UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-3346
Oppenheimer Value Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: November 1, 2002 - October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of
the Fund's performance during its fiscal year ended October 31, 2003, followed
by a graphical comparison of the Fund's performance to an appropriate
broad-based market index.
Management's Discussion of Fund Performance. Strong stock selection--especially
in the consumer-discretionary, financials, and health care sectors--helped
generate favorable performance during the period. For the 12 months that ended
October 31, 2003, the Fund had a total return of 25.18% (Class A shares at net
asset value). By comparison, the Standard & Poor's 500 Index, returned 20.79%
during the same time frame.
Our management strategy remained consistent throughout the reporting period,
as it does in all types of market conditions. While the stocks we select for the
Fund may well be influenced by what is happening in the economy and stock
market, we believe we serve our shareholders best by evaluating stocks in a
variety of sectors and choosing those that we believe offer the best value
within each category. In other words, we primarily look to evaluate energy
stocks against other energy stocks, technology stocks against other technology
stocks, and so on.
Recent investments in stock of companies that provide satellite television
services is one example of how we applied this strategy during the period. As we
assessed value opportunities in the consumer-discretionary sector, and
specifically the media industry, we became convinced that companies that provide
satellite television services would continue to grow faster than other media
companies. We also anticipated an increase in companies that provide satellite
services' free cash flow (cash flow after expenses). Finally, we believed that
some companies that provide satellite television services' stocks offered
compelling value compared to other consumer-discretionary stocks.
Based on this analysis, we bought shares of companies that provide satellite
television services such as EchoStar Communication Corp. and General Motors
Corp.--Class H Stock (also called Hughes Electronics which owns DirecTV). This
decision proved to be a successful one for the Fund. Both stocks performed very
well during the past year and contributed to the portfolio's strong performance.
As the period went on, however, we reduced our weighting in both names because
we believed their rising prices left them less-attractively valued.
Another strong consumer-discretionary performer for the Fund was OfficeMax,
Inc. one of the nation's leading office-supply retailers. A takeover bid from
Boise Cascade boosted OfficeMax's stock price. In the financial sector, the Fund
benefited from owning Chubb Corp., a large property- and casualty-insurance
holding company. Chubb saw its profit margins improve during the period, thanks
to a more favorable pricing environment for insurance companies and the firm's
ability to keep expenses under control. Finally, in the health care sector,
health benefits provider Aetna, Inc. added to performance. We invested in Aetna
because we anticipated that increased profitability would
6 | OPPENHEIMER VALUE FUND
lead to an improvement in the company's medical-loss ratio (the amount spent on
medical care compared to administrative costs). That anticipation was met during
the period, and Aetna's earnings and stock price rose accordingly.
Not all of the Fund's holdings performed as well as we hoped. In the
industrials sector, for example, we were disappointed by some of our defense
industry investments, including contractors Lockheed Martin and Raytheon Co. We
had over weighted this area because we were expecting increased revenues
stemming from strong demand for defense technology. Unfortunately, these stocks
were hurt after short-term investors abandoned them following the end of the
Iraq war. A dramatic increase in the budget deficit also was a concern for
investors. While we eliminated our position in Lockheed Martin, we remained
invested in Raytheon for two reasons. First, we believe that the company's free
cash flow will improve. Second, we noted that Raytheon should benefit from
increasing demand for international missile defense products.
Also detracting from Fund performance were telecommunications-services
stocks. Long-distance provider AT&T Corp., for example, a company we owned at
various times throughout the period, was one notable laggard. The company's
stock fell sharply on earnings weakness early in 2003, leading us to sell our
position. We later bought it back once it appeared that the company's situation
had stabilized. Overall, AT&T had a negative impact on the Fund during the
reporting period.
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 October 31, 2003. In the case of Class A shares, performance is
measured over a 10-year period. In the case of Class B, performance is measured
from inception of the class on October 2, 1995. In the case of Class C,
performance is measured from inception of the class on May 1, 1996. In the case
of Class N shares, performance is measured from inception of the Class on March
1, 2001. In the case of Class Y, performance is measured from inception of the
class on December 16, 1996. 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, Class C shares and Class N, and reinvestments
of all dividends and capital gains distributions. There is no sales charge
applicable for Class Y shares.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities 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 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 index.
7 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Value Fund (Class A) S&P 500 Index
12/31/1993 $9,425 $10,000
03/31/1994 9,207 9,621
06/30/1994 9,027 9,662
09/30/1994 9,488 10,133
12/31/1994 9,363 10,131
03/31/1995 10,188 11,117
06/30/1995 11,052 12,176
09/30/1995 11,991 13,143
12/31/1995 12,772 13,934
03/31/1996 13,380 14,682
06/30/1996 13,548 15,340
09/30/1996 13,925 15,814
10/31/1996 1 14,229 16,250
01/31/1997 15,742 18,201
04/30/1997 15,750 18,641
07/31/1997 18,585 22,303
10/31/1997 18,156 21,466
01/31/1998 18,419 23,097
04/30/1998 20,748 26,295
07/31/1998 19,478 26,609
10/31/1998 18,564 26,191
01/31/1999 20,635 30,606
04/30/1999 20,802 32,035
07/31/1999 20,449 31,985
10/31/1999 19,232 32,913
01/31/2000 18,094 33,771
04/30/2000 19,477 35,278
07/31/2000 19,049 34,852
10/31/2000 18,731 34,913
01/31/2001 20,357 33,467
04/30/2001 19,935 30,704
07/31/2001 20,191 29,861
10/31/2001 17,682 26,224
01/31/2002 19,395 28,067
04/30/2002 19,417 26,830
07/31/2002 16,373 22,809
10/31/2002 16,418 22,265
01/31/2003 16,777 21,610
04/30/2003 17,300 23,260
07/31/2003 19,349 25,235
10/31/2003 20,551 26,893
Average Annual Total Returns of Class A Shares of the Fund at 10/31/03 2
1-Year 17.98% 5-Year 0.85% 10-Year 7.50%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Value Fund (Class B) S&P 500 Index
10/02/1995 $10,000 $10,000
12/31/1995 10,804 10,602
03/31/1996 11,294 11,170
06/30/1996 11,399 11,671
09/30/1996 11,683 12,032
10/31/1996 1 11,930 12,364
01/31/1997 13,169 13,848
04/30/1997 13,143 14,183
07/31/1997 15,487 16,969
10/31/1997 15,105 16,332
01/31/1998 15,287 17,573
04/30/1998 17,188 20,007
07/31/1998 16,114 20,245
10/31/1998 15,327 19,928
01/31/1999 17,002 23,286
04/30/1999 17,109 24,374
07/31/1999 16,780 24,335
10/31/1999 15,754 25,041
01/31/2000 14,798 25,694
04/30/2000 15,901 26,841
07/31/2000 15,515 26,517
10/31/2000 15,237 26,563
01/31/2001 16,526 25,463
04/30/2001 16,158 23,360
07/31/2001 16,328 22,719
10/31/2001 14,280 19,952
01/31/2002 15,663 21,354
04/30/2002 15,680 20,413
07/31/2002 13,223 17,354
10/31/2002 13,258 16,940
01/31/2003 13,549 16,442
04/30/2003 13,971 17,697
07/31/2003 15,625 19,200
10/31/2003 16,596 20,461
Average Annual Total Returns of Class B Shares of the Fund at 10/31/03 2
1-Year 19.18% 5-Year 0.94% Since Inception 6.47%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
