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, 2003 - October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK HOLDINGS
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BP plc, ADR 5.2%
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International Business Machines Corp. 5.2
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Altria Group, Inc. 5.2
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UnitedGlobalCom, Inc., Cl. A 4.8
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Raytheon Co. 4.8
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Bank of America Corp. 4.6
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Cendant Corp. 4.4
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General Electric Co. 4.2
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Take-Two Interactive Software, Inc. 4.1
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Citigroup, Inc. 4.0
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets. For more current Fund holdings,
please visit www.oppenheimerfunds.com.
TOP TEN COMMON STOCK INDUSTRIES
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Diversified Financial Services 10.4%
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Media 8.8
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Commercial Banks 8.1
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Oil & Gas 7.9
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Industrial Conglomerates 6.5
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Aerospace & Defense 6.4
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Computers & Peripherals 5.5
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Diversified Telecommunication Services 5.2
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Tobacco 5.2
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Software 5.1
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on net assets.
8 | OPPENHEIMER VALUE FUND
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Financials 26.3%
Diversified Financial Services 10.5
Commercial Banks 8.3
Insurance 5.0
Thrifts & Mortgage Finance 2.5
Industrials 17.8
Information Technology 12.4
Consumer Discretionary 12.2
Energy 9.1
Telecommunication Services 5.3
Consumer Staples 5.3
Utilities 4.8
Materials 4.1
Health Care 2.7
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2004, and are based on common stocks.
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9 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2004, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund generated successful
results during the past 12 months, driven partly by the portfolio's
overweighting of the industrials sector and strong stock selection in the
industrials, health care and technology sectors.
Our management strategy remained consistent during the period, as it does
in all types of market environments. We look for companies with strong
fundamentals and whose long-term earnings power we believe is being
underestimated by Wall Street.
The portfolio's weighting in consumer staples stocks fell during the
period as we followed our investment strategy. Much of that reduction stemmed
from our sale of warehouse club retailer Costco Wholesale Corp. This company had
performed well for the Fund, and we sold our shares as they rose and began
reflecting the company's improving margin prospects. At the same time, the
portfolio's technology weighting increased, fueled in part by our purchase of
video game maker Take-Two Interactive Software, Inc. In our opinion, this
company was significantly undervalued and poised to benefit from the forthcoming
release of San Andreas, the next game in the company's popular Grand Theft Auto
franchise.
As we mentioned, the industrials sector added to the Fund's results. In
particular, we benefited from defense contractor Raytheon Co. and a leading
defense contractor. Raytheon, a large holding for most of the reporting period,
has been a classic turnaround story. The company has gained market share as a
result of its significant emphasis in electronics, intelligence and
communications.
The Fund also benefited from stock selection in the health care sector. A
managed healthcare provider was successful in turning around its operations and
was an especially positive contributor during the period. Also, the
pharmaceutical stocks owned in the portfolio performed well compared to other
drug companies.
On the negative side, the telecommunications sector dragged down
performance, especially our investment in IDT Corp. Investors worried that
recent regulatory changes affecting the telecom-services company's competitive
local exchange business could squeeze profit margins. Despite this challenge, we
continued to hold onto our shares of IDT. The company owns other attractive
businesses and offered strong value, in our opinion. Being underweighted in the
energy sector during a time of rising oil prices also hurt performance. While we
benefited overall from the energy stocks we did own, such as U.K.-based
petroleum giant BP plc, ADR, maintaining a smaller weighting in energy companies
relative to the benchmark detracted from results.
10 | OPPENHEIMER VALUE FUND
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, 2004. In the case of Class A shares, performance is
measured over a ten-fiscal-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, and Class N shares, and reinvestments
of all dividends and capital gains distributions. Past performance cannot
guarantee future results.
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 income but does not consider the
effect of transaction costs, and none of the data in the graphs shows the effect
of taxes. The Fund's performance reflects the effects of the Fund's business and
operating expenses. While index comparisons may be useful to provide a benchmark
for the Fund's performance, it must be noted that the Fund's investments are not
limited to the investments in the index.
11 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class A)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value
Date 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
01/31/2004 23,201 29,075
04/30/2004 22,375 28,579
07/31/2004 22,486 28,556
10/31/2004 23,602 29,424
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 8.24% 5-Year 2.95% 10-Year 8.73%
1. The Fund changed its fiscal year-end from 12/31 to 10/31.
12 | OPPENHEIMER VALUE FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class B)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value
Date 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
01/31/2004 18,736 22,121
04/30/2004 18,069 21,744
07/31/2004 18,159 21,727
10/31/2004 19,061 22,387
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 8.75% 5-Year 2.99% Since Inception (10/2/95) 7.36%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. 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. SEE PAGE 17 FOR
FURTHER INFORMATION.
