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 SERIES FUND, INC.
(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: October 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
OPPENHEIMER DISCIPLINED ALLOCATION FUND
TOP HOLDINGS AND ALLOCATIONS
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PORTFOLIO ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Bonds and Notes 48.3%
Stocks 45.2
Cash Equivalents 6.5
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on the total market value of investments.
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TOP TEN COMMON STOCK INDUSTRIES
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Software 7.2%
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Media 6.0
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Pharmaceuticals 4.0
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Aerospace & Defense 3.3
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Diversified Financial Services 3.1
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Oil & Gas 3.1
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Insurance 2.9
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Tobacco 2.6
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Electric Utilities 2.1
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Commercial Services & Supplies 2.0
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Take-Two Interactive Software, Inc. 3.1%
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Altria Group, Inc. 2.6
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Liberty Media Corp., Cl. A 2.3
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Microsoft Corp. 2.2
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Cendant Corp. 2.0
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BP plc, ADR 2.0
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Liberty Global, Inc., Series A 1.9
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Liberty Global, Inc., Series C 1.8
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Honeywell International, Inc. 1.6
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AES Corp. (The) 1.5
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets. For more current Fund holdings,
please visit www.oppenheimerfunds.com.
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7 | OPPENHEIMER DISCIPLINED ALLOCATION 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, 2005, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED
MARKET INDICES.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. As stocks outperformed bonds in the
twelve months ended October 31, 2005, Oppenheimer Disciplined Allocation Fund,
which can invest in stocks, bonds, cash equivalents or any combination of these,
benefited from a moderate tilt toward equities which represented approximately
52% of the Fund's assets at period end.
In managing the equity portfolio, we strove, as always, to achieve
above-average total returns while seeking to maintain overall portfolio risk at
market-like levels. Because we do not believe that investors can consistently
add value by significantly over- or underweighting equity market sectors, we
limit sector variances so that these weightings can have no more effect on
performance than any of the Fund's 50 - 70 individual stock holdings would have.
To add value, we seek to identify within each sector those companies that have
the strongest three-year earnings power. We believe this time-tested,
traditional value investor's metric is the single most reliable predictor of
stocks that outperform.
In nine of 10 sectors, the stock portfolio's positive results can be
attributed to our individual stock selections rather than sector weightings;
over- or underweightings in those sectors were negligible while our holdings
delivered above-average total returns. Among the largest individual contributors
was Liberty Global, Inc., a U.S. company that operates cable TV systems in
Europe and Japan. Our research showed that Liberty Global faced fewer structural
competitive issues and may have more growth opportunities than U.S. cable
operators.
Few stocks detracted from performance. The notable exception was IDT
Corp., Cl. B, a multinational communications company that did not stay focused
on its core growth opportunities in telephone services, prepaid phone cards and
animation media. Nonetheless, we maintained the position; the release of a new
animated film in 2006 could help to get the company back on track.
The one area where we might have added more value was the market-leading
energy sector. We intentionally underweighted energy stocks, because we could
not identify a significant supply-demand issue that justified current prices. As
we see it, a bottleneck at the U.S. refining level has been extrapolated
throughout the energy industry on a global basis and is unlikely to be
sustainable. We remain slightly underexposed to energy-related investments.
The loss of performance in energy stocks was partially offset by the
Fund's bond portfolio, which was positioned to enhance yield while limiting
principal erosion in a rising-rate environment.
Toward that end, we maintained a short duration (i.e., a lower sensitivity
to changing interest rates than the benchmark index). Last May and again in
September, our analysis told us that investors expected interest rates to remain
at historically low levels for some years to
8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
come. Yet our quantitative analysis suggested that, given the fundamental
strength of the economy and the Fed's commitment to keeping inflation low,
interest rates were likely to rise more significantly than investors
anticipated. In response, we briefly shortened the Fund's duration even more. In
both May and September, this proved beneficial, limiting the negative impact on
principal as rates continued to climb. This interest-rate management approach
was the major contributor to the bond portfolio's positive returns during the
six-month period.
Another positive factor was our decision to trim the portfolio's exposure
to mortgage-backed securities. Within this sector, we continued to favor
higher-coupon mortgages. In our view the market had priced in too high a level
of expected prepayments which led to these securities offering value. As rates
rose these prepayment assumptions of the market moved closer to our
expectations, leading to these high-coupon mortgage pools adding significantly
to the Fund's current income during the past six months.
Our corporate bond allocation had little net effect on performance. An
emphasis on shorter-term corporates was a boon as these are less sensitive to
the widening in credit spread that occurred during the period but was more or
less offset by a larger investment in BBB-rated securities, the lowest echelon
of the investment-grade universe. These BBB securities boosted current yield but
were also more sensitive to widening in credit spreads.
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, 2005. In the case of Class A and Class B shares,
performance is measured over a ten-fiscal-year period. 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. 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.
The Fund's performance is also compared to the Merrill Lynch
Corporate/Government Master Index, a broad-based index of U.S. Treasury and
government agency securities, corporate and Yankee bonds regarded as a general
measurement of the performance of the domestic debt 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 indices.
9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class A)
S&P 500 Index
Merrill Lynch Corporate/Government Master Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Merrill
Lynch Corporate/
Oppenheimer Disciplined Government
Allocation Fund (Class A) S&P 500 Index Master Index
12/31/1994 9,425 10,000 10,000
03/31/1995 10,000 10,973 10,488
06/30/1995 10,654 12,019 11,166
09/30/1995 11,144 12,973 11,372
12/31/1995 11,682 13,753 11,898
03/31/1996 11,879 14,491 11,636
06/30/1996 11,959 15,141 11,685
09/30/1996 12,190 15,609 11,887
10/31/1996 1 12,803 16,039 12,160
01/31/1997 13,094 17,965 12,268
04/30/1997 13,131 18,399 12,336
07/31/1997 14,885 22,014 12,976
10/31/1997 14,752 21,188 13,251
01/31/1998 15,036 22,798 13,646
04/30/1998 16,055 25,955 13,724
07/31/1998 15,625 26,264 14,034
10/31/1998 15,626 25,852 14,617
01/31/1999 16,879 30,209 14,838
04/30/1999 16,937 31,620 14,603
07/31/1999 16,650 31,570 14,359
10/31/1999 16,035 32,486 14,509
01/31/2000 15,733 33,333 14,425
04/30/2000 16,620 34,820 14,748
07/31/2000 16,734 34,400 15,175
10/31/2000 17,362 34,461 15,555
01/31/2001 17,558 33,033 16,391
04/30/2001 16,539 30,306 16,516
07/31/2001 16,549 29,473 17,112
10/31/2001 15,605 25,884 17,946
01/31/2002 15,930 27,703 17,617
04/30/2002 15,806 26,482 17,747
07/31/2002 14,544 22,513 18,322
10/31/2002 14,690 21,976 18,946
01/31/2003 14,600 21,330 19,422
04/30/2003 15,151 22,959 19,934
07/31/2003 16,164 24,908 19,585
10/31/2003 16,772 26,544 20,055
01/31/2004 17,846 28,698 20,493
04/30/2004 17,485 28,209 20,296
07/31/2004 17,393 28,186 20,490
10/31/2004 17,967 29,043 21,166
01/31/2005 18,943 30,484 21,305
04/30/2005 18,712 29,995 21,356
07/31/2005 19,641 32,145 21,512
10/31/2005 19,331 31,574 21,382
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 1.41% 5-Year 0.97% 10-Year 5.05%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class B)
S&P 500 Index
Merrill Lynch Corporate/Government Master Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined
Allocation fund Merrill Lynch Corporate/
(Class B) S&P 500 Index Government Master Index
10/02/1995 10,000 10,000 10,000
12/31/1995 10,493 10,602 10,463
03/31/1996 10,647 11,170 10,232
06/30/1996 10,697 11,671 10,275
09/30/1996 10,880 12,032 10,453
10/31/1996 1 11,072 12,364 10,693
01/31/1997 11,651 13,848 10,788
04/30/1997 11,664 14,183 10,848
07/31/1997 13,198 16,969 11,411
10/31/1997 13,060 16,332 11,652
01/31/1998 13,283 17,573 11,999
04/30/1998 14,159 20,007 12,068
07/31/1998 13,749 20,245 12,341
10/31/1998 13,726 19,928 12,854
01/31/1999 14,805 23,286 13,048
04/30/1999 14,821 24,374 12,841
07/31/1999 14,546 24,335 12,627
10/31/1999 13,978 25,041 12,758
01/31/2000 13,687 25,694 12,685
04/30/2000 14,437 26,841 12,968
07/31/2000 14,507 26,517 13,344
10/31/2000 15,023 26,563 13,678
01/31/2001 15,171 25,463 14,414
04/30/2001 14,259 23,360 14,524
07/31/2001 14,239 22,719 15,047
10/31/2001 13,407 19,952 15,781
01/31/2002 13,686 21,354 15,492
04/30/2002 13,579 20,413 15,606
07/31/2002 12,495 17,354 16,111
10/31/2002 12,621 16,940 16,660
01/31/2003 12,544 16,442 17,079
04/30/2003 13,017 17,697 17,529
07/31/2003 13,887 19,200 17,222
10/31/2003 14,409 20,461 17,635
01/31/2004 15,332 22,121 18,021
04/30/2004 15,021 21,744 17,848
07/31/2004 14,943 21,727 18,018
10/31/2004 15,436 22,387 18,613
01/31/2005 16,274 23,498 18,735
04/30/2005 16,076 23,121 18,779
07/31/2005 16,874 24,778 18,916
10/31/2005 16,608 24,338 18,803
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 1.68% 5-Year 0.94% 10-Year 5.19%
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.
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 14 FOR FURTHER INFORMATION.
1. The Fund changed its fiscal year end from 12/31 to 10/31.
11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class C)
S&P 500 Index
Merrill Lynch Corporate/Government Master Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined
Allocation Fund Merrill Lynch Corporate/
(Class C) S&P 500 Index Government Master Index
05/01/1996 10,000 10,000 10,000
06/30/1996 10,062 10,297 10,113
09/30/1996 10,225 10,615 10,288
10/31/1996 1 10,408 10,908 10,524
01/31/1997 10,955 12,217 10,618
04/30/1997 10,965 12,512 10,677
07/31/1997 12,406 14,971 11,231
10/31/1997 12,274 14,409 11,469
01/31/1998 12,489 15,503 11,810
04/30/1998 13,304 17,650 11,878
07/31/1998 12,921 17,861 12,146
10/31/1998 12,901 17,581 12,651
01/31/1999 13,912 20,544 12,842
04/30/1999 13,927 21,503 12,639
07/31/1999 13,664 21,469 12,428
10/31/1999 13,138 22,092 12,557
01/31/2000 12,858 22,668 12,485
04/30/2000 13,561 23,679 12,764
07/31/2000 13,628 23,394 13,134
10/31/2000 14,115 23,435 13,463
01/31/2001 14,248 22,464 14,187
04/30/2001 13,400 20,609 14,295
07/31/2001 13,373 20,043 14,810
10/31/2001 12,596 17,602 15,533
01/31/2002 12,835 18,839 15,248
04/30/2002 12,704 18,009 15,360
07/31/2002 11,666 15,310 15,857
10/31/2002 11,760 14,945 16,397
01/31/2003 11,658 14,505 16,809
04/30/2003 12,073 15,613 17,253
07/31/2003 12,856 16,939 16,951
10/31/2003 13,310 18,051 17,357
01/31/2004 14,130 19,516 17,737
04/30/2004 13,809 19,183 17,567
07/31/2004 13,707 19,168 17,734
10/31/2004 14,125 19,750 18,319
01/31/2005 14,866 20,730 18,440
04/30/2005 14,645 20,398 18,483
07/31/2005 15,341 21,860 18,618
10/31/2005 15,073 21,472 18,506
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 5.71% 5-Year 1.32% Since Inception (5/1/96) 4.41%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund (Class N)
S&P 500 Index
Merrill Lynch Corporate/Government Master Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined
Allocation Fund Merrill Lynch Corporate/
(Class N) S&P 500 Index Government Master Index
03/01/2001 10,000 10,000 10,000
04/30/2001 9,793 10,094 9,968
07/31/2001 9,785 9,817 10,328
10/31/2001 9,210 8,621 10,831
01/31/2002 9,399 9,227 10,633
04/30/2002 9,317 8,821 10,711
07/31/2002 8,570 7,499 11,058
10/31/2002 8,642 7,320 11,435
01/31/2003 8,581 7,104 11,722
04/30/2003 8,897 7,647 12,031
07/31/2003 9,484 8,296 11,820
10/31/2003 9,835 8,841 12,104
01/31/2004 10,458 9,559 12,368
04/30/2004 10,229 9,396 12,250
07/31/2004 10,167 9,388 12,367
10/31/2004 10,493 9,674 12,775
01/31/2005 11,051 10,154 12,859
04/30/2005 10,899 9,991 12,889
07/31/2005 11,431 10,707 12,983
10/31/2005 11,236 10,517 12,905
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 6.09% 5-Year N/A Since Inception (3/1/01) 2.53%
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.
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 14 FOR FURTHER INFORMATION.
13 | OPPENHEIMER DISCIPLINED ALLOCATION 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.
14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FUND EXPENSES
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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, 2005.