2. See Notes on page 11 for further details.
8 | OPPENHEIMER VALUE FUND
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Value Fund (Class C) S&P 500 Index
05/01/1996 $10,000 $10,000
06/30/1996 10,061 10,297
09/30/1996 10,314 10,615
10/31/1996 1 10,535 10,908
01/31/1997 11,629 12,217
04/30/1997 11,606 12,512
07/31/1997 13,676 14,971
10/31/1997 13,341 14,409
01/31/1998 13,508 15,503
04/30/1998 15,186 17,650
07/31/1998 14,233 17,861
10/31/1998 13,537 17,581
01/31/1999 15,012 20,544
04/30/1999 15,115 21,503
07/31/1999 14,821 21,469
10/31/1999 13,918 22,092
01/31/2000 13,070 22,668
04/30/2000 14,049 23,679
07/31/2000 13,712 23,394
10/31/2000 13,463 23,435
01/31/2001 14,600 22,464
04/30/2001 14,270 20,609
07/31/2001 14,423 20,043
10/31/2001 12,065 17,602
01/31/2002 13,804 18,839
04/30/2002 13,795 18,009
07/31/2002 11,607 15,310
10/31/2002 11,616 14,945
01/31/2003 11,841 14,505
04/30/2003 12,195 15,613
07/31/2003 13,602 16,939
10/31/2003 14,423 18,051
Average Annual Total Returns of Class C Shares of the Fund at 10/31/03 2
1-Year 23.17% 5-Year 1.28% Since Inception 5.00%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Value Fund (Class N) S&P 500 Index
03/01/2001 $10,000 $10,000
04/30/2001 9,928 10,094
07/31/2001 10,050 9,817
10/31/2001 8,794 8,621
01/31/2002 9,635 9,227
04/30/2002 9,640 8,821
07/31/2002 8,126 7,499
10/31/2002 8,143 7,320
01/31/2003 8,307 7,104
04/30/2003 8,563 7,647
07/31/2003 9,564 8,296
10/31/2003 10,154 8,841
Average Annual Total Returns of Class N Shares of the Fund at 10/31/03 2
1-Year 23.70% Since Inception 0.57%
The performance information for the S&P 500 Index in the graphs begins on
12/31/93 for Class A, 9/30/95 for Class B, 4/30/96 for Class C, 2/28/01 for
Class N and 12/31/96 for Class Y.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
9 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Value Fund (Class Y) S&P 500 Index
12/16/1996 $10,000 $10,000
01/31/1997 10,699 10,624
04/30/1997 10,693 10,881
07/31/1997 12,637 13,019
10/31/1997 12,362 12,531
01/31/1998 12,552 13,482
04/30/1998 14,145 15,349
07/31/1998 13,292 15,532
10/31/1998 12,687 15,289
01/31/1999 14,111 17,866
04/30/1999 14,238 18,700
07/31/1999 13,984 18,670
10/31/1999 13,170 19,212
01/31/2000 12,392 19,713
04/30/2000 13,355 20,593
07/31/2000 13,062 20,344
10/31/2000 12,851 20,380
01/31/2001 13,980 19,536
04/30/2001 13,709 17,923
07/31/2001 13,905 17,431
10/31/2001 12,196 15,308
01/31/2002 13,387 16,383
04/30/2002 13,409 15,661
07/31/2002 11,321 13,314
10/31/2002 11,321 12,997
01/31/2003 11,557 12,614
04/30/2003 11,981 13,578
07/31/2003 13,391 14,730
10/31/2003 14,240 15,698
Average Annual Total Returns of Class Y Shares of the Fund at 10/31/03 2
1-Year 25.78% 5-Year 2.34% Since Inception 5.28%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
