republic Technologies International Holdings LLC/RTI Capital Corp.,
Units (each unit consists of $1,000 principal amount of 13.75% sr. nts.,
7/15/09 and one warrant to purchase Cl. D common stock $.01 per share)(9) 4,200,000 945,000
------------
31,075,625
-----------------------------------------------------------------------------------------------------------------
RETAIL--0.6%
Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts., 5/1/08 2,000,000 1,160,000
-----------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08(2) 3,500,000 3,115,000
-----------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1,025,000 912,250
-----------------------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(2) 2,200,000 1,771,000
-----------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,416,000
------------
8,374,250
</TABLE>
20 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 23
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICE--4.4%
Allied Waste North America, Inc.:
7.625% Sr. Nts., Series B, 1/1/06 $1,000,000 $ 825,000
7.875% Sr. Unsec. Nts., Series B, 1/1/09 4,000,000 3,200,000
10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 4,500,000 3,442,500
-----------------------------------------------------------------------------------------------------------------
American Plumbing & Mechanical, Inc., 11.625% Gtd. Sr. Sub. Nts.,
Series B, 10/15/08 4,500,000 4,027,500
-----------------------------------------------------------------------------------------------------------------
Azurix Corp., 10.75% Sr. Nts., 2/15/10(7) 5,000,000 5,000,000
-----------------------------------------------------------------------------------------------------------------
Brand Scaffold Service, Inc., 10.25% Unsec. Sr. Nts., 2/15/08 1,800,000 1,602,000
-----------------------------------------------------------------------------------------------------------------
Charles River Laboratories, Inc., 13.50% Sr. Sub. Nts., 10/1/09(7) 4,500,000 4,657,500
-----------------------------------------------------------------------------------------------------------------
Coinstar, Inc., 13% Sr. Disc. Nts., 10/1/06 1,000,000 1,005,000
-----------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 1,080,000 634,500
-----------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,150,000 1,763,000
-----------------------------------------------------------------------------------------------------------------
IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 3,150,000 2,992,500
-----------------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09(2) 3,550,000 3,212,750
-----------------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10(2) 7,500,000 5,685,938
-----------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc., 6.75% Cv. Sr. Sub. Nts., 9/15/03 2,868,000 1,616,835
-----------------------------------------------------------------------------------------------------------------
Protection One, Inc., 7.375% Gtd. Sr. Unsec. Nts., 8/15/05 5,800,000 4,205,000
-----------------------------------------------------------------------------------------------------------------
Stericycle, Inc., 12.375% Sr. Unsec. Sub. Nts., Series B, 11/15/09 3,300,000 3,382,500
-----------------------------------------------------------------------------------------------------------------
United Rentals, Inc.:
9% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,000,000 875,000
9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 5,750,000 5,117,500
-----------------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 692,000 740,440
-----------------------------------------------------------------------------------------------------------------
URS Corp., 12.25% Sr. Sub. Nts., Series B, 5/1/09 4,000,000 4,140,000
-----------------------------------------------------------------------------------------------------------------
US Unwired, Inc., 0%/13.375% Sr. Disc. Nts., 11/1/09(6),(7) 7,500,000 4,031,250
------------
62,156,713
-----------------------------------------------------------------------------------------------------------------
TRANSPORTATION--4.1%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 2,000,000 1,925,000
-----------------------------------------------------------------------------------------------------------------
Amtran, Inc.:
9.625% Nts., 12/15/05 1,800,000 1,521,000
10.50% Sr. Nts., 8/1/04 3,400,000 2,975,000
10.50% Sr. Nts., 8/1/04(7) 2,000,000 1,750,000
-----------------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375% Sr. Unsec. Nts., 11/15/06 4,750,000 4,441,250
10.75% Sr. Nts., 8/1/05 60,000 60,300
-----------------------------------------------------------------------------------------------------------------
Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06 6,000,000 4,830,000
-----------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Sr. Unsec. Sub. Nts., 4/15/06 1,250,000 1,196,875
-----------------------------------------------------------------------------------------------------------------
Dura Operating Corp.:
9% Sr. Sub. Nts., Series B, 5/1/09 5,200,000 4,836,000
9% Sr. Sub. Nts., Series B, 5/1/09 [EUR] 2,200,000 1,957,817
-----------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 3,245,000 3,358,575
</TABLE>
21 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 24
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION Continued
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 $3,785,000 $ 3,728,225
-----------------------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05 3,150,000 2,756,250