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
16 | OPPENHEIMER DISCIPLINED ALLOCATION 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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(5/1/05) (10/31/05) OCTOBER 31, 2005
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Class A Actual $ 1,000.00 $ 1,033.10 $ 5.65
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Class A Hypothetical 1,000.00 1,019.66 5.62
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Class B Actual 1,000.00 1,028.80 10.17
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Class B Hypothetical 1,000.00 1,015.22 10.11
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Class C Actual 1,000.00 1,029.20 10.33
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Class C Hypothetical 1,000.00 1,015.07 10.26
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Class N Actual 1,000.00 1,031.00 8.02
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Class N Hypothetical 1,000.00 1,017.34 7.96
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 184/365 (to reflect the one-half
year period). Those annualized expense ratios based on the 6-month period ended
October 31, 2005 are as follows:
CLASS EXPENSE RATIOS
- ------------------------
Class A 1.10%
- ------------------------
Class B 1.98
- ------------------------
Class C 2.01
- ------------------------
Class N 1.56
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
- --------------------------------------------------------------------------------
17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS October 31, 2005
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--51.7%
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.3%
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.3%
WCI Communities, Inc. 1 17,500 $ 437,850
- ------------------------------------------------------------------------------------------------------------------------------------
MEDIA--6.0%
Liberty Global, Inc., Series A 99,731 2,470,337
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Global, Inc., Series C 1 99,731 2,365,619
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 1 375,200 2,990,344
--------------
7,826,300
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.9%
- ------------------------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.6%
Constellation Brands, Inc., Cl. A 1 36,300 854,502
- ------------------------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.7%
Wal-Mart Stores, Inc. 18,600 879,966
- ------------------------------------------------------------------------------------------------------------------------------------
TOBACCO--2.6%
Altria Group, Inc. 44,600 3,347,230
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY--4.0%
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.9%
Halliburton Co. 20,400 1,205,640
- ------------------------------------------------------------------------------------------------------------------------------------
OIL & GAS--3.1%
BP plc, ADR 39,800 2,642,720
- ------------------------------------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc. 4,000 363,600
- ------------------------------------------------------------------------------------------------------------------------------------
LUKOIL, Sponsored ADR 18,100 995,500
--------------
4,001,820
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIALS--10.3%
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--1.4%
UBS AG 21,311 1,809,869
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--2.0%
Bank of America Corp. 16,102 704,301
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Corp. 14,788 747,090
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 19,200 1,155,840
--------------
2,607,231
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.1%
Capital One Financial Corp. 15,800 1,206,330
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. 21,377 978,639
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase & Co. 32,200 1,179,164
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 6,200 741,954
--------------
4,106,087
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE--2.9%
American International Group, Inc. 7,100 $ 460,080
- ------------------------------------------------------------------------------------------------------------------------------------
Aspen Insurance Holdings Ltd. 15,300 370,107
- ------------------------------------------------------------------------------------------------------------------------------------
Everest Re Group Ltd. 8,300 825,435
- ------------------------------------------------------------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 42,400 1,343,656
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix Cos., Inc. (The) 28,600 370,370
- ------------------------------------------------------------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 12,700 361,823
--------------
3,731,471
- ------------------------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.9%
Countrywide Financial Corp. 22,100 702,117
- ------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac 8,500 521,475
--------------
1,223,592
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--6.6%
- ------------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--1.3%
MedImmune, Inc. 1 16,000 559,680
- ------------------------------------------------------------------------------------------------------------------------------------
Wyeth 25,300 1,127,368
--------------
1,687,048
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Boston Scientific Corp. 1 22,600 567,712
- ------------------------------------------------------------------------------------------------------------------------------------
Cooper Cos., Inc. (The) 6,000 413,040
--------------
980,752
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.6%
Manor Care, Inc. 11,200 417,200
- ------------------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp. 1 45,900 386,478
--------------
803,678
- ------------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--4.0%
GlaxoSmithKline plc, ADR 18,900 982,611
- ------------------------------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 48,400 1,052,216
- ------------------------------------------------------------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 31,900 1,279,828
- ------------------------------------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 2 44,800 911,232
- ------------------------------------------------------------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. 1 27,500 950,400
--------------
5,176,287
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--5.8%
- ------------------------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.3%
Honeywell International, Inc. 61,500 $ 2,103,300
- ------------------------------------------------------------------------------------------------------------------------------------
Orbital Sciences Corp. 1 131,300 1,527,019
- ------------------------------------------------------------------------------------------------------------------------------------
United Technologies Corp. 14,000 717,920
--------------
4,348,239
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.0%
Cendant Corp. 152,500 2,656,550
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.3%
Corinthian Colleges, Inc. 1 26,700 332,148
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.2%
GrafTech International Ltd. 1 41,100 201,390
- ------------------------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--10.8%
- ------------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.6%
Cisco Systems, Inc. 1 42,500 741,625
- ------------------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., Series B, Escrow Shares 1,3,4 100 --
--------------
741,625
- ------------------------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.2%
Hewlett-Packard Co. 45,400 1,273,016
- ------------------------------------------------------------------------------------------------------------------------------------
Hutchinson Technology, Inc. 1 14,100 349,680
--------------
1,622,696
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.3%
Flextronics International Ltd. 1 44,700 415,263
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.1%
Net2Phone, Inc. 1 118,500 177,750
- ------------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.4%
ATI Technologies, Inc. 1 52,500 758,625
- ------------------------------------------------------------------------------------------------------------------------------------
Freescale Semiconductor, Inc., Cl. A 1 44,200 1,047,098
--------------
1,805,723
- ------------------------------------------------------------------------------------------------------------------------------------
SOFTWARE--7.2%
Compuware Corp. 1 48,000 388,320
- ------------------------------------------------------------------------------------------------------------------------------------
Microsoft Corp. 113,200 2,909,240
- ------------------------------------------------------------------------------------------------------------------------------------
Novell, Inc. 1 153,900 1,172,718
- ------------------------------------------------------------------------------------------------------------------------------------
Synopsys, Inc. 1 44,400 841,380
- ------------------------------------------------------------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 197,150 4,071,148
--------------
9,382,806
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MATERIALS--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.6%
Praxair, Inc. 15,100 $ 746,091
- ------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.3%
- ------------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.3%
IDT Corp., Cl. B 1 141,400 1,688,316
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--2.1%
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.1%
AES Corp. (The) 1 121,500 1,930,635
- ------------------------------------------------------------------------------------------------------------------------------------
Reliant Energy, Inc. 1 58,200 739,140
--------------
2,669,775
--------------
Total Common Stocks (Cost $58,477,600) 67,467,695
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--6.7%
Aesop Funding II LLC, Automobile Asset-Backed Certificates, Series 2005-1A, Cl. A2, 4.06%, 4/20/08 5 $ 80,000 80,061
- ------------------------------------------------------------------------------------------------------------------------------------
BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2005-A, Cl. A2, 3.66%, 12/26/07 276,299 275,493
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.:
Series 2004-2, Cl. A3, 3.58%, 1/15/09 270,000 264,371
Series 2005-1, Cl. A2B, 3.73%, 7/16/07 130,000 129,820
- ------------------------------------------------------------------------------------------------------------------------------------
Capital One Prime Auto Receivables Trust, Automobile Loan Asset-Backed Securities,
Series 2005-1, Cl. A2, 4.24%, 11/15/07 310,000 309,345
- ------------------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2004-D, Cl. AF1, 2.98%, 4/25/20 39,671 39,455
Series 2005-B, Cl. AF1, 4.02%, 3/26/35 56,092 55,755
Series 2005-C, Cl. AF1, 4.196%, 6/25/35 154,730 153,968
Series 2005-D, Cl. AF1, 5.04%, 10/25/35 270,000 270,000
Series 2005-D, Cl. AV2, 4.21%, 10/25/35 5 220,000 220,000
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations:
Series 2003-5, Cl. 1A2, 2.451%, 11/25/18 3,810 3,801
Series 2004-1, Cl. 1A2, 2.427%, 6/25/19 43,028 42,899
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.24%, 9/15/08 23,584 23,576
Series 2005-A, Cl. A2, 3.72%, 12/15/07 230,000 228,885
- ------------------------------------------------------------------------------------------------------------------------------------
CIT Equipment Collateral, Equipment Receivable-Backed Nts.,
Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 142,803 142,247
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 40,000 38,957
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc., Collateralized Mtg. Obligations,
Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 5 338,504 337,020
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates,
Series 2002-B, Cl. FX, 10.421%, 3/22/07 3 $ 70,000 $ 72,861
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates, Inc., Home Equity Asset-Backed Certificates:
Series 2002-4, Cl. A1, 4.408%, 2/25/33 5 4,125 4,167
Series 2005-7, Cl. AF1B, 4.317%, 11/25/35 5 178,828 177,958
- ------------------------------------------------------------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.49%, 10/6/08 48,983 49,009
Series 2004-B, Cl. A2, 2.48%, 2/8/07 20,251 20,236
Series 2004-C, Cl. A2, 2.62%, 6/8/07 188,987 188,346
Series 2005-A, Cl. A2, 3.17%, 9/8/07 236,095 235,285
Series 2005-B, Cl. A2, 3.75%, 12/8/07 230,000 229,464
- ------------------------------------------------------------------------------------------------------------------------------------
Equity One ABS, Inc., Home Equity Mtg. Pass-Through Certificates, Series 2004-3, Cl. AF2, 3.80%,
7/25/34 5 230,000 228,875
- ------------------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Asset-Backed Certificates, Home Equity Receivables, Series 2005-FF10,
Cl. A3, 4.248%, 11/25/39 5 330,000 330,000
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates:
Series 2004-A, Cl. A2, 2.13%, 10/15/06 49,536 49,482
Series 2005-A, Cl. A3, 3.48%, 11/17/08 190,000 187,565
Series 2005-B, Cl. A2, 3.77%, 9/15/07 171,315 170,968
- ------------------------------------------------------------------------------------------------------------------------------------
GS Auto Loan Trust, Automobile Loan Asset-Backed Securities, Series 2005-1, Cl. A2, 4.32%, 5/15/08 590,000 588,444
- ------------------------------------------------------------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts., Series 2003-3, Cl. A1, 1.50%, 1/15/08 17,776 17,764
- ------------------------------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations:
Series 2005-1, Cl. A2, 3.21%, 5/21/07 107,281 106,940
Series 2005-3, Cl. A2, 3.73%, 10/18/07 210,000 208,870
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman XS Trust, Home Equity Obligations, Series 2005-2, Cl. 2A1B, 5.18%, 8/25/35 290,226 290,668
- ------------------------------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates, Series 2001-1A, Cl. A1, 8.33%,
4/25/31 3 596,634 606,276
- ------------------------------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables, Series 2003-C7, Cl. C7, 5.32%, 3/15/16 5 360,000 382,538
- ------------------------------------------------------------------------------------------------------------------------------------
Nissan Auto Lease Trust, Automobile Lease Obligations, Series 2004-A, Cl. A2, 2.55%, 1/15/07 65,248 65,122
- ------------------------------------------------------------------------------------------------------------------------------------
Onyx Acceptance Owner Trust, Automobile Receivable Obligations:
Series 2002-B, Cl. A4, 4.71%, 3/15/09 117,871 117,804
Series 2005-B, Cl. A2, 4.03%, 4/15/08 170,000 169,380
- ------------------------------------------------------------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through Trust, Home Equity Pass-Through Certificates:
Series 2004-5, Cl. A F2, 3.735%, 11/10/34 5 70,000 69,023
Series 2005-1, Cl. A F2, 3.914%, 5/25/35 5 60,000 59,039
Series 2005-2, Cl. A F2, 4.415%, 4/25/35 5 90,000 89,025
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Asset Mortgage Products, Inc., Home Equity Asset-Backed Pass-Through Certificates,
Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 170,000 168,674
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates,
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 $ 365,644 $ 365,416
- ------------------------------------------------------------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.:
Series 2004-2, Cl. A2, 2.41%, 2/15/07 42,993 42,942
Series 2004-3, Cl. A2, 2.79%, 6/15/07 100,362 100,107
- ------------------------------------------------------------------------------------------------------------------------------------
Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities:
Series 2004-A, Cl. A2, 2.47%, 1/22/07 98,496 98,241
Series 2005-A, Cl. A2, 3.52%, 4/20/07 230,000 229,169
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B, Cl. A2, 2.40%, 5/21/07 54,790 54,650
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Trust, Collateralized Mtg. Obligations, Series 2004-2, Cl. AI1B, 2.94%,
9/25/18 5 142,847 141,655
- ------------------------------------------------------------------------------------------------------------------------------------
WFS Financial Owner Trust, Automobile Receivable Obligations, Series 2002-2, Cl. A4, 4.50%,
2/20/10 57,594 57,638
- ------------------------------------------------------------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile Loan Receivable Certificates, Series 2004-1, Cl. A2A, 2.59%, 5/15/07 125,576 125,010
--------------
Total Asset-Backed Securities (Cost $8,736,282) 8,714,264
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--30.0%
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--25.2%
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--24.9%
Federal Home Loan Mortgage Corp.:
6%, 4/1/17-7/1/24 882,392 900,312
6.50%, 4/1/18-4/1/34 315,925 325,333
7%, 6/1/29-11/1/32 848,162 885,850
8%, 4/1/16 87,416 93,403
9%, 8/1/22-5/1/25 24,613 26,725
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through
Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 8,707 8,700
Series 2034, Cl. Z, 6.50%, 2/15/28 70,358 72,358
Series 2053, Cl. Z, 6.50%, 4/15/28 80,700 82,952
