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
Date of reporting period: APRIL 30, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
OPPENHEIMER DISCIPLINED ALLOCATION FUND
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Software 7.9%
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Media 6.1
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Aerospace & Defense 3.8
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Oil & Gas 3.3
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Diversified Financial Services 2.9
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Pharmaceuticals 2.7
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Biotechnology 2.7
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Tobacco 2.5
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Insurance 2.5
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Electric Utilities 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Take-Two Interactive Software, Inc. 2.9%
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Liberty Media Corp., Cl. A 2.7
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Altria Group, Inc. 2.5
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BP plc, ADR 2.5
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Microsoft Corp. 2.3
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UBS AG 2.1
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Cendant Corp. 1.8
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Liberty Global, Inc., Series A 1.8
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Liberty Global, Inc., Series C 1.7
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AES Corp. (The) 1.6
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on net assets.
For up-to-date Top 10 Fund Holdings, please visit www.oppenheimerfunds.com.
5 | 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.]
Stocks 49.5%
Bonds and Notes 45.6
Cash Equivalents 4.9
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on the total market value of investments.
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6 | 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 April 30, 2006.
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
7 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FUND EXPENSES
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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
(11/1/05) (4/30/06) APRIL 30, 2006
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Class A Actual $1,000.00 $1,031.20 $ 5.91
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Class A Hypothetical 1,000.00 1,018.99 5.87
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Class B Actual 1,000.00 1,026.80 10.25
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Class B Hypothetical 1,000.00 1,014.73 10.19
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Class C Actual 1,000.00 1,026.60 10.15
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Class C Hypothetical 1,000.00 1,014.83 10.09
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Class N Actual 1,000.00 1,029.20 7.93
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Class N Hypothetical 1,000.00 1,017.01 7.88
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended April 30, 2006 are as follows:
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CLASS EXPENSE RATIOS
- ---------------------------
Class A 1.17%
- ---------------------------
Class B 2.03
- ---------------------------
Class C 2.01
- ---------------------------
Class N 1.57
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.
8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS April 30, 2006 / Unaudited
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VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--53.4%
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CONSUMER DISCRETIONARY--6.5%
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HOUSEHOLD DURABLES--0.4%
WCI Communities, Inc. 1 19,000 $ 486,970
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MEDIA--6.1%
Liberty Global, Inc., Series A 1 108,331 2,243,535
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Liberty Global, Inc., Series C 1 108,331 2,163,370
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Liberty Media Corp., Cl. A 1 407,700 3,404,295
--------------
7,811,200
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CONSUMER STAPLES--5.1%
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BEVERAGES--1.5%
Constellation Brands, Inc., Cl. A 1 46,600 1,151,020
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Diageo plc, Sponsored ADR 11,200 742,000
--------------
1,893,020
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FOOD & STAPLES RETAILING--0.8%
Wal-Mart Stores, Inc. 21,700 977,151
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FOOD PRODUCTS--0.3%
ConAgra Foods, Inc. 16,300 369,684
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TOBACCO--2.5%
Altria Group, Inc. 44,500 3,255,620
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ENERGY--3.9%
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ENERGY EQUIPMENT & SERVICES--0.6%
Halliburton Co. 8,500 664,275
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OIL & GAS--3.3%
BP plc, ADR 43,200 3,184,704
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Kinder Morgan, Inc. 4,300 378,486