2. See Notes on page 11 for further details.
The performance information for the S&P 500 Index in the graphs begins on
12/31/93 for Class A, 9/30/95 for Class B, 4/30/96 for Class C, 2/28/01 for
Class N and 12/31/96 for Class Y.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
10 | OPPENHEIMER VALUE FUND
NOTES
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In reviewing performance, please remember that past performance cannot guarantee
future results. Investment return and principal value of an investment in the
Fund will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than the original cost. Because of ongoing market volatility, the
Fund's performance may be subject to substantial fluctuations, and current
performance may be more or less than the results shown. For updates on the
Fund's performance, 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 reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
Class A shares of the Fund were first publicly offered on 9/16/85. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 10/2/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. Class B shares are
subject to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 5/1/96. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the one-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the one-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 12/16/96. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2003
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- -----------------------------------------------------
Common Stocks--95.3%
- -----------------------------------------------------
Consumer Discretionary--10.2%
- -----------------------------------------------------
Hotels, Restaurants & Leisure--2.1%
McDonald's Corp. 265,800 $ 6,647,658
- -----------------------------------------------------
Media--7.1%
EchoStar
Communications
Corp., Cl. A 1 100,200 3,839,664
- -----------------------------------------------------
Liberty Media
Corp., Cl. A 1 1,691,600 17,068,244
- -----------------------------------------------------
UGC Europe, Inc. 1 6,500 435,500
- -----------------------------------------------------
UnitedGlobalCom,
Inc., Cl. A 1 205,300 1,453,524
------------
22,796,932
- -----------------------------------------------------
Textiles, Apparel & Luxury Goods--1.0%
Nike, Inc., Cl. B 47,800 3,054,420
- -----------------------------------------------------
Consumer Staples--8.0%
- -----------------------------------------------------
Beverages--1.1%
Constellation Brands,
Inc., Cl. A 1 115,900 3,635,783
- -----------------------------------------------------
Food & Staples Retailing--3.1%
Costco Wholesale
Corp. 1 276,600 9,783,342
- -----------------------------------------------------
Tobacco--3.8%
Altria Group, Inc. 257,400 11,969,100
- -----------------------------------------------------
Energy--6.6%
- -----------------------------------------------------
Energy Equipment & Services--1.3%
Halliburton Co. 142,500 3,402,900
- -----------------------------------------------------
Talisman Energy, Inc. 15,400 751,520
------------
4,154,420
- -----------------------------------------------------
Oil & Gas--5.3%
BP plc, ADR 382,900 16,227,302
- -----------------------------------------------------
Pioneer Natural
Resources Co. 1 30,500 806,725
------------
17,034,027
- -----------------------------------------------------
Financials--28.6%
- -----------------------------------------------------
Capital Markets--2.1%
Bank of New York
Co., Inc. (The) 220,200 6,868,038
- -----------------------------------------------------
Commercial Banks--6.7%
SunTrust Banks, Inc. 149,400 10,020,258
- -----------------------------------------------------
Wachovia Corp. 139,500 6,398,865
- -----------------------------------------------------
Wells Fargo & Co. 85,600 4,820,992
------------
21,240,115
Market Value
Shares See Note 1
- -----------------------------------------------------
Diversified Financial Services--9.1%
Citigroup, Inc. 219,666 $ 10,412,168
- -----------------------------------------------------
Franklin Resources,
Inc. 99,600 4,723,032
- -----------------------------------------------------
Merrill Lynch
& Co., Inc. 61,500 3,640,800
- -----------------------------------------------------
Morgan Stanley 185,900 10,200,333
------------
28,976,333
- -----------------------------------------------------
Insurance--10.7%
American
International
Group, Inc. 47,300 2,877,259
- -----------------------------------------------------
Chubb Corp. 158,800 10,609,428
- -----------------------------------------------------
Platinum
Underwriters
Holdings Ltd. 201,700 5,796,858
- -----------------------------------------------------
Prudential
Financial, Inc. 260,200 10,054,128
- -----------------------------------------------------
Travelers Property
Casualty Corp., Cl. B 194,120 3,177,744
- -----------------------------------------------------
XL Capital Ltd., Cl. A 22,200 1,542,900
------------
34,058,317
- -----------------------------------------------------
Health Care--4.2%
- -----------------------------------------------------
Health Care Providers & Services--2.7%
Aetna, Inc. 128,100 7,354,221
- -----------------------------------------------------
Service Corp.
International 1 259,000 1,256,150
------------
8,610,371
- -----------------------------------------------------
Pharmaceuticals--1.5%
Schering-Plough
Corp. 308,400 4,709,268
- -----------------------------------------------------
Industrials--15.8%
- -----------------------------------------------------
Aerospace & Defense--6.6%
Boeing Co. 156,100 6,008,289
- -----------------------------------------------------
Raytheon Co. 565,900 14,985,032
------------
20,993,321
- -----------------------------------------------------
Commercial Services & Supplies--6.3%
Cendant Corp. 1 833,600 17,030,448
- -----------------------------------------------------
ChoicePoint, Inc. 1 89,700 3,143,088
------------
20,173,536
12 | OPPENHEIMER VALUE FUND
Market Value
Shares See Note 1
- -----------------------------------------------------
Industrial Conglomerates--2.0%
Tyco International
Ltd. 306,700 $ 6,403,896
- -----------------------------------------------------
Road & Rail--0.9%
CNF Transportation,
Inc. 83,800 2,934,676
- -----------------------------------------------------
Information Technology--7.9%
- -----------------------------------------------------
Communications Equipment--1.8%
QUALCOMM, Inc. 121,200 5,757,000
- -----------------------------------------------------
Computers & Peripherals--3.1%
Hewlett-Packard Co. 446,500 9,961,415
- -----------------------------------------------------
Electronic Equipment & Instruments--2.5%
Flextronics
International Ltd. 1 332,000 4,648,000
- -----------------------------------------------------
Thermo Electron
Corp. 1 145,200 3,191,496
------------
7,839,496
- -----------------------------------------------------
Semiconductors & Semiconductor Equipment--0.4%
National
Semiconductor
Corp. 1 31,300 1,271,719
- -----------------------------------------------------
Software--0.1%
Novell, Inc. 1 41,200 241,844
- -----------------------------------------------------
Materials--4.5%
- -----------------------------------------------------
Chemicals--2.6%
Dow Chemical Co. 219,400 8,269,186
- -----------------------------------------------------
Containers & Packaging--0.5%
Smurfit-Stone
Container Corp. 1 104,500 1,619,750
- -----------------------------------------------------
Paper & Forest Products--1.4%
Sappi Ltd.,
Sponsored ADR 339,400 4,344,320
- -----------------------------------------------------
Telecommunication Services--4.6%
- -----------------------------------------------------
Diversified Telecommunication Services--1.2%
IDT Corp., Cl. B 1 208,100 3,978,872
- -----------------------------------------------------
Wireless Telecommunication Services--3.4%
AT&T Corp. 349,100 6,489,769