Series 2055, Cl. ZM, 6.50%, 5/15/28 112,178 114,944
Series 2075, Cl. D, 6.50%, 8/15/28 221,691 227,648
Series 2080, Cl. Z, 6.50%, 8/15/28 68,806 70,342
Series 2387, Cl. PD, 6%, 4/15/30 93,010 93,557
Series 2456, Cl. BD, 6%, 3/15/30 40,232 40,349
Series 2498, Cl. PC, 5.50%, 10/15/14 3,485 3,484
Series 2500, Cl. FD, 4.47%, 3/15/32 5 36,998 37,379
Series 2526, Cl. FE, 4.37%, 6/15/29 5 46,665 47,041
Series 2551, Cl. FD, 4.37%, 1/15/33 5 36,408 36,702
Series 2583, Cl. KA, 5.50%, 3/15/22 213,127 213,724
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security:
Series 176, Cl. IO, 12.125%, 6/1/26 6 66,743 14,607
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Continued
Series 183, Cl. IO, 9.65%, 4/1/27 6 $ 104,113 $ 23,669
Series 184, Cl. IO, 15.59%, 12/1/26 6 111,933 23,127
Series 192, Cl. IO, 13.946%, 2/1/28 6 32,408 6,359
Series 200, Cl. IO, 12.592%, 1/1/29 6 38,758 8,698
Series 2003-118, Cl. S, 22.81%, 12/25/33 6 534,233 57,489
Series 2130, Cl. SC, 8.269%, 3/15/29 6 88,102 7,062
Series 2796, Cl. SD, 13.706%, 7/15/26 6 115,984 9,060
Series 2920, Cl. S, 16.676%, 1/15/35 6 730,791 37,569
Series 3000, Cl. SE, 27.85%, 7/15/25 6 695,883 28,119
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed Security, Series 176, Cl. PO,
4.781%, 6/1/26 7 37,266 31,010
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 12/1/20 8 2,037,000 1,968,251
5%, 6/1/18-7/1/18 677,324 668,836
5%, 11/1/35 8 3,925,000 3,777,813
5.50%, 2/1/33-11/1/34 2,249,870 2,223,605
5.50%, 11/1/33-11/1/35 8 3,594,823 3,548,302
6%, 7/1/16-11/1/32 1,796,831 1,835,988
6%, 11/1/20-11/1/35 8 5,797,000 5,862,882
6.50%, 3/1/26-10/1/30 88,840 91,589
6.50%, 10/1/34-12/1/35 8 4,343,000 4,456,911
7%, 11/1/17-2/25/22 407,053 421,098
7.50%, 1/1/08-8/1/29 100,303 105,459
8.50%, 7/1/32 8,728 9,472
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1, Cl. A2, 7%, 11/25/31 244,405 253,080
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg. Investment Conduit Pass-Through
Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 187,435 192,952
Trust 1996-35, Cl. Z, 7%, 7/25/26 281,572 292,313
Trust 1998-63, Cl. PG, 6%, 3/25/27 12,792 12,770
Trust 2001-50, Cl. NE, 6%, 8/25/30 49,237 49,495
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 272,204 280,904
Trust 2001-70, Cl. LR, 6%, 9/25/30 55,562 56,054
Trust 2001-72, Cl. NH, 6%, 4/25/30 36,758 36,935
Trust 2001-74, Cl. PD, 6%, 5/25/30 13,868 13,911
Trust 2002-77, Cl. WF, 4.38%, 12/18/32 5 56,618 57,014
Trust 2002-94, Cl. MA, 4.50%, 8/25/09 1,411 1,408
Trust 2003-10, Cl. HP, 5%, 2/25/18 350,000 343,407
Trust 2004-101, Cl. BG, 5%, 1/25/20 236,000 231,839
Trust 2005-71, Cl. DB, 4.50%, 8/25/25 160,000 150,232
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg. Investment Conduit Pass-Through
Certificates, Interest-Only Stripped Mtg.-Backed Security:
Trust 1993-223, Cl. PM, 2.758%, 10/25/23 6 63,120 6,387
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates, Interest-Only
Stripped Mtg.-Backed Security: Continued
Trust 2002-38, Cl. SO, 8.938%, 4/25/32 6 $ 87,399 $ 5,185
Trust 2002-47, Cl. NS, 10.012%, 4/25/32 6 140,108 12,058
Trust 2002-51, Cl. S,10.203%, 8/25/32 6 128,714 9,887
Trust 2002-77, Cl. IS, 10.288%, 12/18/32 6 148,903 12,636
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 222, Cl. 2, 10.91%, 6/1/23 6 227,110 45,983
Trust 240, Cl. 2, 14.07%, 9/1/23 6 357,107 80,851
Trust 247, Cl. 2, 12.803%, 10/1/23 6 391,454 83,654
Trust 252, Cl. 2, 2.975%, 11/1/23 6 171,257 39,533
Trust 254, Cl. 2, 6.781%, 1/1/24 6 84,793 19,421
Trust 273, Cl. 2, 12.538%, 8/1/26 6 49,190 10,436
Trust 319, Cl. 2, 12.063%, 2/1/32 6 71,277 17,563
Trust 321, Cl. 2, 6.79%, 3/1/32 6 697,272 169,960
Trust 329, Cl. 2, 9.491%, 1/1/33 6 113,158 27,618
Trust 331, Cl. 9, (12.619)%, 2/1/33 6 193,828 43,795
Trust 333, Cl. 2, 10.34%, 3/1/33 6 813,531 200,968
Trust 334, Cl. 17, (4.23)%, 2/1/33 6 115,821 25,730
Trust 350, Cl. 2, 10.96%, 2/1/34 6 764,947 187,292
Trust 2001-65, Cl. S, 22.94%, 11/25/31 6 318,298 29,652
Trust 2001-81, Cl. S, 12.685%, 1/25/32 6 71,405 6,434
Trust 2002-9, Cl. MS, 11.025%, 3/25/32 6 100,174 8,114
Trust 2002-52, Cl. SD, 5.444%, 9/25/32 6 158,575 13,064
Trust 2002-77, Cl. SH, 13.63%, 12/18/32 6 92,257 8,994
Trust 2002-96, Cl. SK, 23.313%, 4/25/32 6 823,718 70,332
Trust 2003-4, Cl. S, 21.729%, 2/25/33 6 175,876 20,821
Trust 2004-54, Cl. DS, 8.44%, 11/25/30 6 132,803 8,652
Trust 2005-6, Cl. SE, 15.893%, 2/25/35 6 496,012 26,103
Trust 2005-19, Cl. SA, 14.36%, 3/25/35 6 1,964,881 103,754
Trust 2005-40, Cl. SA, 15.993%, 5/25/35 6 426,530 22,210
Trust 2005-71, Cl. SA, 24.563%, 8/25/25 6 443,384 26,095
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed Security:
Trust 352, Cl. 1, 4.58%, 7/1/34 7 817,358 603,951
Trust 1993-184, Cl. M, 6.327%, 9/25/23 7 74,031 61,559
--------------
32,478,784
- ------------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.3%
Government National Mortgage Assn.:
7%, 4/15/09-2/15/24 125,003 131,035
7.50%, 3/15/09 72,912 75,964
8%, 5/15/17 51,032 54,583
8.50%, 8/15/17-12/15/17 31,681 34,339
- ------------------------------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 6.189%, 1/16/27 6 217,015 15,472
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED Continued
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security: Continued
Series 2002-76, Cl. SY, 5.791%, 12/16/26 6 $ 289,844 $ 21,359
Series 2004-11, Cl. SM, 1.808%, 1/17/30 6 108,416 6,899
--------------
339,651
- ------------------------------------------------------------------------------------------------------------------------------------
NON-AGENCY--4.8%
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL--4.3%
Banc of America Commercial Mortgage, Inc., Commercial
Mtg. Pass-Through Certificates:
Series 2004-6, Cl. A3, 4.512%, 12/10/42 210,000 202,709
Series 2005-2, Cl. A4, 4.783%, 7/10/43 5 280,000 273,783
Series 2005-3, Cl. A2, 4.501%, 7/10/43 230,000 223,994
- ------------------------------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series
2004-2, Cl. 2A1, 6.50%, 7/20/32 210,695 211,352
- ------------------------------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., Collateralized Mtg. Obligations Pass-Through Certificates:
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 173,437 176,309
Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 5 35,628 35,612
Series 2005-E, Cl. 2A2, 4.99%, 6/25/35 5 57,502 57,339
- ------------------------------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg. Obligations, Series 2005-PWR7,
Cl. A2, 4.945%, 2/11/41 100,000 98,390
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank Commercial Mortgage Trust, Commercial Mtg. Obligations, Series 2005-CD1, Cl.
A4, 5.224%, 9/15/20 8 260,000 260,163
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations, Series 2004-J9, Cl. 1A1,
4.218%, 10/25/34 5 88,461 88,532
- ------------------------------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, Cl. D,
7.64%, 4/29/39 5,9 170,000 170,425
- ------------------------------------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America Commercial Mtg. Trust, Pass-Through
Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 129,302 133,355
- ------------------------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2005-CA, Cl. A3, 4.578%, 6/10/48 90,000 87,286
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 140,000 138,803
- ------------------------------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Commercial Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. A3, 6.869%, 7/15/29 80,548 82,651
Series 2004-C3, Cl. A4, 4.547%, 12/10/41 140,000 135,100
- ------------------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg. Pass-Through Certificates, Series
2005-GG3, Cl. A2, 4.305%, 8/10/42 190,000 184,699
- ------------------------------------------------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates, Series 2004-C1, Cl. A1,
3.659%, 10/10/28 147,611 142,828
- ------------------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust, Collateralized Mtg. Obligations, Series 2004-12, Cl. 3A1, 4.469%, 12/25/34 5 123 123
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 $ 60,000 $ 58,665
- ------------------------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2005-C5, Cl. A2,
4.885%, 9/15/40 160,000 158,651
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, Pass-Through Collateralized Mtg. Obligations, Series 2004-6, Cl. 10A1,
6%, 7/25/34 301,441 304,127
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Asset Securitization Trust, Pass-Through Collateralized Mtg. Obligations, Series 2004-9, Cl.
A3, 4.70%, 8/25/34 5 543,496 540,446
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Seasoned Securities Trust, Collateralized Mtg. Obligations, Series 2004-2, Cl. A1, 6.50%,
8/25/32 431,565 436,150
- ------------------------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 1998-D6, Cl. A1B,
6.59%, 3/15/30 160,000 165,908
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG
2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 210,287
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Accredit Loans, Inc., Mtg. Asset-Backed Pass-Through Certificates, Series 2003-QS1, Cl.
A2, 5.75%, 1/25/33 157,239 157,535
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations:
Series 2005-C17, Cl. A2, 4.782%, 3/15/42 300,000 296,213
Series 2005-C20, Cl. A5, 5.087%, 7/15/42 5 160,000 158,466
- ------------------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Pass-Through Certificates, Series
2005-AR5, Cl. A1, 4.683%, 5/25/35 5 214,248 214,214
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities Trust, Collateralized Mtg. Obligations:
Series 2004-DD, Cl. 2 A1, 4.528%, 1/25/35 5 213,850 213,241
Series 2004-N, Cl. A10, 3.803%, 8/25/34 5 29,070 29,079
Series 2004-W, Cl. A2, 4.59%, 11/25/34 5 13,525 13,487
--------------
5,659,922
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER--0.2%
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 200,000 196,937
- ------------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--0.3%
Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations, Series 2005-J1, Cl. 3A1, 6.50%,
8/25/32 444,553 450,388
--------------
Total Mortgage-Backed Obligations (Cost $39,493,021) 39,125,682
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.3%
Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 140,000 136,881
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
3.625%, 9/15/06 1,065,000 1,056,991
4.125%, 7/12/10 250,000 243,299
6.625%, 9/15/09 240,000 255,860
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
4%, 2/28/07 320,000 317,596
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.: Continued
4.25%, 7/15/07 $ 550,000 $ 546,745
6%, 5/15/11 600,000 634,034
7.25%, 5/15/30 170,000 220,009
7.25%, 1/15/10 10 750,000 821,131
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
4.65%, 6/15/35 280,000 260,033
5.375%, 11/13/08 109,000 111,256
Series A, 6.79%, 5/23/12 950,000 1,052,294
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 269,000 293,462
STRIPS, 4.96%, 2/15/16 11 171,000 105,600
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.625%, 6/30/07 86,000 84,962
3.875%, 7/15/10-9/15/10 397,000 386,969
4%, 9/30/07 110,000 109,252
4.25%, 10/15/10-8/15/15 297,000 291,032
5%, 2/15/11 76,000 77,906
--------------
Total U.S. Government Obligations (Cost $7,138,702) 7,005,312
- ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
United Mexican States Nts., 7.50%, 1/14/12 (Cost $249,845) 235,000 260,968
- ------------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--13.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 250,000 252,232
- ------------------------------------------------------------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 155,000 142,257
- ------------------------------------------------------------------------------------------------------------------------------------
Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 125,000 130,938
- ------------------------------------------------------------------------------------------------------------------------------------
Allstate Financial Global Funding LLC, 4.25% Nts., 9/10/08 9 50,000 49,111
- ------------------------------------------------------------------------------------------------------------------------------------
AOL Time Warner, Inc., 7.70% Debs., 5/1/32 145,000 165,640
- ------------------------------------------------------------------------------------------------------------------------------------
Archer Daniels Midland Co., 5.375% Nts., 9/15/35 135,000 126,985
- ------------------------------------------------------------------------------------------------------------------------------------
ASIF Global Financing XXIII, 3.90% Nts., 10/22/08 9 160,000 155,318
- ------------------------------------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 8.125% Sr. Unsec. Nts., 5/1/12 180,000 207,271
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of America Corp., 4.875% Sr. Unsec. Nts., 1/15/13 3,000 2,950
- ------------------------------------------------------------------------------------------------------------------------------------
Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 20,000 21,123
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual Bond 12 220,000 208,558
- ------------------------------------------------------------------------------------------------------------------------------------
Beazer Homes USA, Inc., 6.875% Sr. Nts., 7/15/15 9 130,000 119,925
- ------------------------------------------------------------------------------------------------------------------------------------
British Telecommunications plc, 8.875% Bonds, 12/15/30 115,000 150,671
- ------------------------------------------------------------------------------------------------------------------------------------
Canadian National Railway Co., 4.25% Nts., 8/1/09 32,000 31,271
- ------------------------------------------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25% Sr. Nts., Series B, 9/1/10 145,000 155,476
- ------------------------------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 240,000 255,854
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
CIGNA Corp.:
7% Sr. Unsec. Nts., 1/15/11 $ 90,000 $ 97,192
7.40% Unsec. Nts., 5/15/07 180,000 186,359
- ------------------------------------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 100,000 113,262
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 105,000 115,224
- ------------------------------------------------------------------------------------------------------------------------------------
ConAgra Foods, Inc., 6% Nts., 9/15/06 130,000 131,262
- ------------------------------------------------------------------------------------------------------------------------------------
Constellation Energy Group, Inc., 7% Unsec. Nts., 4/1/12 205,000 222,171
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Financial Corp., 4.50% Nts., Series A, 6/15/10 135,000 130,716
- ------------------------------------------------------------------------------------------------------------------------------------
Cox Communications, Inc., 4.625% Unsec. Nts., 1/15/10 270,000 260,785
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc., (USA), 5.50% Nts., 8/15/13 250,000 253,808
- ------------------------------------------------------------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts., 10/15/08 120,000 124,062
- ------------------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 6.125% Nts., 1/15/14 115,000 113,289
- ------------------------------------------------------------------------------------------------------------------------------------
DaimlerChrysler NA Holdings Corp.:
7.20% Unsec. Nts., 9/1/09 135,000 142,596
8% Nts., 6/15/10 96,000 104,945
- ------------------------------------------------------------------------------------------------------------------------------------
Dana Corp., 6.50% Unsec. Nts., 3/1/09 175,000 149,188
- ------------------------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 170,000 191,111
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 160,000 178,723
- ------------------------------------------------------------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 190,000 211,940
- ------------------------------------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 120,000 121,136
- ------------------------------------------------------------------------------------------------------------------------------------
EOP Operating LP, 8.10% Unsec. Nts., 8/1/10 205,000 227,642
- ------------------------------------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 170,000 176,710
- ------------------------------------------------------------------------------------------------------------------------------------
FedEx Corp., 2.65% Unsec. Nts., 4/1/07 275,000 266,714
- ------------------------------------------------------------------------------------------------------------------------------------
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts., Series A, 11/15/06 105,000 105,635
7.375% Sr. Unsub. Nts., Series C, 11/15/31 130,000 148,497
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.80% Sr. Unsec. Nts., 1/12/09 225,000 206,212
6.25% Unsec. Nts., 12/8/05 110,000 109,983
7.375% Nts., 10/28/09 55,000 52,524
- ------------------------------------------------------------------------------------------------------------------------------------
France Telecom SA:
7.75% Sr. Unsec. Nts., 3/1/11 5 125,000 139,384
8.50% Sr. Unsec. Nts., 3/1/31 5 40,000 52,423
- ------------------------------------------------------------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts., 4/15/08 80,000 77,832