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LUKOIL, Sponsored ADR 7,600 681,340
--------------
4,244,530
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FINANCIALS--10.3%
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CAPITAL MARKETS--2.2%
UBS AG 23,158 2,744,901
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COMMERCIAL BANKS--1.7%
Wachovia Corp. 11,988 717,482
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Wells Fargo & Co. 21,000 1,442,490
--------------
2,159,972
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DIVERSIFIED FINANCIAL SERVICES--2.9%
Bank of America Corp. 20,602 1,028,452
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Bear Stearns Cos., Inc. (The) 3,600 513,036
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Capital One Financial Corp. 17,200 1,490,208
9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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VALUE
SHARES SEE NOTE 1
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DIVERSIFIED FINANCIAL SERVICES Continued
Citigroup, Inc. 13,977 $ 698,151
--------------
3,729,847
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INSURANCE--2.5%
American International Group, Inc. 7,700 502,425
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Everest Re Group Ltd. 9,000 819,000
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Genworth Financial, Inc., Cl. A 38,400 1,274,880
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Platinum Underwriters Holdings Ltd. 23,300 642,381
--------------
3,238,686
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THRIFTS & MORTGAGE FINANCE--1.0%
Countrywide Financial Corp. 18,300 744,078
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Freddie Mac 9,200 561,752
--------------
1,305,830
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HEALTH CARE--6.5%
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BIOTECHNOLOGY--2.7%
Amgen, Inc. 1 16,600 1,123,820
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Human Genome Sciences, Inc. 1 33,400 381,094
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Medicines Co. (The) 1 15,300 294,066
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MedImmune, Inc. 1,2 30,700 966,129
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Myogen, Inc. 1 9,300 307,458
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Vanda Pharmaceuticals, Inc. 1 31,700 348,700
--------------
3,421,267
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HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Boston Scientific Corp. 1 24,600 571,704
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Cooper Cos., Inc. (The) 6,500 356,330
--------------
928,034
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HEALTH CARE PROVIDERS & SERVICES--0.4%
Manor Care, Inc. 12,200 534,970
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PHARMACEUTICALS--2.7%
MGI Pharma, Inc. 1 19,400 362,392
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Pfizer, Inc. 58,500 1,481,805
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Sanofi-Aventis SA, ADR 34,700 1,632,288
--------------
3,476,485
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INDUSTRIALS--6.0%
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AEROSPACE & DEFENSE--3.8%
Honeywell International, Inc. 34,800 1,479,000
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Orbital Sciences Corp. 1 131,300 2,054,845
10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE
SHARES SEE NOTE 1
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AEROSPACE & DEFENSE Continued
United Technologies Corp. 22,400 $ 1,406,944
--------------
4,940,789
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COMMERCIAL SERVICES & SUPPLIES--1.8%
Cendant Corp. 130,900 2,281,587
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ELECTRICAL EQUIPMENT--0.4%
Gamesa Corporacion Tecnologica SA 21,500 467,356
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INFORMATION TECHNOLOGY--10.9%
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COMMUNICATIONS EQUIPMENT--1.9%
Cisco Systems, Inc. 1 79,700 1,669,715
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Juniper Networks, Inc. 1 37,900 700,392
--------------
2,370,107
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COMPUTERS & PERIPHERALS--0.7%
Hutchinson Technology, Inc. 1 21,400 508,678
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Palm, Inc. 1 18,000 406,800
--------------
915,478
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.4%
ATI Technologies, Inc. 1 32,600 505,952
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SOFTWARE--7.9%
Compuware Corp. 1 127,500 979,200
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Microsoft Corp. 123,000 2,970,450
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Novell, Inc. 1 136,000 1,117,920
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Synopsys, Inc. 1 64,400 1,405,852
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Take-Two Interactive Software, Inc. 1 215,450 3,673,423
--------------
10,146,845
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MATERIALS--0.7%
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CHEMICALS--0.7%
Praxair, Inc. 16,400 920,532
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TELECOMMUNICATION SERVICES--1.3%