- -----------------------------------------------------
Vodafone Group
plc, Sponsored ADR 198,500 4,198,275
------------
10,688,044
Market Value
Shares See Note 1
- -----------------------------------------------------
Utilities--4.9%
- -----------------------------------------------------
Electric Utilities--4.0%
AES Corp. (The) 1 774,100 $ 6,773,376
- -----------------------------------------------------
Dominion
Resources, Inc. 39,600 2,439,360
- -----------------------------------------------------
FirstEnergy Corp. 1,400 48,146
- -----------------------------------------------------
PG&E Corp. 1 134,100 3,278,745
------------
12,539,627
- -----------------------------------------------------
Multi-Utilities & Unregulated Power--0.9%
Equitable
Resources, Inc. 72,400 2,982,880
------------
Total Common Stocks
(Cost $260,056,222) 303,537,706
Principal
Amount
- -----------------------------------------------------
Joint Repurchase Agreements--4.4%
- -----------------------------------------------------
Undivided interest of 42.66% in joint repurchase
agreement (Principal Amount/Market Value
$33,038,000, with a maturity value of $33,040,671)
with Zions Bank/Capital Markets Group, 0.97%,
dated 10/31/03, to be repurchased at $14,096,139
on 11/3/03, collateralized by U.S. Treasury Bonds,
1.625%, 1/31/05, with a value of $33,755,317
(Cost $14,095,000) $14,095,000 14,095,000
- -----------------------------------------------------
Total Investments,
at Value
(Cost $274,151,222) 99.7% 317,632,706
- -----------------------------------------------------
Other Assets
Net of Liabilities 0.3 903,640
-------------------------
Net Assets 100.0% $318,536,346
=========================
Footnote to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2003
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------
Investments, at value (cost $274,151,222)--see
accompanying statement $317,632,706
- -----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 1,793,822
Shares of capital stock sold 1,064,657
Interest and dividends 306,152
Other 703
-------------
Total assets 320,798,040
- -----------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------
Bank overdraft 64,890
- -----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,274,729
Shares of capital stock redeemed 619,148
Shareholder reports 106,167
Transfer and shareholder servicing agent fees 66,791
Distribution and service plan fees 64,255
Directors' compensation 45,249
Other 20,465
-------------
Total liabilities 2,261,694
- -----------------------------------------------------------------------------------
Net Assets $318,536,346
=============
Composition of Net Assets
- -----------------------------------------------------------------------------------
Par value of shares of capital stock $ 17,359
- -----------------------------------------------------------------------------------
Additional paid-in capital 304,416,219
- -----------------------------------------------------------------------------------
Undistributed net investment income 158,891
- -----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (29,537,607)
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments 43,481,484
-------------
Net Assets $318,536,346
=============
14 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $215,019,467 and 11,645,369 shares of capital stock
outstanding) $18.46
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $19.59
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $60,858,038 and 3,348,174 shares of capital stock
outstanding) $18.18
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $32,625,172 and 1,819,741 shares of capital stock
outstanding) $17.93
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $7,416,940 and 406,315 shares of capital stock
outstanding) $18.25
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $2,616,729 and 139,262 shares of capital
stock outstanding) $18.79
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2003
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Investment Income
- -----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $54,988) $ 3,749,849
- -----------------------------------------------------------------------------------
Interest 128,352
------------
Total investment income 3,878,201
- -----------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------
Management fees 1,520,857
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 406,162
Class B 514,387
Class C 213,131
Class N 16,290
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 434,581
Class B 217,294
Class C 74,299
Class N 12,685
Class Y 7,364
- -----------------------------------------------------------------------------------
Shareholder reports 163,180
- -----------------------------------------------------------------------------------
Accounting service fees 15,000
- -----------------------------------------------------------------------------------
Directors' compensation 8,660
- -----------------------------------------------------------------------------------
Custodian fees and expenses 3,596
- -----------------------------------------------------------------------------------
Other 32,277
------------
Total expenses 3,639,763
Less reduction to custodian expenses (467)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (4,989)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (46,887)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (1,469)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class N (1,834)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class Y (6,000)
------------
Net expenses 3,578,117
- -----------------------------------------------------------------------------------
Net Investment Income 300,084
- -----------------------------------------------------------------------------------
Realized and Unrealized Gain
- -----------------------------------------------------------------------------------
Net realized gain on investments (including premiums
on options exercised) 15,182,559
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 39,305,650
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $54,788,293
============
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended October 31, 2003 2002
- -----------------------------------------------------------------------------------
Operations
- -----------------------------------------------------------------------------------
Net investment income $ 300,084 $ 361,047
- -----------------------------------------------------------------------------------
Net realized gain (loss) 15,182,559 (27,141,607)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation 39,305,650 10,745,185
---------------------------
Net increase (decrease) in net assets
resulting from operations 54,788,293 (16,035,375)
- -----------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
- -----------------------------------------------------------------------------------
Dividends from net investment income:
Class A (328,372) (135,466)
Class B -- --
Class C -- --
Class N (4,026) (43)
Class Y (1,634) (3,575)
- -----------------------------------------------------------------------------------
Capital Stock Transactions
- -----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from capital stock transactions:
Class A 35,867,196 (14,210,177)
Class B 2,513,021 (6,150,602)
Class C 14,468,487 4,299,663
Class N 5,433,039 1,286,579
Class Y 1,172,727 563,632
- -----------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------
Total increase (decrease) 113,908,731 (30,385,364)
- -----------------------------------------------------------------------------------
Beginning of period 204,627,615 235,012,979
---------------------------
End of period [including undistributed net investment
income of $158,891 and $177,268, respectively] $318,536,346 $204,627,615
===========================
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Class A Year Ended October 31, 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.78 $15.93 $17.06 $20.69 $20.91