- ------------------------------------------------------------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts., 9/15/07 135,000 138,405
9.55% Unsub. Nts., 12/15/08 5 29,000 32,378
- ------------------------------------------------------------------------------------------------------------------------------------
General Mills, Inc., 3.875% Nts., 11/30/07 195,000 191,059
- ------------------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.125% Unsec. Unsub. Nts., 2/1/07 360,000 356,566
8% Bonds, 11/1/31 190,000 196,690
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 5.70% Sr. Unsec. Nts., 9/1/12 $ 245,000 $ 250,601
- ------------------------------------------------------------------------------------------------------------------------------------
Harrah's Operating Co., Inc., 5.625% Bonds, 6/1/15 9 135,000 129,778
- ------------------------------------------------------------------------------------------------------------------------------------
HCA, Inc., 7.125% Sr. Unsec. Nts., 6/1/06 125,000 126,981
- ------------------------------------------------------------------------------------------------------------------------------------
Hertz Corp. (The), 6.35% Nts., 6/15/10 59,000 58,985
- ------------------------------------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr. Unsec. Nts., 2/15/11 114,000 123,647
- ------------------------------------------------------------------------------------------------------------------------------------
HSBC Finance Corp., 4.75% Sr. Unsec. Nts., 7/15/13 265,000 255,004
- ------------------------------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 5 110,000 114,950
- ------------------------------------------------------------------------------------------------------------------------------------
iStar Financial, Inc.:
4.875% Sr. Unsec. Nts., Series B, 1/15/09 100,000 98,336
5.125% Sr. Unsec. Nts., Series B, 4/1/11 85,000 82,451
- ------------------------------------------------------------------------------------------------------------------------------------
J.C. Penney Co., Inc. (Holding Co.), 7.40% Nts., 4/1/37 235,000 248,500
- ------------------------------------------------------------------------------------------------------------------------------------
JPMorgan Capital XV, 5.875% Nts., 3/15/35 180,000 171,188
- ------------------------------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc., 6.50% Sr. Nts., 1/15/14 130,000 121,805
- ------------------------------------------------------------------------------------------------------------------------------------
KB Home, 5.75% Sr. Unsec. Unsub. Nts., 2/1/14 165,000 153,448
- ------------------------------------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 145,000 153,654
- ------------------------------------------------------------------------------------------------------------------------------------
Kraft Foods, Inc., 5.25% Nts., 6/1/07 300,000 301,932
- ------------------------------------------------------------------------------------------------------------------------------------
Kroger Co. (The), 6.80% Sr. Unsec. Nts., 4/1/11 190,000 198,779
- ------------------------------------------------------------------------------------------------------------------------------------
Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09 210,000 197,547
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers, Inc., 6.625% Sr. Sub. Nts., 2/15/08 25,000 25,941
- ------------------------------------------------------------------------------------------------------------------------------------
Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 130,000 130,569
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 5.70% Sr. Unsec. Nts., 5/15/13 140,000 126,995
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 130,000 130,663
- ------------------------------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 5.875% Sr. Unsec. Bonds, 8/1/33 170,000 152,704
- ------------------------------------------------------------------------------------------------------------------------------------
May Department Stores Co., 7.90% Unsec. Debs., 10/15/07 90,000 94,212
- ------------------------------------------------------------------------------------------------------------------------------------
MBNA Corp., 7.50% Sr. Nts., Series F, 3/15/12 200,000 224,574
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5% Sr. Unsub. Nts., Series C, 2/3/14 265,000 259,981
- ------------------------------------------------------------------------------------------------------------------------------------
MetLife, Inc., 5.70% Sr. Unsec. Nts., 6/15/35 135,000 130,799
- ------------------------------------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 220,000 225,770
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 125,000 134,206
- ------------------------------------------------------------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts., 12/15/11 17,000 18,040
- ------------------------------------------------------------------------------------------------------------------------------------
Nationwide Financial Services, Inc.:
5.90% Nts., 7/1/12 95,000 98,255
6.25% Sr. Unsec. Nts., 11/15/11 30,000 31,796
- ------------------------------------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 211,434
- ------------------------------------------------------------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 160,000 174,898
- ------------------------------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust, 5.75% Unsec. Unsub. Nts.,
Series 12, 12/15/15 9 215,000 209,034
- ------------------------------------------------------------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV, 4.623% Sr. Nts., Cl. A1, 6/15/10 9 395,000 391,488
- ------------------------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 9 66,281 61,999
30 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Portland General Electric Co., 8.125% First Mortgage Nts., 2/1/10 9 $ 95,000 $ 104,975
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 9 295,000 370,493
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 9 260,000 330,229
- ------------------------------------------------------------------------------------------------------------------------------------
PSE&G Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 115,000 117,300
- ------------------------------------------------------------------------------------------------------------------------------------
PSE&G Power LLC, 6.875% Sr. Unsec. Nts., 4/15/06 130,000 131,230
- ------------------------------------------------------------------------------------------------------------------------------------
Safeway, Inc., 7.50% Sr. Unsec. Nts., 9/15/09 175,000 186,620
- ------------------------------------------------------------------------------------------------------------------------------------
Sempra Energy, 7.95% Sr. Unsec. Unsub. Nts., 3/1/10 127,000 139,628
- ------------------------------------------------------------------------------------------------------------------------------------
Simon Property Group LP:
5.45% Unsec. Nts., 3/15/13 115,000 114,542
5.625% Unsec. Unsub. Nts., 8/15/14 85,000 85,429
- ------------------------------------------------------------------------------------------------------------------------------------
Sprint Capital Corp., 8.75% Nts., 3/15/32 160,000 207,569
- ------------------------------------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 190,000 195,463
- ------------------------------------------------------------------------------------------------------------------------------------
SunTrust Banks, Inc.:
4% Nts., 10/15/08 135,000 131,662
7.75% Unsec. Sub. Nts., 5/1/10 11,000 12,200
- ------------------------------------------------------------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 245,000 296,900
- ------------------------------------------------------------------------------------------------------------------------------------
Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 65,000 80,263
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Property Casualty Corp., 3.75% Sr. Unsec. Nts., 3/15/08 195,000 189,272
- ------------------------------------------------------------------------------------------------------------------------------------
Tyco International Group SA, 6.375% Sr. Unsec. Unsub. Nts., 2/15/06 165,000 165,841
- ------------------------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc., 3.50% Sr. Unsec. Nts., 10/15/07 210,000 203,386
- ------------------------------------------------------------------------------------------------------------------------------------
Verizon Global Funding Corp., 5.85% Nts., 9/15/35 135,000 126,685
- ------------------------------------------------------------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 260,000 262,376
- ------------------------------------------------------------------------------------------------------------------------------------
Waste Management, Inc., 6.875% Sr. Unsec. Nts., 5/15/09 150,000 158,382
- ------------------------------------------------------------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 260,000 264,346
-------------
Total Non-Convertible Corporate Bonds and Notes (Cost $17,206,382) 16,997,738
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--1.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank,
3.65%, 11/1/05 (Cost $2,500,000) 2,500,000 2,500,000
- ------------------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Undivided interest of 1.11% in joint repurchase agreement (Principal Amount/
Value $647,082,000, with a maturity value of $647,153,179) with UBS Warburg
LLC, 3.96%, dated 10/31/05, to be repurchased at $7,186,790 on 11/1/05,
collateralized by Federal National Mortgage Assn., 5%, 10/1/35, with a
value of $661,717,556 (Cost $7,186,000) 7,186,000 7,186,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $140,987,832) 114.3% 149,257,659
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (14.3) (18,719,474)
-------------------------
NET ASSETS 100.0% $130,538,185
=========================
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------
Schering-Plough Corp. 127 1/23/06 $ 22.50 $ 15,589 $ 6,350
3. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of October 31, 2005 was $679,137, which represents
0.52% of the Fund's net assets, none of which is considered restricted. See Note
9 of Notes to Financial Statements.
4. Received as the result of issuer reorganization.
5. Represents the current interest rate for a variable or increasing rate
security.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $1,602,671 or 1.23% of the Fund's net assets
as of October 31, 2005.
7. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $696,520 or 0.53% of the Fund's net assets as of
October 31, 2005.
8. When-issued security or forward commitment to be delivered and settled after
October 31, 2005. See Note 1 of Notes to Financial Statements.
9. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $2,092,775 or 1.60% of the Fund's net
assets as of October 31, 2005.
10. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $240,865. See Note 6 of Notes to Financial
Statements.
11. Zero coupon bond reflects effective yield on the date of purchase.
12. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $140,987,832)--
see accompanying statement of investments $ 149,257,659
- --------------------------------------------------------------------------------
Cash 628,687
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold on a when-issued or forward commitment 6,049,128
Interest, dividends and principal paydowns 547,604
Shares of capital stock sold 54,309
Other 6,612
--------------
Total assets 156,543,999
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Options written, at value (premiums received $15,589)--
see accompanying statement of investments 6,350
- --------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 9,892
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $25,509,481 purchased
on a when-issued basis or forward commitment) 25,652,782
Shares of capital stock redeemed 210,818
Directors' compensation 29,013
Distribution and service plan fees 27,515
Shareholder communications 21,921
Transfer and shareholder servicing agent fees 20,368
Futures margins 6,584
Other 20,571
--------------
Total liabilities 26,005,814
- --------------------------------------------------------------------------------
NET ASSETS $ 130,538,185
==============
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of capital stock $ 8,918
- --------------------------------------------------------------------------------
Additional paid-in capital 126,960,535
- --------------------------------------------------------------------------------
Accumulated net investment income 442,397
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (5,350,236)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and
translation of assets and liabilities denominated
in foreign currencies 8,476,571
--------------
NET ASSETS $ 130,538,185
==============
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $107,800,101 and 7,367,454 shares
of capital stock outstanding) $ 14.63
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $ 15.52
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share
(based on net assets of $12,692,022 and 855,162 shares of
capital stock outstanding) $ 14.84
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $8,305,105
and 575,603 shares of capital stock outstanding) $ 14.43
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $1,740,957
and 119,453 shares of capital stock outstanding) $ 14.57
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 2,453,870
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,137) 1,094,359
- --------------------------------------------------------------------------------
Other income 5,926
------------
Total investment income 3,554,155
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 817,529
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 265,963
Class B 135,165
Class C 74,900
Class N 8,220
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 168,207
Class B 33,651
Class C 20,457
Class N 5,650
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 34,861
Class B 9,977
Class C 4,947
Class N 716
- --------------------------------------------------------------------------------
Accounting service fees 15,000
- --------------------------------------------------------------------------------
Directors' compensation 3,037
- --------------------------------------------------------------------------------
Custodian fees and expenses 2,641
- --------------------------------------------------------------------------------
Other 29,638
------------
Total expenses 1,630,559
Less reduction to custodian expenses (1,762)
Less waivers and reimbursements of expenses (42)
------------
Net expenses 1,628,755
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,925,400
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 6,051,754
Closing of futures contracts 554,923
Foreign currency transactions 117
Swap contracts (23,678)
------------
Net realized gain 6,583,116
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 837,485
Translation of assets and liabilities denominated in foreign
currencies (41,643)
Futures contracts (23,659)
Option contracts (9,239)
Swap contracts (17,997)
------------
Net change in unrealized appreciation 744,947
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,253,463
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,925,400 $ 920,493
- ------------------------------------------------------------------------------------------------------------------
Net realized gain 6,583,116 12,129,756
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 744,947 (4,860,509)
-------------------------------
Net increase in net assets resulting from operations 9,253,463 8,189,740
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (1,991,668) (888,024)
Class B (127,951) (1,401)
Class C (73,018) (3,750)
Class N (22,788) (4,892)
- ------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from capital stock transactions:
Class A (1,298,550) (2,841,650)
Class B (1,695,759) (1,999,035)
Class C 1,529,758 1,447,054
Class N 167,777 1,061,292
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total increase 5,741,264 4,959,334
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 124,796,921 119,837,587
-------------------------------
End of period (including accumulated net investment
income of $442,397 and $388,283, respectively) $130,538,185 $ 124,796,921
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.85 $ 13.04 $ 11.56 $ 12.54 $ 14.23
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .24 1 .12 1 .14 .22 .26
Net realized and unrealized gain (loss) .81 .81 1.48 (.94) (1.69)
----------------------------------------------------------------------------
Total from investment operations 1.05 .93 1.62 (.72) (1.43)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.12) (.14) (.26) (.26)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.63 $ 13.85 $ 13.04 $ 11.56 $ 12.54
============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 7.59% 7.12% 14.17% (5.86)% (10.12)%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 107,800 $ 103,268 $ 100,032 $ 92,806 $ 112,864
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 108,141 $ 103,979 $ 94,811 $ 104,415 $ 128,477
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.62% 0.88% 1.18% 1.73% 1.88%
Total expenses 1.10% 4 1.13% 4,5 1.26% 4,5 1.21% 4,5 1.19% 4
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 6 79% 6 275% 193% 164%
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%.
6. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Year Ended October 31, 2005 $ 288,196,124 $ 291,611,924
Year Ended October 31, 2004 316,759,702 306,486,129
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.04 $ 13.23 $ 11.73 $ 12.72 $ 14.43
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .11 1 -- 1 .04 .11 .15
Net realized and unrealized gain (loss) .83 .81 1.50 (.94) (1.70)
--------------------------------------------------------------
Total from investment operations .94 .81 1.54 (.83) (1.55)
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.14) -- 2 (.04) (.16) (.16)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.84 $ 14.04 $ 13.23 $ 11.73 $ 12.72
==============================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 6.68% 6.13% 13.21% (6.61)% (10.79)%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 12,692 $ 13,619 $ 14,747 $ 12,204 $ 14,770
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 13,568 $ 14,875 $ 12,776 $ 13,639 $ 16,569
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.74% (0.01)% 0.31% 0.94% 1.14%
Total expenses 1.98% 2.02% 2.15% 2.00% 1.94%
Expenses after payments and waivers and
reduction to custodian expenses 1.98% 2.02% 2.11% 2.00% 1.94%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 5 79% 5 275% 193% 164%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
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. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Year Ended October 31, 2005 $288,196,124 $291,611,924
Year Ended October 31, 2004 316,759,702 306,486,129
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.66 $ 12.88 $ 11.43 $ 12.41 $ 14.08
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 1 -- 1 .07 .13 .13
Net realized and unrealized gain (loss) .82 .79 1.43 (.94) (1.64)
---------------------------------------------------------------
Total from investment operations .92 .79 1.50 (.81) (1.51)
- -----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.15) (.01) (.05) (.17) (.16)
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.43 $ 13.66 $ 12.88 $ 11.43 $ 12.41
===============================================================
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 6.71% 6.13% 13.18% (6.64)% (10.76)%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 8,305 $ 6,422 $ 4,666 $ 2,984 $ 2,893
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,524 $ 5,726 $ 3,806 $ 2,961 $ 3,280
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.71% 0.00% 0.29% 0.93% 1.14%
Total expenses 2.00% 2.02% 2.17% 2.00% 1.94%
Expenses after payments and waivers and
reduction to custodian expenses 2.00% 2.02% 2.12% 2.00% 1.94%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 4 79% 4 275% 193% 164%
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. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Year Ended October 31, 2005 $288,196,124 $291,611,924
Year Ended October 31, 2004 316,759,702 306,486,129
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 1
- ----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.80 $ 13.00 $ 11.52 $ 12.52 $ 13.74
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .17 2 .06 2 .12 .16 .12
Net realized and unrealized gain (loss) .81 .81 1.46 (.91) (1.20)
--------------------------------------------------------------
Total from investment operations .98 .87 1.58 (.75) (1.08)
- ----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.07) (.10) (.25) (.14)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.57 $ 13.80 $ 13.00 $ 11.52 $ 12.52
==============================================================
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 7.09% 6.68% 13.81% (6.17)% (7.90)%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,741 $ 1,488 $ 392 $ 241 $ 2
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,647 $ 1,030 $ 342 $ 160 $ 1
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.17% 0.46% 0.79% 1.28% 1.04%
Total expenses 1.54% 1.61% 2.04% 1.60% 1.68%
Expenses after payments and waivers
and reduction to custodian expenses 1.54% 1.55% 1.58% 1.60% 1.68%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 5 79% 5 275% 193% 164%
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. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Year Ended October 31, 2005 $288,196,124 $291,611,924
Year Ended October 31, 2004 316,759,702 306,486,129
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Disciplined Allocation 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 to maximize total investment return (including
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. government securities and money market
instruments, according to changing market conditions. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class N 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. 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. 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Directors. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, in the country that is identified by the portfolio
pricing service, prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the official closing price on the
principal exchange. Corporate, government and municipal debt instruments having
a remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by
41 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
such principal exchange at its trading session ending at, or most recently prior
to, the time when the Fund's assets are valued. 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 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).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of October 31, 2005, the Fund had purchased
$25,509,481 of securities issued on a when-issued basis or forward commitment
and sold $6,049,128 of securities issued on a when-issued basis or forward
commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
42 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income 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. 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 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 following table 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.
43 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND OTHER
UNDISTRIBUTED NET UNDISTRIBUTED ACCUMULATED LOSS INVESTMENTS FOR FEDERAL
INVESTMENT INCOME LONG-TERM GAIN CARRYFORWARD 1,2,3 INCOME TAX PURPOSES
- --------------------------------------------------------------------------------
$460,079 $-- $5,050,942 $8,188,248
1. As of October 31, 2005, the Fund had $5,050,942 of net capital loss
carryforwards available to offset furure realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2005,
details of the capital loss carryforward were as follows:
EXPIRING
-------------------------
2010 $ 5,050,942
2. During the fiscal year ended October 31, 2005, the Fund utilized $6,206,177
of capital loss carryforward to offset capital gains realized in that fiscal
year.
3. During the fiscal year ended October 31, 2004, the Fund utilized $11,697,830
of capital loss carryforward to offset capital gains realized in that fiscal
year.
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, 2005. Net assets of the
Fund were unaffected by the reclassifications.
INCREASE TO
INCREASE TO ACCUMULATED NET
ACCUMULATED NET REALIZED LOSS ON
INVESTMENT INCOME INVESTMENTS
- ------------------------------------
$344,139 $344,139
The tax character of distributions paid during the years ended October 31,
2005 and October 31, 2004 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2005 OCTOBER 31, 2004
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $2,215,425 $898,067
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, 2005 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.
44 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
Federal tax cost of securities $ 141,079,972
Federal tax cost of other investments (24,645,155)
----------------
Total federal tax cost $ 116,434,817
================
Gross unrealized appreciation $ 12,535,928
Gross unrealized depreciation (4,347,680)
----------------
Net unrealized appreciation $ 8,188,248
================
- --------------------------------------------------------------------------------
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, 2005, the Fund's projected benefit obligations were decreased by
$622 and payments of $1,434 were made to retired directors, resulting in an
accumulated liability of $22,853 as of October 31, 2005.
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 Director 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 distributions, if any, are declared
and paid quarterly. 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 account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. 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
45 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 550 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
CLASS A
Sold 818,855 $ 11,945,822 1,031,614 $ 14,122,521
Dividends and/or
distributions reinvested 131,047 1,915,494 62,731 854,672
Redeemed (1,040,110) (15,159,866) (1,307,401) (17,818,843)
---------------------------------------------------------
Net decrease (90,208) $ (1,298,550) (213,056) $ (2,841,650)
=========================================================
- -------------------------------------------------------------------------------------
CLASS B
Sold 215,428 $ 3,183,426 290,346 $ 4,026,294
Dividends and/or
distributions reinvested 8,063 119,409 96 1,314
Redeemed (338,238) (4,998,594) (435,276) (6,026,643)
---------------------------------------------------------
Net decrease (114,747) $ (1,695,759) (144,834) $ (1,999,035)
=========================================================
- -------------------------------------------------------------------------------------
CLASS C
Sold 210,886 $ 3,045,208 221,557 $ 2,977,259
Dividends and/or
distributions reinvested 4,885 70,489 267 3,610
Redeemed (110,147) (1,585,939) (114,094) (1,533,815)
---------------------------------------------------------
Net increase 105,624 $ 1,529,758 107,730 $ 1,447,054
=========================================================
- -------------------------------------------------------------------------------------
CLASS N
Sold 33,998 $ 492,558 85,506 $ 1,165,275
Dividends and/or
distributions reinvested 1,563 22,772 357 4,887
Redeemed (23,994) (347,553) (8,146) (108,870)
---------------------------------------------------------
Net increase 11,567 $ 167,777 77,717 $ 1,061,292
=========================================================
46 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
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, 2005, were as
follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $ 76,718,731 $ 73,809,454
U.S. government and government agency obligations 8,537,881 8,925,638
To Be Announced (TBA) mortgage-related securities 288,196,124 291,611,924
- --------------------------------------------------------------------------------
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, 2005, the Fund paid
$231,434 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 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
47 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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, 2005 for Class B, Class C
and Class N shares were $434,366, $160,268 and $14,030, 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, 2005 $71,166 $261 $27,678 $2,259 $1,242
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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, 2005, OFS
waived $42 for Class N shares. This undertaking may be amended or withdrawn at
any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2005, the Fund had no outstanding foreign currency
contracts.
48 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of October 31, 2005, the Fund had outstanding futures contracts as
follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS OCTOBER 31, 2005 (DEPRECIATION)
- --------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 12/20/05 36 $ 4,030,875 $(146,538)
----------
CONTRACTS TO SELL
Euro-Bundesobligation, 10 yr. 12/8/05 7 1,010,223 (19)
U.S. Treasury Nts., 2 yr. 12/30/05 71 14,569,422 131,360
U.S. Treasury Nts., 5 yr. 12/20/05 63 6,671,109 100,523
U.S. Treasury Nts., 10 yr. 12/20/05 59 6,398,734 121,810
----------
353,674
----------
$ 207,136
==========
49 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the year ended October 31, 2005 was as
follows:
CALL OPTIONS
---------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ---------------------------------------------------------
Options outstanding as of
October 31, 2004 -- $ --
Options written 127 15,589
---------------------------
Options outstanding as of
October 31, 2005 127 $15,589
===========================
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termi-
50 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
nation or settlement. Total return swaps are subject to risks (if the
counterparty fails to meet its obligations).
As of October 31, 2005, the Fund had entered into the following total
return swap agreements:
PAID BY RECEIVED BY
SWAP NOTIONAL THE FUND AT RATE AS OF THE FUND AT RATE AS OF TERMINATION UNREALIZED
COUNTERPARTY AMOUNT OCT. 31, 2005 OCT. 31, 2005 OCT. 31, 2005 OCT. 31, 2005 DATE DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------
One-Month Change of Total
LIBOR Minus Return of
0.25% Lehman
(+ or -) Rate Brothers
UBS AG $1,000,000 Received 4.3946% CMBS Index (0.7846)%* 12/1/05 $9,892
* Represents an additional amount paid by the Fund at October 31, 2005.
Index abbreviations are as follows:
CMBS Commercial Mortgage Backed Securities
LIBOR London-Interbank Offered Rate
- --------------------------------------------------------------------------------
9. ILLIQUID OR RESTRICTED SECURITIES
As of October 31, 2005, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Directors as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund will not invest more than 10% of
its net assets (determined at the time of purchase and reviewed periodically) in
illiquid or restricted securities. Certain restricted securities, eligible for
resale to qualified institutional investors, are not subject to that limitation.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST OCTOBER 31, 2005 DEPRECIATION
- --------------------------------------------------------------------------------
Geotek Communications, Inc.,
Series B, Escrow Shares 1/4/01 $400 $ -- $400
- --------------------------------------------------------------------------------
10. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 2005,
consolidates into a single action and amends six individual previously-filed
putative derivative and class action complaints. Like those prior complaints,
the complaint alleges that the Manager charged excessive fees for distribution
and other
51 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. LITIGATION Continued
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 assets of the funds to make those
payments in violation of the Investment Company Act of 1940 and the Investment
Advisers Act of 1940. Also, like those prior complaints, the complaint further
alleges that by permitting and/or participating in those actions, the
Directors/Trustees and the Officers breached their fiduciary duties to
shareholders of the funds under the Investment Company Act of 1940 and at common
law. The complaint seeks unspecified compensatory and punitive damages,
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The defendants believe that it is premature to
render any opinion as to the likelihood of an outcome unfavorable to them and
that no estimate can yet be made with any degree of certainty as to the amount
or range of any potential loss.
52 | OPPENHEIMER DISCIPLINED ALLOCATION 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 Disciplined Allocation Fund (one of the portfolios constituting the
Oppenheimer Series Fund, Inc.), including the statement of investments, as of
October 31, 2005, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year 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, 2005, 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 Disciplined Allocation Fund as of October 31, 2005, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
December 20, 2005
53 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2006, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2005. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended October
31, 2005 which are not designated as capital gain distributions should be
multiplied by 44.61% 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, 2005 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. $1,098,303 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2006, 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.
54 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
REPORT OF SHAREHOLDER MEETING Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
On August 17, 2005, a shareholder meeting of the Oppenheimer Series Fund, Inc.
(Oppenheimer Disciplined Allocation Fund) was held at which the eleven Trustees
identified below were elected to both Funds (Proposal No. 1) as described in the
Funds' proxy statement for that meeting. The following is a report of the votes
cast:
- --------------------------------------------------------------------------------
PROPOSAL NO. 1
NOMINEE FOR WITHHELD TOTAL
- --------------------------------------------------------------------------------
TRUSTEES
Matthew P. Fink 33,382,247.805 378,488.787 33,760,736.592
Robert G. Galli 33,351,276.097 409,460.495 33,760,736.592
Phillip A. Griffiths 33,373,198.248 387,538.344 33,760,736.592
Mary F. Miller 33,359,875.828 400,860.764 33,760,736.592
Joel W. Motley 33,380,600.979 380,135.613 33,760,736.592
John V. Murphy 33,368,822.956 391,913.636 33,760,736.592
Kenneth A. Randall 33,328,691.369 432,045.223 33,760,736.592
Russell S. Reynolds, Jr. 33,343,144.967 417,591.625 33,760,736.592
Joseph M. Wikler 33,376,187.675 384,548.917 33,760,736.592
Peter I. Wold 33,368,807.905 391,928.687 33,760,736.592
Clayton K. Yeutter 33,343,755.040 416,981.552 33,760,736.592
55 | OPPENHEIMER DISCIPLINED ALLOCATION 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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing 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
http://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.
56 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
DIRECTORS AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF
THE FUND, LENGTH OF SERVICE, PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN.
AGE
INDEPENDENT DIRECTORS THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924.
EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR
REMOVAL.
CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January 2005); Attorney at Hogan &
Chairman of the Board of Hartson (law firm) (since June 1993); Director of Danielson Holding Corp. (waste-to-energy company)
Directors (since 2003), (since 2002); Director of Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Inc.
Director (since 1996) (1993-December 2002); Director of ConAgra Foods (1993-2001); Director of Texas Instruments
Age: 74 (1993-2001); Director of FMC Corporation (1993-2001). Oversees 38 portfolios in the OppenheimerFunds
complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005);
Director (since 2005) Director of ICI Education Foundation (education foundation) (since October 1991); President of the
Age: 64 Investment Company Institute (trade association) (1991-2004); Director of ICI Mutual Insurance
Company (insurance company) (1991-2004). Oversees 38 portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in the OppenheimerFunds
Director (since 1996) complex.
Age: 72
PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier) (since 2001); Trustee of
Director (since 1999) Woodward Academy (since 1983); Senior Advisor of The Andrew W. Mellon Foundation (since 2001);
Age: 67 Member of the National Academy of Sciences (since 1979); Member of the American Philosophical
Society (since 1996); Council on Foreign Relations (since 2002); Director of the Institute for
Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999). Oversees 38
portfolios in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice
Director (since 2004) President and General Auditor of American Express Company (financial services company) (July
Age: 63 1998-February 2003). Oversees 38 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002);
Director (since 2002) Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January 2002);
Age: 53 Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January
1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds complex.
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (since February 1972);
Director (since 1996) Former Director of Prime Retail, Inc. (real estate investment trust), Dominion Energy Inc. (electric
Age: 78 power and oil & gas producer), Lumbermens Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive
Officer of The Conference Board, Inc. (international economic and business research). Oversees 38
portfolios in the OppenheimerFunds complex.
57 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting and executive
Director (since 1996) recruiting) (since 1993); Life Trustee of International House (non-profit educational organization);
Age: 73 Former Trustee of The Historical Society of the Town of Greenwich. Oversees 38 portfolios in the
OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996);
Director (since 2005) Director of Lakes Environmental Association (since 1996); Member of the Investment Committee of the
Age: 64 Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds
(1994-December 2001). Oversees 39 portfolios in the OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since
Director (since 2005) 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and
Age: 57 production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since 1999);
Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of
the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of
PacifiCorp. (electric utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds complex.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1996); Director of Special
Director (since 2005) Value Opportunities Fund, LLC (registered investment company) (since September 2004); Director of
Age: 62 Zurich Financial Investment Advisory Board (affiliate of the Manager's parent company) (since
October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August
1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May
1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment)
(January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment
research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990-
September 2001) (economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002)
(executive search firm). Oversees 48 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
AND OFFICER NY 10281-1008. MR. MURPHY SERVES AS A DIRECTOR FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN
ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED
DIRECTOR DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since September
President and Principal 2000) of the Manager; President and Director or Trustee of other Oppenheimer funds; President and
Executive Officer and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and of
Director (since 2001) Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July
Age: 56 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November
2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services,
Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of
OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July
2001); 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
58 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
JOHN V. MURPHY, 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset
Continued Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's
parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company
parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company
Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager
(September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual
Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life
Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of
MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp
and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998).