-----------------------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07(5) 2,000,000 190,000
-----------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000 principal
amount of 12% first priority ship mtg. sr. sec. nts., 7/15/05 and one
warrant to purchase five shares of common stock)(2),(3),(9) 3,500,000 1,942,500
-----------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07 (7) 3,715,000 1,616,025
Units (each unit consists of $1,000 principal amount of 12% second
priority ship mtg. nts., 6/30/07 and 7.66 warrants)(2),(9) 2,605,000 143,275
-----------------------------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., Series D, 6/15/07 3,000,000 2,805,000
-----------------------------------------------------------------------------------------------------------------
Tenneco, Inc., 11.625% Sr. Unsec. Sub. Nts., Series B, 10/15/09 5,750,000 5,635,000
-----------------------------------------------------------------------------------------------------------------
TFM SA de CV, 10.25% Sr. Nts., 6/15/07 1,440,000 1,386,000
-----------------------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 1,010,330 868,884
-----------------------------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 4,500,000 2,992,500
-----------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 13.375% Sr. Disc. Nts.,
Series B, 12/15/03 4,391,000 4,533,708
-----------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(7) 860,759 475,569
------------
57,924,753
-----------------------------------------------------------------------------------------------------------------
UTILITY--0.1%
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 2,000,000 2,121,128
-------------
Total Corporate Bonds and Notes (Cost $1,296,387,573) 1,152,670,438
</TABLE>
<TABLE>
<CAPTION>
SHARES
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS--5.9%
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(11) 120,420 1,339,672
-----------------------------------------------------------------------------------------------------------------
BankUnited Capital Trust, 10.25% Gtd. Bonds, 12/31/26 750,000 646,875
-----------------------------------------------------------------------------------------------------------------
CGA Group Ltd., Series A(2),(11),(13) 190,161 4,754,025
-----------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cv., Non-Vtg.(4),(7) 71,000 2,644,750
-----------------------------------------------------------------------------------------------------------------
Clark USA, Inc., 11.50% Cum. Sr. Exchangeable, Non-Vtg.(11) 3,201 648,202
-----------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Sr. Redeemable Exchangeable,
Series B, Non-Vtg.(11) 2,767 2,829,257
-----------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 11.125% Cum., Series M(11) 6,288 675,960
-----------------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(2),(4) 100,000 3,825,000
-----------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.:
12.25% Sr. Exchangeable, Non-Vtg.(11) 3,281 3,198,975
13% Sr. Exchangeable, Non-Vtg.(11) 7,709 8,171,540
-----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg.(11) 636 160,590
-----------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg.(4) 15,000 431,250
-----------------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr., Series C, Non-Vtg.(2),(4) 49,409 123,522
</TABLE>
22 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 25
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS Continued
Fidelity Federal Bank, l2% Non-Cum. Exchangeable, Series A 30 $ 443
-----------------------------------------------------------------------------------------------------------------
Global Crossing Ltd., 10.50% Sr. Exchangeable(11) 20,000 1,955,000
-----------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.(11) 3,474 3,308,985
-----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
7% Cv.(7) 200,000 6,500,000
Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr.,
Series E, Non-Vtg.(7) 61,150 2,514,794
13.50% Exchangeable, Series B(11) 2,600 2,450,500
-----------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc.:
13%, Non-Vtg.(7),(11) 82 68,060
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),(9),(11) 300 268,125
-----------------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable
Preferred Stock, Non-Vtg.(11) 30,310 3,789
-----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 11.125% Exchangeable, Series E, Non-Vtg.(11) 5,190 4,969,425
-----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum., Non-Vtg.(11) 110,872 5,682,190
-----------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg.(11) 342 3,479,850
-----------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable, Series H, Non-Vtg. 54,950 4,739,438
9.20% Exchangeable, Series F, Non-Vtg. 22,500 2,030,625
-----------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 13.875% Cum., Non-Vtg.(11) 8,669 9,644,263
-----------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(11) 5,500 5,238,750
-----------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 13.75% Cum. Nts., Series B, 3/15/09, Non-Vtg.(11) 100 452,500
-----------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 13.75% Exchangeable(7) 24 108,600
-----------------------------------------------------------------------------------------------------------------
Star Gas Partners, LP 2,139 29,144
-----------------------------------------------------------------------------------------------------------------
Supermarkets General Holdings Corp., $3.52 Exchangeable(4),(11) 22,624 36,764