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DIVERSIFIED TELECOMMUNICATION SERVICES--1.3%
IDT Corp., Cl. B 1 153,700 1,706,070
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UTILITIES--2.2%
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ELECTRIC UTILITIES--2.2%
AES Corp. (The) 1 121,500 2,061,855
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Reliant Energy, Inc. 1 67,500 766,125
--------------
2,827,980
--------------
Total Common Stocks (Cost $58,841,003) 68,325,138
11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--5.5%
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Ace Securities Corp., Home Equity Loan Pass-Through Certificates,
Series 2002-HE7, Cl. A2B, 5.139%, 11/25/35 3 $ 110,000 $ 110,096
- -----------------------------------------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile Asset-Backed Certificates,
Series 2005-1A, Cl. A2, 4.983%, 4/20/08 3 80,000 80,057
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Argent Securities, Inc., Home Equity Asset-Backed Securities,
Series 2004-W8, Cl. A2, 5.439%, 5/25/34 3 390,000 392,804
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BMW Vehicle Owner Trust, Automobile Loan Certificates,
Series 2005-A, Cl. A2, 3.66%, 12/26/07 120,445 120,145
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Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.:
Series 2004-2, Cl. A3, 3.58%, 1/15/09 270,000 264,683
Series 2005-1, Cl. A2B, 3.73%, 7/16/07 31,803 31,793
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Capital One Prime Auto Receivables Trust, Automobile Loan
Asset-Backed Securities, Series 2005-1, Cl. A2, 4.24%, 11/15/07 300,518 300,055
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Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates:
Series 2005-B, Cl. AF1, 4.02%, 3/26/35 21,938 21,831
Series 2005-C, Cl. AF1, 4.196%, 6/25/35 79,737 79,214
Series 2005-D, Cl. AF1, 5.04%, 10/25/35 184,444 183,363
Series 2005-D, Cl. AV2, 5.229%, 10/25/35 3 220,000 220,196
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Chase Manhattan Auto Owner Trust, Automobile Loan
Pass-Through Certificates, Series 2005-A, Cl. A2, 3.72%, 12/15/07 180,527 179,793
- -----------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 40,000 38,034
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Citigroup Mortgage Loan Trust, Inc., CMO, Series 2005-WF2,
Cl. AF2, 4.922%, 8/25/35 3 257,418 254,611
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Consumer Credit Reference Index Securities Program,
Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07 4 250,000 255,428
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Countrywide Asset-Backed Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2002-4, Cl. A1, 5.329%, 2/25/33 3 4,125 4,134
Series 2005-7, Cl. AF1B, 4.317%, 11/25/35 3 102,387 101,810
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 3 80,000 79,541
Series 2005-17, Cl. 1AF1, 5.159%, 5/25/36 3 159,250 159,363
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36 3 50,000 49,709
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DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates:
Series 2004-C, Cl. A2, 2.62%, 6/8/07 10,107 10,107
Series 2005-A, Cl. A2, 3.17%, 9/8/07 70,274 70,198
Series 2005-B, Cl. A2, 3.75%, 12/8/07 101,899 101,728
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Equity One ABS, Inc., Home Equity Mtg. Pass-Through Certificates,
Series 2004-3, Cl. AF2, 3.80%, 7/25/34 3 60,856 60,672
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First Franklin Mortgage Loan Asset-Backed Certificates,
Home Equity Receivables:
Series 2005-FF10, Cl. A3, 5.169%, 11/25/35 3 330,000 330,334
Series 2006-FF5, Cl. 2A1, %, 5/15/36 3,5 120,000 120,000
12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan
Pass-Through Certificates:
Series 2005-A, Cl. A3, 3.48%, 11/17/08 $ 190,000 $ 188,040
Series 2005-B, Cl. A2, 3.78%, 9/15/07 66,425 66,338
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GS Auto Loan Trust, Automobile Loan Asset-Backed Securities,
Series 2005-1, Cl. A2, 4.32%, 5/15/08 488,729 487,459
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Honda Auto Receivables Owner Trust, Automobile Receivable Obligations:
Series 2005-1, Cl. A2, 3.21%, 5/21/07 23,711 23,688
Series 2005-3, Cl. A2, 3.73%, 10/18/07 164,651 164,091
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Household Home Equity Loan Trust, Home Equity Loan
Pass-Through Certificates, Series 2005-3, Cl. A1, 5.183%, 1/20/35 3 141,603 141,789
- -----------------------------------------------------------------------------------------------------------------
Lehman XS Trust, Home Equity Mtg. Pass-Through Certificates,
Series 2005-2, Cl. 2A1B, 3.63%, 8/25/35 3 209,870 209,419
- -----------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed
Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 6 544,489 553,892
- -----------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 6.251%, 3/15/16 3 360,000 383,703
- -----------------------------------------------------------------------------------------------------------------
Morgan Stanley ABS Capital I, Home Equity Receivables,
Series 2005-WMC6, Cl. A2B, 5.219%, 7/25/35 3 100,000 100,260
- -----------------------------------------------------------------------------------------------------------------
