[picture of power lines]
Annual Report September 30, 2000
Oppenheimer
Champion Income Fund
[logo]OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Rising default rates forced yield spreads to widen, causing high yield bonds to
underperform U.S. Treasuries.
Several investments in the energy sector paid off handsomely as we identified
bonds with favorable risk/reward characteristics.
Quick recognition of increased market risk and a contrarian instinct allowed us
to upgrade the average credit quality of the Fund early.
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Managers
6 Fund Performance
12 Financial
Statements
47 Independent
Auditors' Report
50 Federal
Income Tax
Information
51 Officers and
Trustees
Average Annual
Total Returns*
For the 1-Year Period
Ended 9/30/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
3.42% -1.49%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
2.54% -2.11%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
2.52% 1.59%
* See Notes on page 10 for further details.
<PAGE>
PRESIDENT'S LETTER
[photo]
James C. Swain
Chairman
Oppenheimer
Champion Income
Fund
Bridget A. Macaskill
President
Oppenheimer
Champion Income
Fund
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace
of global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has
prompted the Treasury to buy back many of its long-term securities. The
resulting supply shortage boosted these securities' returns, causing an
inversion of the yield curve--an unusual situation in which shorter term
Treasuries yield more than their longer term counterparts. Other bond sectors
are offering many opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in
the stock market. Formerly high-flying Internet stocks have generally come down
to earth, and investors have
1 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
PRESIDENT'S LETTER
begun to refocus on companies with strong business fundamentals and justifiable
valuations. Investors have also returned to long-neglected, value-oriented
companies.
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor and
to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/s/James C. Swain /s/Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
October 20, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of the securities markets or any
particular fund. Specific discussion, as it applies to your Fund, is contained
in the pages that follow. Stocks and bonds have different types of investment
risks; stocks are subject to market volatility and bonds are subject to credit
and interest rate risks.
2 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
AN INTERVIEW WITH YOU FUND'S MANAGERS
[photo]
Portfolio Management
Team (l to r)
David Negri
Thomas Reedy
Q How did Oppenheimer Champion Income Fund perform during the 12 months that
ended September 30, 2000?
A. We are generally pleased with the Fund's performance during what was again a
challenging period for high yield bonds. Our ability to carefully balance the
risks of our asset class with its potential rewards allowed the Fund's Class A
shares to finish within the top quartile of the high current yield funds
category for the 1-, 3- and 5-year periods, ended September 30, 2000, as tracked
by Lipper Analytical Services.(1)
What were some of the specific challenges faced by the high yield market during
the period?
The Federal Reserve's efforts to slow the economy through a series of interest
rate increases had a dampening effect on the performance of virtually all fixed
income securities, and high yield bonds were no exception. In addition, the
Treasury Department's campaign to reduce the national debt by repurchasing
30-year bonds skewed demand toward government bonds--particularly at the long
end of the maturity spectrum--often at the expense of other areas of the bond
market.
At the same time, equity markets witnessed a marked increase in volatility
during the fiscal year. However, we did not see a corresponding rise in risk
aversion that would ordinarily cause investors to add fixed income assets to
their portfolios. One reason may be that, as investors continued to view
equities as the more attractive opportunity, demand for fixed income sec-urities
in general and high yield bonds in particular was muted.
One of the most notable developments during the period was an increase in
default rates among high yield issuers. Simultaneously, recovery rates, or the
amount of capital that
1. Source of data: Lipper Analytical Services, Inc., 9/30/00. Lipper rankings
are based on the comparisons between changes in net asset value without
considering sales charges, with dividends and capital gains distributions
reinvested. The Fund's Class A shares were ranked 80 of 350 (1-year), 33 of 209
(3-year), 21 of 126 (5-year) and 15 of 53 (10-year) among high current yield
funds for the periods ended 9/30/00.
3 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
AN INTERVIEW WITH YOU FUND'S MANAGERS
bondholders ultimately recover in the event of a default, declined. These two
trends caused the price of high yield bonds to fall and spreads, or differences
in yields versus U.S. Treasuries, to widen, placing further pressure on an
already unsettled market.
What tactics did you employ to overcome these difficulties?
Within certain high growth industries, such as telecommunications, media and
technology, we responded to a dramatic increase in risk by focusing on higher
quality companies that are further along in their life cycle. We employed this
tactic because banks, as well as stock and bond investors, were becoming far
more selective in funding early stage companies. Owing at least in part to our
contrarian instincts, we were early in upgrading our portfolio--a strategy that
worked to our advantage and was partially responsible for our strong
performance.
What industries and sectors contributed most to the Fund's performance?
Emerging market bonds registered double-digit gains during the year as
developing economies continued to recover from the global financial crisis of
1998. Several sizable investments in the energy sector, where the risk of
default was adequately offset by high quality collateral, also aided
performance.
Meanwhile, our relative underweighting in healthcare, particularly
companies exposed to the political "hot button" of government reimbursement,
continued to work to our advantage. Elsewhere, our early recognition of
increased risks borne by theater operators allowed us to escape much of the
damage that occurred in the entertainment sector during the year.
What is your outlook for the coming year?
We remain upbeat about the bond market's prospects, primarily because the
Federal Reserve's efforts to engineer a soft landing for the U.S. economy appear
to have been successful. This is
Average
Annual Total Returns
For the Periods Ended 9/30/00(2)
Class A
1-Year 5-Year 10-Year
--------------------------------
-1.49% 6.28% 10.66%
Class B Since
1-Year 5-Year Inception
--------------------------------
-2.11% N/A 6.18%
Class C Since
1-Year 5-Year Inception
--------------------------------
1.59% 6.49% 6.23%
--------------------------------
Standardized Yields(3)
For the 30 Days Ended 9/30/00
--------------------------------
Class A 11.02%
--------------------------------
Class B 10.79
--------------------------------
Class C 10.78
2. See page 10 for further details.
3. Standardized yield is based on net investment income for the 30-day period
ended September 30, 2000. Falling share prices will tend to artificially raise
yields.
4 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
particularly true in interest rate sensitive sectors such as construction,
manufacturing and housing. Meanwhile, continued productivity gains have worked
to offset rising commodity prices and stave off inflation. The combination of
these forces has created exactly the kind of moderate growth, low inflation
environment in which high yield markets often thrive.
At the same time, a widening of yield spreads suggests that the market
believes the default rate will continue to rise--a pros-pect seemingly at odds
with the widely held belief that the economy will achieve sustainable growth of
3 to 5% per year for the near future. Still, we believe this is a fundamentally
sound backdrop offering a number of attractive individual opportunities. This is
particularly true of the lower quality tiers of the high yield market, which we
currently believe offer the best risk/reward tradeoff.
However, in any environment, we remain committed to combining rigorous
fundamental research with detailed, "big picture" economic analysis. That's the
approach that has allowed us to perform well during periods of substantial
market volatility. It's also the approach that makes Oppenheimer Champion Income
Fund part of The Right Way to Invest.
Top Five Holdings By Issuer(5)
------------------------------------------------------------
NTL, Inc. 2.4%
------------------------------------------------------------
VoiceStream Wireless Corp. 2.2
------------------------------------------------------------
Bear Stearns Cos., Inc. 2.0
------------------------------------------------------------
Nextel Communications, Inc. 1.8
------------------------------------------------------------
R&B Falcon Corp. 1.8
Credit Allocation(4)
[pie chart]
o AA 0.2%
o A 2.4
o BBB 2.0
o BB 13.9
o B 65.0
o CCC 7.9
o CC 0.7
o C 1.1
o Other
Securities 6.8
4. Portfolio data is subject to change. Percentages are as of September 30,
2000, and are dollar-weighted based on total market value of investments.
Securities rated by any rating organization are included in the equivalent
Standard & Poor's rating category. Average credit quality and allocation include
rated securities and those not rated by a national rating organization
(currently 6.95% of total investments) but for which the ratings given above
have been assigned by the Manager for internal purposes as being comparable, in
the Manager's judgment, to securities rated by a rating agency in the same
category.
5. Portfolio is subject to change. Percentages are as of September 30, 2000, and
are based on total market value of investments.
5 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
FUND PERFORMANCE
How has the Fund Performed?
Below is a discussion by OppenheimerFunds, Inc. of the Fund's performance during
its fiscal year ended September 30, 2000, followed by a graphical comparison of
the Fund's performance to an appropriate broad-based market index and a narrower
market index.
Management's discussion of performance. During the fiscal year that ended
September 30, 2000, Oppenheimer Champion Income Fund performed relatively well,
delivering a total return that was on par with the overall market. An
acceleration of global growth, led by strong expansion in the United States and
a recovery in emerging markets, prompted the Federal Reserve to raise interest
rates on five separate occasions. This put a dam-per on financial markets in
general and bonds in particular. A dramatic rise in default rates, coupled with
investors' reluctance to fund early stage businesses, caused high yield bonds in
several fast growing sectors to languish. We recognized the trend early and
successfully upgraded the credit quality of the telecommunications, media and
technology portions of the portfolio, while repositioning the remainder of the
Fund in lower quality securities with attractive return potential. The Fund's
portfolio holdings, allocations and strategies are subject to change.
Comparing the Fund's performance to the market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each Class of shares of the
Fund held until September 30, 2000. In the case of Class A shares, performance
is measured over a 10-year period. In the case of Class B shares, performance is
measured from inception of the Class on October 2, 1995. In the case of Class C
shares, perfor-mance is measured from inception of the Class on December 1,
1993. The Fund's performance reflects the deduction of the maximum initial sales
charge on Class A shares, the applicable contingent deferred sales charge on
Class B and Class C shares, and reinvestments of all dividends and capital gains
distributions.
6 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
The Fund's performance is compared to the performance of Lehman Brothers
Corporate Bond Index and the Merrill Lynch High Yield Master Index. The Lehman
Brothers Corporate Bond Index is an unmanaged index of publicly issued
nonconvertible investment-grade corporate debt of U.S. issuers, widely
recognized as a measure of the U.S. fixed rate corporate bond market. The
Merrill Lynch High Yield Master Index is an index of below investment grade
(ratings are generally comparable to below BBB of S&P) U.S. corporate issuers.
It is widely recognized as a measure of the U.S. corporate high yield bond
market.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the securities in
the indices.