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .07 .03 .16 .17
Net realized and unrealized gain (loss) 3.67 (1.21) (.98) (.65) .64
-----------------------------------------------------------------
Total from investment operations 3.71 (1.14) (.95) (.49) .81
- --------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.01) (.18) (.16) (.17)
Distributions from net realized gain -- -- -- (2.98) (.86)
------------------------------------------------
Total dividends and/or distributions
to shareholders (.03) (.01) (.18) (3.14) (1.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.46 $14.78 $15.93 $17.06 $20.69
=================================================================
- --------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 25.18% (7.15)% (5.60)% (2.60)% 3.60%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $215,019 $141,563 $166,285 $181,566 $392,483
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $166,143 $166,319 $181,631 $234,840 $448,884
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.37% 0.38% 0.19% 0.66% 0.68%
Total expenses 1.22% 3,4 1.22% 3,4 1.26% 4 1.17% 4 1.02% 4
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 117% 150% 336% 86% 135%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Voluntary waiver of transfer agent fees less than 0.01%.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER VALUE FUND
Class B Year Ended October 31, 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.64 $15.89 $16.99 $20.58 $20.83
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.06) (.10) (.11) (.05) (.03)
Net realized and unrealized gain (loss) 3.60 (1.15) (.97) (.56) .66
--------------------------------------------------------
Total from investment operations 3.54 (1.25) (1.08) (.61) .63
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.02) -- (.02)
Distributions from net realized gain -- -- -- (2.98) (.86)
--------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- (.02) (2.98) (.88)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.18 $14.64 $15.89 $16.99 $20.58
========================================================
- ------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 24.18% (7.87)% (6.34)% (3.28)% 2.79%
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $60,858 $47,323 $57,584 $64,287 $102,736
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $51,476 $56,200 $65,115 $79,239 $123,616
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment loss (0.44)% (0.40)% (0.57)% (0.14)% (0.08)%
Total expenses 2.14% 2.01% 2.01% 1.93% 1.77%
Expenses after expense reimbursement or fee
waiver and reduction to custodian expenses 2.05% N/A 3,4 N/A 4 N/A 4 N/A 4
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 117% 150% 336% 86% 135%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Voluntary waiver of transfer agent fees less than 0.01%.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER VALUE FUND
FINANCIAL highlights Continued
- --------------------------------------------------------------------------------
Class C Year Ended October 31, 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.44 $15.67 $16.77 $20.35 $20.60
- ----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 (.01) (.08) (.04) (.02)
Net realized and unrealized gain (loss) 3.46 (1.22) (.99) (.56) .65
------------------------------------------------------------
Total from investment operations 3.49 (1.23) (1.07) (.60) .63
- ----------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.03) -- (.02)
Distributions from net realized gain -- -- -- (2.98) (.86)
------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- (.03) (2.98) (.88)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.93 $14.44 $15.67 $16.77 $20.35
============================================================
- ----------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 24.17% (7.85)% (6.38)% (3.27)% 2.82%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $32,625 $13,466 $10,494 $ 9,849 $14,582
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $21,366 $12,977 $11,088 $11,975 $17,746
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment loss (0.49)% (0.41)% (0.56)% (0.14)% (0.07)%
Total expenses 2.07% 3,4 2.00% 3,4 2.01% 4 1.93% 4 1.77% 4
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 117% 150% 336% 86% 135%
<FN>
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Voluntary waiver of transfer agent fees less than 0.01%.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER VALUE FUND
Class N Year Ended October 31, 2003 2002 2001 1
- ----------------------------------------------------------------------------------------
Per Share Operating Data
- ----------------------------------------------------------------------------------------
Net asset value, beginning of period $14.68 $15.90 $18.08
- ----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 .05 (.02)
Net realized and unrealized gain (loss) 3.59 (1.22) (2.16)
------------------------------
Total from investment operations 3.62 (1.17) (2.18)
- ----------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.05) (.05) --
Distributions from net realized gain -- -- --
------------------------------
Total dividends and/or distributions to shareholders (.05) (.05) --
- ----------------------------------------------------------------------------------------
Net asset value, end of period $18.25 $14.68 $15.90
==============================
- ----------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 24.70% (7.41)% (12.06)%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $7,417 $1,201 $12
- ----------------------------------------------------------------------------------------
Average net assets (in thousands) $3,275 $ 508 $ 5
- ----------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.03)% 0.00% (0.45)%
Total expenses 1.61% 1.49% 1.61%
Expenses after expense reimbursement or fee
waiver and reduction to custodian expenses 1.55% N/A 4,5 N/A 5
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 117% 150% 336%
<FN>
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an 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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Voluntary waiver of transfer agent fees less than 0.01%.
5. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
Class Y Year Ended October 31, 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------
Per Share Operating Data
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.96 $16.20 $17.07 $20.72 $20.97
- ----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (1.82) 1 .06 1 .10 1 .17 1 .22
Net realized and unrealized gain (loss) 5.71 1 (1.21) 1 (.97) 1 (.63) 1 .64
------------------------------------------------------
Total from investment operations 3.85 (1.15) (.87) (.46) .86
- ----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.09) -- (.21) (.25)
Distributions from net realized gain -- -- -- (2.98) (.86)
------------------------------------------------------
Total dividends and/or distributions
to shareholders (.02) (.09) -- (3.19) (1.11)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $18.79 $14.96 $16.20 $17.07 $20.72
======================================================
- ----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 25.78% (7.18) % (5.10) % (2.42)% 3.81%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,617 $1,074 $638 $ 1 $76,571
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,558 $955 $155 $48,714 $95,765
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.76% 0.33% 0.62% 1.06% 0.90%
Total expenses 1.19% 3.77% 1.20% 0.97% 0.76%
Expenses after expense reimbursement or fee
waiver and reduction to custodian expenses 0.80% 1.23% 0.83% N/A 4 N/A 4
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 117% 150% 336% 86% 135%
<FN>
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
</FN>
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc.