Onyx Acceptance Owner Trust, Automobile Receivable Obligations,
Series 2005-B, Cl. A2, 4.03%, 4/15/08 104,509 104,269
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Popular ABS Mortgage Pass-Through Trust, Home Equity
Pass-Through Certificates:
Series 2004-5, Cl. A F2, 3.735%, 11/10/34 3 70,000 69,321
Series 2005-1, Cl. A F2, 3.914%, 5/25/35 3 60,000 59,204
Series 2005-2, Cl. A F2, 4.415%, 4/25/35 3 90,000 88,966
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Residential Asset Mortgage Products, Inc., Home Equity Asset-Backed
Pass-Through Certificates, Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 170,000 169,090
- -----------------------------------------------------------------------------------------------------------------
Structured Asset Investment Loan Trust, Home Equity Asset-Backed
Securities, Series 2006-2, Cl. A1, 4.878%, 4/25/36 3 144,998 145,082
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Structured Asset Securities Corp., CMO Pass-Through Certificates,
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 263,177 262,403
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Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities,
Series 2005-A, Cl. A2, 3.52%, 4/20/07 101,148 100,956
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Wells Fargo Home Equity Trust, Home Equity Asset-Backed Certificates,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 3 51,121 50,922
- -----------------------------------------------------------------------------------------------------------------
WFS Financial Owner Trust, Automobile Receivable Obligations,
Series 2002-2, Cl. A4, 4.50%, 2/20/10 36,612 36,644
- -----------------------------------------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile Loan Receivable Certificates,
Series 2004-1, Cl. A2A, 2.59%, 5/15/07 24,569 24,542
--------------
Total Asset-Backed Securities (Cost $7,061,523) 7,049,777
13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--26.5%
- -----------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--22.3%
- -----------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--22.1%
Federal Home Loan Mortgage Corp.:
4.50%, 5/1/18 5 $ 270,519 $ 258,027
4.50%, 5/1/19 741,407 706,793
5%, 8/1/33-6/1/36 5 1,110,854 1,052,456
6%, 4/1/17-7/1/24 785,382 791,955
6.50%, 4/1/18-4/1/34 801,692 818,717
7%, 6/1/29-11/1/32 721,499 742,186
8%, 4/1/16 73,000 77,430
9%, 8/1/22-5/1/25 21,380 23,003
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Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass Pass-Through Certificates:
Series 2034, Cl. Z, 6.50%, 2/15/28 62,491 63,671
Series 2053, Cl. Z, 6.50%, 4/15/28 70,774 72,341
Series 2055, Cl. ZM, 6.50%, 5/15/28 96,836 98,561
Series 2075, Cl. D, 6.50%, 8/15/28 193,069 197,354
Series 2080, Cl. Z, 6.50%, 8/15/28 61,344 62,305
Series 2387, Cl. PD, 6%, 4/15/30 55,142 55,283
Series 2456, Cl. BD, 6%, 3/15/30 8,021 8,016
Series 2500, Cl. FD, 5.41%, 3/15/32 3 30,101 30,380
Series 2526, Cl. FE, 5.31%, 6/15/29 3 40,488 40,708
Series 2551, Cl. FD, 5.31%, 1/15/33 3 31,709 32,083
Series 2583, Cl. KA, 5.50%, 3/15/22 131,555 131,474
Series 2921, Cl. NG, 5%, 1/15/35 490,000 441,371
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Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 176, Cl. IO, 12.782%, 6/1/26 7 58,376 13,729
Series 183, Cl. IO, 9.549%, 4/1/27 7 88,378 21,587
Series 184, Cl. IO, 15.535%, 12/1/26 7 96,698 22,200
Series 192, Cl. IO, 15.174%, 2/1/28 7 28,276 6,410
Series 200, Cl. IO, 13.817%, 1/1/29 7 33,547 8,229
Series 2003-118, Cl. S, 14.355%, 12/25/33 7 482,188 53,842
Series 2130, Cl. SC, 1.356%, 3/15/29 7 76,220 4,966
Series 2796, Cl. SD, 5.205%, 7/15/26 7 101,217 6,705
Series 2920, Cl. S, 4.193%, 1/15/35 7 627,758 26,002
Series 3000, Cl. SE, 6.965%, 7/15/25 7 626,420 17,375
- -----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Principal-Only Stripped
Mtg.-Backed Security, Series 176, Cl. PO, 4.596%, 6/1/26 8 32,594 26,045
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 6/1/18-11/1/33 1,196,182 1,152,183
5%, 6/1/33-5/1/36 5 4,703,280 4,449,542
5.50%, 2/1/33-11/1/34 3,747,722 3,650,711
5.50%, 5/1/21-5/25/36 5 3,230,000 3,171,542
6%, 7/1/16-11/1/32 296,018 296,920
6.50%, 3/1/26-10/1/30 79,746 81,548
6.50%, 12/1/29-5/1/36 5 2,859,370 2,912,856
14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.: Continued
7%, 11/1/17-5/1/36 $ 2,475,978 $ 2,545,449
7.50%, 1/1/08-1/1/33 80,349 83,298
8.50%, 7/1/32 5,990 6,471
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Grantor Trust, CMO,
Trust 2002-T1, Cl. A2, 7%, 11/25/31 211,611 216,603
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 167,544 171,588
Trust 1996-35, Cl. Z, 7%, 7/25/26 243,809 249,960
Trust 2001-50, Cl. NE, 6%, 8/25/30 32,192 32,325
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 243,671 248,498
Trust 2001-70, Cl. LR, 6%, 9/25/30 40,879 41,092
Trust 2001-72, Cl. NH, 6%, 4/25/30 22,117 22,126
Trust 2001-74, Cl. PD, 6%, 5/25/30 8,431 8,429
Trust 2002-77, Cl. WF, 5.31%, 12/18/32 3 47,669 48,100
Trust 2004-101, Cl. BG, 5%, 1/25/20 236,000 224,829
Trust 2005-30, Cl. UG, 5%, 4/25/35 528,000 474,331
Trust 2005-71, Cl. DB, 4.50%, 8/25/25 160,000 143,337
Trust 2006-24, Cl. DB, 5.50%, 4/25/26 550,000 532,145
Trust 2006-50, Cl. SK, 5.72%, 5/15/36 5 160,000 143,713