-----------------------------------------------------------------------------------------------------------------
World Access, Inc., Cv. Sr., Series D, Non-Vtg.(2),(4) 506 419,980
------------
Total Preferred Stocks (Cost $93,997,472) 83,350,843
-----------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.0%
Adelphia Communications Corp., Cl. A(4) 10,000 490,000
-----------------------------------------------------------------------------------------------------------------
Allied Waste Industries, Inc.(4) 40,000 262,500
-----------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp.(4) 10,000 607,500
-----------------------------------------------------------------------------------------------------------------
Calpine Corp.(4) 15,000 1,410,021
-----------------------------------------------------------------------------------------------------------------
Charter Communications, Inc., Cl. A(4) 40,000 573,125
-----------------------------------------------------------------------------------------------------------------
Completel Europe NV(4) 11,400 227,287
-----------------------------------------------------------------------------------------------------------------
Cumulus Media, Inc., Cl. A(4) 40,000 575,000
-----------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A(4) 15,000 345,000
-----------------------------------------------------------------------------------------------------------------
ECM Fund, LPI(2),(4) 75 65,719
-----------------------------------------------------------------------------------------------------------------
Emmis Communications Corp., Cl. A(4) 20,000 930,000
</TABLE>
23 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 26
STATEMENT OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS Continued
Equitable Bag, Inc.(2),(4) 2,261 $ 2,261
-----------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc.(4) 3,000 421,500
-----------------------------------------------------------------------------------------------------------------
Global Crossing Ltd.(4) 15,000 614,062
-----------------------------------------------------------------------------------------------------------------
Grupo Iusacell SA, ADR V(4) 20,000 405,000
-----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(4) 1,935 93,485
-----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(2),(4) 8,121 392,346
-----------------------------------------------------------------------------------------------------------------
KPNQwest NV(4) 5,000 271,250
-----------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc., Cl. A(4) 10,000 848,125
-----------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc.(4) 10,000 230,625
-----------------------------------------------------------------------------------------------------------------
Optel, Inc.(2),(4) 3,815 38
-----------------------------------------------------------------------------------------------------------------
Premier Holdings Ltd.(2),(4) 288,828 938,691
-----------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.(4) 5,000 242,500
-----------------------------------------------------------------------------------------------------------------
SF Holding Group, Cl. C(2),(4) 3,700 37
-----------------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc., Cl. A(4) 20,000 816,250
-----------------------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(4) 17,058 20,257
-----------------------------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., Cl. A(4) 20,000 469,062
-----------------------------------------------------------------------------------------------------------------
Teligent, Inc.(4) 10,000 668,125
-----------------------------------------------------------------------------------------------------------------
Verio, Inc.(4) 5,000 225,313
-----------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp.(4) 17,534 2,258,598
----------
Total Common Stocks (Cost $10,910,416) 14,403,677
</TABLE>
<TABLE>
<CAPTION>
UNITS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.5%
Adelphia Business Solutions, Inc. Wts., Exp. 4/15/01 265 80,858
-----------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 8/10/00(2) 850 9
-----------------------------------------------------------------------------------------------------------------
Australis Holdings PTY Ltd./Australia Media Ltd. Wts., Exp. 5/15/00(2) 190 1
-----------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/15/00(2) 12,500 --
-----------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/1/07(7) 1,649 6,390
-----------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 6/16/07(2),(13) 130,000 39,000
-----------------------------------------------------------------------------------------------------------------
Charles River Laboratories, Inc., Wts., Exp 10/1/09 4,500 22,500
-----------------------------------------------------------------------------------------------------------------
Clearnet Communications, Inc. Wts., Exp. 9/15/05 1,320 42,345
-----------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07(2) 2,320 1,090,690
-----------------------------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/1/08 5,000 61,250
-----------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 3,450 --
-----------------------------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/1/08(2) 6,000 144,000
-----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05 725 6,236
-----------------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/1/02 1,174 6,897
</TABLE>