Oversees 77 portfolios as a Director or Trustee and 10 additional portfo- lios as officer in the
OppenheimerFunds complex.
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OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. FERREIRA, LEAVY,
MANIUODAKIS AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR
MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR
AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
EMMANUEL FERREIRA, Vice President of the Manager since January 2003. Formerly, Portfolio Manager at Lashire Investments
Vice President (since 2003) (July 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999). An
Age: 37 officer of 4 portfolios in the OppenheimerFunds complex.
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000. Formerly a portfolio manager of Morgan
Vice President (since 2000) Stanley Dean Witter Investment Management (1997 - September 2000). An officer of 7 portfolios in the
Age: 33 OppenheimerFunds complex.
ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView Asset Management Corporation
Vice President (since 2002) (since April 2002 and of OFI Institutional Asset Management, Inc. (since June 2002). Formerly
Age: 38 Executive Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan
Stanley Investment Management (August 1993-April 2002). An officer of 14 portfolios in the
OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice President
Vice President and Chief of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder
Compliance Officer Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit of the
(since 2004) Manager (1997-February 2004). An officer of 87 portfolios in the OppenheimerFunds complex.
Age: 55
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following:
Treasurer and Principal HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Financial and Accounting Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings,
Officer (since 1999) Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
Age: 46 International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset
Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust
program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI
Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the
following: OAC (since March 1999),Centennial Asset Management Corporation (March 1999-October 2003)
and OppenheimerFunds
59 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust
Continued Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager;
Secretary (since 2001) General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial
Age: 57 Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of
HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC
(since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001)
of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of
Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset
Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of
Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior
Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company
(since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior
Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November
2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); 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 the following: Shareholder
Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An
officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S DIRECTORS AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST, BY CALLING 1.800.525.7048.
60 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
OPPENHEIMER VALUE FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
- --------------------------------------------------------------------------------
Software 11.9%
- --------------------------------------------------------------------------------
Aerospace & Defense 9.6
- --------------------------------------------------------------------------------
Oil & Gas 9.4
- --------------------------------------------------------------------------------
Diversified Financial Services 9.1
- --------------------------------------------------------------------------------
Commercial Banks 8.8
- --------------------------------------------------------------------------------
Media 6.7
- --------------------------------------------------------------------------------
Electric Utilities 5.4
- --------------------------------------------------------------------------------
Insurance 5.2
- --------------------------------------------------------------------------------
Tobacco 5.0
- --------------------------------------------------------------------------------
Capital Markets 4.8
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Wells Fargo & Co. 5.0%
- --------------------------------------------------------------------------------
Altria Group, Inc. 5.0
- --------------------------------------------------------------------------------
Honeywell International, Inc. 4.9
- --------------------------------------------------------------------------------
UBS AG 4.8
- --------------------------------------------------------------------------------
BP plc, ADR 4.5
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 4.1
- --------------------------------------------------------------------------------
Microsoft Corp. 4.1
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 4.0
- --------------------------------------------------------------------------------
United Technologies Corp. 4.0
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 3.8
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets. For more current Fund holdings,
please visit www.oppenheimerfunds.com.
- --------------------------------------------------------------------------------
7 | OPPENHEIMER VALUE FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Financials 32.0%
Diversified Financial Services 9.5
Commercial Banks 9.1
Insurance 5.4
Capital Markets 5.0
Thrifts & Mortgage Finance 3.0
Information Technology 15.0
Industrials 13.5
Energy 11.7
Consumer Discretionary 6.9
Utilities 6.5
Consumer Staples 5.1
Health Care 3.6
Materials 3.5
Telecommunication Services 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on the total market value of common stocks.
- --------------------------------------------------------------------------------
8 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2005, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE Oppenheimer Value Fund withstood a
volatile market environment to deliver an attractive 12-month total return.
Strong absolute and relative total returns for the Fund's financial, consumer
staples, and consumer discretionary stocks helped overcome relative weakness in
the portfolio's technology and industrial holdings.
The Fund's performance can be attributed to our bottom-up stock selection
discipline. Our investment strategy centers around finding stocks whose prices
are, in our view, inexpensive relative to the underlying companies' long-term
earnings power and potential to generate cash flow. As a byproduct of this sharp
focus on the value characteristics of individual stocks, the Fund's sector
weightings may vary from those of the index. Such over- and underweightings are
a reflection of our conviction about the prospects for individual holdings and
their industry niches rather than enthusiasm for broad sectors.
During this period, we found relatively few financial services or consumer
discretionary companies that met our investment parameters. In our estimation,
many financial services companies were overly exposed to rising interest rates
and a flat yield curve (i.e., a relatively small gap or difference between
short- and long-term fixed-income yields). Many consumer companies appeared
richly valued and vulnerable to a falloff in spending as consumers struggled to
deal with higher energy prices and interest rates.
As a result of these concerns, the portfolio was underweighted (vs. the
index) in these sectors. Despite the variance, these were areas of relative
strength for the Fund. Among the largest contributors to performance were
Liberty Global, Inc., Lehman Brothers Holdings, Inc., Franklin Resources, Inc.
and Prudential Financial, Inc. The Fund was also underweight in the energy
sector, which detracted from results due to the strong performance from the
energy stocks.
The Fund acquired shares of Liberty Global, Inc., as a result of a merger
between UnitedGlobal Com, Inc., a previous holding, and another cable TV
operator. Liberty Global, Inc. is a U.S.-domiciled company that operates cable
TV systems in Europe and Japan. Our research showed that it had considerable
growth potential, since the company faced fewer structural competitive issues
than U.S. cable operators. The stock has benefited from that favorable
competitive environment and from growing subscriber bases for its broadband and
cable telephony services.
The Fund's financial services holdings benefited primarily from
company-specific developments. The stock of brokerage firm Lehman Brothers was
inexpensive (compared to other broker/dealers) when we purchased it, even though
its profitability was among
9 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
the best in the industry and its franchises and returns were improving. Since
then, the market has awakened to Lehman's strong points. Asset manager Franklin
Resources benefited from robust mutual fund inflows that helped to boost
earnings and, as a result, its stock price. At Prudential, successful
restructuring efforts have contributed to improved returns and stock
performance.
During this period, we found relatively few energy companies that met our
investment parameters. In the energy sector, we were concerned about
sustainability of higher oil prices. As a result of these concerns, the
portfilio was underweighted (vs. the index) in this sector.
The Fund's primary area of weakness was technology, a sector in which the
portfolio was overweighted. The single largest detractors from results were
Take-Two Interactive Software, Inc., and IBM Corp. Take Two, which manufactures
mature-rated and sports-related game software and video game accessories, was
negatively impacted by a recall of its leading videogame and, to a lesser
extent, by generally weaker consumer demand. We view the setback as temporary
and believe that the company may benefit from new releases and its excellent
competitive position in the mature-rated market. In the first half of the
period, IBM experienced difficulty with execution. Although the situation has
improved, the stock still has not recovered fully. Stock selection in
industrials also detracted from performance due primarily to weakness in Cendant
Corp.
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, 2005. In the case of Class A and Class
B shares, performance is measured over a ten-fiscal-year period. 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.
10 | OPPENHEIMER VALUE FUND
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
Fund (Class A) S&P 500 Index
12/31/1994 9,425 10,131
03/31/1995 10,255 10,973
06/30/1995 11,124 12,019
09/30/1995 12,070 12,973
12/31/1995 12,856 13,753
03/31/1996 13,468 14,491
06/30/1996 13,637 15,141
09/30/1996 14,016 15,609
10/31/1996 1 14,322 16,039
01/31/1997 15,845 17,965
04/30/1997 15,853 18,399
07/31/1997 18,707 22,014
10/31/1997 18,276 21,188
01/31/1998 18,540 22,798
04/30/1998 20,884 25,955
07/31/1998 19,607 26,264
10/31/1998 18,686 25,852
01/31/1999 20,771 30,209
04/30/1999 20,939 31,620
07/31/1999 20,584 31,570
10/31/1999 19,358 32,486
01/31/2000 18,213 33,333
04/30/2000 19,606 34,820
07/31/2000 19,175 34,400
10/31/2000 18,854 34,461
01/31/2001 20,491 33,033
04/30/2001 20,067 30,306
07/31/2001 20,324 29,473
10/31/2001 17,798 25,884
01/31/2002 19,522 27,703
04/30/2002 19,545 26,482
07/31/2002 16,481 22,513
10/31/2002 16,526 21,976
01/31/2003 16,887 21,330
04/30/2003 17,414 22,959
07/31/2003 19,476 24,908
10/31/2003 20,686 26,544
01/31/2004 23,353 28,698
04/30/2004 22,522 28,209
07/31/2004 22,634 28,186
10/31/2004 23,758 29,043
01/31/2005 25,932 30,484
04/30/2005 25,636 29,995
07/31/2005 27,423 32,145
10/31/2005 27,082 31,574
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 7.44% 5-Year 6.25% 10-Year 7.93%
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 16 FOR
FURTHER INFORMATION.
1. The Fund changed its fiscal year end from 12/31 to 10/31.
11 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
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
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 19,060 22,387
01/31/2005 20,805 23,498
04/30/2005 20,567 23,121
07/31/2005 22,001 24,778
10/31/2005 21,727 24,338
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 8.02% 5-Year 6.31% 10-Year 8.15%
1. The Fund changed its fiscal year end from 12/31 to 10/31.
12 | OPPENHEIMER VALUE FUND
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
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
01/31/2005 17,893 20,730
04/30/2005 17,658 20,398
07/31/2005 18,851 21,860
10/31/2005 18,575 21,472
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 12.14% 5-Year 6.65% Since Inception (5/1/96) 6.74%
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 16 FOR
FURTHER INFORMATION.
1. The Fund changed its fiscal year end from 12/31 to 10/31.
13 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
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
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
01/31/2005 12,667 10,154
04/30/2005 12,514 9,991
07/31/2005 13,379 10,707
10/31/2005 13,203 10,517
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1-Year 12.68% 5-Year N/A Since Inception (3/1/01) 6.14%
14 | OPPENHEIMER VALUE FUND
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
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
01/31/2005 17,942 18,028
04/30/2005 17,756 17,739
07/31/2005 19,003 19,010
10/31/2005 18,779 18,673
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/05
1-Year 14.38% 5-Year 7.88% Since Inception (12/16/96) 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 16 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER VALUE FUND
NOTES
- --------------------------------------------------------------------------------
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 "10-year" 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.
16 | OPPENHEIMER VALUE FUND
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, 2005.