- -----------------------------------------------------------------------------------------------------------------
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, 5.323%, 10/25/23 7 51,472 4,869
Trust 2002-38, Cl. SO, 1.073%, 4/25/32 7 73,585 4,167
Trust 2002-47, Cl. NS, 4.169%, 4/25/32 7 120,361 10,471
Trust 2002-51, Cl. S, 4.309%, 8/25/32 7 110,573 9,478
Trust 2002-77, Cl. IS, 4.994%, 12/18/32 7 125,368 10,870
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only
Stripped Mtg.-Backed Security:
Trust 222, Cl. 2, 14.53%, 6/1/23 7 203,008 45,475
Trust 240, Cl. 2, 17.628%, 9/1/23 7 315,195 77,548
Trust 247, Cl. 2, 13.094%, 10/1/23 7 330,226 79,793
Trust 252, Cl. 2, 10.746%, 11/1/23 7 149,862 36,737
Trust 273, Cl. 2, 15.9%, 8/1/26 7 43,663 10,275
Trust 319, Cl. 2, 12.866%, 2/1/32 7 61,126 16,042
Trust 321, Cl. 2, 8.216%, 4/1/32 7 598,996 157,479
Trust 329, Cl. 2, 10.763%, 1/1/33 7 103,579 26,762
Trust 331, Cl. 9, 1.712%, 2/1/33 7 166,982 39,273
Trust 333, Cl. 2, 11.466%, 4/1/33 7 1,303,830 339,861
Trust 334, Cl. 17, 10.552%, 2/1/33 7 99,600 23,755
Trust 344, Cl. 2, 6%, 12/1/33 7 352,488 90,447
Trust 2001-65, Cl. S, 14.671%, 11/25/31 7 283,035 25,145
Trust 2001-81, Cl. S, 5.886%, 1/25/32 7 61,263 5,129
Trust 2002-9, Cl. MS, 5.031%, 3/25/32 7 85,908 7,731
Trust 2002-52, Cl. SD, 1.229%, 9/25/32 7 133,511 11,402
Trust 2002-77, Cl. SH, 7.421%, 12/18/32 7 79,603 6,928
15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only
Stripped Mtg.-Backed Security: Continued
Trust 2002-96, Cl. SK, 15.654%, 4/25/32 7 $ 741,785 $ 67,407
Trust 2003-4, Cl. S, 14.704%, 2/25/33 7 156,472 16,540
Trust 2004-54, Cl. DS, 0.593%, 11/25/30 7 112,195 5,493
Trust 2005-6, Cl. SE, 4.525%, 2/25/35 7 422,729 17,871
Trust 2005-19, Cl. SA, 3.387%, 3/25/35 7 1,650,828 74,002
Trust 2005-40, Cl. SA, 3.871%, 5/25/35 7 354,894 15,540
Trust 2005-71, Cl. SA, 9.771%, 8/25/25 7 393,410 18,126
Trust 2006-33, CL. SP, 18.973%, 5/25/36 7 1,168,000 68,449
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped
Mtg.-Backed Security, Trust 1993-184, Cl. M, 5.551%, 9/25/23 8 66,620 53,004
--------------
28,194,869
- -----------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.2%
Government National Mortgage Assn.:
7%, 4/15/09-2/15/24 109,806 113,294
7.50%, 3/15/09 62,712 64,249
8%, 5/15/17 44,070 46,673
8.50%, 8/15/17-12/15/17 27,851 29,838
- -----------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., Interest-Only
Stripped Mtg.-Backed Security:
Series 2001-21, Cl. SB, (2.562)%, 1/16/27 7 184,213 9,975
Series 2002-76, Cl. SY, (2.116)%, 12/16/26 7 254,658 14,481
Series 2004-11, Cl. SM, (4.72)%, 1/17/30 7 91,714 5,048
--------------
283,558
- -----------------------------------------------------------------------------------------------------------------
NON-AGENCY--4.2%
- -----------------------------------------------------------------------------------------------------------------
COMMERCIAL--3.7%
Banc of America Commercial Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2004-6, Cl. A3, 4.512%, 12/10/42 210,000 199,719
Series 2005-2, Cl. A4, 4.783%, 7/10/43 3 280,000 269,154
Series 2005-3, Cl. A2, 4.501%, 7/10/43 230,000 221,902
- -----------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 178,178 174,987
- -----------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates:
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 150,078 151,156
Series 2005-E, Cl. 2A2, 4.978%, 6/25/35 3 35,452 35,400
- -----------------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc., Commercial
Mtg. Obligations, Series 2005-PWR7, Cl. A2, 4.945%, 2/11/41 100,000 97,134
- -----------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc., CMO,
Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36 60,000 59,359
- -----------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank Commercial Mortgage Trust,
Commercial Mtg. Obligations, Series 2005-CD1, Cl. A4, 5.40%, 7/15/44 3 260,000 252,418
16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
COMMERCIAL Continued
Countrywide Alternative Loan Trust, CMO,
Series 2004-J9, Cl. 1A1, 5.139%, 10/25/34 3 $ 13,284 $ 13,292
- -----------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, Cl. D, 7.577%, 4/29/39 3,4 68,705 68,838
- -----------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2005-CA, Cl. A3, 4.578%, 6/10/48 90,000 86,025
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 140,000 137,270
- -----------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc.,
Commercial Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. A3, 6.869%, 7/15/29 55,041 55,807
Series 2004-C3, Cl. A4, 4.547%, 12/10/41 140,000 133,468
- -----------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp.,
Commercial Mtg. Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 190,000 183,379
Series 2005-GG5, Cl. A2, 5.117%, 4/10/37 150,000 148,110
- -----------------------------------------------------------------------------------------------------------------
JPMorgan Chase Commercial Mortgage Securities Corp.,
Commercial Mtg. Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 60,000 58,083
Series 2006-CB14, Cl. A4, 5.481%, 12/12/44 230,000 225,821
Series 2006-LDP6, Cl. A4, 5.475%, 4/15/43 260,000 254,524
- -----------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial Mtg.