1. The Fund changed its fiscal year-end from 12/31 to 10/31.
13 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class C)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value
Date 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 12,605 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
01/31/2004 16,241 19,516
04/30/2004 15,638 19,183
07/31/2004 15,678 19,168
10/31/2004 16,418 19,750
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 12.83% 5-Year 3.36% Since Inception (5/1/96) 6.01%
1. The Fund changed its fiscal year-end from 12/31 to 10/31.
14 | OPPENHEIMER VALUE FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class N)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value
Date 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
01/31/2004 11,453 9,559
04/30/2004 11,034 9,396
07/31/2004 11,079 9,388
10/31/2004 11,615 9,674
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/04
1-Year 13.39% 5-Year N/A Since Inception (3/1/01) 4.17%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 17 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class Y)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value
Date 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
01/31/2004 16,090 16,972
04/30/2004 15,541 16,683
07/31/2004 15,633 16,669
10/31/2004 16,418 17,176
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/04
1-Year 15.30% 5-Year 4.51% Since Inception (12/16/96) 6.50%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 17 FOR FURTHER
INFORMATION.
16 | OPPENHEIMER VALUE FUND
NOTES
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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.
Investors should consider the Fund's investment objectives, risks, and other
charges and expenses carefully before investing. The Fund's prospectus contains
this and other information about the Fund, and may be obtained by asking your
financial advisor, calling us at 1.800.525.7048 or visiting our website at
www.oppenheimerfunds.com. Read the prospectus carefully before investing.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
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 1-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 1-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.
17 | OPPENHEIMER VALUE FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended October 31, 2004.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
18 | OPPENHEIMER VALUE FUND
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(5/1/04) (10/31/04) OCTOBER 31, 2004
- ---------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,054.90 $ 5.54
- ---------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,019.76 5.45
- ---------------------------------------------------------------------
Class B Actual 1,000.00 1,049.70 10.15
- ---------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.28 9.98
- ---------------------------------------------------------------------
Class C Actual 1,000.00 1,049.90 9.73
- ---------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,015.69 9.57
- ---------------------------------------------------------------------
Class N Actual 1,000.00 1,052.60 7.35
- ---------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.00 7.23
- ---------------------------------------------------------------------
Class Y Actual 1,000.00 1,056.40 3.16
- ---------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,022.07 3.11
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/366
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended October 31, 2004 are as follows:
CLASS EXPENSE RATIOS
- ------------------------
Class A 1.07%
- ------------------------
Class B 1.96
- ------------------------
Class C 1.88
- ------------------------
Class N 1.42
- ------------------------
Class Y 0.61
19 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.9%
- --------------------------------------------------------------------------------
HOTELS,RESTAURANTS & LEISURE--3.1%
McDonald's Corp. 657,670 $ 19,171,081
- --------------------------------------------------------------------------------
MEDIA--8.8%
Liberty Media
Corp., Cl. A 1 2,704,670 24,125,656
- --------------------------------------------------------------------------------
UnitedGlobalCom,
Inc., Cl. A 1 3,932,062 29,411,824
-------------
53,537,480
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.2%
- --------------------------------------------------------------------------------
TOBACCO--5.2%
Altria Group, Inc. 649,600 31,479,616
- --------------------------------------------------------------------------------
ENERGY--8.9%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.0%
Halliburton Co. 164,710 6,100,858
- --------------------------------------------------------------------------------
OIL & GAS--7.9%
BP plc, ADR 547,130 31,870,323
- --------------------------------------------------------------------------------
Kinder Morgan, Inc. 70,730 4,552,890
- --------------------------------------------------------------------------------
LUKOIL, Sponsored
ADR 94,850 11,832,538
-------------
48,255,751
- --------------------------------------------------------------------------------
FINANCIALS--25.9%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--8.1%
Bank of America
Corp. 620,538 27,793,897
- --------------------------------------------------------------------------------
Commerce
Bancorp, Inc. 63,600 3,767,664
- --------------------------------------------------------------------------------
Wells Fargo & Co. 302,260 18,050,967
-------------
49,612,528
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--10.4%
Citigroup, Inc. 551,746 24,480,970
- --------------------------------------------------------------------------------
Franklin Resources,
Inc. 322,060 19,523,277
- --------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc. 234,200 19,239,530
-------------
63,243,777
- --------------------------------------------------------------------------------
INSURANCE--4.9%
Genworth Financial,
Inc., Cl. A 111,300 2,655,618
- --------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd. 161,800 4,732,650
- --------------------------------------------------------------------------------
Prudential Financial,
Inc. 477,650 22,196,396
-------------
29,584,664
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.5%
Freddie Mac 227,930 15,180,138
- --------------------------------------------------------------------------------