(the Company), 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 long-term growth of capital by investing primarily in
common stocks with low price- earnings ratios and better-than-anticipated
earnings. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those accounts.
Class Y shares are sold to certain institutional investors without either a
front-end sales charge or a CDSC. All classes of shares have identical rights
and voting privileges. Earnings, net assets and net asset value per share may
differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares 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. Securities traded on NASDAQ are valued based on the closing price
provided by NASDAQ prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the last sale price on the prior
trading day, if it is within the spread of the closing bid and asked prices, and
if not, at the closing bid price. Securities (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 Directors, or at their fair value. Fair value is determined in good faith
using consistently applied procedures under the supervision of the Board of
Directors. Short-term "money market type" debt securities with remaining
maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records 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.
23 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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.
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. Secured by U.S. government securities, these balances
are invested in one or more repurchase agreements. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
Net Unrealized
Appreciation
Undistributed Undistributed Accumulated Based on Cost of
Net Investment Long-Term Loss Securities for Federal
Income Gain Carryforward 1,2 Income Tax Purposes
-----------------------------------------------------------------------
$203,330 $-- $27,993,109 $41,936,987
1. As of October 31, 2003, the Fund had $27,993,109 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2003,
details of the capital loss carryforwards were as follows:
Expiring
----------------------
2009 $ 825,069
2010 27,168,040
-----------
Total $27,993,109
===========
2. During the fiscal year October 31, 2003, the Fund utilized $13,852,965 of
capital loss carryforward to offset capital gains realized in that fiscal year.
During the fiscal year October 31, 2002, the Fund did not utilize any capital
loss carryforwards.
24 | OPPENHEIMER VALUE FUND
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2003. Net assets of the
Fund were unaffected by the reclassifications.
To Net
Ordinary To Tax Return Investment
Income Capital Loss of Capital Loss
---------------------------------------------------------
$15,571 $52,353 $-- $--
The tax character of distributions paid during the years ended October 31, 2003
and October 31, 2002 was as follows:
Year Ended Year Ended
October 31, 2003 October 31, 2002
------------------------------------------------------
Distributions paid from:
Ordinary income $334,032 $139,084
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2003 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities and
other investments $ 275,695,719
===============
Gross unrealized appreciation $ 47,454,612
Gross unrealized depreciation (5,517,625)
---------------
Net unrealized appreciation $ 41,936,987
===============
- --------------------------------------------------------------------------------
Directors' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the year ended
October 31, 2003, the Fund's projected benefit obligations were increased by
$416 and payments of $2,575 were made to retired directors, resulting in an
accumulated liability of $44,440 as of October 31, 2003.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enables directors to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the Fund.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of the Fund or are invested in other Oppenheimer funds
selected by the Director. Deferral of directors' fees under the plan will not
affect the net assets of the Fund, and will not materially affect the Fund's
assets, liabilities or net investment income per share. Amounts will be deferred
until distributed in accordance to the Plan.
25 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
- --------------------------------------------------------------------------------
2. Shares of Capital Stock
The Fund has authorized 600 million shares of $0.001 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
Class A
Sold 4,264,565 $ 70,376,827 1,908,060 $ 31,560,410
Dividends and/or
distributions reinvested 20,386 312,728 7,395 129,115
Acquisition--Note 6 248,058 4,532,025 -- --
Redeemed (2,463,894) (39,354,384) (2,777,138) (45,899,702)
--------------------------------------------------------
Net increase (decrease) 2,069,115 $ 35,867,196 (861,683) $(14,210,177)
========================================================
- ------------------------------------------------------------------------------------
Class B
Sold 1,231,988 $ 19,785,723 849,996 $ 13,980,805
Dividends and/or
distributions reinvested -- -- -- --
Acquisition--Note 6 113,904 2,051,415 -- --
Redeemed (1,230,153) (19,324,117) (1,241,241) (20,131,407)
--------------------------------------------------------
Net increase (decrease) 115,739 $ 2,513,021 (391,245) $ (6,150,602)
========================================================
26 | OPPENHEIMER VALUE FUND
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------
Class C
Sold 1,864,248 $ 28,908,203 508,463 $ 8,150,546
Dividends and/or
distributions reinvested -- -- -- --
Acquisition--Note 6 101,608 1,804,555 -- --
Redeemed (1,078,588) (16,244,271) (245,484) (3,850,883)
------------------------------------------------------
Net increase 887,268 $ 14,468,487 262,979 $ 4,299,663
======================================================
- ----------------------------------------------------------------------------------
Class N
Sold 348,563 $ 5,697,204 91,314 $ 1,447,129
Dividends and/or
distributions reinvested 264 4,022 2 40
Acquisition--Note 6 31,233 564,383 -- --
Redeemed (55,602) (832,570) (10,222) (160,590)
------------------------------------------------------
Net increase 324,458 $ 5,433,039 81,094 $ 1,286,579
======================================================
- ----------------------------------------------------------------------------------
Class Y
Sold 65,067 $ 1,092,179 46,172 $ 771,487
Dividends and/or
distributions reinvested 105 1,632 201 3,570
Acquisition--Note 6 33,446 621,753 -- --
Redeemed (31,137) (542,837) (13,958) (211,425)
------------------------------------------------------
Net increase 67,481 $ 1,172,727 32,415 $ 563,632
======================================================
- --------------------------------------------------------------------------------
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 October 31, 2003, were
$330,040,078 and $271,438,045, respectively.
- --------------------------------------------------------------------------------
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 at an
annual rate of 0.625% of the first $300 million of average annual net assets of
the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets
in excess of $400 million.
- --------------------------------------------------------------------------------
Accounting Fees. The Manager acts as the accounting agent for the Fund at an
annual fee of $15,000, plus out-of-pocket costs and expenses reasonably
incurred.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2003, the Fund paid
$688,082 to OFS for services to the Fund.