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
(5/1/05) (10/31/05) OCTOBER 31, 2005
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,056.40 $ 5.09
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.27 5.00
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,051.80 9.61
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.88 9.44
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,051.90 9.14
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,016.33 8.98
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,055.10 6.65
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.75 6.53
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,057.60 3.64
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,021.68 3.57
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 184/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended October 31, 2005 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------
Class A 0.98%
- ---------------------------
Class B 1.85
- ---------------------------
Class C 1.76
- ---------------------------
Class N 1.28
- ---------------------------
Class Y 0.70
- --------------------------------------------------------------------------------
19 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2005
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--96.6%
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.7%
- -----------------------------------------------------------------------------------------------------------------------------------
MEDIA--6.7%
Liberty Global, Inc.,
Series A 1,306,546 $ 32,363,144
- -----------------------------------------------------------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1 1,377,846 32,682,507
- -----------------------------------------------------------------------------------------------------------------------------------
News Corp., Inc.,
Cl. A 1,791,800 25,533,150
---------------
90,578,801
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--5.0%
- -----------------------------------------------------------------------------------------------------------------------------------
TOBACCO--5.0%
Altria Group, Inc. 892,100 66,952,105
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY--11.4%
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.0%
Halliburton Co. 441,752 26,107,543
- -----------------------------------------------------------------------------------------------------------------------------------
OIL & GAS--9.4%
BP plc, ADR 913,230 60,638,472
- -----------------------------------------------------------------------------------------------------------------------------------
Exxon Mobil Corp. 904,000 50,750,560
- -----------------------------------------------------------------------------------------------------------------------------------
TotalFinaElf SA,
Sponsored ADR 125,600 15,828,112
---------------
127,217,144
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIALS--30.8%
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--4.8%
UBS AG 758,900 65,014,963
- -----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--8.8%
Bank of America
Corp. 513,478 22,459,528
- -----------------------------------------------------------------------------------------------------------------------------------
Wachovia Corp. 560,400 28,311,408
- -----------------------------------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 1,131,810 68,134,962
---------------
118,905,898
- -----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--9.1%
Capital One
Financial Corp. 444,300 33,922,305
- -----------------------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. 293,966 13,457,763
- -----------------------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase & Co. 1,472,300 53,915,626
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Lehman Brothers
Holdings, Inc. 180,900 $ 21,648,303
---------------
122,943,997
- -----------------------------------------------------------------------------------------------------------------------------------
INSURANCE--5.2%
Everest Re Group Ltd. 140,300 13,952,835
- -----------------------------------------------------------------------------------------------------------------------------------
Genworth Financial,
Inc., Cl. A 1,311,770 41,569,991
- -----------------------------------------------------------------------------------------------------------------------------------
Platinum
Underwriters
Holdings Ltd. 539,870 15,380,896
---------------
70,903,722
- -----------------------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.9%
Countrywide
Financial Corp. 760,940 24,175,064
- -----------------------------------------------------------------------------------------------------------------------------------
Freddie Mac 237,970 14,599,460
---------------
38,774,524
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE--3.5%
- -----------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--1.3%
Wyeth 389,990 17,377,954
- -----------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--2.2%
Sanofi-Aventis
SA, ADR 745,800 29,921,496
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--13.0%
- -----------------------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--9.6%
Honeywell
International, Inc. 1,946,300 66,563,460
- -----------------------------------------------------------------------------------------------------------------------------------
Raytheon Co. 249,550 9,220,873
- -----------------------------------------------------------------------------------------------------------------------------------
United
Technologies Corp. 1,046,000 53,638,880
---------------
129,423,213
- -----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--3.4%
Cendant Corp. 2,680,440 46,693,265
- -----------------------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--14.4%
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.5%
Hutchinson
Technology, Inc. 1 261,300 6,480,240
20 | OPPENHEIMER VALUE FUND
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS Continued
International Business
Machines Corp. 339,850 $ 27,826,918
---------------
34,307,158
- -----------------------------------------------------------------------------------------------------------------------------------
SOFTWARE--11.9%
Microsoft Corp. 2,133,360 54,827,352
- -----------------------------------------------------------------------------------------------------------------------------------
Novell, Inc. 1 1,989,540 15,160,295
- -----------------------------------------------------------------------------------------------------------------------------------
Synopsys, Inc. 1 1,839,500 34,858,525
- -----------------------------------------------------------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 2,703,925 55,836,051
---------------
160,682,223
- -----------------------------------------------------------------------------------------------------------------------------------
MATERIALS--3.4%
- -----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--2.3%
Praxair, Inc. 637,880 31,517,651
- -----------------------------------------------------------------------------------------------------------------------------------
METALS & MINING--1.1%
Phelps Dodge Corp. 122,700 14,781,669
- -----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.1%
- -----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.1%
IDT Corp., Cl. B 1 1,263,103 15,081,450
- -----------------------------------------------------------------------------------------------------------------------------------
Sprint Nextel Corp. 579,800 13,515,138
---------------
28,596,588
- -----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--6.3%
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--5.4%
AES Corp. (The) 1 2,122,180 33,721,440
- -----------------------------------------------------------------------------------------------------------------------------------
CMS Energy Corp. 1 823,300 12,275,403
- -----------------------------------------------------------------------------------------------------------------------------------
PG&E Corp. 264,030 9,605,412
- -----------------------------------------------------------------------------------------------------------------------------------
Reliant Energy, Inc. 1 1,306,230 16,589,121
---------------
72,191,376
- -----------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.9%
Sempra Energy 285,930 12,666,699
---------------
Total Common Stocks
(Cost $1,220,214,364) 1,305,557,989
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Undivided interest of 5.44% in joint
repurchase agreement (Principal Amount/Value $647,082,000, with a maturity value
of $647,153,179) with UBS Warburg LLC, 3.96%, dated 10/31/05, to be repurchased
at $35,182,870 on 11/1/05, collateralized by Federal National Mortgage Assn.,
5%, 10/1/35, with a value of $661,717,556 (Cost $35,179,000) $ 35,179,000 $ 35,179,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,255,393,364) 99.2% 1,340,736,989
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 0.8 10,570,546
-------------------------------
NET ASSETS 100.0% $1,351,307,535
===============================
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, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $1,255,393,364)--see
accompanying statement of investments $ 1,340,736,989
- --------------------------------------------------------------------------------
Cash 160,291
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of capital stock sold 7,709,140
Investments sold 7,251,897
Interest and dividends 377,243
Other 15,122
----------------
Total assets 1,356,250,682
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,297,238
Shares of capital stock redeemed 1,937,843
Distribution and service plan fees 243,883
Transfer and shareholder servicing agent fees 218,613
Shareholder communications 81,358
Directors' compensation 80,662
Other 83,550
----------------
Total liabilities 4,943,147
- --------------------------------------------------------------------------------
NET ASSETS $ 1,351,307,535
================
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of capital stock $ 57,172
- --------------------------------------------------------------------------------
Additional paid-in capital 1,199,311,063
- --------------------------------------------------------------------------------
Accumulated net investment income 5,255,662
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 61,340,013
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 85,343,625
----------------
NET ASSETS $ 1,351,307,535
================
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 $835,793,016 and 35,130,280
shares of capital stock outstanding) $ 23.79
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering price) $ 25.24
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $127,257,483 and 5,492,215
shares of capital stock outstanding) $ 23.17
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $170,710,048 and 7,456,442
shares of capital stock outstanding) $ 22.89
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering
price per share (based on net assets of $76,057,811
and 3,253,372 shares of capital stock outstanding) $ 23.38
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $141,489,177 and
5,839,383 shares of capital stock outstanding) $ 24.23
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $133,653) $ 16,428,818
- --------------------------------------------------------------------------------
Interest 1,185,723
- --------------------------------------------------------------------------------
Other income 21,997
----------------
Total investment income 17,636,538
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 4,932,587
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,476,547
Class B 1,092,359
Class C 1,242,652
Class N 264,945
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,172,478
Class B 323,583
Class C 272,567
Class N 142,517
Class Y 147,376
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 153,634
Class B 58,652
Class C 34,565
Class N 6,288
- --------------------------------------------------------------------------------
Directors' compensation 39,113
- --------------------------------------------------------------------------------
Accounting service fees 15,000
- --------------------------------------------------------------------------------
Custodian fees and expenses 7,487
- --------------------------------------------------------------------------------
Other 101,165
----------------
Total expenses 11,483,515
Less reduction to custodian expenses (1,232)
----------------
Net expenses 11,482,283
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,154,255
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 70,292,725
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 20,234,425
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 96,681,405
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004
- ----------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 6,154,255 $ 1,875,843
- ----------------------------------------------------------------------------------------------------------
Net realized gain 70,292,725 37,112,277
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 20,234,425 18,764,765
---------------------------------
Net increase in net assets resulting from operations 96,681,405 57,752,885
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (2,034,104) (574,991)
Class B -- --
Class C -- --
Class N (98,987) (59,111)
Class Y (289,396) (16,057)
- ----------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (3,563,988) --
Class B (799,560) --
Class C (788,223) --
Class N (319,960) --
Class Y (289,411) --
- ----------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital stock transactions:
Class A 401,024,642 126,690,468
Class B 30,568,616 15,328,730
Class C 80,170,490 40,268,281
Class N 38,290,520 23,054,671
Class Y 103,772,486 28,001,783
- ----------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Total increase 742,324,530 290,446,659
- ----------------------------------------------------------------------------------------------------------
Beginning of period 608,983,005 318,536,346
---------------------------------
End of period (including accumulated net investment
income of $5,255,662 and $1,545,458, respectively) $ 1,351,307,535 $ 608,983,005
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.15 $ 18.46 $ 14.78 $ 15.93 $ 17.06
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .19 1 .13 1 .04 .07 .03
Net realized and unrealized gain (loss) 2.75 2.61 3.67 (1.21) (.98)
--------------------------------------------------------------------------
Total from investment operations 2.94 2.74 3.71 (1.14) (.95)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.11) (.05) (.03) (.01) (.18)
Distributions from net realized gain (.19) -- -- -- --
--------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.30) (.05) (.03) (.01) (.18)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.79 $ 21.15 $ 18.46 $ 14.78 $ 15.93
==========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.99% 14.85% 25.18% (7.15)% (5.60)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 835,793 $ 378,785 $ 215,019 $ 141,563 $ 166,285
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 600,426 $ 303,560 $ 166,143 $ 166,319 $ 181,631
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.83% 0.66% 0.37% 0.38% 0.19%
Total expenses 0.99% 4 1.07% 4,5 1.22% 4,5 1.22% 4,5 1.26% 4
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 72% 85% 117% 150% 336%
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, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.68 $ 18.18 $ 14.64 $ 15.89 $ 16.99
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.01) 1 (.05)(1) (.06) (.10) (.11)
Net realized and unrealized gain (loss) 2.69 2.55 3.60 (1.15) (.97)
--------------------------------------------------------------------------
Total from investment operations 2.68 2.50 3.54 (1.25) (1.08)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- (.02)
Distributions from net realized gain (.19) -- -- -- --
--------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.19) -- -- -- (.02)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.17 $ 20.68 $ 18.18 $ 14.64 $ 15.89
==========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.02% 13.75% 24.18% (7.87)% (6.34)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 127,258 $ 85,683 $ 60,858 $ 47,323 $ 57,584
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 109,545 $ 77,341 $ 51,476 $ 56,200 $ 65,115
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.03)% (0.24)% (0.44)% (0.40)% (0.57)%
Total expenses 1.87% 1.98% 2.14% 2.01% 2.01%
Expenses after payments and waivers and
reduction to custodian expenses 1.87% 1.98% 2.05% 2.01% 2.01%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 72% 85% 117% 150% 336%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.41 $ 17.93 $ 14.44 $ 15.67 $ 16.77
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 1 (.03) 1 .03 (.01) (.08)
Net realized and unrealized gain (loss) 2.66 2.51 3.46 (1.22) (.99)
--------------------------------------------------------------------------
Total from investment operations 2.67 2.48 3.49 (1.23) (1.07)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- (.03)
Distributions from net realized gain (.19) -- -- -- --
--------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.19) -- -- -- (.03)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.89 $ 20.41 $ 17.93 $ 14.44 $ 15.67
==========================================================================
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 13.14% 13.83% 24.17% (7.85)% (6.38)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 170,710 $ 79,501 $ 32,625 $ 13,466 $ 10,494
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 124,605 $ 61,387 $ 21,366 $ 12,977 $ 11,088
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.04% (0.17)% (0.49)% (0.41)% (0.56)%
Total expenses 1.77% 4 1.89% 4,5 2.07% 4,5 2.00% 4,5 2.01% 4
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 72% 85% 117% 150% 336%
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, 2005 2004 2003 2002 2001 1
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.80 $ 18.25 $ 14.68 $ 15.90 $ 18.08
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .11 2 .06 2 .03 .05 (.02)
Net realized and unrealized gain (loss) 2.72 2.56 3.59 (1.22) (2.16)
------------------------------------------------------------------------
Total from investment operations 2.83 2.62 3.62 (1.17) (2.18)
- --------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.06) (.07) (.05) (.05) --
Distributions from net realized gain (.19) -- -- -- --
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.25) (.07) (.05) (.05) --
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.38 $ 20.80 $ 18.25 $ 14.68 $ 15.90
========================================================================
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 13.68% 14.39% 24.70% (7.41)% (12.06)%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 76,058 $ 33,100 $ 7,417 $ 1,201 $ 12
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 53,166 $ 23,344 $ 3,275 $ 508 $ 5
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.50% 0.28% (0.03)% 0.00% (0.45)%
Total expenses 1.30% 1.45% 1.61% 1.49% 1.61%
Expenses after payments and waivers and
reduction to custodian expenses 1.30% 1.45% 1.55% 1.49% 1.61%
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 72% 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.54 $ 18.79 $ 14.96 $ 16.20 $ 17.07
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 1 .26 .24 (1.86) .06 .10
Net realized and unrealized gain (loss) 2.81 2.62 5.71 1 (1.21) 1 (.97) 1
-------------------------------------------------------------------------
Total from investment operations 3.07 2.86 3.85 (1.15) (.87)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.19) (.11) (.02) (.09) --
Distributions from net realized gain (.19) -- -- -- --
-------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.38) (.11) (.02) (.09) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.23 $ 21.54 $ 18.79 $ 14.96 $ 16.20
=========================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.38% 15.30% 25.78% (7.18)% (5.10)%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 141,489 $ 31,914 $ 2,617 $ 1,074 $ 638
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 83,000 $ 8,398 $ 1,558 $ 955 $ 155
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.10% 1.17% 0.76% 0.33% 0.62%
Total expenses 0.70% 0.61% 1.19% 3.77% 1.20%
Expenses after payments and waivers and
reduction to custodian expenses 0.70% 0.61% 0.80% 1.23% 0.83%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 72% 85% 117% 150% 336%
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.
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. Realization of current income is a secondary consideration. 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Directors. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, in the country that is identified by the portfolio
pricing service, prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the official closing price on the
principal exchange. Corporate, government and municipal debt instruments having
a remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by
31 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
such principal exchange at its trading session ending at, or most recently prior
to, the time when the Fund's assets are valued. 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 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. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income 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. 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.
32 | OPPENHEIMER VALUE FUND
Operating expenses directly attributable to a specific class are charged against
the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
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
----------------------------------------------------------------------
$ 27,129,610 $ 40,125,513 $ -- $ 84,761,319
1. During the fiscal year ended October 31, 2005, the Fund utilized $1,620,254
of capital loss carryforward to offset capital gains realized in that fiscal
year. a,b
a. Includes $1,175,862 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, 2004, the Fund utilized $29,785,616
of capital loss carryforward to offset capital gains realized in that fiscal
year. a,b
a. Includes $444,392 of capital loss carryforwards acquired in the
September 18, 2003 merger of Oppenheimer Trinity Value Fund.
b. Includes $1,348,116 of capital loss carryforwards acquired in the
November 6, 2003 merger of Oppenheimer Select Managers Salomon Brothers
All Cap 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, 2005. Net assets
of the Fund were unaffected by the reclassifications.
REDUCTION TO
REDUCTION TO ACCUMULATED NET
INCREASE TO ACCUMULATED NET REALIZED GAIN ON
PAID-IN CAPITAL INVESTMENT INCOME INVESTMENTS 3
----------------------------------------------------------------------
$ 8,249,637 $ 21,564 $ 8,228,073
3. $6,629,383, including $4,295,824 of long-term capital gain, was distributed
in connection with Fund share redemptions.
33 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
The tax character of distributions paid during the years ended October 31, 2005
and October 31, 2004 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2005 OCTOBER 31, 2004
-----------------------------------------------------------
Distributions
paid from:
Ordinary income $ 2,422,487 $ 650,159
Long-term
capital gain 5,761,142 --
--------------------------------------
Total $ 8,183,629 $ 650,159
======================================
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, 2005 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 $ 1,255,975,670
===============
Gross unrealized appreciation $ 119,196,411
Gross unrealized depreciation (34,435,092)
---------------
Net unrealized appreciation $ 84,761,319
===============
- --------------------------------------------------------------------------------
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, 2005, the Fund's projected benefit obligations were increased by
$17,499 and payments of $2,208 were made to retired directors, resulting in an
accumulated liability of $63,088 as of October 31, 2005.
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 Director 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.