HEALTH CARE--2.6%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--2.6%
MedImmune, Inc. 1 108,700 3,089,254
- --------------------------------------------------------------------------------
Wyeth 325,970 12,924,711
-------------
16,013,965
- --------------------------------------------------------------------------------
INDUSTRIALS--17.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--6.4%
Empresa Brasileira
de Aeronautica
SA, ADR 370,200 9,825,108
- --------------------------------------------------------------------------------
Raytheon Co. 800,890 29,216,467
-------------
39,041,575
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--4.4%
Cendant Corp. 1,291,290 26,587,661
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--6.5%
General Electric Co. 755,510 25,778,001
- --------------------------------------------------------------------------------
Tyco International
Ltd. 443,770 13,823,436
-------------
39,601,437
- --------------------------------------------------------------------------------
MACHINERY--0.2%
Deere & Co. 23,900 1,428,742
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.2%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--5.5%
Hewlett-Packard Co. 97,480 1,818,977
- --------------------------------------------------------------------------------
International Business
Machines Corp. 351,170 31,517,508
-------------
33,336,485
20 | OPPENHEIMER VALUE FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.6%
National
Semiconductor
Corp. 1 560,900 $ 9,367,030
- --------------------------------------------------------------------------------
SOFTWARE--5.1%
Compuware Corp. 1 549,220 3,179,984
- --------------------------------------------------------------------------------
Novell, Inc. 1 435,700 3,132,683
- --------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 756,450 24,932,592
-------------
31,245,259
- --------------------------------------------------------------------------------
MATERIALS--4.0%
- --------------------------------------------------------------------------------
CHEMICALS--2.4%
Dow Chemical Co. 66,850 3,004,239
- --------------------------------------------------------------------------------
Praxair, Inc. 280,280 11,827,816
-------------
14,832,055
- --------------------------------------------------------------------------------
METALS & MINING--1.6%
Alcan, Inc. 91,600 4,242,912
- --------------------------------------------------------------------------------
Inco Ltd. 1 145,830 5,162,382
-------------
9,405,294
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--5.2%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--5.2%
IDT Corp., Cl. B 1 1,216,793 16,816,079
- --------------------------------------------------------------------------------
SBC Communications,
Inc. 353,770 8,936,230
- --------------------------------------------------------------------------------
Verizon
Communications, Inc. 157,800 6,169,980
-------------
31,922,289
- --------------------------------------------------------------------------------
UTILITIES--4.7%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.6%
AES Corp. (The) 1 1,443,330 15,732,295
- --------------------------------------------------------------------------------
PG&E Corp. 1 197,920 6,341,357
-------------
22,073,652
- --------------------------------------------------------------------------------
GAS UTILITIES--1.1%
Sempra Energy 191,800 6,432,972
-------------
Total Common Stocks
(Cost $532,345,109) 597,454,309
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.3%
- --------------------------------------------------------------------------------
Undivided interest of 24.40% in joint
repurchase agreement (Principal Amount/
Value $57,987,000, with a maturity value
of $57,995,553) with Zions Bank/Capital
Markets Group, 1.77%, dated 10/29/04,
to be repurchased at $14,150,087 on
11/1/04, collateralized by U.S. Treasury
Nts., 2.375%, 8/15/06, with a
value of $59,191,443
(Cost $14,148,000) $14,148,000 14,148,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $546,493,109) 100.4% 611,602,309
- --------------------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS (0.4) (2,619,304)
----------------------------
NET ASSETS 100.0% $ 608,983,005
============================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2004
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value (cost $546,493,109)--see accompanying statement of investments $ 611,602,309
- -------------------------------------------------------------------------------------------------------
Cash 262,537
- -------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of capital stock sold 1,562,927
Investments sold 1,480,621
Interest and dividends 698,414
Other 9,733
----------------
Total assets 615,616,541
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,574,009
Shares of capital stock redeemed 657,311
Transfer and shareholder servicing agent fees 120,617
Distribution and service plan fees 118,868
Shareholder communications 69,271
Directors' compensation 56,919
Other 36,541
----------------
Total liabilities 6,633,536
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 608,983,005
================
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 29,023
- -------------------------------------------------------------------------------------------------------
Additional paid-in capital 537,262,821
- -------------------------------------------------------------------------------------------------------
Accumulated net investment income 1,545,458
- -------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 5,036,503
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 65,109,200
----------------
NET ASSETS $ 608,983,005
================
22 | OPPENHEIMER VALUE FUND
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $378,784,635 and
17,913,014 shares of capital stock outstanding) $ 21.15
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 22.44
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $85,683,190 and 4,143,459 shares
of capital stock outstanding) $ 20.68
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $79,501,358 and 3,894,456 shares
of capital stock outstanding) $ 20.41
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $33,099,610 and 1,591,177 shares
of capital stock outstanding) $ 20.80
- ---------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$31,914,212 and 1,481,389 shares of capital stock outstanding) $ 21.54