7 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
FUND PERFORMANCE
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Champion Lehman Brothers Merrill Lynch
Income Fund (Class A) Corporate Bond Index High Yield Master Index
<S> <C> <C> <C>
09/30/90 9525 10000 10000
12/31/90 9559 10396 9970
03/31/91 10641 10840 11328
06/30/91 11306 11054 12026
09/30/91 11965 11703 12733
12/31/91 12506 12320 13417
03/31/92 13409 12230 14429
06/30/92 13832 12762 14950
09/30/92 14349 13408 15631
12/31/92 14566 13391 15853
03/31/93 15694 14066 16838
06/30/93 16473 14536 17510
09/30/93 16635 15041 17955
12/31/93 17537 15019 18578
03/31/94 17347 14490 18234
06/30/94 17438 14262 18023
09/30/94 17569 14366 18269
12/31/94 17516 14428 18361
03/31/95 18089 15283 19469
06/30/95 18872 16420 20704
09/30/95 19342 16807 21309
12/31/95 20089 17638 22017
03/31/96 20683 17182 22338
06/30/96 21049 17259 22644
09/30/96 21911 17605 23528
12/31/96 22781 18217 24453
03/31/97 22806 18034 24709
06/30/97 23889 18777 25882
09/30/97 24969 19512 26895
12/31/97 25495 20081 27589
03/31/98 26608 20388 28358
06/30/98 26562 20914 28833
09/30/98 24847 21672 27802
12/31/98 25606 21803 28600
03/31/99 26738 21648 28909
06/30/99 26917 21309 29103
09/30/99 26623 21369 28739
12/31/99 27290 21377 29050
03/31/00 26996 21682 28526
06/30/00 27417 21949 28705
09/30/00 27533 22623 29093
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 9/30/00(1)
1-Year -1.49% 5-Year 6.28% 10-Year 10.66%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Champion Lehman Brothers Merrill Lynch
Income Fund (Class B) Corporate Bond Index High Yield Master Index
<S> <C> <C> <C>
10/02/95 10000 10000 10000
12/31/95 10353 10494 10332
03/31/96 10634 10223 10483
06/30/96 10800 10269 10627
09/30/96 11220 10475 11041
12/31/96 11643 10839 11476
03/31/97 11634 10730 11596
06/30/97 12164 11172 12146
09/30/97 12690 11609 12622
12/31/97 12930 11948 12947
03/31/98 13470 12130 13308
06/30/98 13424 12443 13531
09/30/98 12532 12894 13047
12/31/98 12890 12972 13422
03/31/99 13436 12880 13567
06/30/99 13500 12679 13658
09/30/99 13329 12714 13487
12/31/99 13626 12719 13633
03/31/00 13464 12900 13387
06/30/00 13636 13059 13471
09/30/00 13491 13460 13653
</TABLE>
Average Annual Total Return of Class B Shares of the Fund at 9/30/00(1)
1-Year -2.11% Life 6.18%
1. See page 10 for further details.
8 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Champion Lehman Brothers Merrill Lynch
Income Fund (Class C) Corporate Bond Index High Yield Master Index
<S> <C> <C> <C>
12/01/93 10000 10000 10000
12/31/93 10210 10058 10100
03/31/94 10024 9704 9913
06/30/94 10057 9552 9798
09/30/94 10111 9622 9932
12/31/94 10053 9663 9982
03/31/95 10362 10235 10585
06/30/95 10790 10997 11256
09/30/95 11038 11256 11585
12/31/95 11443 11813 11970
03/31/96 11750 11507 12144
06/30/96 11945 11559 12311
09/30/96 12411 11791 12791
12/31/96 12880 12200 13294
03/31/97 12870 12078 13434
06/30/97 13457 12575 14071
09/30/97 14039 13068 14622
12/31/97 14312 13449 14999
03/31/98 14900 13654 15417
06/30/98 14850 14007 15676
09/30/98 13864 14514 15115
12/31/98 14259 14602 15549
03/31/99 14863 14498 15717
06/30/99 14934 14271 15822
09/30/99 14744 14312 15625
12/31/99 15072 14317 15793
03/31/00 14893 14521 15509
06/30/00 15084 14700 15606
09/30/00 15115 15151 15817
</TABLE>
Average Annual Total Return of Class C Shares of the Fund at 9/30/00(1)
1-Year 1.59% 5-Year 6.49% Life 6.23%
The performance information for both indices in the graphs begins on 9/30/90 for
Class A, on 9/30/95 for Class B and on 11/30/93 for Class C.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
9 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
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. The Fund's
performance may from time to time be subject to substantial short-term changes,
particularly during periods of market or interest rate volatility. For 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 and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns 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.
10 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Financials
11 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS September 30, 2000
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
=====================================================================================================================
<S> <C> <C>
Asset-Backed Securities--0.1%
NC Finance Trust, Collateralized Mtg. Obligations,
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 $1,604,664 $ 1,496,350
---------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Commercial Mtg. Pass-Through Certificates,
Series 1998-1A, 5%, 11/25/27(1) 133,345 127,553
-----------
Total Asset-Backed Securities (Cost $1,725,635) 1,623,903
=====================================================================================================================
Corporate Loans--0.3%
Telergy, Inc., Sr. Sec. Credit Facilities Term Loan,
Tranche A, 6.66%, 12/22/01(1,2) (Cost $3,921,060) 4,000,000 4,000,000
=====================================================================================================================
Mortgage-Backed Obligations--1.6%
AMRESCO Commercial Mortgage Funding I Corp.,
Multiclass Mtg. Pass-Through Certificates,
Series 1997-C1, Cl. H, 7%, 6/17/29(1) 360,000 272,405
---------------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg
Pass-Through Certificates:
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(2) 1,500,000 1,008,398
Series 1997-D5, Cl. B2, 6.93%, 2/14/41 3,800,000 1,815,391
---------------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 6.72%, 12/25/03(1,2) 622,000 573,212
---------------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg
Pass-Through Certificates, Series 1997, Cl. E, 8.104%, 2/25/11(1,2) 4,000,000 2,900,000
---------------------------------------------------------------------------------------------------------------------
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 2,637,125
---------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Commercial Mortgage Securities, Inc.,
Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 6.75%, 4/16/29 2,000,000 1,202,500
---------------------------------------------------------------------------------------------------------------------
Goldman Sachs Asset Management, Sub. Collateralized
Bond Obligations, Series 1A, Cl. D, 12.54%, 6/13/11(1) 2,000,000 1,920,000
---------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates:
Series 1997-RR, Cl. D, 7.771%, 4/30/39(1,2) 2,000,107 1,530,707
Series 1997-RR, Cl. F, 7.771%, 4/30/39(1,2) 5,000,269 2,929,845
Series 1997-XL1, Cl. G, 7.695%, 10/3/30(1,2) 1,200,000 1,016,250
---------------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(1,2) 600,000 501,375
---------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 409,830 404,132
Series 1995-C1, Cl. F, 6.90%, 2/25/27 146,968 135,820
---------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Commercial
Mtg. Pass-Through Certificates, Series 1996-C1, Cl. E, 8.875%, 1/20/28(2) 704,000 649,000
---------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through Certificates,
Series 1999-1, 10%, 8/25/28 3,455,770 3,127,473
-----------
Total Mortgage-Backed Obligations (Cost $27,597,009) 22,623,633
12 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
========================================================================================================================
Foreign Government Obligations--0.1%
Panama (Republic of) Past Due Interest Debs., 7.75%, 7/17/16(2) $ 2,309,403 $ 1,841,749
------------------------------------------------------------------------------------------------------------------------
Perusahaan Listr Nts., 17%, 8/21/01 [IDR] 1,000,000,000 114,672
------------------------------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts.,
Zero Coupon, 3/17/19991,3,4 [IDR] 1,000,000,000 31,339
-----------
Total Foreign Government Obligations (Cost $2,528,919) 1,987,760
========================================================================================================================
Loan Participations--1.1%
Bank Rakyat Loan Participation Nts.:
Series 3 yr., 10.094%, 8/25/01(1,2) 2,000,000 1,850,000
Series 4 yr., 10.344%, 8/25/02(1,2) 500,000 429,375
------------------------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 8.461%, 4/28/02
(representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(1,2) 16,600,000 13,188,593
-----------
Total Loan Participations (Cost $18,902,929) 15,467,968
========================================================================================================================
Corporate Bonds and Notes--83.5%
------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--1.2%
BE Aerospace, Inc., 9.50% Sr. Unsec. Sub. Nts., 11/1/08 4,000,000 3,960,000
------------------------------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable
Asset-Backed Nts., Series 1997-1, 1/1/01(1) 3,500,000 3,360,000
------------------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts.,
Series B, 9/30/08 3,450,000 3,225,750
------------------------------------------------------------------------------------------------------------------------
Fairchild Corp., 10.75% Sr. Unsec. Sub. Nts., 4/15/09 5,750,000 4,686,250
------------------------------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust Sr. Nts.,
Series 1997-A, Cl. B, 11.76%, 6/15/04(1) 1,524,512 1,561,101
------------------------------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07(1) 1,000,000 980,000
-----------
17,773,101
------------------------------------------------------------------------------------------------------------------------
Air Transportation--0.4%
Amtran, Inc., 10.50% Sr. Nts., 8/1/04 5,400,000 5,049,000
------------------------------------------------------------------------------------------------------------------------
Chemicals--3.4%
Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 4,000,000 3,960,000
------------------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 2,000,000 520,000
------------------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp., 10.375% Sr. Unsec. Sub. Nts., 11/1/07 2,400,000 2,424,000
------------------------------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc:
10.125% Sr. Unsec. Sub. Nts., 7/1/09 3,000,000 2,958,750
10.125% Sr. Unsec. Sub. Nts., 7/1/09 [EUR] 4,000,000 3,539,884
Zero Coupon Sr. Unsec. Disc. Nts., 13.09%, 12/31/09(5) 10,000,000 3,250,000
------------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.625% Sr. Sec. Nts., Series A, 5/1/07 3,700,000 3,621,375
9.875% Sec. Nts., Series B, 5/1/07 4,575,000 4,477,781
10.875% Sr. Sub. Nts., 5/1/09 2,350,000 2,282,437
13 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------------------
Chemicals Continued
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 $ 8,000,000 $ 8,120,000
------------------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07(1) 50,000 25,000
------------------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 4,000,000 2,140,000
------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 7/1/07 2,400,000 1,860,000
------------------------------------------------------------------------------------------------------------------
Royster-Clark, Inc., 10.25% First Mtg. Nts., 4/1/09 2,500,000 1,937,500
------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.75% Sr. Unsec. Sub. Nts., 8/15/06 6,000,000 4,230,000
12.375% Sr. Sec. Nts., Series B, 7/15/06 2,700,000 2,740,500
-----------
48,087,227
------------------------------------------------------------------------------------------------------------------
Computer Services--0.0%
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05(1) 802,000 549,370
------------------------------------------------------------------------------------------------------------------
Consumer Durables--0.5%
Boyds Collection Ltd. (The), 9% Sr. Unsec. Sub. Nts., Series B, 5/15/08 2,288,000 2,196,480
------------------------------------------------------------------------------------------------------------------
Holmes Products Corp.:
9.875% Sr. Sub. Nts., Series C, 11/15/07 1,000,000 595,000
9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07 2,575,000 1,532,125
------------------------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08 2,200,000 671,000
------------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(1) 1,865,000 1,989,776
-----------
6,984,381
------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--1.3%
AKI Holdings Corp., 0%/13.50% Sr. Disc. Debs., 7/1/09(1,6) 1,350,000 546,750
------------------------------------------------------------------------------------------------------------------
AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 2,800,000 2,240,000
------------------------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 8/15/08 4,400,000 4,466,000
------------------------------------------------------------------------------------------------------------------
Fruit of the Loom, Inc., 8.875% Sr. Unsec. Nts., 4/15/06(1,3) 3,500,000 367,500
------------------------------------------------------------------------------------------------------------------
Globe Manufacturing Corp., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/08(1,3) 4,300,000 451,500
------------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 9% Sr. Nts., 11/1/06 5,800,000 4,234,000
------------------------------------------------------------------------------------------------------------------
Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 6,000,000 5,910,000
------------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08(3) 2,815,000 239,275
-----------
18,455,025
------------------------------------------------------------------------------------------------------------------
Energy--5.1%
Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 2,000,000 1,725,000
------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06 3,330,000 3,255,075
9.625% Sr. Unsec. Nts., Series B, 5/1/05 5,000,000 4,987,500
------------------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 6,000,000 4,230,000
------------------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 1,250,000 1,156,250
------------------------------------------------------------------------------------------------------------------
Empresa Electrica del Norte Grande SA, 10.50% Sr. Debs., 6/15/05(1) 3,800,000 959,500
------------------------------------------------------------------------------------------------------------------
Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 5,500,000 5,610,000
------------------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05 10,000,000 10,525,000
------------------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08 1,985,000 1,220,775
14 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------------------------
Energy Continued
Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp.,
10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09 $ 2,150,000 $ 2,279,000
------------------------------------------------------------------------------------------------------------------------