Pass-Through Certificates, Series 2005-C5, Cl. A2, 4.885%, 9/15/30 160,000 157,035
- -----------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO Pass-Through Certificates:
Series 2004-6, Cl. 10A1, 6%, 7/25/34 265,372 258,228
Series 2004-9, Cl. A3, 4.70%, 8/25/34 3 498,162 494,057
- -----------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg.
Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 206,161
- -----------------------------------------------------------------------------------------------------------------
Residential Accredit Loans, Inc., Mtg. Asset-Backed Pass-Through
Certificates, Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 128,986 128,113
- -----------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations:
Series 2005-C17, Cl. A2, 4.782%, 3/15/42 300,000 293,277
Series 2005-C20, Cl. A5, 5.087%, 7/15/42 3 160,000 155,961
- -----------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., CMO Pass-Through
Certificates, Series 2005-AR5, Cl. A1, 4.677%, 5/25/35 3 145,148 144,838
- -----------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities Trust, CMO,
Series 2004-DD, Cl. 2A1, 4.516%, 1/25/35 3 111,333 110,785
--------------
4,774,301
- -----------------------------------------------------------------------------------------------------------------
OTHER--0.2%
JPMorgan Chase Commercial Mortgage Securities Corp.,
Commercial Mtg. Pass-Through Certificates,
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 200,000 194,784
17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
RESIDENTIAL--0.3%
Countrywide Alternative Loan Trust, CMO,
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 $ 392,130 $ 395,806
--------------
Total Mortgage-Backed Obligations (Cost $34,317,075) 33,843,318
- -----------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.6%
- -----------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 140,000 136,636
- -----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
3.625%, 9/15/06 1,065,000 1,059,034
4.125%, 7/12/10 120,000 115,108
4.375%, 11/16/07 65,000 64,278
5.125%, 4/18/08-4/18/11 255,000 254,290
6.625%, 9/15/09 240,000 250,810
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
4%, 2/28/07 320,000 316,939
4.25%, 7/15/07 550,000 544,235
6%, 5/15/11 600,000 619,256
7.25%, 1/15/10 9 750,000 801,738
- -----------------------------------------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
5.375%, 11/13/08 109,000 109,662
Series A, 6.79%, 5/23/12 766,000 825,377
- -----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 217,000 220,323
STRIPS, 4.96%, 2/15/16 10 171,000 103,654
- -----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
4.25%, 1/15/11-8/15/15 354,000 342,425
4.375%, 12/31/07-1/31/08 233,000 231,093
4.50%, 2/28/11-2/15/16 237,000 228,894
4.625%, 2/29/08-3/31/08 557,000 554,604
4.75%, 3/31/11 376,000 373,151
--------------
Total U.S. Government Obligations (Cost $7,305,305) 7,151,507
- -----------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--11.6%
- -----------------------------------------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 215,000 203,190
- -----------------------------------------------------------------------------------------------------------------
Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 125,000 131,875
- -----------------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 8.125% Sr. Unsec. Nts., 5/1/12 180,000 201,767
- -----------------------------------------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual Bonds 11 220,000 201,084
- -----------------------------------------------------------------------------------------------------------------
Beazer Homes USA, Inc., 6.875% Sr. Unsec. Nts., 7/15/15 130,000 125,125
- -----------------------------------------------------------------------------------------------------------------
British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 235,000 252,402
- -----------------------------------------------------------------------------------------------------------------
British Telecommunications plc, 8.875% Bonds, 12/15/30 115,000 145,774
- -----------------------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25% Sr. Nts., Series B, 9/1/10 240,000 252,591
- -----------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 120,000 126,322
- -----------------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 235,000 257,719
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- -----------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 $ 105,000 $ 109,404
- -----------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.25% Nts., 3/15/11 125,000 124,818
- -----------------------------------------------------------------------------------------------------------------
Constellation Energy Group, Inc., 7.60% Unsec. Nts., 4/1/32 225,000 253,037
- -----------------------------------------------------------------------------------------------------------------
Countrywide Financial Corp., 4.50% Nts., Series A, 6/15/10 270,000 258,585
- -----------------------------------------------------------------------------------------------------------------
Cox Communications, Inc., 4.625% Unsec. Nts., 1/15/10 270,000 259,702
- -----------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc. (USA), 5.25% Nts., 3/2/11 260,000 256,549
- -----------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 150,000 143,262
6.125% Nts., 1/15/14 115,000 112,051
- -----------------------------------------------------------------------------------------------------------------
DaimlerChrysler North America Holdings Corp., 7.30% Nts., 1/15/12 240,000 254,615