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $86,289) $ 8,092,346
- --------------------------------------------------------------------------------
Interest 114,391
---------------
Total investment income 8,206,737
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 2,702,576
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 743,002
Class B 772,119
Class C 612,515
Class N 116,310
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 636,014
Class B 249,851
Class C 160,911
Class N 80,227
Class Y 2,098
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 58,120
Class B 43,767
Class C 15,791
Class N 264
- --------------------------------------------------------------------------------
Directors' compensation 19,021
- --------------------------------------------------------------------------------
Accounting service fees 15,000
- --------------------------------------------------------------------------------
Custodian fees and expenses 8,269
- --------------------------------------------------------------------------------
Other 101,195
---------------
Total expenses 6,337,050
Less reduction to custodian expenses (2,417)
Less payments and waivers of expenses (3,739)
---------------
Net expenses 6,330,894
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,875,843
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on:
Investments 36,947,651
Foreign currency transactions 38,230
Net increase from payment by affiliate 126,396
---------------
Net realized gain 37,112,277
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 18,764,765
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 57,752,885
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003
- ---------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------
Net investment income $ 1,875,843 $ 300,084
- ---------------------------------------------------------------------------------------------
Net realized gain 37,112,277 15,182,559
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation 18,764,765 39,305,650
----------------------------------
Net increase in net assets resulting from operations 57,752,885 54,788,293
- ---------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (574,991) (328,372)
Class B -- --
Class C -- --
Class N (59,111) (4,026)
Class Y (16,057) (1,634)
- ---------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital
stock transactions:
Class A 126,690,468 35,867,196
Class B 15,328,730 2,513,021
Class C 40,268,281 14,468,487
Class N 23,054,671 5,433,039
Class Y 28,001,783 1,172,727
- ---------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------
Total increase 290,446,659 113,908,731
- --------------------------------------------------------------------------------------------
Beginning of period 318,536,346 204,627,615
----------------------------------
End of period (including accumulated net investment
income of $1,545,458 and $158,891, respectively) $ 608,983,005 $ 318,536,346
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.46 $ 14.78 $ 15.93 $ 17.06 $ 20.69
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .04 .07 .03 .16
Net realized and unrealized gain (loss) 2.61 3.67 (1.21) (.98) (.65)
---------------------------------------------------------------------------
Total from investment operations 2.74 3.71 (1.14) (.95) (.49)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.05) (.03) (.01) (.18) (.16)
Distributions from net realized gain -- -- -- -- (2.98)
---------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.05) (.03) (.01) (.18) (3.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 21.15 $ 18.46 $ 14.78 $ 15.93 $ 17.06
===========================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.85% 25.18% (7.15)% (5.60)% (2.60)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 378,785 $ 215,019 $ 141,563 $ 166,285 $ 181,566
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 303,560 $ 166,143 $ 166,319 $ 181,631 $ 234,840
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.66% 0.37% 0.38% 0.19% 0.66%
Total expenses 1.07% 4,5 1.22% 4,5 1.22% 4,5 1.26% 4 1.17% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 85% 117% 150% 336% 86%
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%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER VALUE FUND
CLASS B YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.18 $ 14.64 $ 15.89 $ 16.99 $ 20.58
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05) 1 (.06) (.10) (.11) (.05)
Net realized and unrealized gain (loss) 2.55 3.60 (1.15) (.97) (.56)
------------------------------------------------------------------------
Total from investment operations 2.50 3.54 (1.25) (1.08) (.61)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.02) --
Distributions from net realized gain -- -- -- -- (2.98)
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- -- (.02) (2.98)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.68 $ 18.18 $ 14.64 $ 15.89 $ 16.99
========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.75% 24.18% (7.87)% (6.34)% (3.28)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 85,683 $ 60,858 $ 47,323 $ 57,584 $ 64,287
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 77,341 $ 51,476 $ 56,200 $ 65,115 $ 79,239
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.24)% (0.44)% (0.40)% (0.57)% (0.14)%
Total expenses 1.98% 2.14% 2.01% 2.01% 1.93%
Expenses after payments and waivers
and reduction to custodian expenses N/A 4 2.05% N/A 4,5 N/A 4 N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 85% 117% 150% 336% 86%
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%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.93 $ 14.44 $ 15.67 $ 16.77 $ 20.35
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) 1 .03 (.01) (.08) (.04)
Net realized and unrealized gain (loss) 2.51 3.46 (1.22) (.99) (.56)
-------------------------------------------------------------------------
Total from investment operations 2.48 3.49 (1.23) (1.07) (.60)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.03) --
Distributions from net realized gain -- -- -- -- (2.98)
-------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- -- (.03) (2.98)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.41 $ 17.93 $ 14.44 $ 15.67 $ 16.77
=========================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.83% 24.17% (7.85)% (6.38)% (3.27)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 79,501 $ 32,625 $ 13,466 $ 10,494 $ 9,849