27 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Additionally, Class Y shares are subject to minimum fees of $5,000 for assets
of less than $10 million and $10,000 for assets of $10 million or more. The
Class Y shares are subject to the minimum fees in the event that the per account
fee does not equal or exceed the applicable minimum fees. OFS may voluntarily
waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all classes.
This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (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.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- ----------------------------------------------------------------------------------------------------------
October 31, 2003 $495,758 $205,051 $27,569 $337,069 $109,612 $62,804
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Year Ended Distributor Distributor Distributor Distributor
- --------------------------------------------------------------------------------
October 31, 2003 $2,547 $161,071 $3,155 $8,724
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended October 31, 2003, expense under
the Class A Plan totaled $406,162, all of which were paid by the Distributor to
recipients, which included $2,998 retained by the Distributor and $107,878 which
was 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.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.
28 | OPPENHEIMER VALUE FUND
Distribution fees paid to the Distributor for the year ended October 31, 2003,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Uncompensated
Uncompensated Expenses as %
Total Expenses Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- -------------------------------------------------------------------------------
Class B Plan $514,387 $332,306 $2,202,172 3.62%
Class C Plan 213,131 74,906 538,559 1.65
Class N Plan 16,290 11,044 61,816 0.83
- --------------------------------------------------------------------------------
5. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist. Written
option activity for the year ended October 31, 2003 was as follows:
Call Options
-------------------------
Number of Amount of
Contracts Premiums
- -----------------------------------------------------
Options outstanding as of
October 31, 2002 14 $ 742
Options written 1,511 72,602
Options exercised (1,525) (73,344)
----------------------
Options outstanding as of
October 31, 2003 -- $ --
======================
29 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Acquisition of Oppenheimer Trinity Value Fund
On September 18, 2003, the Fund acquired all of the net assets of Oppenheimer
Trinity Value Fund, pursuant to an Agreement and Plan of Reorganization approved
by the Oppenheimer Trinity Value Fund shareholders on September 12, 2003. The
Fund issued (at an exchange ratio of 0.462030 for Class A, 0.454702 for Class B,
0.467218 for Class C, 0.462387 for Class N and 0.458575 for Class Y of the Fund
to one share of Oppenheimer Value Fund 248,058; 113,904; 101,608; 31,233 and
33,446 shares of capital stock for Class A, Class B, Class C, Class N and Class
Y, respectively, valued at $4,532,025, $2,051,415, $1,804,555, $564,383 and
$621,753 in exchange for the net assets, resulting in combined Class A net
assets of $199,379,468, Class B net assets of $59,597,524, Class C net assets of
$31,165,757, Class N net assets of $6,114,820 and Class Y net assets of
$2,499,533 on September 18, 2003. The net assets acquired included net
unrealized appreciation of $721,866 and an unused capital loss carryforward of
$2,018,832, potential utilization subject to tax limitations. The exchange
qualified as a tax-free reorganization for federal income tax purposes.
- --------------------------------------------------------------------------------
7. Borrowing and Lending Arrangements
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission to allow these affiliated
funds to lend money to, and borrow money from, each other, in an attempt to
reduce borrowing costs below those of bank loan facilities. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Directors,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the year
ended or at October 31, 2003.
30 | OPPENHEIMER VALUE FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders of
Oppenheimer Series Fund, Inc.:
We have audited the accompanying statement of assets and liabilities including
the statement of investments of Oppenheimer Value Fund (one of the portfolios
constituting the Oppenheimer Series Fund, Inc.) as of October 31, 2003, 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 October 31, 2003, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. 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 Value Fund as of October 31, 2003, 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.
KPMG LLP
Denver, Colorado
November 21, 2003
31 | OPPENHEIMER VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends of $0.0340, $0.0465 and $0.0224 per share were paid to Class A,
Class N and Class Y shareholders, respectively, on December 6, 2002, all of
which was designated as ordinary income for federal income tax purposes.
Dividends, if any, paid by the Fund during the fiscal year ended October 31,
2003 which are not designated as capital gain distributions should be multiplied
by 100% to arrive at the amount eligible for the corporate dividend-received
deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended October 31, 2003 which are not designated as capital gain distributions
are eligible for lower individual income tax rates to the extent that the Fund
has received qualified dividendincome as stipulated by recent tax legislation.
$3,054,725 of the Fund's fiscal year taxable income may be eligible for the
lower individual income tax rates. In early 2004, shareholders of record will
receive information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
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.
Portfolio Proxy Voting
Policies and Procedures Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.225.5677, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund will be
required to file new Form N-PX, with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. The first such
filing is due no later than August 31, 2004, for the twelve months ended June
30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without
charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii)
on the SEC's website at www.sec.gov.
32 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other Trusteeships/Directorships Held
Fund, Length of Service, Age by Director; Number of Portfolios in Fund Complex Currently Overseen by Director
INDEPENDENT The address of each Director in the chart below is 6803 S. Tucson Way,
DIRECTORS Centennial, CO 80112-3924. Each Director serves for an indefinite term, until
his or her resignation, retirement, death or removal. Mr. Motley was elected as
Director to the Board I funds effective October 10, 2002 and did not hold shares
of Board I funds during the calendar year ended December 31, 2002.
Clayton K. Yeutter, Of Counsel (since 1993), Hogan & Hartson (a law firm). Other directorships:
Chairman of the Board Weyerhaeuser Corp. (since 1999) and Danielson Holding Corp. (since 2002);
of Directors (since 2003), formerly a director of Caterpillar, Inc. (1993-December 2002). Oversees 25
Director (since 1991) portfolios in the OppenheimerFunds complex.
Age: 72
Robert G. Galli, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Director (since 1996) OppenheimerFunds complex.
Age: 70
Phillip A. Griffiths, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J., a
Director (since 1999) director (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward
Age: 65 Academy, a Senior Advisor (since 2001) of The Andrew W. Mellon Foundation. A
member of: the National Academy of Sciences (since 1979), American Academy of
Arts and Sciences (since 1995), American Philosophical Society (since 1996) and
Council on Foreign Relations (since 2002). Formerly a director of Bankers Trust
New York Corporation (1994-1999). Oversees 25 portfolios in the OppenheimerFunds
complex.