Nuevo Energy Co., 9.375% Sr. Sub. Nts., 10/1/10(7) 2,800,000 2,796,500
------------------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 3,650,000 3,303,250
------------------------------------------------------------------------------------------------------------------------
Parker Drilling Co., 9.75% Sr. Unsec. Nts., Series D, 11/15/06 1,500,000 1,503,750
------------------------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 1,330,000 1,288,437
------------------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 12.25% Sr. Unsec. Nts., 3/15/06 5,750,000 6,648,437
------------------------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 8,720,000 6,627,200
------------------------------------------------------------------------------------------------------------------------
RBF Finance Co.:
11% Sr. Sec. Nts., 3/15/06 5,000,000 5,750,000
11.375% Sr. Sec. Nts., 3/15/09 2,000,000 2,312,500
------------------------------------------------------------------------------------------------------------------------
Statia Terminals International NV/Statia Terminals (Canada), Inc.,
11.75% First Mtg. Nts., Series B, 11/15/03 1,050,000 1,061,812
------------------------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 2,905,000 2,846,900
------------------------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc., 0%/9.875% Sr. Disc. Nts., 2/15/08(6) 2,350,000 1,827,125
-----------
71,914,011
------------------------------------------------------------------------------------------------------------------------
Financial--1.1%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 4,000,000 1,780,000
------------------------------------------------------------------------------------------------------------------------
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)(7,8) 1,377,777 1,649,889
------------------------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 578,000 476,850
------------------------------------------------------------------------------------------------------------------------
LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07 2,500,000 2,687,500
------------------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03
(Litigation Certificates)(1,3,4) 600,000 --
------------------------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 11.341% Nts., 11/19/07(2,7) 600,000 613,500
------------------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 24% Nts., 6/19/03(3,4) [IDR] 6,314,400,000 93,547
------------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts.,
Series B, 4/1/08 8,800,000 7,590,000
------------------------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28 1,700,000 854,250
-----------
15,745,536
------------------------------------------------------------------------------------------------------------------------
Food & Drug--0.7%
Family Restaurants, Inc.:
9.75% Sr. Nts., 2/1/02 6,690,000 1,438,350
10.875% Sr. Sub. Disc. Nts., 2/1/04 400,000 74,000
------------------------------------------------------------------------------------------------------------------------
Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 5,000,000 4,025,000
------------------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,552,000
------------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(3,4) 1,000,000 45,000
11.625% Sub. Nts., 6/15/02(3,4) 2,000,000 490,000
12.625% Sub. Nts., 6/15/023 5,210,000 1,276,450
------------------------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 1,260,000 1,328,197
-----------
10,228,997
15 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Food/Tobacco--2.0%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 $3,000,000 $ 2,310,000
---------------------------------------------------------------------------------------------------------------------
Canandaigua Brands, Inc., 8.50% Sr. Unsec. Sub. Nts., 3/1/09 1,500,000 1,473,750
---------------------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 3,885,000 3,797,587
---------------------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., Series B, 12/15/07(6) 2,251,000 1,733,270
---------------------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 4,655,000 5,004,125
---------------------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 8,065,000 7,056,875
---------------------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 4,025,000 3,159,625
---------------------------------------------------------------------------------------------------------------------
Triarc Consumer Products Group LLC/Triac Beverage
Holdings Corp., 10.25% Sr. Sub. Nts., 2/15/09 3,250,000 3,631,875
-----------
28,167,107
---------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--1.9%
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05(1,3,4) 1,500,000 121,875
---------------------------------------------------------------------------------------------------------------------
Ball Corp.:
7.75% Sr. Unsec. Nts., 8/1/06 1,500,000 1,466,250
8.25% Sr. Unsec. Sub. Nts., 8/1/08 2,100,000 2,044,875
---------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr. Unsec. Nts., Series B, 6/15/07 1,500,000 1,027,500
---------------------------------------------------------------------------------------------------------------------
Packaging Corp. of America, 9.625% Sr. Unsec. Sub. Nts., 4/1/09 1,750,000 1,780,625
---------------------------------------------------------------------------------------------------------------------
Repap New Brunswick, Inc.:
9% First Priority Sr. Sec. Nts., 6/1/04 1,100,000 1,141,250
10.625% Second Priority Sr. Sec. Nts., 4/15/05 4,000,000 4,140,000
---------------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 4,550,000 4,578,437
---------------------------------------------------------------------------------------------------------------------
SD Warren Co., 14% Unsec. Nts., 12/15/06(9) 5,946,703 6,556,240
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06(1) 800,000 852,000
---------------------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 4,085,000 3,696,925
-----------
27,405,977
---------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--5.0%
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995(1,3,4) 7,500 --
---------------------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 2,100,000 1,984,500
---------------------------------------------------------------------------------------------------------------------
Coast Hotel & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/09 1,750,000 1,736,875
---------------------------------------------------------------------------------------------------------------------
Florida Panthers Holdings, Inc., 9.875% Sr. Sub. Nts., 4/15/09 4,000,000 3,880,000
---------------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.45% Sr. Nts., Series C, 12/1/08 5,000,000 4,775,000
---------------------------------------------------------------------------------------------------------------------
Hollywood Casino Corp., 11.25% Sr. Sec. Nts., 5/1/07 3,600,000 3,753,000
---------------------------------------------------------------------------------------------------------------------
Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 3,500,000 3,631,250
---------------------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC:
9.375% Sr. Sub. Nts., 6/15/07 5,895,000 5,909,737
9.375% Sr. Sub. Nts., 6/15/07 3,000,000 2,955,000
---------------------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 6,995,000 7,029,975
---------------------------------------------------------------------------------------------------------------------
Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 3,725,000 3,594,625
---------------------------------------------------------------------------------------------------------------------
Mandalay Resort Group, 10.25% Sr. Sub. Nts., 8/1/07(7) 8,000,000 8,290,000
16 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
-------------------------------------------------------------------------------------------------------------------
Gaming/Leisure Continued
Meristar Hospitality Corp., 8.75% Sr. Unsec. Sub. Nts., 8/15/07 $ 2,000,000 $ 1,885,000
-------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 8.75% Sr. Unsec. Sub. Nts., 1/1/09 4,800,000 4,776,000
-------------------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08(1,3,4) 3,900,000 --
-------------------------------------------------------------------------------------------------------------------
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(6) 1,970,000 1,324,825
9.25% Sr. Nts., 4/1/06 1,595,000 1,495,312
9.75% Sr. Nts., 6/15/07 3,750,000 3,525,000
-------------------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06 1,900,000 1,795,500
-------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
9.75% Sr. Sub. Nts., 4/15/07 3,400,000 3,408,500
9.875% Sr. Sub. Nts., 7/1/10(7) 1,700,000 1,712,750
10.125% Sr. Sub. Nts., 3/15/06 3,000,000 3,015,000
-----------
70,477,849
-------------------------------------------------------------------------------------------------------------------
Healthcare--2.3%
Charles River Laboratories, Inc., 13.50% Sr. Sub. Nts., Series B, 10/1/09 2,925,000 3,319,875
-------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08(1) 4,350,000 4,121,625
-------------------------------------------------------------------------------------------------------------------
ICN Pharmaceutical, Inc.:
8.75% Sr. Nts., 11/15/08(7) 3,000,000 3,007,500
9.75% Sr. Nts., 11/15/08(7) 3,345,000 3,353,362
-------------------------------------------------------------------------------------------------------------------
King Pharmaceuticals, Inc., 10.75% Sr. Unsec. Sub. Nts., 2/15/09 4,500,000 4,770,000
-------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 9% Sr. Sub. Nts., 2/15/08 6,250,000 4,187,500
-------------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Unsec. Nts., 5/15/05 1,750,000 1,846,250
-------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.:
8.125% Sr. Unsec. Sub. Nts., Series B, 12/1/08 1,000,000 962,500
8.625% Sr. Sub. Nts., 1/15/07 2,500,000 2,487,500
9.25% Sr. Nts., 9/1/10(7) 2,000,000 2,100,000
-------------------------------------------------------------------------------------------------------------------
Unilab Finance Corp., 12.75% Sr. Sub. Nts., 10/1/09 2,000,000 2,170,000
-----------
32,326,112
-------------------------------------------------------------------------------------------------------------------
Housing--1.8%
Building Materials Corp. of America, 8.625% Sr. Nts.,
Series B, 12/15/06 3,100,000 2,061,500
-------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
8% Sr. Nts., 2/1/09 3,500,000 3,228,750
9.75% Sr. Sub. Nts., 9/15/10 3,800,000 3,705,000
-------------------------------------------------------------------------------------------------------------------
Del Webb Corp., 10.25% Sr. Unsec. Sub. Nts., 2/15/10 2,000,000 1,900,000
-------------------------------------------------------------------------------------------------------------------
Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09 3,000,000 1,515,000
Nortek, Inc.:
9.125% Sr. Unsec. Nts., Series B, 9/1/07 5,840,000 5,548,000
9.25% Sr. Nts., Series B, 3/15/07 4,070,000 3,876,675
-------------------------------------------------------------------------------------------------------------------
Tenneco, Inc., 11.625% Sr. Unsec. Sub. Nts., Series B, 10/15/09 6,200,000 3,999,000
-----------
25,833,925
17 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Information Technology--4.0%
Amkor Technologies, Inc.:
9.25% Sr. Unsec. Nts., 5/1/06 $ 6,000,000 $ 5,985,000
10.50% Sr. Unsec. Sub. Nts., 5/1/09 5,000,000 5,093,750
---------------------------------------------------------------------------------------------------------------------
Cherokee International LLC, 10.50% Sr. Unsec. Sub. Nts., Series B, 5/1/09 5,000,000 4,625,000
---------------------------------------------------------------------------------------------------------------------
Chippac International Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09 2,750,000 2,928,750
---------------------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 1,925,000 1,896,125
---------------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,150,000 1,663,562
---------------------------------------------------------------------------------------------------------------------
EchoStar Broadband Corp., 10.375% Sr. Nts., 10/1/07(7) 21,000,000 21,000,000
---------------------------------------------------------------------------------------------------------------------
Fairchild Semiconductor International, Inc.,
10.375% Sr. Unsec. Nts., 10/1/07 5,275,000 5,360,719
---------------------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Unsec. Sub. Nts., 2/1/08 4,190,000 3,886,225
9% Sr. Unsec. Sub. Nts., 2/1/08 910,000 844,025
---------------------------------------------------------------------------------------------------------------------
Flextronics International Ltd., 9.875% Sr. Sub. Nts., 7/1/10(7) 3,750,000 3,871,875
-----------
57,155,031
---------------------------------------------------------------------------------------------------------------------
Manufacturing--2.4%
Actuant Corp., 13% Sr. Sub. Nts., 5/1/09(7) 4,200,000 4,294,500
---------------------------------------------------------------------------------------------------------------------
Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 4,500,000 4,612,500
---------------------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 1,125,000 376,875
---------------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 1,500,000 1,237,500
---------------------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 7,243,000 887,267
---------------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 2,000,000 1,520,000
---------------------------------------------------------------------------------------------------------------------
Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 6,500,000 6,459,375
---------------------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 3,720,000 3,757,200
---------------------------------------------------------------------------------------------------------------------
Jordan Industries, Inc., 10.375% Sr. Unsec. Nts., Series D, 8/1/07 3,000,000 2,835,000
---------------------------------------------------------------------------------------------------------------------
Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts., 7/1/08 1,000,000 260,000
---------------------------------------------------------------------------------------------------------------------
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07 2,100,000 1,879,500
---------------------------------------------------------------------------------------------------------------------
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 2,000,000 1,830,000
---------------------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(1) 1,075,000 1,015,875
-----------
34,079,792
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--1.5%