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 61,387 $ 21,366 $ 12,977 $ 11,088 $ 11,975
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.17)% (0.49)% (0.41)% (0.56)% (0.14)%
Total expenses 1.89% 4,5 2.07% 4,5 2.00% 4,5 2.01% 4 1.93% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 85% 117% 150% 336% 86%
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%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER VALUE FUND
CLASS N YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1
- -------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.25 $ 14.68 $ 15.90 $ 18.08
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 2 .03 .05 (.02)
Net realized and unrealized gain (loss) 2.56 3.59 (1.22) (2.16)
---------------------------------------------------------
Total from investment operations 2.62 3.62 (1.17) (2.18)
- -------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.07) (.05) (.05) --
Distributions from net realized gain -- -- -- --
---------------------------------------------------------
Total dividends and/or distributions to shareholders (.07) (.05) (.05) --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.80 $ 18.25 $ 14.68 $ 15.90
=========================================================
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 14.39% 24.70% (7.41)% (12.06)%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 33,100 $ 7,417 $ 1,201 $ 12
- -------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 23,344 $ 3,275 $ 508 $ 5
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.28% (0.03)% 0.00% (0.45)%
Total expenses 1.45% 1.61% 1.49% 1.61%
Expenses after payments and waivers and reduction
to custodian expenses N/A 5,6 1.55% N/A 5,6 N/A 5
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 85% 117% 150% 336%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Per share amounts calculated based on the average shares outstanding
during the period.
3. 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.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.79 $ 14.96 $ 16.20 $ 17.07 $ 20.72
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .24 1 (1.86) 1 .06 1 .10 1 .17 1
Net realized and unrealized gain (loss) 2.62 5.71 1 (1.21) 1 (.97) 1 (.63) 1
------------------------------------------------------------------------
Total from investment operations 2.86 3.85 (1.15) (.87) (.46)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.11) (.02) (.09) -- (.21)
Distributions from net realized gain -- -- -- -- (2.98)
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.11) (.02) (.09) -- (3.19)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 21.54 $ 18.79 $ 14.96 $ 16.20 $ 17.07
========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.30% 25.78% (7.18)% (5.10)% (2.42)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 31,914 $ 2,617 $ 1,074 $ 638 $ 1
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 8,398 $ 1,558 $ 955 $ 155 $ 48,714
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.17% 0.76% 0.33% 0.62% 1.06%
Total expenses 0.61% 1.19% 3.77% 1.20% 0.97%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 0.80% 1.23% 0.83% N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 85% 117% 150% 336% 86%
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | 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, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class 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. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. 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.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Directors. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair
31 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 as of the close of The New York Stock Exchange (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. 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. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Directors.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
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. 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
32 | OPPENHEIMER VALUE FUND
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
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES
------------------------------------------------------------------------
$ 1,601,750 $ 5,711,852 $ -- $ 64,433,852
1. During the fiscal year ended October 31, 2004, the Fund utilized $29,785,615
a,b of capital loss carryforward to offset capital gains realized in that
fiscal year.
a. Includes $1,348,115 of capital loss carryforwards acquired in the
November 6, 2003 merger of Oppenheimer Select Managers Salomon Brothers All
Cap Fund.
b. Includes $444,392 of capital loss carryforwards acquired in the
September 18, 2003 merger of Oppenheimer Trinity Value Fund.
2. During the fiscal year ended October 31, 2003, the Fund utilized $13,852,965
c of capital loss carryforward to offset capital gains realized in that fiscal
year.
c. Includes $52,353 of capital loss carryforwards acquired in the
September 18, 2003 merger of Oppenheimer Trinity 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, 2004. Net assets of the
Fund were unaffected by the reclassifications.
INCREASE TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
INCREASE TO NET INVESTMENT REALIZED GAIN
PAID-IN CAPITAL INCOME ON INVESTMENTS 3
---------------------------------------------------------
$ 2,377,284 $ 160,883 $ 2,538,167
3. $618,995, all of which was long-term capital gain, was distributed in
connection with Fund share redemptions.
The tax character of distributions paid during the years ended October 31, 2004
and October 31, 2003 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2004 OCTOBER 31, 2003
---------------------------------------------------------------
Distributions paid from:
Ordinary income $ 650,159 $ 334,032
33 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2004 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 $ 547,168,457
==============
Gross unrealized appreciation $ 70,083,866
Gross unrealized depreciation (5,650,014)
--------------
Net unrealized appreciation $ 64,433,852
==============
- --------------------------------------------------------------------------------
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, 2004, the Fund's projected benefit obligations were increased by
$6,163 and payments of $2,806 were made to retired directors, resulting in an
accumulated liability of $47,797 as of October 31, 2004.