Joel W. Motley, Director (since 2002) Columbia Equity Financial Corp. (privately-held financial
Director (since 2002) adviser); Managing Director (since 2002) Carmona Motley, Inc. (privately-held
Age: 51 financial adviser); Formerly he held the following positions: Managing Director
(January 1998-December 2001), Carmona Motley Hoffman Inc. (privately-held
financial adviser); Managing Director (January 1992-December 1997), Carmona
Motley & Co. (privately-held financial adviser). Oversees 25 portfolios in the
OppenheimerFunds complex.
Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility holding company) and
Director (since 1985) Prime Retail, Inc. (real estate investment trust); formerly a director of
Age: 76 Dominion Energy, Inc. (electric power and oil & gas producer), President and
Chief Executive Officer of The Conference Board, Inc. (international economic
and business research) and a director of Lumbermens Mutual Casualty Company,
American Motorists Insurance Company and American Manufacturers Mutual Insurance
Company. Oversees 25 portfolios in the OppenheimerFunds complex.
Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a
Director (since 1993) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB
Age: 73 and GASB), Senior Fellow of Jerome Levy Economics Institute, Bard College,
Chairman of Municipal Assistance Corporation for the City of New York, New York
State Comptroller and Trustee of New York State and Local Retirement Fund.
Oversees 25 investment companies in the OppenheimerFunds complex.
33 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate
Director (since 1989) governance consulting and executive recruiting); a life trustee of International
Age: 71 House (non-profit educational organization), and a trustee (since 1996) of the
Greenwich Historical Society. Oversees 25 portfolios in the OppenheimerFunds
complex.
Donald W. Spiro, Chairman Emeritus (since January 1991) of the Manager. Formerly a director
Vice Chairman of the (January 1969-August 1999) of the Manager. Oversees 25 portfolios in the
Board of Directors, OppenheimerFunds complex.
Director (since 1985)
Age: 77
- ------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR The address of Mr. Murphy in the chart below is Two World Financial Center, 225
AND OFFICER Liberty St., New York, NY 10281-1008. Mr. Murphy serves for an indefinite term,
until his resignation, death or removal.
John V. Murphy, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Director, (since September 2000) of the Manager; President and a director or trustee of
Director (since 2001) other Oppenheimer funds; President and a director (since July 2001) of
Age: 54 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of
Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc.
(a subsidiary of the Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and a director (since July 2001)
of OppenheimerFunds Legacy Program (a charitable trust program established by
the Manager); a director of the investment advisory subsidiaries of the Manager:
OFI Institutional Asset Management, Inc. and Centennial Asset Management
Corporation (since November 2001), HarbourView Asset Management Corporation and
OFI Private Investments, Inc. (since July 2001); President (since November 1,
2001) and a director (since July 2001) of Oppenheimer Real Asset Management,
Inc.; a director (since November 2001) of Trinity Investment Management Corp.
and Tremont Advisers, Inc. (investment advisory affiliates of the Manager);
Executive Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a director (since June 1995)
of DLB Acquisition Corporation (a holding company that owns the shares of David
L. Babson & Company, Inc.); formerly, Chief Operating Officer (September
2000-June 2001) of the Manager; President and trustee (November 1999-November
2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end
investment companies); a director (September 1999-August 2000) of C.M. Life
Insurance Company; President, Chief Executive Officer and director (September
1999-August 2000) of MML Bay State Life Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 72 portfolios as
Trustee/Officer and 10 portfolios as Officer in the OppenheimerFunds complex.
34 | OPPENHEIMER VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below is as follows: for Messrs. Leavy and
Zack, Two World Financial Center, 225 Liberty St., New York, NY 10281-1008, for Mr.
Wixted, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for
an annual term or until his or her earlier resignation, death or removal.
Christopher Leavy, Senior Vice President (since September 2000) of the Manager; prior to joining
Vice President (since 2000) the Manager in September 2000, he was a portfolio manager of Morgan Stanley Dean
Age: 32 Witter Investment Management (from 1997) prior to which he was a portfolio
manager and equity analyst of Crestar Asset Management (from 1995). An officer
of 5 portfolios in the OppenheimerFunds complex.
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
Treasurer (since 1999) (since March 1999) of HarbourView Asset Management Corporation, Shareholder
Age: 44 Services, Inc., Oppenheimer Real Asset Management Corporation, Shareholder
Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private
Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and
OppenheimerFunds plc (since May 2000) and OFI Institutional Asset Management,
Inc. (since November 2000) (offshore fund management subsidiaries of the
Manager); Treasurer and Chief Financial Officer (since May 2000) of Oppenheimer
Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer
(since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy
Program (since April 2000); formerly Principal and Chief Operating Officer
(March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An
officer of 82 portfolios in the OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since February 2002)
Secretary (since 2001) of the Manager; General Counsel and a director (since November 2001) of
Age: 55 OppenheimerFunds Distributor, Inc.; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset Management Corporation; Vice
President and a director (since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel and a director (since
November 2001) of Shareholder Services, Inc., Shareholder Financial Services,
Inc., OFI Private Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel (since November 2001) of
Centennial Asset Management Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director
(since November 2001) of OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy Program; Secretary (since
November 2001) of Oppenheimer Acquisition Corp.; formerly Acting General Counsel
(November 2001-February 2002) and Associate General Counsel (May 1981-October
2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001); OppenheimerFunds International Ltd. and OppenheimerFunds
plc (October 1997-November 2001). An officer of 82 portfolios in the
OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information
about the Fund's Directors and is available without charge upon request.
35 | OPPENHEIMER VALUE FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Fund has determined that Edward
V. Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Director pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. NOT APPLICABLE
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of October 31, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
registrant in the reports that it files under the Securities Exchange
Act of 1934 (a) is accumulated and communicated to registrant's
management, including its principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the
U.S. Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)