Allbritton Communications Co., 8.875% Sr. Sub. Nts., Series B, 2/1/08 1,000,000 940,000
---------------------------------------------------------------------------------------------------------------------
AMFM Operating, Inc., 12.625% Sr. Sub. Debs., Series E, 10/31/06(9) 463,800 524,094
---------------------------------------------------------------------------------------------------------------------
Citadel Broadcasting Co., 9.25% Sr. Unsec. Sub. Nts., 11/15/08 1,500,000 1,500,000
---------------------------------------------------------------------------------------------------------------------
Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 7/1/08 2,400,000 2,052,000
---------------------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Unsec. Sub. Nts.,
Series B, 3/15/09 5,000,000 4,775,000
---------------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 2,500,000 2,562,500
18 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting Continued
Radio One, Inc., 12% Sr. Sub. Nts., Series B, 5/15/04(2) $ 1,000,000 $ 1,055,000
---------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 9% Sr. Unsec. Sub. Nts., 7/15/07 1,000,000 950,000
---------------------------------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., 9.625% Sr. Sub. Nts., 11/1/09 5,000,000 4,987,500
---------------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 2,650,000 2,517,500
------------
21,863,594
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--7.2%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 1,640,000 1,379,650
8.125% Sr. Nts., Series B, 7/15/03 6,000,000 5,610,000
9.375% Sr. Nts., 11/15/09 2,800,000 2,551,500
10.875% Unsec. Sr. Nts., 10/1/10 2,500,000 2,462,500
---------------------------------------------------------------------------------------------------------------------
Charter Communications Holdings LLC/Charter
Communications Holdings Capital Corp.:
0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(6) 13,000,000 7,637,500
8.25% Sr. Unsec. Nts., 4/1/07 2,000,000 1,822,500
8.625% Sr. Unsec. Nts., 4/1/09 1,750,000 1,579,375
---------------------------------------------------------------------------------------------------------------------
Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10 2,500,000 2,150,000
---------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 1,000,000 1,027,500
---------------------------------------------------------------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts., 2/15/07(6) 1,800,000 1,359,000
---------------------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(1) 800,000 732,000
---------------------------------------------------------------------------------------------------------------------
Diva Systems Corp., 0%/12.625% Sr. Disc. Nts., Series B, 3/1/08(6) 2,000,000 910,000
---------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 12,200,000 12,017,000
---------------------------------------------------------------------------------------------------------------------
EchoStar I Bonds, 8.25%, 2/26/01(1) 208,369 208,370
---------------------------------------------------------------------------------------------------------------------
EchoStar II Sinking Fund Bonds, 8.25%, 11/9/01(1) 440,796 440,796
---------------------------------------------------------------------------------------------------------------------
Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09 2,000,000 2,025,000
---------------------------------------------------------------------------------------------------------------------
NTL Communications Corp.:
0%/12.375% Sr. Unsec. Nts., Series B, 10/1/08(6) 9,000,000 5,625,000
9.875% Sr. Nts., 11/15/09(7) [EUR] 5,200,000 4,084,210
11.50% Sr. Unsec. Nts., Series B, 10/1/08 5,000,000 4,850,000
---------------------------------------------------------------------------------------------------------------------
NTL, Inc.:
0%/9.75% Sr. Nts., Series B, 4/15/09(6) [GBP] 16,125,000 12,278,019
0%/10.75% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(6) [GBP] 3,765,000 3,395,597
10% Sr. Nts., Series B, 2/15/07 2,940,000 2,704,800
---------------------------------------------------------------------------------------------------------------------
Telewest Communications plc:
0%/9.25% Sr. Disc. Nts., 4/15/09(6) 8,000,000 4,300,000
0%/9.875% Sr. Nts., 4/15/09(6,7) [GBP] 7,200,000 5,402,439
11.25% Sr. Nts., 11/1/08 4,910,000 4,787,250
---------------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(6) 5,510,000 3,801,900
---------------------------------------------------------------------------------------------------------------------
United Pan-Europe Communications NV, 10.875% Sr. Unsec. Nts.,
Series B, 8/1/09 7,900,000 6,754,500
------------
101,896,406
19 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--3.0%
Ackerley Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 1/15/09 $ 5,250,000 $ 4,974,375
---------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 9,600,000 4,464,000
---------------------------------------------------------------------------------------------------------------------
Carmike Cinemas, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 2/1/09(3,4) 7,500,000 2,100,000
---------------------------------------------------------------------------------------------------------------------
IPC Magazines Group plc:
0%/10.75% Bonds, 3/15/08(1,6) [GBP] 3,800,000 3,539,529
9.625% Bonds, 3/15/08 [GBP] 3,450,000 4,539,734
---------------------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Unsec. Sub. Nts., 12/1/08 7,350,000 7,754,250
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 3,900,000 4,114,500
---------------------------------------------------------------------------------------------------------------------
TV Guide, Inc., 8.125% Sr. Unsec. Sub. Nts., 3/1/09 2,500,000 2,534,375
---------------------------------------------------------------------------------------------------------------------
World Color Press, Inc., 7.75% Sr. Unsec. Sub. Nts., 2/15/09 1,500,000 1,400,876
---------------------------------------------------------------------------------------------------------------------
WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp.,
12.75% Sr. Sub. Nts., 11/15/09 6,500,000 5,955,625
---------------------------------------------------------------------------------------------------------------------
Ziff Davis Media, Inc., 12% Sr. Sub. Nts., 7/15/10(7) 600,000 597,000
-----------
41,974,264
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--14.3%
360networks, Inc.:
12% Sr. Unsec. Sub. Nts., 8/1/09 500,000 447,500
13% Sr. Unsec. Nts., 5/1/08 2,400,000 2,196,000
13% Sr. Unsec. Nts., 5/1/08(7) [EUR] 3,000,000 2,533,393
---------------------------------------------------------------------------------------------------------------------
Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07 5,100,000 3,442,500
---------------------------------------------------------------------------------------------------------------------
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 at $.01 per share)(7,8) 3,300,000 3,382,500
---------------------------------------------------------------------------------------------------------------------
COLT Telecom Group plc:
0%/12% Sr. Unsec. Disc. Nts., 12/15/06(6) 3,185,000 2,914,275
7.625% Bonds, 7/31/08 [DEM] 7,725,000 3,163,215
8.875% Sr. Nts., 11/30/07 [DEM] 1,880,000 827,077
10.125% Sr. Nts., 11/30/07 [GBP] 2,330,000 3,479,354
---------------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07(6) 1,350,000 1,302,750
---------------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 2,225,000 2,236,125
---------------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc., 0%/13.50% Sr. Disc. Nts., 3/15/08(6) 4,200,000 1,953,000
---------------------------------------------------------------------------------------------------------------------
Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05(6) 10,665,000 10,078,425
---------------------------------------------------------------------------------------------------------------------
Equinix, Inc., 13% Sr. Unsec. Nts., 12/1/07 5,000,000 4,018,750
---------------------------------------------------------------------------------------------------------------------
ESAT Telecom Group plc, 11.875% Sr. Unsec. Unsub. Nts., 11/1/09 [EUR] 2,000,000 2,176,422
---------------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc.:
10.75% Sr. Nts., 12/15/09(7) [EUR] 4,000,000 3,274,075
10.75% Sr. Unsec. Sub. Nts., 12/15/09 1,000,000 975,000
11.25% Sr. Nts., 7/1/08 5,255,000 5,241,863
---------------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08(6) 1,750,000 393,750
---------------------------------------------------------------------------------------------------------------------
FLAG Telecom Holdings Ltd.:
11.625% Sr. Nts., 3/30/10(1) [EUR] 1,000,000 758,950
11.625% Sr. Unsec. Nts., 3/30/10 1,000,000 860,000
---------------------------------------------------------------------------------------------------------------------
Focal Communications Corp.:
0%/12.125% Sr. Unsec. Disc. Nts., 2/15/08(6) 1,800,000 855,000
11.875% Sr. Unsec. Nts., Series B, 1/15/10 4,500,000 3,442,500
20 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications Continued
Global Crossing Holdings Ltd., 9.625% Sr. Unsec. Nts., 5/15/08 $ 6,825,000 $6,859,125
---------------------------------------------------------------------------------------------------------------------
Global Telesystems Group, Inc., 10.50% Sr. Unsec. Bonds, 12/1/06(7) [EUR] 3,150,000 1,216,195
---------------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
0%/12.25% Sr. Disc. Nts., Series B, 3/1/09(6) 7,800,000 5,265,000
8.50% Sr. Nts., Series B, 1/15/08 1,200,000 1,155,000
8.60% Sr. Unsec. Nts., Series B, 6/1/08 800,000 772,000
8.875% Sr. Nts., 11/1/07 2,690,000 2,582,400
---------------------------------------------------------------------------------------------------------------------
Jazztel plc, 13.25% Sr. Nts., 12/15/09(7) [EUR] 7,000,000 5,127,325
---------------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc.:
0%/12.50% Sr. Unsec. Disc. Nts., 2/15/08(6) 8,600,000 3,483,000
13.50% Sr. Unsec. Nts., 5/15/09 1,300,000 903,500
---------------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08(6) 10,000,000 5,950,000
9.125% Sr. Unsec. Nts., 5/1/08 2,700,000 2,349,000
11% Sr. Unsec. Nts., 3/15/08 3,000,000 2,880,000
11.25% Sr. Unsec. Nts., 3/15/10 2,500,000 2,400,000
---------------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc.:
8.125% Sr. Unsec. Nts., 2/15/09 2,800,000 2,429,000
8.375% Sr. Nts., 3/15/08 600,000 528,000
---------------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc.:
10% Sr. Nts., 12/15/09 4,750,000 4,465,000
10% Sr. Unsec. Nts., Series B, 11/15/08 6,000,000 5,640,000
---------------------------------------------------------------------------------------------------------------------
Metromedia International Group, Inc.,
0%/10.50% Sr. Unsec. Disc. Nts., 9/30/07(6) 5,349,602 2,487,565
---------------------------------------------------------------------------------------------------------------------
MGC Communications, Inc./Mpower Holding Corp.:
13% Sr. Nts., 4/1/10(7) 6,200,000 4,185,000
13% Sr. Unsec. Nts., 4/1/10 500,000 337,500
---------------------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(6) [DEM] 2,000,000 622,677
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(6) 3,570,000 2,356,200
13.125% Sr. Nts., Series B, 6/15/09 5,220,000 4,437,000
---------------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
9% Sr. Nts., 3/15/08 1,700,000 1,453,500
9.625% Sr. Nts., 10/1/07 4,773,000 4,331,498
10.75% Sr. Unsec. Nts., 11/15/08 5,700,000 5,301,000
---------------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 4,000,000 4,020,000
---------------------------------------------------------------------------------------------------------------------
NTL, Inc., 0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(6) 2,055,000 1,258,688
---------------------------------------------------------------------------------------------------------------------
OpTel, Inc., 13% Sr. Nts., Series B, 2/15/05(3) 5,000,000 3,175,000
---------------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(1,3) 4,000,000 650,000
---------------------------------------------------------------------------------------------------------------------
PSINet, Inc.:
10% Sr. Unsec. Nts., Series B, 2/15/05 500,000 327,500
10.50% Sr. Nts., 12/1/06(7) [EUR] 7,000,000 4,015,375
10.50% Sr. Unsec. Nts., 12/1/06 1,000,000 655,000
11% Sr. Nts., 8/1/09 1,000,000 655,000
---------------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.,
0%/9.47% Sr. Disc. Nts., 10/15/07(6) 2,000,000 1,752,108
---------------------------------------------------------------------------------------------------------------------
RCN Corp., 10.125% Sr. Unsec. Nts., 1/15/10 2,200,000 1,573,000
21 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications Continued
Rhythms NetConnections, Inc., 14% Sr. Unsec. Nts., Series B, 2/15/10 $ 2,000,000 $ 1,330,000
---------------------------------------------------------------------------------------------------------------------
RSL Communications plc:
10.50% Sr. Unsec. Nts., 11/5/08 4,000,000 980,000
12.875% Sr. Unsec. Nts., 3/1/10(7) 3,300,000 990,000
---------------------------------------------------------------------------------------------------------------------
Tele1 Europe BV, 11.875% Sr. Nts., 12/1/09(7) [EUR] 6,000,000 5,017,013
---------------------------------------------------------------------------------------------------------------------
Telewest Communications plc, 0%/11% Sr. Disc. Debs., 10/1/07(6) 5,525,000 5,317,813
---------------------------------------------------------------------------------------------------------------------
Telewest Finance (Jersey) Ltd., 6% Cv. Sr. Bonds, 7/7/05(7) 500,000 378,438
---------------------------------------------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 2,000,000 910,000
---------------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 3,950,000 3,614,250
---------------------------------------------------------------------------------------------------------------------
United Pan-Europe Communications NV:
0%/13.375% Sr. Unsec. Disc. Nts., Series B, 11/1/09(6) 4,800,000 2,292,000
10.875% Sr. Nts., 8/1/09 [EUR] 250,000 189,186
10.875% Sr. Unsec. Nts., Series B, 11/1/07 1,000,000 875,000
---------------------------------------------------------------------------------------------------------------------
United Pan-Europe Communications NV, 11.25% Sr. Nts., 11/1/09(7) [EUR] 3,000,000 2,300,016
---------------------------------------------------------------------------------------------------------------------
Versatel Telecom International NV:
11.25% Sr. Nts., 3/30/107 [EUR] 1,800,000 1,381,995
11.875% Sr. Nts., 7/15/09 3,200,000 2,784,000
11.875% Sr. Nts., 7/15/09 [EUR] 1,000,000 776,600
---------------------------------------------------------------------------------------------------------------------
Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 3,200,000 1,488,000