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.
For purposes of determining the amount owed to the under the plan, deferred
amounts are treated as though equal dollar amounts had been invested in shares
of the Fund or in other Oppenheimer funds selected by the Director. The Fund
purchases shares of the funds selected for deferral by the Director in amounts
equal to his or her deemed investment, resulting in a Fund asset equal to the
deferred compensation liability. Such assets are included as a component of
"Other" within the asset section of the Statement of Assets and Liabilities.
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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian
34 | OPPENHEIMER VALUE FUND
account during the period. The Fund pays interest to its custodian on such cash
overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction
to Custodian Expenses line item, if applicable, represents earnings on cash
balances maintained by the Fund during the period. Such interest expense and
other custodian fees may be paid with these earnings.
- --------------------------------------------------------------------------------
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 U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF 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, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------
CLASS A
Sold 8,369,840 $ 170,220,679 4,264,565 $ 70,376,827
Dividends and/or
distributions reinvested 26,697 512,868 20,386 312,728
Acquisition-Note 5 393,950 7,335,351 248,058 4,532,025
Redeemed (2,522,842) (51,378,430) (2,463,894) (39,354,384)
--------------------------------------------------------------------
Net increase 6,267,645 $ 126,690,468 2,069,115 $ 35,867,196
====================================================================
- ----------------------------------------------------------------------------------------------------
CLASS B
Sold 2,032,579 $ 40,623,831 1,231,988 $ 19,785,723
Dividends and/or
distributions reinvested -- -- -- --
Acquisition-Note 5 286,209 5,246,208 113,904 2,051,415
Redeemed (1,523,503) (30,541,309) (1,230,153) (19,324,117)
--------------------------------------------------------------------
Net increase 795,285 $ 15,328,730 115,739 $ 2,513,021
====================================================================
- ----------------------------------------------------------------------------------------------------
CLASS C
Sold 2,218,314 $ 43,763,468 1,864,248 $ 28,908,203
Dividends and/or
distributions reinvested -- -- -- --
Acquisition-Note 5 440,763 7,968,992 101,608 1,804,555
Redeemed (584,362) (11,464,179) (1,078,588) (16,244,271)
--------------------------------------------------------------------
Net increase 2,074,715 $ 40,268,281 887,268 $ 14,468,487
====================================================================
35 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK Continued
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------
CLASS N
Sold 1,012,546 $ 20,320,194 348,563 $ 5,697,204
Dividends and/or
distributions reinvested 3,115 59,100 264 4,022
Acquisition-Note 5 452,633 8,332,974 31,233 564,383
Redeemed (283,432) (5,657,597) (55,602) (832,570)
--------------------------------------------------------------------
Net increase 1,184,862 $ 23,054,671 324,458 $ 5,433,039
====================================================================
- ----------------------------------------------------------------------------------------------------
CLASS Y
Sold 1,405,605 $ 29,328,236 65,067 $ 1,092,179
Dividends and/or
distributions reinvested 822 16,039 105 1,632
Acquisition-Note 5 51 969 33,446 621,753
Redeemed (64,351) (1,343,461) (31,137) (542,837)
--------------------------------------------------------------------
Net increase 1,342,127 $ 28,001,783 67,481 $ 1,172,727
====================================================================
- --------------------------------------------------------------------------------
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, 2004, were
$627,996,449 and $392,688,685, 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, 2004, the Fund paid
$1,071,535 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $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.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
36 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
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. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
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 to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Directors and its independent directors
must determine whether the Distributor shall be entitled to payment from the
Fund of all or a portion of the service fee and/or asset-based sales charge in
respect to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at October 31,
2004 for Class B, Class C and Class N shares were $2,650,135, $954,749 and
$408,066, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
October 31, 2004 $ 515,449 $ 2,362 $ 142,868 $ 14,466 $ 13,039
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
commissions for sales that is permitted under its investment advisory agreement,
the Fund's Manager terminated that practice in July 2003. Subsequently, the
Manager paid the Fund $126,396, an amount equivalent to certain of such
commissions incurred in prior years.
37 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class.
During the year ended October 31, 2004, OFS waived $1,801, $535, and $1,403 for
Class A, Class C and Class N shares, respectively. This undertaking may be
amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. ACQUISITION OF OPPENHEIMER TRINITY VALUE FUND AND OPPENHEIMER SELECT
MANAGERS SALOMON BROTHERS ALL CAP FUND
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 $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.