24 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 27
<TABLE>
<CAPTION>
MARKET VALUE
UNITS SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES Continued
Globix Corp. Wts., Exp. 5/1/05 4,175 $2,087,500
-----------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/1/01 58,176 78,174
-----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/23/03 58,503 --
Exp. 1/23/03(2) 30,983 310
Exp. 5/1/05(2) 69,612 6,961
Exp. 9/1/04(2) 91,000 --
-----------------------------------------------------------------------------------------------------------------
Grand Union Co. Wts., Exp. 8/17/03 94 29
-----------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 17,655 490,276
-----------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/31/02 1,600 --
-----------------------------------------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/15/07(2) 3,390 --
-----------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/15/08(2) 7,885 24,152
-----------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08(2) 1,390 139
-----------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07 2,565 30,459
-----------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/15/05(2) 3,200 4,400
-----------------------------------------------------------------------------------------------------------------
PLD Telekom, Inc.:
Wts., Exp. 6/1/06(2) 3,500 175
9% Cv. Sub. Nts. Wts., Exp. 3/31/03(2) 200 10
14% Sr. Disc. Nts. Wts., Exp. 3/31/03(2) 3,500 175
-----------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc. Wts.:
Exp. 6/30/05(2) 15,200 1,520
Exp. 11/1/03(2) 28,000 49,000
-----------------------------------------------------------------------------------------------------------------
R&B Falcon Corp. Wts., Exp. 5/1/09(2) 7,800 2,730,000
-----------------------------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/3/03(2) 12,145 85,021
-----------------------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/1/05(7) 17,235 289,763
---------
Total Rights, Warrants and Certificates (Cost $503,365) 7,378,240
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS--1.6%
Deutsche Bank AG, Indian Rupee/Japanese Yen Linked Nts., Zero
Coupon, 12.51%, 10/9/01(8) $ 6,684,000 4,945,492
-----------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, Lehman Brothers High Yield Index Linked Nts.:
8.70%, 4/6/00 10,000,000 9,600,200
8.75%, 5/5/00 7,750,000 7,543,819
-----------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (New York Branch), Russian OFZ Linked Nts.:
Series 27001, 25%, 2/6/02(2),(3) [RUR] 876,870 18,042
Series 27002, 25%, 5/22/02(2),(3) [RUR] 1,611,010 31,969
Series 27003, 25%, 6/5/02(2),(3) [RUR] 3,893,220 77,120
Series 27003, 25%, 6/5/02(2),(3) [RUR] 3,079,270 60,997
Series 27004, 24.868%, 9/18/02(2),(3) [RUR] 4,231,270 81,541
</TABLE>
25 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 28
STATEMENTS OF INVESTMENTS UNAUDITED / CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT(1) SEE NOTE 1
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS Continued
Series 27005, 24.868%, 10/9/02(2),(3) [RUR] 4,470,760 $ 83,371
Series 27006, 24.868%, 1/22/03(2),(3) [RUR] 4,723,200 84,899
Series 27007, 25%, 2/5/03(2),(3) [RUR] 4,349,990 77,917
Series 27008, 25%, 5/21/03(2),(3) [RUR] 4,444,570 77,177
Series 27009, 25%, 6/4/03(2),(3) [RUR] 4,907,930 85,507
Series 27010, 24.868%, 9/17/03(2),(3) [RUR] 2,744,510 46,747
Series 27011, 24.868%, 10/8/03(2),(3) [RUR] 1,462,330 24,077
-----------------------------------------------------------------------------------------------------------------
Russia (Government of) Federal Loan Bonds, Series 27010, 24.868%,
9/17/03(2),(3) [RUR] 1,966,960 33,503
---------------
Total Structured Instruments (Cost $24,227,925) 22,872,378
-----------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--2.9%
Repurchase agreement with Banc One Capital Markets, Inc.,
6.05%, dated 3/31/00, to be repurchased at $40,720,520 on 4/3/00,
collateralized by U.S. Treasury Nts., 5%-7.50%, 5/31/00-2/15/07,
with a value of $27,227,569 and U.S. Treasury Bonds, 5.25%-12%,
11/15/09-2/15/29, with a value of $14,322,061 (Cost $40,700,000) 40,700,000 40,700,000
-----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $1,529,875,792) 97.8% 1,378,950,217
-----------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.2 30,600,120
------------------------------
NET ASSETS 100.0% $1,409,550,337
==============================
</TABLE>
26 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 29
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Principal amount is reported in U.S. Dollars, except for those denoted in
the following currencies:
ARP Argentine Peso
CAD Canadian Dollar
DEM German Mark
EUR Euro
GBP British Pound Sterling
IDR Indonesian Rupiah
RUR Russian Ruble
2. Identifies issues considered to be illiquid or restricted--See Note 7
of Notes to Financial Statements.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Non-income-producing security.
5. Issuer is in default.
6. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
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 $206,447,883 or 14.65% of the Fund's net
assets as of March 31, 2000.
8. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
9. 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, principal amount disclosed represents
total underlying principal.
10. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
11. Interest or dividend is paid-in-kind.
12. When-issued security to be delivered and settled after March 31, 2000.
13. 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 March 31, 2000.