---------------------------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts., Series B, 3/1/05(6) 5,745,000 2,613,975
---------------------------------------------------------------------------------------------------------------------
Williams Communications Group, Inc., 11.70% Sr. Unsec. Nts., 8/1/08(7) 10,000,000 9,600,000
---------------------------------------------------------------------------------------------------------------------
Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10(7) 2,850,000 2,080,500
---------------------------------------------------------------------------------------------------------------------
202,469,366
---------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications--12.4%
AirGate PCS, Inc., 0%/13.50% Sr. Sub. Disc. Nts., 10/1/09(6) 2,400,000 1,458,000
---------------------------------------------------------------------------------------------------------------------
Alamosa PCS Holdings, Inc., 0%/12.875% Sr. Unsec. Disc. Nts., 2/15/10(6) 800,000 436,000
---------------------------------------------------------------------------------------------------------------------
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07 700,000 486,500
---------------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Unsec. Disc. Nts., 10/1/07(1,3,4,6) 4,749,000 356,175
---------------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 10.75% Sr. Sub. Nts., 12/15/08 3,200,000 3,144,000
---------------------------------------------------------------------------------------------------------------------
CFW Communications Co., Units (each unit consists of
$1,000 principal amount of 13% Sr. Nts., 8/15/10 and one warrant
to purchase 1.8 shares of common stock at $47.58 per share)(7,8) 4,500,000 4,207,500
---------------------------------------------------------------------------------------------------------------------
Crown Castle International Corp.:
0%/10.375% Sr. Disc. Nts., 5/15/11(6) 5,800,000 3,784,500
0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(6) 5,635,000 4,423,475
9% Sr. Nts., 5/15/11 2,700,000 2,578,500
10.75% Sr. Nts., 8/1/11 5,000,000 5,162,500
---------------------------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(6) 2,525,000 1,294,063
---------------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc., 11.25% Sr. Nts., 7/15/10(7) 10,000,000 10,075,000
---------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(3,4) 1,665,000 --
---------------------------------------------------------------------------------------------------------------------
Globix Corp., 12.50% Sr. Unsec. Nts., 2/1/10 8,300,000 5,934,500
---------------------------------------------------------------------------------------------------------------------
Horizon PCS, Inc., Units (each unit consists of $1,000 principal
amount of 0%/14% Sr. Disc. Nts., 10/1/05 and one warrant to purchase
12.9 shares of Cl. A common stock at $5.88 per share)(6,7,8) 6,700,000 3,450,500
22 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
----------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications Continued
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)(1,3,4,8) $ 1,325,000 $ 795,000
----------------------------------------------------------------------------------------------------------------------
IPCS, Inc., Units (each unit consists of $1,000 principal amount
of 0%/14% Sr. Disc. Nts., 7/15/10 and one warrant to purchase
2,971,830 shares of common stock)(6,7,8) 3,600,000 1,998,000
----------------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc., 12.50% Sr. Nts., 4/15/107 2,000,000 1,570,000
----------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 3,500,000 2,520,000
----------------------------------------------------------------------------------------------------------------------
Mail-Well I Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08(1) 3,335,000 2,918,125
----------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.:
0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(6) [CAD] 4,405,000 2,247,001
0%/12% Sr. Unsec. Disc. Nts., 6/1/09(6) 5,500,000 3,973,750
0%/14% Sr. Disc. Nts., Series B, 6/1/06(6) 3,300,000 3,184,500
----------------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(6) 2,000,000 1,730,000
----------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(6) 1,000,000 787,500
0%/9.95% Sr. Disc. Nts., 2/15/08(6) 2,950,000 2,264,125
0%/10.65% Sr. Disc. Nts., 9/15/07(6) 9,000,000 7,402,500
9.375% Sr. Unsec. Nts., 11/15/09 6,700,000 6,566,000
----------------------------------------------------------------------------------------------------------------------
Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(7) 11,900,000 13,328,000
----------------------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp.,
14% Sr. Nts., 8/15/04(1,3) 2,890,000 447,950
----------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(1,6) 3,315,000 1,143,675
----------------------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(6) 6,445,000 4,672,625
----------------------------------------------------------------------------------------------------------------------
Polska Telefoniz Cyfrowa International Financial II SA,
11.25% Sr. Sub. Nts., 12/1/09 [EUR] 2,200,000 1,892,963
----------------------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., Series B, 12/15/06 3,500,000 3,552,500
11.75% Sr. Sub. Nts., 7/15/07(1) 3,650,000 3,923,750
----------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 3,000,000 2,880,000
----------------------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(6) 10,435,000 7,774,075
----------------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc.:
0%/11.25% Sr. Unsec. Disc. Nts., 4/15/09(6) 4,500,000 2,475,000
0%/12% Sr. Disc. Nts., 7/15/08(6) 4,100,000 2,726,500
10.75% Sr. Nts., 3/15/10(7) 2,500,000 2,375,000
----------------------------------------------------------------------------------------------------------------------
Telecorp PCS, Inc.:
0%/11.625% Sr. Unsec. Sub. Disc. Nts., 4/15/09(6) 2,000,000 1,365,000
10.625% Sr. Sub. Nts., 7/15/10(7) 5,400,000 5,481,000
----------------------------------------------------------------------------------------------------------------------
Tritel PCS, Inc., 0%/12.75% Sr. Unsec. Sub. Disc. Nts., 5/15/09(6) 3,400,000 2,312,000
----------------------------------------------------------------------------------------------------------------------
Triton PCS, Inc., 0%/11% Sr. Unsec. Sub. Disc. Nts., 5/1/08(6) 2,500,000 1,887,500
----------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts.,
Series B, 11/1/09(6) 9,500,000 5,130,000
----------------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 25,236,104 27,381,173
----------------------------------------------------------------------------------------------------------------------
Williams Communications Group, Inc., 10.875% Sr. Unsec. Nts., 10/1/09 1,000,000 920,000
------------
176,416,425
23 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------------------------------------------
Metals/Minerals--2.2%
AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(7) $ 2,500,000 $ 162,500
--------------------------------------------------------------------------------------------------------------------
AK Steel Corp.:
7.875% Sr. Unsec. Nts., 2/15/09 4,000,000 3,600,000
9.125% Sr. Nts., 12/15/06 2,275,000 2,218,125
--------------------------------------------------------------------------------------------------------------------
California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09 2,800,000 2,562,000
--------------------------------------------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 2,325,000 1,476,375
--------------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 2,700,000 2,119,500
--------------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 750,000 543,750
--------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 5,500,000 5,087,500
--------------------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(6) 6,100,000 1,250,500
--------------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 5,745,000 4,624,725
--------------------------------------------------------------------------------------------------------------------
National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 4,500,000 2,677,500
--------------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 5,000,000 4,875,000
--------------------------------------------------------------------------------------------------------------------
Republic Technologies International LLC/RTI Capital Corp.,
13.75% Sr. Sec. Nts., 7/15/09 3,000,000 555,000
-----------
31,752,475
--------------------------------------------------------------------------------------------------------------------
Paper--0.8%
Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 7,200,000 4,860,000
--------------------------------------------------------------------------------------------------------------------
Repap New Brunswick, Inc., 11.50% Sr. Sec. Nts., 6/1/04 1,750,000 1,951,250
--------------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.875% Sr. Sub. Nts., 4/1/08 4,450,000 4,094,000
--------------------------------------------------------------------------------------------------------------------
10,905,250
--------------------------------------------------------------------------------------------------------------------
Retail--0.8%
Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(6) 11,000,000 5,830,000
--------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts., 5/1/08(1) 2,000,000 850,000
--------------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 3,500,000 3,202,500
--------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1,025,000 948,125
-----------
10,830,625
--------------------------------------------------------------------------------------------------------------------
Service--4.2%
Allied Waste North America, Inc.:
7.625% Sr. Nts., Series B, 1/1/06 2,700,000 2,430,000
7.875% Sr. Unsec. Nts., Series B, 1/1/09 4,000,000 3,510,000
10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 6,700,000 5,879,250
--------------------------------------------------------------------------------------------------------------------
American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts.,
Series B, 10/15/08 4,500,000 4,511,250
--------------------------------------------------------------------------------------------------------------------
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(6) 750,000 78,750
--------------------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08(1) 1,675,000 619,750
--------------------------------------------------------------------------------------------------------------------
Brand Scaffold Service, Inc., 10.25% Unsec. Sr. Nts., 2/15/08 4,000,000 3,620,000
--------------------------------------------------------------------------------------------------------------------
Coinstar, Inc., 13% Sr. Disc. Nts., 10/1/06 1,000,000 1,020,000
--------------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07(1) 1,080,000 507,600
24 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------------------------------------------
Service Continued
Integrated Electric Services, Inc., 9.375% Sr. Sub. Nts., Series B, 2/1/09 $2,400,000 $ 2,178,000
--------------------------------------------------------------------------------------------------------------------
IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 3,150,000 2,772,000
--------------------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 6,000,000 5,580,000
--------------------------------------------------------------------------------------------------------------------
Lamar Media Corp., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 3,270,000 3,364,013
--------------------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10(1) 7,500,000 5,700,000
--------------------------------------------------------------------------------------------------------------------
Protection One, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 5,000,000 3,537,500
--------------------------------------------------------------------------------------------------------------------
Stericycle, Inc., 12.375% Sr. Unsec. Sub. Nts., Series B, 11/15/09 3,300,000 3,432,000
--------------------------------------------------------------------------------------------------------------------
United Rentals, Inc.:
9% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,000,000 900,000
9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 5,750,000 5,232,500
--------------------------------------------------------------------------------------------------------------------
URS Corp., 12.25% Sr. Sub. Nts., Series B, 5/1/09 4,000,000 4,120,000
-----------
58,992,613
--------------------------------------------------------------------------------------------------------------------
Transportation--3.2%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 2,000,000 1,930,000
--------------------------------------------------------------------------------------------------------------------
Amtran, Inc., 9.625% Nts., 12/15/05(1) 1,800,000 1,656,000
--------------------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375% Sr. Unsec. Nts., 11/15/06 4,750,000 4,767,813
10.75% Sr. Nts., 8/1/05 60,000 62,400
--------------------------------------------------------------------------------------------------------------------
Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06 6,000,000 4,350,000
--------------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Sr. Unsec. Sub. Nts., 4/15/06(10) 1,250,000 1,206,250
--------------------------------------------------------------------------------------------------------------------
Dura Operating Corp.:
9% Sr. Sub. Nts., Series B, 5/1/09 5,200,000 4,472,000
9% Sr. Sub. Nts., Series B, 5/1/09 [EUR] 2,200,000 1,786,180
--------------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 3,245,000 3,204,438
--------------------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 3,785,000 3,633,600
--------------------------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05 2,000,000 1,337,500
--------------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000 principal
amount of 11.675% first priority ship mtg. Sr. Sec. Nts., 7/15/05 and
one warrant to purchase five shares of common stock)(1,2,8) 3,500,000 1,837,500
--------------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc, 10.50% First Priority
Ship Mtg. Nts., 6/30/07(7) 3,800,000 1,805,000
--------------------------------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts.,
Series D, 6/15/07 3,000,000 2,655,000
--------------------------------------------------------------------------------------------------------------------
Trans World Airlines, Inc.:
11.50% Sr. Sec. Nts., 12/15/04 4,500,000 3,150,000
14% Lease Equipment Trust, 7/2/08(1) 983,532 816,332
--------------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
13.375% Sr. Disc. Nts., Series B, 12/15/03 5,491,000 5,573,365