34 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
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 account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. 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, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
CLASS A
Sold 21,899,954 $ 510,001,541 8,369,840 $ 170,220,679
Dividends and/or
distributions reinvested 224,061 5,016,717 26,697 512,868
Acquisition-Note 5 -- -- 393,950 7,335,351
Redeemed (4,906,749) (113,993,616) (2,522,842) (51,378,430)
----------------------------------------------------------
Net increase 17,217,266 $ 401,024,642 6,267,645 $ 126,690,468
==========================================================
- -------------------------------------------------------------------------------------
CLASS B
Sold 2,699,016 $ 61,263,523 2,032,579 $ 40,623,831
Dividends and/or
distributions reinvested 33,852 744,025 -- --
Acquisition-Note 5 -- -- 286,209 5,246,208
Redeemed (1,384,112) (31,438,932) (1,523,503) (30,541,309)
----------------------------------------------------------
Net increase 1,348,756 $ 30,568,616 795,285 $ 15,328,730
==========================================================
35 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK Continued
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
CLASS C
Sold 4,592,560 $ 103,383,454 2,218,314 $ 43,763,468
Dividends and/or
distributions reinvested 31,946 693,237 -- --
Acquisition-Note 5 -- -- 440,763 7,968,992
Redeemed (1,062,520) (23,906,201) (584,362) (11,464,179)
-----------------------------------------------------------
Net increase 3,561,986 $ 80,170,490 2,074,715 $ 40,268,281
===========================================================
- -------------------------------------------------------------------------------------
CLASS N
Sold 2,243,821 $ 51,659,803 1,012,546 $ 20,320,194
Dividends and/or
distributions reinvested 18,560 409,435 3,115 59,100
Acquisition-Note 5 -- -- 452,633 8,332,974
Redeemed (600,186) (13,778,718) (283,432) (5,657,597)
-----------------------------------------------------------
Net increase 1,662,195 $ 38,290,520 1,184,862 $ 23,054,671
===========================================================
- -------------------------------------------------------------------------------------
CLASS Y
Sold 5,325,506 $ 127,221,723 1,405,605 $ 29,328,236
Dividends and/or
distributions reinvested 25,451 578,749 822 16,039
Acquisition-Note 5 -- -- 51 969
Redeemed (992,963) (24,027,986) (64,351) (1,343,461)
-----------------------------------------------------------
Net increase 4,357,994 $ 103,772,486 1,342,127 $ 28,001,783
===========================================================
- --------------------------------------------------------------------------------
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, 2005, were as
follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $1,285,593,955 $667,849,379
- --------------------------------------------------------------------------------
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
36 | OPPENHEIMER VALUE FUND
account fee. For the year ended October 31, 2005, the Fund paid $1,960,525 to
OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum 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.
- --------------------------------------------------------------------------------
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% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 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, 2005 for Class B, Class C
and Class N shares were $3,075,727, $1,719,593 and $713,193, 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.
37 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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, 2005 $ 1,065,744 $ 948 $ 190,006 $ 27,739 $ 51,032
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. ACQUISITION OF 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 Select Managers Salomon Brothers All Cap 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.
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 2005,
consolidates into a single action and amends six individual previously-filed
putative derivative and class action complaints. Like those prior complaints,
the complaint alleges 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 assets of the funds to make
those payments in violation of the Investment Company Act of 1940 and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or
38 | OPPENHEIMER VALUE FUND
participating in those actions, the Directors/Trustees and the Officers breached
their fiduciary duties to shareholders of the funds under the Investment Company
Act of 1940 and at common law. The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory agreements, an
accounting of all fees paid, and an award of attorneys' fees and litigation
expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The defendants believe that it is premature to
render any opinion as to the likelihood of an outcome unfavorable to them and
that no estimate can yet be made with any degree of certainty as to the amount
or range of any potential loss.
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,
2005, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the five-year
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, 2005, 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, 2005, the results of its operations for
the year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended, in conformity with U.S. generally accepted
accounting principles.
KPMG LLP
Denver, Colorado
December 20, 2005
40 | OPPENHEIMER VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2006, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2005. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends and distributions of $0.3005, $0.1913, $0.1913, $0.2505 and
$0.3826 per share were paid to Class A, Class B, Class C, Class N and Class Y
shareholders, respectively, on December 3, 2004, of which $0.1913 was designated
as a "capital gain distribution" for federal income tax purposes. Whether
received in stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of the capital assets held for more than
one year (long-term capital gains).
Dividends, if any, paid by the Fund during the fiscal year ended October
31, 2005 which are not designated as capital gain distributions should be
multiplied by 45.40% 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, 2005 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. $16,418,121 of the Fund's fiscal year taxable income may be
eligible for the lower individual income tax rates. In early 2006, 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
REPORT OF SHAREHOLDER MEETING Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
On August 17, 2005, a shareholder meeting of the Oppenheimer Series Fund, Inc.
(Oppenheimer Value Fund) was held at which the eleven Trustees identified below
were elected to both Funds (Proposal No. 1) and the sub-proposals in (Proposal
No. 2) were approved by the Oppenheimer Value Fund as described in the Fund's
proxy statement for that meeting. The following is a report of the votes cast:
- --------------------------------------------------------------------------------
PROPOSAL NO. 1
NOMINEE FOR WITHHELD TOTAL
- --------------------------------------------------------------------------------
TRUSTEES
Matthew P. Fink 27,131,084.022 250,883.060 27,381,967.082
Robert G. Galli 27,104,151.422 277,815.660 27,381,967.082
Phillip A. Griffiths 27,122,224.683 259,742.399 27,381,967.082
Mary F. Miller 27,108,544.790 273,422.292 27,381,967.082
Joel W. Motley 27,129,378.717 252,588.365 27,381,967.082
John V. Murphy 27,117,932.351 264,034.731 27,381,967.082
Kenneth A. Randall 27,081,245.815 300,721.267 27,381,967.082
Russell S. Reynolds, Jr. 27,094,703.832 287,263.250 27,381,967.082
Joseph M. Wikler 27,128,328.216 253,638.866 27,381,967.082
Peter I. Wold 27,113,639.594 268,327.488 27,381,967.082
Clayton K. Yeutter 27,096,139.270 285,827.812 27,381,967.082
- --------------------------------------------------------------------------------
PROPOSAL NO. 2: Proposal to change the policy on
FOR AGAINST ABSTAIN BROKER NON-VOTE TOTAL
- --------------------------------------------------------------------------------
2K: Real Estate and Commodities
19,302,099.667 538,654.907 505,337.508 7,035,875.000 27,381,967.082
2L: Senior Securities
19,314,271.577 499,822.506 531,997.999 7,035,875.000 27,381,967.082
42 | 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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing 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
http://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.
43 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER
THE FUND, LENGTH OF SERVICE, TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX
AGE CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY,
DIRECTORS CENTENNIAL, CO 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, OR
UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January
Chairman of the Board 2005); Attorney at Hogan & Hartson (law firm) (since June 1993); Director
of Directors (since 2003), of Danielson Holding Corp. (waste-to-energy company) (since 2002);
Director (since 1996) Director of Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar,
Age: 74 Inc. (1993-December 2002); Director of ConAgra Foods (1993-2001); Director
of Texas Instruments (1993-2001); Director of FMC Corporation
(1993-2001). Oversees 38 portfolios in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research
Director (since 2005) foundation) (since 2005); Director of ICI Education Foundation (education
Age: 64 foundation) (since October 1991); President of the Investment Company
Institute (trade association) (1991-2004); Director of ICI Mutual
Insurance Company (insurance company) (1991-2004). Oversees 38 portfolios
in the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios
Director (since 1996) in the OppenheimerFunds complex.
Age: 72
PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier)
Director (since 1999) (since 2001); Trustee of Woodward Academy (since 1983); Senior Advisor of
Age: 67 The Andrew W. Mellon Foundation (since 2001); Member of the National
Academy of Sciences (since 1979); Member of the American Philosophical
Society (since 1996); Council on Foreign Relations (since 2002); Director
of the Institute for Advanced Study (1991-2004); Director of Bankers Trust
New York Corporation (1994-1999). Oversees 38 portfolios in the
OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October
Director (since 2004) 1998); and Senior Vice President and General Auditor of American Express
Age: 63 Company (financial services company) (July 1998-February 2003). Oversees
38 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial
Director (since 2002) adviser) (since 2002); Managing Director of Carmona Motley, Inc.
Age: 53 (privately-held financial adviser) (since January 2002); Managing Director
of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January
1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds
complex.
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company)
Director (since 1996) (since February 1972); Former Director of Prime Retail, Inc. (real estate
Age: 78 investment trust), Dominion Energy Inc. (electric power and oil & gas
producer), Lumbermens Mutual Casualty Company, American Motorists
Insurance Company and American Manufacturers Mutual Insurance Company;
Former President and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research). Oversees 38 portfolios in
the OppenheimerFunds complex.
44 | OPPENHEIMER VALUE FUND
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance
Director (since 1996) consulting and executive recruiting) (since 1993); Life Trustee of
Age: 73 International House (non-profit educational organization); Former Trustee
of The Historical Society of the Town of Greenwich. Oversees 38 portfolios
in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992)
Director (since 2005) and Cathco (since 1996); Director of Lakes Environmental Association
Age: 64 (since 1996); Member of the Investment Committee of the Associated Jewish
Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual
funds (1994-December 2001). Oversees 39 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and
Director (since 2005) production company) (since 1994); Vice President, Secretary and Treasurer
Age: 57 of Wold Trona Company, Inc. (soda ash processing and production) (since
1996); Vice President of Wold Talc Company, Inc. (talc mining) (since
1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since
1979); Director and Chairman of the Denver Branch of the Federal Reserve
Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric
utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds
complex.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September
Director (since 2005) 1996); Director of Special Value Opportunities Fund, LLC (registered
Age: 62 investment company) (since September 2004); Director of Zurich Financial
Investment Advisory Board (affiliate of the Manager's parent company)
(since October 2004); Board of Governing Trustees of The Jackson
Laboratory (non-profit) (since August 1990); Trustee of the Institute for
Advanced Study (non-profit educational institute) (since May 1992);
Special Limited Partner of Odyssey Investment Partners, LLC (private
equity investment) (January 1999-September 2004); Trustee of Research
Foundation of AIMR (2000-2002) (investment research, non-profit);
Governor, Jerome Levy Economics Institute of Bard College (August 1990-
September 2001) (economics research); Director of Ray & Berendtson, Inc.
(May 2000-April 2002) (executive search firm). Oversees 48 portfolios in
the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR AND OFFICER THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY
STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A
DIRECTOR FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR
UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN
INTERESTED DIRECTOR DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND
ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and
President, Principal Executive President (since September 2000) of the Manager; President and Director or
Officer and Director Trustee of other Oppenheimer funds; President and Director of Oppenheimer
(since 2001) Acquisition Corp. ("OAC") (the Manager's parent holding company) and of
Age: 56 Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the
Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc.
(subsidiary of the Manager) (since November 2001); Chairman and Director
of Shareholder Services, Inc. and of Shareholder Financial Services, Inc.
(transfer agent subsidiaries of the Manager) (since July 2001); President
and Director of OppenheimerFunds Legacy Program (charitable trust program
established by the Manager) (since July 2001); 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
45 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
Director (since July 2001) of Oppenheimer Real Asset Management, Inc.;
Executive Vice President of Massachusetts Mutual Life Insurance Company
(OAC's parent company) (since February 1997); Director of DLB Acquisition
Corporation (holding company parent of Babson Capital Management LLC)
(since June 1995); Member of the Investment Company Institute's Board of
Governors (since October 3, 2003); Chief Operating Officer of the Manager
(September 2000-June 2001); President and Trustee of MML Series Investment
Fund and MassMutual Select Funds (open-end investment companies)
(November 1999-November 2001); Director of C.M. Life Insurance Company
(September 1999-August 2000); President, Chief Executive Officer and
Director of MML Bay State Life Insurance Company (September 1999-August
2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank
(wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998).
Oversees 77 portfolios as a Director or Trustee and 10 additional
portfolios as officer in the OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------
OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR
MESSRS. LEAVY AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET,
NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON
WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR
UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000. Formerly a
Vice President (since 2000) portfolio manager of Morgan Stanley Dean Witter Investment Management
Age: 34 (1997 - September 2000). An officer of 7 portfolios in the
OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since
Vice President and Chief March 2004); Vice President of OppenheimerFunds Distributor, Inc.,
Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc.
(since 2004) (since June 1983). Former Vice President and Director of Internal Audit of
Age: 55 the Manager (1997-February 2004). An officer of 87 portfolios in the
OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999);
Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation,
Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc.,
Officer (since 1999) Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership
Age: 46 Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since
March 2000), OppenheimerFunds International Ltd. (since May 2000),
OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management,
Inc. (since November 2000), and OppenheimerFunds Legacy Program
(charitable trust program established by the Manager) (since June 2003);
Treasurer and Chief Financial Officer of OFI Trust Company (trust company
subsidiary of the Manager) (since May 2000); Assistant Treasurer of the
following: OAC (since March 1999),Centennial Asset Management Corporation
(March 1999-October 2003) and OppenheimerFunds Legacy Program (April
2000-June 2003); Principal and Chief Operating Officer of Bankers Trust
Company-Mutual Fund Services Division (March 1995-March 1999). An officer
of 87 portfolios in the OppenheimerFunds complex.
46 | OPPENHEIMER VALUE FUND
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Secretary (since 2001) March 2002) of the Manager; General Counsel and Director of the
Age: 57 Distributor (since December 2001); General Counsel of Centennial Asset
Management Corporation (since December 2001); Senior Vice President and
General Counsel of HarbourView Asset Management Corporation (since
December 2001); Secretary and General Counsel of OAC (since November
2001); Assistant Secretary (since September 1997) and Director (since
November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds
plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc.
(since December 2002); Director of Oppenheimer Real Asset Management, Inc.
(since November 2001); Senior Vice President, General Counsel and Director
of Shareholder Financial Services, Inc. and Shareholder Services, Inc.
(since December 2001); Senior Vice President, General Counsel and Director
of OFI Private Investments, Inc. and OFI Trust Company (since November
2001); Vice President of OppenheimerFunds Legacy Program (since June
2003); Senior Vice President and General Counsel of OFI Institutional
Asset Management, Inc. (since November 2001); Director of OppenheimerFunds
(Asia) Limited (since December 2003); 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 the following: Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001), and OppenheimerFunds International Ltd. (September
1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds
complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S DIRECTORS AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST, BY CALLING 1.800.525.7048.
47 | 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 the registrant does
not have an audit committee financial expert serving on its Audit Committee. In
this regard, no member of the Audit Committee was identified as having all of
the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR
to qualify as an "audit committee financial expert," whether
through the type of specialized education or experience described in that
Instruction. The Board has concluded that while the members of the Audit
Committee collectively have the necessary attributes and experience required to
serve effectively as an Audit Committee, no single member possesses all of the
required technical attributes through the particular methods of education or
experience set forth in the Instructions to be designated as an audit committee
financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $28,000 in fiscal 2005 and $26,000 in fiscal 2004.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $156,805 in fiscal 2005 and $39,500 in fiscal 2004 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 services: internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 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 services: Computations of capital gain tax liability, preparation of tax
returns, preparation of Form 5500 and tax consultations on pass through of
foreign withholding taxes and mortgage dollar roll transactions.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
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.
(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.
Under applicable laws, pre-approval of non-audit services maybe 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 $161,805 in fiscal 2005 and $45,500 in fiscal
2004 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 trustees 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 accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee
evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of October 31, 2005, the registrant's principal executive
officer and principal financial officer found the registrant's disclosure
controls and procedures to provide reasonable assurances that information
required to be disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Series Fund, Inc.
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: December 20, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
------------------
John V. Murphy
Principal Executive Officer
Date: December 20, 2005
By: /s/ Brian W. Wixted
-------------------
Brian W. Wixted
Principal Financial Officer
Date: December 20, 2005