The aggregate fair value of securities of affiliated companies held by the Fund
as of March 31, 2000, amounts to $4,793,025. Transactions during the period in
which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
SHARES GROSS GROSS SHARES DIVIDEND
SEPTEMBER 30, 1999 ADDITIONS REDUCTIONS MARCH 31, 2000 INCOME
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CGA Group Ltd., Series A 160,595 29,566 -- 190,161 $ 739,209
-----------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 6/16/07 130,000 -- -- 130,000 --
---------
$ 739,209
=========
</TABLE>
See accompanying Notes to Financial Statements.
27 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 30
STATEMENT OF ASSETS AND LIABILITIES Unaudited
<TABLE>
<CAPTION>
March 31, 2000
===================================================================================================================
ASSETS
<S> <C>
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,525,121,642) $ 1,374,157,192
Affiliated companies (cost $4,754,150) 4,793,025
-------------------------------------------------------------------------------------------------------------------
Cash 98,258
-------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 39,404
-------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 32,179,631
Investments sold 9,323,269
Shares of beneficial interest sold 4,418,484
Other 7,655
-------------------------------------------------------------------------------------------------------------------
Total assets 1,425,016,918
===================================================================================================================
LIABILITIES
Unrealized depreciation on foreign currency contracts 87,270
-------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 6,104,337
Investments purchased (including $1,955,000 purchased on a when-issued basis) 4,913,076
Dividends 3,065,320
Distribution and service plan fees 900,427
Transfer and shareholder servicing agent fees 206,911
Trustees' compensation 1,275
Other 187,965
-------------------------------------------------------------------------------------------------------------------
Total liabilities 15,466,581
===================================================================================================================
NET ASSETS $1,409,550,337
==============
===================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $1,586,192,312
-------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 2,340,752
-------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (27,971,646)
-------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and liabilities
denominated in foreign currencies (151,011,081)
--------------
Net assets $1,409,550,337
==============
</TABLE>
28 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 31
<TABLE>
<CAPTION>
==================================================================================================================
NET ASSET VALUE PER SHARE
------------------------------------------------------------------------------------------------------------------
Class A Shares:
<S> <C>
Net asset value and redemption price per share (based on net assets of
$658,084,732 and 57,976,405 shares of beneficial interest outstanding) $11.35
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $11.92
------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $526,648,935
and 46,452,263 shares of beneficial interest outstanding) $11.34
------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $224,816,670
and 19,829,994 shares of beneficial interest outstanding) $11.34
</TABLE>
See accompanying Notes to Financial Statements
29 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 32
STATEMENT OF OPERATIONS Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended March 31, 2000
==================================================================================================================
INVESTMENT INCOME
<S> <C>
Interest $ 74,635,964
------------------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 4,359,183
Affiliated companies 739,209
-------------
Total income 79,734,356
==================================================================================================================
EXPENSES
Management fees 4,493,839
------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 828,414
Class B 2,706,629
Class C 1,242,278
------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 1,110,909
------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 37,975
------------------------------------------------------------------------------------------------------------------
Trustees' compensation 27,739
------------------------------------------------------------------------------------------------------------------
Other 286,077
-------------
Total expenses 10,733,860
Less expenses paid indirectly (12,739)
-------------
Net expenses 10,721,121
==================================================================================================================
NET INVESTMENT INCOME 69,013,235
==================================================================================================================
REALIZED AND UNREALIZED LOSS
Net realized loss on:
Investments (8,355,492)
Closing of futures contracts (1,198,360)
Foreign currency transactions (2,551,196)
------------
Net realized loss (12,105,048)
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (38,291,240)
Translation of assets and liabilities denominated in foreign currencies (2,291,563)
------------
Net change (40,582,803)
------------
Net realized and unrealized loss (52,687,851)
=================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $16,325,384
============
</TABLE>
See accompanying Notes to Financial Statements.