--------------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust 1, Asset-Backed Securities,
Series 1993-A, 10.50%, 12/1/11(1) 842,043 507,331
-----------
44,750,709
25 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
---------------------------------------------------------------------------------------------------------------
Utility--0.8%
AES Corp. (The), 9.375% Sr. Unsec. Nts., 9/15/10 $4,000,000 $ 4,080,000
---------------------------------------------------------------------------------------------------------------
AES Drax Energy Ltd.:
11.25% Sr. Sec. Bonds, 8/30/10(7) [GBP] 2,000,000 3,097,458
11.50% Sr. Sec. Bonds, 8/30/10(7) 1,250,000 1,328,125
---------------------------------------------------------------------------------------------------------------
Azurix Corp., 10.75% Sr. Nts., 2/15/10(7) 1,500,000 1,387,500
---------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 2,000,000 2,128,344
---------------------------------------------------------------------------------------------------------------
12,021,427
--------------
Total Corporate Bonds and Notes (Cost $1,347,051,939) 1,184,105,595
Shares
===============================================================================================================
Preferred Stocks--5.8%
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(1,9) 106,418 452,276
---------------------------------------------------------------------------------------------------------------
BankUnited Capital Trust, 10.25% Capital Securities, Non-Vtg.(1) 750,000 607,500
---------------------------------------------------------------------------------------------------------------
CGA Group Ltd., Series A(1,9,10) 196,698 4,917,450
---------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cv., Non-Vtg.(4) 84,475 5,195,212
---------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Sr. Redeemable
Exchangeable, Series B, Non-Vtg.(9) 2,861 2,267,342
---------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 11.125% Cum., Series M(9) 6,643 705,819
---------------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(1,4) 100,000 4,025,000
---------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.:
12.25% Sr. Exchangeable, Non-Vtg.(9) 3,383 3,027,785
13% Sr. Exchangeable, Non-Vtg.(9) 8,224 7,853,920
---------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg.(1,9) 677 116,782
---------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable,
Series B, Non-Vtg.(1,4) 15,000 266,250
---------------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr., Series C, Non-Vtg.(4,7) 49,409 124,017
---------------------------------------------------------------------------------------------------------------
Fidelity Federal Bank, l2% Non-Cum. Exchangeable,
Series A, Non-Vtg.(1) 30 457
---------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable(9) 20,000 2,045,000
---------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.(9) 3,727 83,857
---------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
7% Cv.(7) 200,000 4,775,000
13.50% Exchangeable, Series B9 2,779 2,674,788
---------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc.:
13%, Non-Vtg.(7,9) 82 51,865
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)(1,8,9) 300 210,750
---------------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg.(9) 30,310 3,789
---------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 11.125% Exchangeable, Series E, Non-Vtg.(9) 5,482 5,276,425
---------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum., Non-Vtg.(9) 118,768 5,255,484
---------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg.(9) 364 3,539,900
---------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable, Series H, Non-Vtg 54,950 4,629,538
9.20% Exchangeable, Series F, Non-Vtg 22,500 2,008,125
26 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Market Value
Shares See Note 1
Preferred Stocks Continued
======================================================================================================================
R&B Falcon Corp., 13.875% Cum., Non-Vtg.(9) 10,000 $12,825,000
----------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(1,9) 5,817 5,249,843
----------------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc.:
13.75% Cum. Nts., Series B, 3/15/09, Non-Vtg.(9) 100 402,500
13.75% Exchangeable(7) 29 116,725
----------------------------------------------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A(1) 40,500 3,645,000
----------------------------------------------------------------------------------------------------------------------
Supermarkets General Holdings Corp., $3.52 Exchangeable(4,9) 22,624 2,828
----------------------------------------------------------------------------------------------------------------------
World Access, Inc., Cv. Sr., Series D, Non-Vtg.(1,4) 506 144,210
-----------
Total Preferred Stocks (Cost $97,201,621) 82,500,437
======================================================================================================================
Common Stocks--2.0%
Allegiance Telecom, Inc.(4) 20,000 745,000
----------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.(1,4) 800,000 4,252,552
----------------------------------------------------------------------------------------------------------------------
Crown Castle International Corp.(4) 20,000 621,250
----------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc. 80,000 1,375,000
----------------------------------------------------------------------------------------------------------------------
Digex, Inc.(4) 50,000 2,343,750
----------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A(4) 40,000 587,500
----------------------------------------------------------------------------------------------------------------------
ECM Fund, LPI(1,4) 75 65,719
----------------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(1,4) 2,261 2,261
----------------------------------------------------------------------------------------------------------------------
Forcenergy, Inc.(1,4) 140,000 3,657,500
----------------------------------------------------------------------------------------------------------------------
Kaufman & Broad Home Corp. 40,000 1,077,500
----------------------------------------------------------------------------------------------------------------------
Lennar Corp. 20,000 593,750
----------------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.(4) 10,000 771,250
----------------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., Cl. A(4) 30,000 729,375
----------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A(4) 60,000 2,805,000
----------------------------------------------------------------------------------------------------------------------
NorthPoint Communications Group, Inc.(4) 50,000 443,750
----------------------------------------------------------------------------------------------------------------------
OpTel, Inc., Non-Vtg.(1,4) 3,815 38
----------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.(4) 246,461 3,034,551
----------------------------------------------------------------------------------------------------------------------
Premier Holdings Ltd.(1,4) 288,828 72,207
----------------------------------------------------------------------------------------------------------------------
Purina Mills, Inc.(4) 20,939 204,155
----------------------------------------------------------------------------------------------------------------------
SBA Communications Corp.(4) 20,000 838,750
----------------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., Cl. C1,4 3,700 18,500
----------------------------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(4) 17,058 25,054
----------------------------------------------------------------------------------------------------------------------
Star Gas Partners LP 2,139 37,700
----------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., Cl. A(4) 30,000 285,938
----------------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp.(4) 30,000 3,481,875
----------------------------------------------------------------------------------------------------------------------
Williams Communications Group, Inc.(4) 20,000 400,000
----------------------------------------------------------------------------------------------------------------------
WinStar Communications, Inc.(4) 20,000 310,000
----------------------------------------------------------------------------------------------------------------------
WRC Media Corp.(1,4) 8,794 88
-----------
Total Common Stocks (Cost $29,121,195) 28,780,013
27 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Market Value
Units See Note 1
=================================================================================================================
Rights, Warrants and Certificates--0.7%
Adelphia Business Solutions, Inc. Wts., Exp. 4/15/01 265 $ 19,179
-----------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/15/00(1) 12,500 --
-----------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/1/07(7) 1,649 1,031
-----------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 6/16/07(1,11) 130,000 39,000
-----------------------------------------------------------------------------------------------------------------
Charles River Laboratories, Inc. Wts., Exp. 10/1/09(1) 4,500 72,000
-----------------------------------------------------------------------------------------------------------------
Clearnet Communications, Inc. Wts., Exp. 9/15/05 1,320 44,120
-----------------------------------------------------------------------------------------------------------------
COLT Telecom Group plc, ADR Wts., Exp. 12/31/06 3,185 2,643,550
-----------------------------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/1/08(1) 5,000 61,250
-----------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 3,450 --
-----------------------------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/1/08(1) 6,000 84,750
-----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05(1) 725 2,612
-----------------------------------------------------------------------------------------------------------------
Equinix, Inc. Wts., Exp. 12/1/07(1) 5,000 750,625
-----------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/1/01 58,176 70,902
-----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/23/03 58,503 --
Exp. 1/23/03(1) 30,983 310
Exp. 9/1/04 91,000 --
Exp. 5/1/05(1) 69,612 --
-----------------------------------------------------------------------------------------------------------------
Grand Union Co. Wts., Exp. 8/17/03 94 3
-----------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 17,655 2,350
-----------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/31/02 1,600 --
-----------------------------------------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/15/07(1) 3,390 3,390
-----------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/15/08(1) 7,885 16,267
-----------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc. Wts., Exp. 4/15/10(1) 2,000 5,250
-----------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08(1) 1,390 139
-----------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07(1) 2,565 18,276
-----------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/15/05(1) 3,200 1,801
-----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc. Wts., Exp. 12/15/07(1) 2,320 997,890
-----------------------------------------------------------------------------------------------------------------
PLD Telekom, Inc. Wts.:
Exp. 3/31/03(1) 3,500 175
Exp. 3/31/03(1) 200 10
Exp. 6/1/06(1) 3,500 175
-----------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc. Wts.:
Exp. 11/1/03(1) 28,000 49,000
Exp. 6/30/05(1) 15,200 1,520
-----------------------------------------------------------------------------------------------------------------
R&B Falcon Corp. Wts., Exp. 5/1/09(7) 7,800 5,305,950
-----------------------------------------------------------------------------------------------------------------
Republic Technologies International LLC Wts., Exp. 7/15/09(1) 3,000 30
-----------------------------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/3/03(1) 12,145 15,182
-----------------------------------------------------------------------------------------------------------------
Telergy, Inc. Wts., Exp. 9/25/10 8,077 81
-----------------------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/1/05(1) 17,235 202,511
-----------
Total Rights, Warrants and Certificates (Cost $1,433,939) 10,409,329
28 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
Principal Market Value
Amount See Note 1
=================================================================================================================
Structured Instruments--2.1%
Bear Stearns, Inc., High Yield Bond Index Linked Nts.:
10%, 2/16/01 $14,000,000 $ 13,983,200
10%, 3/14/01 7,000,000 6,929,300
10%, 3/14/01(12) 7,000,000 7,000,000
-----------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (New York Branch),
Russian Obligatzii Federal'nogo Zaima Linked Nts.:
Series 27001, 20.11%, 2/6/02(1,2) [RUR] 876,870 26,516
Series 27002, 20.11%, 5/22/02(1,2) [RUR] 1,611,010 47,550
Series 27003, 20.11%, 6/5/02(1,2) [RUR] 4,669,220 137,596
Series 27003, 20.11%, 6/5/02(1,2) [RUR] 3,079,270 90,742
Series 27004, 20.11%, 9/18/02(1,2) [RUR] 4,231,270 122,862
Series 27005, 20.11%, 10/9/02(1,2) [RUR] 5,395,610 153,311
Series 27006, 20.11%, 1/22/03(1,2) [RUR] 6,479,330 180,303
Series 27007, 20.11%, 2/5/03(1,2) [RUR] 6,965,260 193,399
Series 27008, 20.11%, 5/21/03(1,2) [RUR] 4,444,570 121,217
Series 27009, 20.11%, 6/4/03(1,2) [RUR] 4,907,930 133,695
Series 27010, 20.11%, 9/17/03(1,2) [RUR] 2,744,510 73,695
Series 27011, 20.11%, 10/8/03(1,2) [RUR] 2,080,350 54,491
-----------------------------------------------------------------------------------------------------------------
Russia (Government of) Federal Loan Bonds,
Series 27010, 20.11%, 9/17/03(1,2) [RUR] 1,966,960 52,817
--------------
Total Structured Instruments (Cost $29,227,510) 29,300,694
=================================================================================================================
Repurchase Agreements--1.3%
Repurchase agreement with Zion First National Bank, 6.50%,
dated 9/29/00, to be repurchased at $18,600,070 on 10/2/00,
collateralized by U.S. Treasury Bonds, 10.75%, 2/15/03,
with a value of $2,073,035 and U.S. Treasury Nts., 5.75%-6.375%,
6/30/01-10/31/02, with a value of $16,902,482 (Cost $18,590,000) 18,590,000 18,590,000
-----------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,577,301,756) 98.6% 1,399,389,332
-----------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.4 19,545,315
------------------------------------
Net Assets 100.0% $1,418,934,647
====================================
</TABLE>
29 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Footnotes to Statement of Investments
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
CAD Canadian Dollar GBP British Pound Sterling
DEM German Mark IDR Indonesian Rupiah
EUR Euro RUR Russian Ruble
1. Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Issuer is in default.