- --------------------------------------------------------------------------------
OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND. On November 6, 2003,
the Fund acquired all of the net assets of Oppenheimer Select Managers Salomon
Brothers All Cap Fund, pursuant to an Agreement and Plan of Reorganization
approved by the Oppenheimer Select Managers Salomon Brothers All Cap Fund
shareholders on October 31, 2003. The Fund issued (at an exchange ratio of
0.516576 for Class A, 0.514763 for Class B, 0.521451 for Class C, 0.517683 for
Class N and 0.511551 for Class Y of the Fund to one share of Oppenheimer Value
Fund) 393,950; 286,209; 440,763; 452,633 and 51 shares of beneficial interest
for Class A, Class B, Class C, Class N and Class Y, respectively, valued at
$7,335,351, $5,246,208, $7,968,992, $8,332,974 and $969 in exchange for the net
assets, resulting in combined Class A net assets of $227,060,486, Class B net
assets of $66,085,206, Class C net assets of $41,217,738, Class N net assets of
$15,907,953 and Class Y net assets of $2,648,868 on November 6, 2003. The net
assets acquired included net unrealized appreciation of $2,862,951 and an unused
capital loss carryforward of $2,523,977, potential utilization subject to tax
limitation. The exchange qualified as a tax-free reorganization for federal
income tax purposes.
38 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
6. LITIGATION
Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund,
and nine Directors/ Trustees of certain of the Funds (collectively, the
"Directors/Trustees"). The complaints allege that the Manager charged excessive
fees for distribution and other costs, improperly used assets of the Funds in
the form of directed brokerage commissions and 12b-1 fees to pay brokers to
promote sales of the Funds, and failed to properly disclose the use of Fund
assets to make those payments in violation of the Investment Company Act of 1940
and the Investment Advisers Act of 1940. The complaints further allege that by
permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superseding consolidated and
amended complaint.
OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.
39 | OPPENHEIMER VALUE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER SERIES FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Value Fund (one of the portfolios constituting the Oppenheimer
Series Fund, Inc.), including the statement of investments, as of October 31,
2004, 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 the standards of the Public
Company Accounting Oversight Board (United States). 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, 2004, 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, 2004, 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 U.S. generally accepted accounting
principles.
KPMG LLP
Denver, Colorado
December 16, 2004
40 | OPPENHEIMER VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends of $0.0463, $0.0688 and $0.1121 per share were paid to Class A,
Class N and Class Y shareholders, respectively, on December 5, 2003, 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, 2004 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, 2004 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 dividend income as stipulated by recent tax
legislation. $7,441,939 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2005, 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.
41 | OPPENHEIMER VALUE FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS 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
1.800.525.7048, (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 is 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 Fund's Form N-PX
filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q -filings are available on the SEC's website at www.sec.gov.
Those forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
42 | 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, CENTENNIAL,
DIRECTORS CO 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL
CLAYTON K. YEUTTER, Of Counsel (since June 1993) Hogan & Hartson (a law firm); a director (since 2002)
Chairman of the Board of of Danielson Holding Corp. Formerly a director of Weyerhaeuser Corp. (1999-April
Directors (since 2003); 2004), Caterpillar, Inc. (1993-December 2002), ConAgra Foods (1993-2001), Texas
Director (since 1996) Instruments (1993-2001) and FMC Corporation (1993-2001). Oversees 25 portfolios in
Age: 73 the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Director (since 1996) OppenheimerFunds complex.
Age: 71
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 Academy,
Age: 66 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.
MARY F. MILLER, Formerly a Senior Vice President and General Auditor, American Express Company
Director (since 2004) (July 1998-February 2003). Member of Trustees of the American Symphony Orchestra
Age: 62 (October 1998 to present). Oversees 25 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director (since January 2002) Columbia Equity Financial Corp. (privately-held
Director (since 2002) financial adviser); Managing Director (since January 2002) Carmona Motley, Inc.
Age: 52 (privately-held financial adviser). Formerly a Managing Director of Carmona Motley
Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001).
Oversees 25 portfolios in the OppenheimerFunds complex.
KENNETH A. RANDALL, A director (since February 1972) of Dominion Resources, Inc. (electric utility
Director (since 1996) holding company); formerly a director of Prime Retail, Inc. (real estate
Age: 77 investment trust) and 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 1996) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB and
Age: 74 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.
43 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited / Continued
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RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate governance
Director (since 1996) consulting and executive recruiting); a Life Trustee of International House
Age: 72 (non-profit educational organization); a former trustee of The Historical Society
of the Town of Greenwich. Oversees 25 portfolios in the OppenheimerFunds complex.
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INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225
AND OFFICER LIBERTY STREET 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 Oppenheimer
Age: 55 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 following investment advisory subsidiaries of the
Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital
Management, Inc. (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.;
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 Babson
Capital Management LLC); a member of the Investment Company Institute's Board of
Governors (elected to serve from October 3, 2003 through September 30, 2006).