30 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 33
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30,
(UNAUDITED) 1999
==================================================================================================================
OPERATIONS
<S> <C> <C>
Net investment income $ 69,013,235 $ 117,592,700
------------------------------------------------------------------------------------------------------------------
Net realized loss (12,105,048) (2,302,101)
------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (40,582,803) (31,609,616)
------------------------------------
Net increase in net assets resulting from operations 16,325,384 83,680,983
==================================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (33,429,855) (58,066,835)
Class B (24,201,383) (39,188,529)
Class C (10,920,162) (20,334,122)
------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (4,516,076) (4,624,645)
Class B (3,573,775) (3,298,134)
Class C (1,583,733) (1,792,486)
==================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 11,861,723 123,346,795
Class B 18,818,007 157,938,895
Class C (17,520,186) 35,263,745
==================================================================================================================
NET ASSETS
Total increase (decrease) (48,740,056) 272,925,667
------------------------------------------------------------------------------------------------------------------
Beginning of period 1,458,290,393 1,185,364,726
------------------------------------
End of period (including undistributed net investment income of
$2,340,752 and $1,878,917, respectively) $1,409,550,337 $1,458,290,393
====================================
</TABLE>
See accompanying Notes to Financial Statements
31 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 34
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30
CLASS A (UNAUDITED) 1999 1998 1997 1996 1995
==================================================================================================================
PER SHARE OPERATING DATA
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.84 $12.18 $13.49 $12.92 $12.47 $12.32
----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .59 1.10 1.09 1.15 1.15 1.05
Net realized and unrealized gain (loss) (.42) (.25) (1.11) .57 .44 .14
---------------------------------------------------------------
Total income (loss) from
investment operations .17 .85 (.02) 1.72 1.59 1.19
----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.58) (1.10) (1.05) (1.15) (1.14) (1.04)
Tax return of capital distribution -- -- (.04) -- -- --
Distributions from net realized gain (.08) (.09) (.20) -- -- --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.66) (1.19) (1.29) (1.15) (1.14) (1.04)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.35 $11.84 $12.18 $13.49 $12.92 $12.47
===============================================================
================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 1.40% 7.15% (0.49)% 13.96% 13.28% 10.09%
================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $658,085 $675,395 $572,354 $502,211 $359,208 $255,139
----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $688,401 $644,839 $567,689 $425,258 $305,638 $204,917
----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.78% 9.01% 8.18% 8.75% 8.97% 8.45%
Expenses 1.05% 1.06% 1.06%(3) 1.10%(3) 1.17%(3) 1.18%(3)
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 16% 47% 100% 136% 95% 73%
</TABLE>
1. Assumes a $1,000 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. 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 period ended March 31, 2000 were $321,014,794 and $221,453,806,
respectively.
See accompanying Notes to Financial Statements.
32 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 35
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30
CLASS B (UNAUDITED) 1999 1998 1997 19965
=================================================================================================================
PER SHARE OPERATING DATA
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.83 $12.17 $13.48 $12.91 $12.47
-------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .54 1.01 .99 1.05 1.03
Net realized and unrealized gain (loss) (.42) (.25) (1.11) .57 .44
-------------------------------------------------------------
Total income (loss) from
investment operations .12 .76 (.12) 1.62 1.47
-----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.53) (1.01) (.95) (1.05) (1.03)
Tax return of capital distribution -- -- (.04) -- --
Distributions from net realized gain (.08) (.09) (.20) -- --
-------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.61) (1.10) (1.19) (1.05) (1.03)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.34 $11.83 $12.17 $13.48 $12.91
=============================================================
=================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 1.01% 6.36% (1.25)% 13.10% 12.20%
=================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $526,649 $530,619 $388,572 $238,505 $82,052
-----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $540,560 $475,049 $326,804 $151,197 $33,189
-----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.02% 8.25% 7.42% 7.89% 7.90%
Expenses 1.81% 1.81% 1.81%(3) 1.86%(3) 1.97%(3)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 16% 47% 100% 136% 95%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. 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 investment securities (excluding short-term securities) for the period
ended March 31, 2000 were $321,014,794 and $221,453,806, respectively.
5. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
See accompanying Notes to Financial Statements.
33 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 36
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, 2000 SEPT. 30
CLASS C (UNAUDITED) 1999 1998 1997 1996 1995
==================================================================================================================
PER SHARE OPERATING DATA
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.83 $12.17 $13.48 $12.91 $12.46 $12.32
------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .54 1.01 .99 1.05 1.06 .95
Net realized and unrealized gain (loss) (.41) (.25) (1.11) .57 .44 .13
------------------------------------------------------------------
Total income (loss) from
investment operations .13 .76 (.12) 1.62 1.50 1.08
------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.54) (1.01) (.95) (1.05) (1.05) (.94)
Tax return of capital distribution -- -- (.04) -- -- --
Distributions from net realized gain (.08) (.09) (.20) -- -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.62) (1.10) (1.19) (1.05) (1.05) (.94)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.34 $11.83 $12.17 $13.48 $12.91 $12.46
==================================================================
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(1) 1.01% 6.35% (1.25)% 13.12% 12.44% 9.16%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $224,817 $252,277 $224,439 $181,025 $112,945 $64,932
------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $243,562 $246,416 $210,338 $143,363 $ 89,416 $43,584
------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.01% 8.25% 7.42% 7.98% 8.19% 7.63%
Expenses 1.83% 1.81% 1.81%(3) 1.86%(3) 1.93%(3) 1.95%(3)
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 16% 47% 100% 136% 95% 73%
</TABLE>
1. Assumes a $1,000 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.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. 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 period
ended March 31, 2000 were $321,014,794 and $221,453,806, respectively.