4. Non-income-producing security.
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
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 $168,895,519 or 11.90% of the Fund's net
assets as of September 30, 2000.
8. 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.
9. Interest or dividend is paid in kind.
10. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
11. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended September 30,
2000. The aggregate fair value of securities of affiliated companies held by the
Fund as of September 30, 2000, amounts to $4,956,450. Transactions during the
period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares Shares
Sept. 30, Gross Gross Sept. 30, Dividend
1999 Additions Reductions 2000 Income
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CGA Group Ltd., Series A 160,595 36,103 -- 196,698 $902,660
CGA Group Ltd. Wts., Exp. 6/16/07 130,000 -- -- 130,000 --
--------
$902,660
========
</TABLE>
12. When-issued security to be delivered and settled after September 30, 2000.
See accompanying Notes to Financial Statements.
30 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES September 30, 2000
<TABLE>
==================================================================================
<S> <C>
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,572,384,180) $1,394,432,882
Affiliated companies (cost $4,917,576) 4,956,450
--------------
1,399,389,332
----------------------------------------------------------------------------------
Cash 7,230,895
----------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 325,360
----------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 32,517,390
Investments sold 7,285,116
Shares of beneficial interest sold 5,330,960
Closed foreign currency contracts 1,484,693
Other 69,500
--------------
Total assets 1,453,633,246
==================================================================================
Liabilities
Unrealized depreciation on foreign currency contracts 682,057
----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $7,000,000 purchased
on a when-issued basis) 14,684,174
Shares of beneficial interest redeemed 14,284,795
Dividends 3,549,118
Distribution and service plan fees 878,684
Transfer and shareholder servicing agent fees 421,482
Trustees' compensation 7,185
Other 191,104
--------------
Total liabilities 34,698,599
==================================================================================
Net Assets $1,418,934,647
==============
==================================================================================
Composition of Net Assets
Paid-in capital $1,640,714,556
----------------------------------------------------------------------------------
Undistributed net investment income 3,890,472
----------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (47,364,333)
----------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (178,306,048)
--------------
Net Assets $1,418,934,647
==============
</TABLE>
31 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
==================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $672,817,285 and 61,183,106 shares of beneficial
interest outstanding) $11.00
Maximum offering price per share (net asset value plus sales
charge of 4.75% of offering price) $11.55
----------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $534,308,747 and 48,644,828 shares of
beneficial interest outstanding) $10.98
----------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $211,808,615 and 19,282,278 shares of
beneficial interest outstanding) $10.98
</TABLE>
See accompanying Notes to Financial Statements.
32 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended September 30, 2000
<TABLE>
==================================================================================
<S> <C>
Investment Income
Interest (net of foreign withholding taxes of $9,086) $150,875,600
----------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 8,196,177
Affiliated companies 902,660
------------
Total income 159,974,437
==================================================================================
Expenses
Management fees 8,836,979
----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,633,654
Class B 5,344,685
Class C 2,318,778
----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 2,167,556
----------------------------------------------------------------------------------
Custodian fees and expenses 96,159
----------------------------------------------------------------------------------
Trustees' compensation 35,149
----------------------------------------------------------------------------------
Other 588,995
------------
Total expenses 21,021,955
Less expenses paid indirectly (36,016)
------------
Net expenses 20,985,939
==================================================================================
Net Investment Income 138,988,498
==================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (30,298,623)
Closing of futures contracts (1,235,438)
Foreign currency transactions 2,052,009
------------
Net realized loss (29,482,052)
----------------------------------------------------------------------------------
Net change in unrealized depreciation on:
Investments (57,868,944)
Translation of assets and liabilities denominated in foreign
currencies (10,008,826)
------------
Net change (67,877,770)
------------
Net realized and unrealized loss (97,359,822)
==================================================================================
Net Increase in Net Assets Resulting from Operations $ 41,628,676
============
</TABLE>
See accompanying Notes to Financial Statements.
33 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended September 30, 2000 1999
=====================================================================================
<S> <C> <C>
Operations
Net investment income $ 138,988,498 $ 117,592,700
-------------------------------------------------------------------------------------
Net realized loss (29,482,052) (2,302,101)
-------------------------------------------------------------------------------------
Net change in unrealized depreciation (67,877,770) (31,609,616)
--------------------------------
Net increase in net assets resulting
from operations 41,628,676 83,680,983
=====================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (68,261,573) (58,066,835)
Class B (49,411,814) (39,188,529)
Class C (21,319,152) (20,334,122)
-------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (4,516,186) (4,624,645)
Class B (3,573,923) (3,298,134)
Class C (1,583,562) (1,792,486)
=====================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class A 48,104,208 123,346,795
Class B 43,255,033 157,938,895
Class C (23,677,453) 35,263,745
=====================================================================================
Net Assets
Total increase (decrease) (39,355,746) 272,925,667
-------------------------------------------------------------------------------------
Beginning of period 1,458,290,393 1,185,364,726
--------------------------------
End of period (including undistributed net
investment income of $3,890,472 and $1,878,917,
respectively) $1,418,934,647 $1,458,290,393
================================
</TABLE>
See accompanying Notes to Financial Statements.
34 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended September 30, 2000 1999 1998 1997 1996
========================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $11.84 $12.18 $13.49 $12.92 $12.47
--------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.15 1.10 1.09 1.15 1.15
Net realized and unrealized gain (loss) (.76) (.25) (1.11) .57 .44
----------------------------------------------------------
Total income (loss) from investment
operations .39 .85 (.02) 1.72 1.59
--------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.15) (1.10) (1.05) (1.15) (1.14)
Tax return of capital distribution -- -- (.04) -- --
Distributions from net realized gain (.08) (.09) (.20) -- --
----------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.23) (1.19) (1.29) (1.15) (1.14)
--------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.00 $11.84 $12.18 $13.49 $12.92
==========================================================
========================================================================================================
Total Return, at Net Asset Value(1) 3.42% 7.15% (0.49)% 13.96% 13.28%
========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $672,817 $675,395 $572,354 $502,211 $359,208
--------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $681,335 $644,839 $567,689 $425,258 $305,638
--------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 10.02% 9.01% 8.18% 8.75% 8.97%
Expenses 1.05% 1.06% 1.06%(3) 1.10%(3) 1.17%(3)
--------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 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 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.
See accompanying Notes to Financial Statements.
35 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class B Year Ended September 30, 2000 1999 1998 1997 1996(1)
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $11.83 $12.17 $13.48 $12.91 $12.47
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.06 1.01 .99 1.05 1.03
Net realized and unrealized gain (loss) (.77) (.25) (1.11) .57 .44
----------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations .29 .76 (.12) 1.62 1.47
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.06) (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 (1.14) (1.10) (1.19) (1.05) (1.03)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.98 $11.83 $12.17 $13.48 $12.91
==========================================================================
============================================================================================================================
Total Return, at Net Asset Value(2) 2.54% 6.36% (1.25)% 13.10% 12.20%
============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $534,309 $530,619 $388,572 $238,505 $82,052
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $534,106 $475,049 $326,804 $151,197 $33,189
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 9.25% 8.25% 7.42% 7.89% 7.90%
Expenses 1.80% 1.81% 1.81%(4) 1.86%(4) 1.97%(4)
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 47% 100% 136% 95%
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
36 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
Class C Year Ended September 30, 2000 1999 1998 1997 1996
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $11.83 $12.17 $13.48 $12.91 $12.46
----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.06 1.01 .99 1.05 1.06
Net realized and unrealized gain (loss) (.77) (.25) (1.11) .57 .44
--------------------------------------------------------------------------
Total income (loss) from investment
operations .29 .76 (.12) 1.62 1.50
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.06) (1.01) (.95) (1.05) (1.05)
Tax return of capital distribution -- -- (.04) -- --
Distributions from net realized gain (.08) (.09) (.20) -- --
--------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.14) (1.10) (1.19) (1.05) (1.05)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.98 $11.83 $12.17 $13.48 $12.91
==========================================================================
============================================================================================================================
Total Return, at Net Asset Value(1) 2.52% 6.35% (1.25)% 13.12% 12.44%
============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $211,809 $252,277 $224,439 $181,025 $112,945
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $230,954 $246,416 $210,338 $143,363 $ 89,416
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
----------------------------------------------------------------------------------------------------------------------------
Net investment income 9.23% 8.25% 7.42% 7.98% 8.19%
Expenses 1.80% 1.81% 1.81%(3) 1.86%(3) 1.93%(3)
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 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 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.
See accompanying Notes to Financial Statements.
37 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Significant Accounting Policies
Oppenheimer Champion Income Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as 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. (the Manager) believes not to involve undue risk.
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 a front-end
sales charge. Class B and Class C shares are sold without a front-end 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 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 listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (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. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
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 are leveraged, which increases the notes' volatility
relative to the principal of the security. Fluctuations in value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of September 30, 2000, the market value of these
securities comprised 2.1% of the Fund's net assets and resulted in unrealized
gains of $73,184 at September 30, 2000. The Fund also hedges a portion of the
foreign currency exposure generated by these securities, as discussed in Note 5.
38 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
--------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a when-issued basis can take place a
month or more after the trade date. Normally the settlement date occurs within
six months after the trade 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 September 30, 2000, the Fund had entered into net outstanding
when-issued or forward commitments of $7,000,000.
In connection with its ability to purchase securities on a when-issued
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 September 30, 2000, securities with an
aggregate market value of $10,640,611, representing 0.75% of the Fund's net
assets, were in default.
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
39 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders.