- -----------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 170,000 194,869
- -----------------------------------------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 235,000 254,759
- -----------------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 120,000 120,098
- -----------------------------------------------------------------------------------------------------------------
EOP Operating LP, 8.10% Unsec. Nts., 8/1/10 230,000 250,166
- -----------------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 170,000 174,228
- -----------------------------------------------------------------------------------------------------------------
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts., Series A, 11/15/06 105,000 105,006
7.375% Sr. Unsub. Nts., Series C, 11/15/31 130,000 141,670
- -----------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.80% Sr. Unsec. Nts., 1/12/09 160,000 144,911
6.625% Nts., 6/16/08 405,000 380,698
- -----------------------------------------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts., 9/15/07 135,000 136,825
9.55% Unsub. Nts., 12/15/08 3 29,000 31,539
- -----------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.15% Nts., 4/5/07 410,000 402,456
8% Bonds, 11/1/31 205,000 194,893
- -----------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34 260,000 250,201
- -----------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 4,11 300,000 277,098
- -----------------------------------------------------------------------------------------------------------------
HCA, Inc., 7.125% Sr. Unsec. Nts., 6/1/06 125,000 125,143
- -----------------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr. Unsec. Nts., 2/15/11 155,000 167,750
- -----------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 3 300,000 290,349
- -----------------------------------------------------------------------------------------------------------------
Hyatt Equities LLC, 6.875% Nts., 6/15/07 4 95,000 96,152
- -----------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 3 110,000 114,950
- -----------------------------------------------------------------------------------------------------------------
iStar Financial, Inc., 5.15% Sr. Unsec. Nts., 3/1/12 270,000 258,362
- -----------------------------------------------------------------------------------------------------------------
J.C. Penney Co., Inc. (Holding Co.), 7.40% Nts., 4/1/37 185,000 197,860
- -----------------------------------------------------------------------------------------------------------------
JPMorgan Chase & Co., 5.15% Sub. Nts., 10/1/15 265,000 251,169
- -----------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc., 6.50% Sr. Nts., 1/15/14 135,000 128,024
- -----------------------------------------------------------------------------------------------------------------
KB Home, 5.75% Sr. Unsec. Unsub. Nts., 2/1/14 165,000 152,165
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- -----------------------------------------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 $ 145,000 $ 149,405
- -----------------------------------------------------------------------------------------------------------------
Kroger Co. (The):
5.50% Unsec. Unsub. Nts., 2/1/13 200,000 194,414
6.80% Sr. Unsec. Nts., 4/1/11 55,000 57,282
- -----------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 5.70% Sr. Unsec. Nts., 5/15/13 140,000 130,978
- -----------------------------------------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 130,000 126,145
- -----------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 5.875% Sr. Unsec. Bonds, 8/1/33 175,000 150,697
- -----------------------------------------------------------------------------------------------------------------
May Department Stores Co., 7.90% Unsec. Debs., 10/15/07 90,000 92,471
- -----------------------------------------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub. Nts., 12/1/34 88,000 77,861
- -----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5% Sr. Unsub. Nts., Series C, 2/3/14 135,000 128,039
- -----------------------------------------------------------------------------------------------------------------
MetLife, Inc., 5.70% Sr. Unsec. Nts., 6/15/35 135,000 123,095
- -----------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts., 10/1/09 200,000 198,250
- -----------------------------------------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 240,000 251,176
- -----------------------------------------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts., 12/15/11 17,000 17,506
- -----------------------------------------------------------------------------------------------------------------
Nationwide Financial Services, Inc.:
5.90% Nts., 7/1/12 95,000 96,316
6.25% Sr. Unsec. Nts., 11/15/11 30,000 30,739
- -----------------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 205,439
- -----------------------------------------------------------------------------------------------------------------
Pemex Project Funding Master Trust:
5.75% Nts., 12/15/15 4 175,000 166,119
5.75% Unsec. Unsub. Nts., Series 12, 12/15/15 215,000 204,089
- -----------------------------------------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV, 4.623% Sr. Nts., Cl. A1, 6/15/10 4 373,056 366,336
- -----------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 4 62,655 58,380
- -----------------------------------------------------------------------------------------------------------------
Popular North America, Inc.:
4.70% Nts., 6/30/09 100,000 97,107
5.20% Nts., 12/12/07 150,000 149,091
- -----------------------------------------------------------------------------------------------------------------