See accompanying Notes to Financial Statements.
34 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS UNAUDITED
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Champion Income Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek a high level of current income
primarily by investing in a diversified portfolio of high-yield, lower-rated
fixed-income securities that the Fund's investment Manager, OppenheimerFunds,
Inc., believes 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 at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable to
that class and exclusive voting rights with respect to matters affecting that
class. Classes A, B and C shares have separate distribution and/or service
plans. 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.
--------------------------------------------------------------------------------
SECURITIES VALUATION. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are
valued primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Foreign currency 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, dealer or pricing service. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
--------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in foreign currency-linked structured notes
whose market value and redemption price are linked to foreign currency exchange
rates. The structured notes may be leveraged, which increases the notes'
volatility relative to the face of the security. Fluctuations in value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of March 31, 2000, the market value of these securities
comprised 2.62% of the Fund's net assets and resulted in realized and unrealized
losses of $2,058,311. The Fund also hedges a portion of the foreign currency
exposure generated by these securities, as discussed in Note 5.
--------------------------------------------------------------------------------
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. Normally the
settlement date
35 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
occurs within six months after the transaction date; however, the Fund may, from
time to time, purchase securities whose settlement date extends beyond six
months and possibly as long as two years or more beyond trade date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains segregated assets with a market value equal to or greater than 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 March 31, 2000, the Fund had entered into net outstanding
when-issued or forward commitments of $1,955,000.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Fund may enter into mortgage dollar-rolls in which
the Fund sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records each dollar-roll as a sale and a new purchase transaction.
--------------------------------------------------------------------------------
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 March 31, 2000, securities with an
aggregate market value of $11,708,184, representing 0.83% 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.
-------------------------------------------------------------------------------
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.
36 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 39
-------------------------------------------------------------------------------
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.
-------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
-------------------------------------------------------------------------------
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 paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of 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.
-------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
-------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of 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 options
written 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.
37 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
-------------------------------------------------------------------------------
2. 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>
SIX MONTHS ENDED MARCH 31, 2000 YEAR ENDED SEPTEMBER 30, 1999
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 15,269,863 $ 179,275,841 27,319,607 $ 335,115,751
Dividends and/or distributions
reinvested 2,326,998 27,105,525 3,639,977 44,482,979
Redeemed (16,644,779) (194,519,643) (20,932,674) (256,251,935)
-----------------------------------------------------------------------
Net increase 952,082 $ 11,861,723 10,026,910 $ 123,346,795
=======================================================================
------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 8,220,088 $ 96,289,831 19,729,277 $ 241,233,572
Dividends and/or distributions
reinvested 1,515,396 17,632,167 2,215,843 27,048,739
Redeemed (8,133,524) (95,103,991) (9,032,360) (110,343,416)
-----------------------------------------------------------------------
Net increase 1,601,960 $ 18,818,007 12,912,760 $ 157,938,895
=======================================================================
-----------------------------------------------------------------------------------------------------------------
CLASS C
Sold 2,897,625 $ 33,931,468 8,758,433 $ 107,076,757
Dividends and/or distributions
reinvested 686,510 7,994,221 1,257,082 15,358,557
Redeemed (5,076,702) (59,445,875) (7,141,459) (87,171,569)
-----------------------------------------------------------------------
Net increase (decrease) (1,492,567) $ (17,520,186) 2,874,056 $ 35,263,745
=======================================================================
</TABLE>
-------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of March 31, 2000, net unrealized depreciation on securities of $150,925,575
was composed of gross appreciation of $28,765,492, and gross depreciation of
$179,691,067.
-------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. 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 of the Fund, 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 six months
ended March 31, 2000 was 0.61% of average annual net assets for each class of
shares, annualized for periods of less than one full year.
38 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 41
--------------------------------------------------------------------------------
TRANSFER AGENT FEES. 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.