As of September 30, 2000, the Fund had available for federal income tax purposes
an unused capital loss carryover as follows:
<TABLE>
<CAPTION>
Expiring
--------------------------------------
<S> <C>
2008 $19,623,850
</TABLE>
--------------------------------------------------------------------------------
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 Dividends and 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 dividends and distributions made during the
fiscal 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 dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended September 30, 2000, amounts have been reclassified to reflect an
increase in undistributed net investment income of $2,015,596. Accumulated net
realized loss on investments was increased by the same amount. Net assets of the
Fund were unaffected by the reclassifications.
40 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
--------------------------------------------------------------------------------
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
accreted 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.
================================================================================
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>
Year Ended September 30, 2000 Year Ended September 30, 1999
Shares Amount Shares Amount
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 29,544,630 $ 339,392,312 27,319,607 $ 335,115,751
Dividends and/or
distributions reinvested 4,523,835 51,606,288 3,639,977 44,482,979
Redeemed (29,909,682) (342,894,392) (20,932,674) (256,251,935)
-----------------------------------------------------------
Net increase 4,158,783 $ 48,104,208 10,026,910 $ 123,346,795
===========================================================
--------------------------------------------------------------------------------------
Class B
Sold 14,972,628 $ 171,870,311 19,729,277 $ 241,233,572
Dividends and/or
distributions reinvested 2,880,099 32,832,346 2,215,843 27,048,739
Redeemed (14,058,202) (161,447,624) (9,032,360) (110,343,416)
-----------------------------------------------------------
Net increase 3,794,525 $ 43,255,033 12,912,760 $ 157,938,895
===========================================================
--------------------------------------------------------------------------------------
Class C
Sold 5,136,471 $ 58,990,167 8,758,433 $ 107,076,757
Dividends and/or
distributions reinvested 1,198,780 13,699,506 1,257,082 15,358,557
Redeemed (8,375,534) (96,367,126) (7,141,459) (87,171,569)
-----------------------------------------------------------
Net increase (decrease) (2,040,283) $(23,677,453) 2,874,056 $ 35,263,745
===========================================================
</TABLE>
41 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended September 30, 2000, were
$661,931,122 and $462,328,572, respectively.
As of September 30, 2000, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $1,583,864,379 was:
Gross unrealized appreciation $ 35,449,431
Gross unrealized depreciation (219,924,478)
-------------
Net unrealized depreciation $(184,475,047)
=============
================================================================================
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 year ended
September 30, 2000, was an annualized rate of 0.61%, before any waiver by the
Manager if applicable.
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer 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
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
September 30, 2000 $2,571,853 $718,418 $241,836 $5,294,841 $429,470
</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 Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
September 30, 2000 $15,973 $1,739,204 $81,115
</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.
42 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
--------------------------------------------------------------------------------
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 year ended September 30, 2000, payments
under the Class A plan totaled $1,633,654 prior to Manager waiver if applicable,
all of which were paid by the Distributor to recipients, and included $100,318
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.
--------------------------------------------------------------------------------
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 year ended September 30, 2000,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate 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 $5,344,685 $4,462,236 $21,923,173 4.10%
Class C Plan 2,318,778 2,007,209 4,457,964 2.10
</TABLE>
43 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
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.
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 September 30, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Expiration Contract Valuation as of Unrealized Unrealized
Contract Description Date Amounts (000s) Sept. 30, 2000 Appreciation Depreciation
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Sell
British Pound Sterling (gbp) 12/5/00 GBP24,345 $36,035,866 $ -- $ 682,057
Canadian Dollar (cad) 11/1/00 CAD2,925 1,945,475 11,047 --
Euro (eur) 10/6/00 EUR16,555 14,614,158 314,313 --
-----------------------
Total Unrealized Appreciation and Depreciation $325,360 $682,057
=======================
</TABLE>
================================================================================
6. Futures Contracts
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a particular price on a stipulated future
date at a negotiated price. Futures contracts are traded on a commodity
exchange. The Fund may buy and sell futures contracts that relate to broadly
based securities indices "financial futures" or debt securities "interest rate
futures" in order to gain exposure to or to seek to protect against changes in
market value of stock and bonds or 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 decreases in market value of 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.
44 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
================================================================================
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
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.
================================================================================
7. Illiquid or Restricted Securities
As of September 30, 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 September 30, 2000, was
$107,996,099, which represents 7.61% of the Fund's net assets, of which
$15,882,539 is considered restricted. Information concerning restricted
securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit Sept. 30, 2000
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
TAG Heuer International SA,
12% Sr. Sub. Nts., 12/15/05 8/13/96 105.75% 106.69%
Trans World Airlines, Inc.,
14% Lease Equipment Trust, 7/2/08 3/19/98 101.00 83.00
Stocks and Warrants
Becker Gaming, Inc. Wts., Exp. 11/15/00 11/18/93 $ 2.00 $ --
CGA Group Ltd., Series A 6/17/97-6/28/00 25.00 25.00
CGA Group Ltd. Wts., Exp. 6/16/07 6/17/97 -- 0.30
Chesapeake Energy Corp. 6/27/00 5.83 5.32
ECM Fund, LPI 4/14/92 1,000.00 876.25
Forcenergy, Inc. 4/18/00 15.25 26.13
World Access, Inc., Cv. Sr., Series D, Non-Vtg. 2/14/00 1,383.40 285.00
</TABLE>
45 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
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 year ended September 30,
2000.
46 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
To the Board of Trustees and Shareholders of
Oppenheimer Champion Income Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Champion Income Fund, including the statement of investments, as of
September 30, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Champion Income Fund as of September 30, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Denver, Colorado
October 20, 2000
47 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
SHAREHOLDER MEETING Unaudited
================================================================================
On October 12, 2000, a shareholder meeting was held at which the following items
and proposals were approved, as described in the Fund's proxy statement for that
meeting. The following is a report of the votes cast:
Proposal No. 1
Election of Trustees
<TABLE>
<CAPTION>
Withheld/ Broker
Nominee For Against Abstain Non-Votes Total
-------------------------------------------------------------------------------------------------
Trustees
<S> <C> <C> <C>
William L. Armstrong 62,298,825 1,269,759 63,568,584
Robert G. Avis 62,243,433 1,325,151 63,568,584
George C. Bowen 62,323,813 1,244,771 63,568,584
Edward L. Cameron 62,334,570 1,234,014 63,568,584
Jon S. Fossel 62,319,189 1,249,395 63,568,584
Sam Freedman 62,315,712 1,252,872 63,568,584
Raymond J. Kalinowski 62,172,322 1,396,262 63,568,584
C. Howard Kast 62,134,214 1,434,370 63,568,584
Robert M. Kirchner 62,140,821 1,427,763 63,568,584
Bridget A. Macaskill 62,290,823 1,277,761 63,568,584
F. William Marshall 62,309,366 1,259,218 63,568,584
James C. Swain 62,307,325 1,261,259 63,568,584
-------------------------------------------------------------------------------------------------
Proposal No. 2
Ratification of the selection of Deloitte & Touche LLP as independent auditors
for the Fund for the fiscal year beginning October 1, 2000
61,052,115 628,267 1,888,202 63,568,584
-------------------------------------------------------------------------------------------------
Proposal No. 3a
Approval to eliminate the Fund's fundamental policy on purchasing securities on margin and engaging in
short sales
43,655,064 4,962,211 2,802,366 12,148,943 63,568,584
Proposal No. 3b
Approval to eliminate the Fund's fundamental policy on investing in other investment companies
45,274,353 3,333,881 2,811,408 12,148,942 63,568,584
Proposal No. 3c
Approval to eliminate the Fund's fundamental policy on the purchase and sale of futures contracts
43,907,879 4,597,915 2,913,848 12,148,942 63,568,584
Proposal No. 3d
Approval to eliminate the Fund's fundamental policy on the types of put and call
options that the Fund may purchase and sell
44,019,113 4,309,549 3,090,980 12,148,942 63,568,584
Proposal No. 3e
Approval to eliminate the Fund's fundamental policy on writing put options on interest rate futures
43,783,343 4,565,819 3,070,480 12,148,942 63,568,584
Proposal No. 3f
Approval to eliminate the Fund's fundamental policy on covered call writing
43,938,808 4,206,816 3,274,018 12,148,942 63,568,584
Proposal No. 3g
Approval to eliminate the Fund's fundamental policy on investing in warrants and rights
44,531,653 3,735,092 3,152,897 12,148,942 63,568,584
Proposal No. 3h
Approval to eliminate the Fund's fundamental policy on purchasing put or call options
43,899,680 4,391,771 3,128,191 12,148,942 63,568,584
48 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
SHAREHOLDER MEETING Unaudited/Continued
=================================================================================================
Withheld/ Broker
For Against Abstain Non-Votes Total
-------------------------------------------------------------------------------------------------
Proposal No. 3i
Approval to eliminate the Fund's fundamental policy on writing put options on debt securities
43,683,915 4,553,728 3,181,999 12,148,942 63,568,584
Proposal No. 3j
Approval to eliminate the Fund's fundamental policy on purchasing securities of
issuers in which officers or trustees have an interest
43,219,260 5,398,194 2,802,188 12,148,942 63,568,584
Proposal No. 3k
Approval to eliminate the Fund's fundamental policy on investing in unseasoned issuers
43,054,486 5,325,956 3,039,200 12,148,942 63,568,584
Proposal No. 3l
Approval to eliminate the Fund's fundamental policy on investing in a company for the purpose of
acquiring control
44,521,820 4,056,211 2,841,611 12,148,942 63,568,584
Proposal No. 3m
Approval to eliminate the Fund's fundamental policy on investing in mineral-related programs or leases
44,902,485 3,566,051 2,951,106 12,148,942 63,568,584
-------------------------------------------------------------------------------------------------
Proposal No. 4
Approval of changes to four of the Fund's fundamental investment restrictions to
permit the Fund to participate in an inter-fund lending arrangement
44,629,312 3,675,668 3,114,662 12,148,942 63,568,584
-------------------------------------------------------------------------------------------------
Proposal No. 5
Approval to authorize the Trustees to adopt an Amended and Restated Declaration of Trust
45,399,846 2,877,225 3,142,571 12,148,942 63,568,584
-------------------------------------------------------------------------------------------------
Proposal No. 6
Approval of the new Class C 12b-1 Distribution and Service Plan and Agreement
6,629,035 453,522 506,948 2,284,216 9,873,721
</TABLE>
49 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends and distributions of $0.1644, $0.1571 and $0.1571 per share were
paid to Class A, Class B and Class C shareholders, respectively, on December 30,
1999, all of which was designated as ordinary income for federal income tax
purposes.
Dividends paid by the Fund during the fiscal year ended September 30, 2000,
which are not designated as capital gain distributions should be multiplied by
6.29% to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
50 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
OPPENHEIMER CHAMPION INCOME FUND
================================================================================
Officers and Trustees James C. Swain, Trustee and Chairman of the Board
Bridget A. Macaskill, Trustee and President
William L. Armstrong, Trustee
Robert G. Avis, Trustee
George C. Bowen, Trustee
Edward L. Cameron, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
F. William Marshall, 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.
For more complete information about Oppenheimer
Champion Income Fund, please refer to the Prospectus.
To obtain a copy, call your financial advisor, call
OppenheimerFunds Distributor, Inc. at 1.800.525.7048,
or visit the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com.
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.
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.
51 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
===========================================================================================================
<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
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
===========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R) California Municipal Fund(2,3)
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(2)
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. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund subject to shareholder approval.
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.
52 | OPPENHEIMER CHAMPION INCOME FUND
<PAGE>
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(1)
www.oppenheimerfunds.com
--------------------------------------------------------------------------------
General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8am-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 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OppenheimerFunds Market 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
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
RA0190.001.0900 November 29, 2000 [LOGO]OppenheimerFunds(R)
Distributor, Inc.