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 63 portfolios as Trustee/Director and 21 additional portfolios as Officer
in the OppenheimerFunds complex.
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OFFICERS OF THE FUND THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. LEAVY
AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY
10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL,
CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS EARLIER
RESIGNATION, DEATH OR REMOVAL.
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000; an officer of 7
Vice President and Portfolio portfolios in the OppenheimerFunds complex. Formerly a portfolio manager of
Manager (since 2000) Morgan Stanley Dean Witter Investment Management (1997 - September 2000).
Age: 33
44 | OPPENHEIMER VALUE FUND
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BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
Treasurer (since 1999) of HarbourView Asset Management Corporation, Shareholder Financial Services, Inc.,
Age: 44 Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and
Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI Private
Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and
OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc.
(since November 2000), and of OppenheimerFunds Legacy Program (a Colorado
non-profit corporation) (since June 2003); Treasurer and Chief Financial Officer
(since May 2000) of OFI Trust Company (a trust company subsidiary of the Manager);
Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. Formerly
Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October
2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and
Chief Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual
Fund Services Division. An officer of 84 portfolios in the OppenheimerFunds
complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February
Secretary (since 2001) 2002) of the Manager; General Counsel and a director (since November 2001) of the
Age: 56 Distributor; General Counsel (since November 2001) of Centennial Asset Management
Corporation; Senior Vice President and General Counsel (since November 2001) of
HarbourView Asset Management Corporation; Secretary and General Counsel (since
November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a
director (since October 1997) of OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and a director (since November 2001) of
Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel
and a director (since November 2001) of Shareholder Financial Services, Inc.,
Shareholder Services, Inc., OFI Private Investments, Inc. and OFI Trust Company;
Vice President (since November 2001) of OppenheimerFunds Legacy Program; Senior
Vice President and General Counsel (since November 2001) of OFI Institutional
Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia)
Limited. Formerly Senior Vice President (May 1985-December 2003), 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); and OppenheimerFunds International Ltd. (October
1997-November 2001). An officer of 84 portfolios in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the
Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor, Inc.,
Chief Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc. Formerly
(since 2004) (until February 2004) Vice President and Director of Internal Audit of the
Age: 54 Manager. An officer of 84 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, BY
CALLING 1.800.525.7048.
45 | OPPENHEIMER VALUE FUND
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the registrant 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
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $13,000 in fiscal 2004 and $10,000 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and $5,000
in fiscal 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed $39,500 in fiscal 2004 and no such fees
in fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include, among others: due diligence related to mergers
and acquisitions, accounting consultations and audits in connection
with acquisitions and internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $6,250 in fiscal 2004 and no such fees
during fiscal 2003 to the registrant.
The principal accountant for the audit of the registrant's annual
financial statements billed $6,000 in fiscal 2004 and $5,000 in
fiscal 2003 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include, among others: tax compliance, tax planning and
tax advice. Tax compliance generally involves preparation of
original and amended tax returns, claims for a refund and tax
payment-planning services. Tax planning and tax advice
includes assistance with tax audits and appeals, tax advice related
to mergers and acquisitions and requests for rulings or technical
advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and $52 in
fiscal 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last two fiscal
years to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant.
Such fees include consultations regarding the registrant's
retirement plan with respect to its directors.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the registrant
to it principal accountant during the fiscal year in which services
are provided 2) such services were not recognized by the registrant
at the time of engagement as non-audit services and 3) such services
are promptly brought to the attention of the audit committee of the
registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $45,500 in fiscal 2004 and $16,302 in
fiscal 2003 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not include
any prohibited non-audit services as defined by the Securities
Exchange Act of 1934.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is
compatible with maintaining the principal account's independence. No
such services were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a meeting of the Board of Directors of the registrant held on February
18, 2004, the Board adopted (1) a policy that, should the Board determine that a
vacancy exists or is likely to exist on the Board, the Governance Committee of
the Board, which is comprised entirely of independent directors, shall consider
any candidates for Board membership recommended by the registrant's security
holders and (2) a policy that security holders wishing to submit a nominee for
election to the Board may do so by mailing their submission to the offices of
OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th
Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance
Committee. Prior to February 18, 2004, the Board did not have a formalized
policy with respect to consideration of security holder nominees or a procedure
by which security holders may make their submissions. In addition to security
holder nominees, the Governance Committee may also consider nominees recommended
by independent Board members or recommended by any other Board members and is
authorized under its Charter, upon Board approval, to retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the
Governance Committee may also obtain legal, financial, or other external counsel
that may be necessary or desirable in the screening process.
ITEM 10. 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, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances 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 over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)