--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
SIX MONTHS ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 31, 2000 $1,364,038 $376,032 $127,446 $2,929,450 $242,592
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CONTINGENT CLASS B CONTINGENT CLASS C CONTINGENT
DEFERRED SALES CHARGES DEFERRED SALES CHARGES DEFERRED SALES CHARGES
SIX MONTHS ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
March 31, 2000 $7,103 $935,262 $52,010
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
--------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the six months ended March 31, 2000, payments
under the Class A plan totaled $828,414, all of which was paid by the
Distributor to recipients. That included $51,427 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
39 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 42
NOTES TO FINANCIAL STATEMENTS UNAUDITED/CONTINUED
-------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES CONTINUED
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the Fund
under the plans. If any plan is terminated by the Fund, the Board of Trustees
may allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended March 31,
2000, were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGAT UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $2,706,629 $2,268,623 $21,468,685 4.08%
Class C Plan 1,242,278 1,705,446 4,189,475 1.86
------------------------------------------------------------------------------------------------------------------
</TABLE>
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
40 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 43
Securities denominated in foreign currency to cover net exposure on outstanding
foreign currency contracts are noted in the Statement of Investments where
applicable.
As of March 31, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
CONTRACT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION EXPIRATION DATE AMOUNT (000S) MARCH 31, 2000 APPRECIATION DEPRECIATION
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO SELL
British Pound
Sterling (GBP) 6/2/00-6/5/00 GBP22,345 $35,656,683 $35,127 $61,909
Canadian Dollar (CAD) 6/1/00 CAD2,925 2,017,868 -- 25,361
Euro (EUR) 4/4/00 EUR1,126 1,077,624 4,277 --
-------------------------
Total Unrealized Appreciation and Depreciation $39,404 $87,270
=========================
------------------------------------------------------------------------------------------------------------------
</TABLE>
6. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to protect against changes in interest rates. 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 may recognize 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
and/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.
41 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 44
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
================================================================================
7. ILLIQUID OR RESTRICTED SECURITIES
As of March 31, 2000, 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, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also 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 limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of March 31, 2000 was $101,982,178,
which represents 7.22% of the Fund's net assets, of which $8,564,072 is
considered restricted. Information concerning restricted securities is as
follows:
<TABLE>
<CAPTION>
VALUATION
ACQUISITION COST PER UNIT AS OF
SECURITY DATE PER UNIT MARCH 31, 2000
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS
TAG Heuer International SA, 12% Sr. Nts., 12/15/05 8/13/96 105.75% 108.53%
Trans World Airlines Lease, 14%
Equipment Trust, 7/2/08 3/19/98 101.00 86.00
STOCKS AND WARRANTS
Becker Gaming, Inc. Wts., Exp. 11/15/00 11/18/93 $ 2.00 $ --
CGA Group Ltd., Series A 6/17/97 25.00 25.00
CGA Group Ltd. Wts., Exp. 6/16/07 6/17/97 -- 0.30
ECM Fund, LPI 4/14/92 1,000.00 876.25
Intermedia Communications, Inc. 9/29/98 15.09 48.31
World Access, Inc., Cv. Sr., Series D, Non-Vtg. 2/14/00 1,383.40 830.00
===========================================================================================================
</TABLE>
8. 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 0.45%. 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 0.08% per annum.
The Fund had no borrowings outstanding during the six months ended March
31, 2000.
42 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 45
OPPENHEIMER CHAMPION INCOME FUND
================================================================================
OFFICERS AND TRUSTEES James C. Swain, Trustee and Chairman of the Board
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
George C. Bowen, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
David P. Negri, Vice President
Thomas P. Reedy, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
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.
The financial statements included herein have been
taken from the records of the Fund without
examination of those records by the independent
auditors.
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 more
complete 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, ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING
THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
43 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 46
OPPENHEIMERFUNDS FAMILY
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GLOBAL EQUITY
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
----------------------------------------------------------------------------------------------------------------------
EQUITY
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
----------------------------------------------------------------------------------------------------------------------
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
----------------------------------------------------------------------------------------------------------------------
MONEY MARKET(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only 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 2000 OppenheimerFunds, Inc. All rights reserved.
44 OPPENHEIMER CHAMPION INCOME FUND
<PAGE> 47
INFORMATION AND SERVICES
--------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
INTERNET
24-hr access to account information and transactions
WWW.OPPENHEIMERFUNDS.COM
-------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
-------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
-------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
-------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
-------------------------------------------------------
OPPENHEIMERFUNDS INFORMATION HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
-------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
-------------------------------------------------------
TICKER SYMBOLS
Class A: OPCHX Class B: OCHBX Class C: OCHCX
[OPPENHEIMERFUNDS LOGO]
DISTRIBUTOR, INC.
RS0190.001.0300 May 30, 2000