Portland General Electric Co., 8.125% First Mortgage Nts., 2/1/10 4 95,000 102,416
- -----------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 4 295,000 353,278
- -----------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 260,000 312,116
- -----------------------------------------------------------------------------------------------------------------
PSEG Funding Trust I, 5.381% Nts., 11/16/07 130,000 129,574
- -----------------------------------------------------------------------------------------------------------------
Reed Elsevier Capital, Inc., 4.625% Nts., 6/15/12 105,000 97,871
- -----------------------------------------------------------------------------------------------------------------
Safeway, Inc., 6.50% Sr. Unsec. Nts., 3/1/11 245,000 251,587
- -----------------------------------------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 245,000 287,349
- -----------------------------------------------------------------------------------------------------------------
Telus Corp., 8% Nts., 6/1/11 30,000 32,966
- -----------------------------------------------------------------------------------------------------------------
Time Warner Entertainment Co. LP, 8.375% Sr. Nts., 7/15/33 220,000 252,369
- -----------------------------------------------------------------------------------------------------------------
TXU Energy Co., 6.125% Nts., 3/15/08 165,000 166,255
- -----------------------------------------------------------------------------------------------------------------
Tyco International Group SA:
6.125% Unsec. Unsub. Nts., 11/1/08 225,000 228,009
6.125% Unsec. Unsub. Nts., 1/15/09 31,000 31,360
- -----------------------------------------------------------------------------------------------------------------
Tyson Foods, Inc., 7.25% Sr. Unsec. Nts., 10/1/06 50,000 50,342
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- -----------------------------------------------------------------------------------------------------------------
Univision Communications, Inc., 3.50% Sr. Unsec. Nts., 10/15/07 $ 215,000 $ 208,260
- -----------------------------------------------------------------------------------------------------------------
Verizon Global Funding Corp.:
5.85% Nts., 9/15/35 135,000 120,649
7.25% Sr. Unsec. Unsub. Nts., 12/1/10 120,000 127,310
- -----------------------------------------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 260,000 260,078
- -----------------------------------------------------------------------------------------------------------------
Wachovia Bank NA, 5.60% Sub. Nts., 3/15/16 130,000 127,255
- -----------------------------------------------------------------------------------------------------------------
Yum! Brands, Inc., 7.70% Sr. Nts., 7/1/12 165,000 178,719
--------------
Total Non-Convertible Corporate Bonds and Notes (Cost $15,191,089) 14,899,911
- -----------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--5.3%
- -----------------------------------------------------------------------------------------------------------------
Undivided interest of 0.74% in joint repurchase agreement (Principal
Amount/Value $912,364,000, with a maturity value of $912,721,343) with UBS
Warburg LLC, 4.70%, dated 4/28/06, to be repurchased at $6,786,657 on 5/1/06,
collateralized by Federal National Mortgage Assn., 5%, 3/1/34, with a value of
$933,734,744
(Cost $6,784,000) 6,784,000 6,784,000
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $129,499,995) 107.9% 138,053,651
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (7.9) (10,065,178)
-----------------------------
NET ASSETS 100.0% $ 127,988,473
=============================
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF INVESTMENTS Unaudited / 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 7
- ------------------------------------------------------------------------------------------------------
Medlmmune, Inc. 102 6/19/06 $40.00 $9,594 $1,020
3. Represents the current interest rate for a variable or increasing rate
security.
4. 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 $1,744,045 or 1.36% of the Fund's net
assets as of April 30, 2006.
5. When-issued security or forward commitment to be delivered and settled after
April 30, 2006. See Note 1 of accompanying Notes.
6. Illiquid security. The aggregate value of illiquid securities as of April 30,
2006 was $553,892, which represents 0.43% of the Fund's net assets. See Note 10
of accompanying Notes.
7. 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 $1,533,614 or 1.20% of the Fund's net assets
as of April 30, 2006.
8. 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 $79,049 or 0.06% of the Fund's net assets as of April
30, 2006.
9. 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 $235,176. See Note 6 of accompanying Notes.
10. Zero coupon bond reflects effective yield on the date of purchase.
11. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
April 30, 2006
- -----------------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------------
Investments, at value (cost $129,499,995)--see accompanying statement of investments $ 138,053,651
- -----------------------------------------------------------------------------------------------------------------
Cash 39,927
- -----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 9,797
- -----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $3,480,880 sold on a when-issued basis or forward commitment) 4,474,178
Interest, dividends and principal paydowns 613,873
Shares of capital stock sold 82,421
Other 11,300
----------------
Total assets 143,285,147
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------
Bank overdraft-foreign currencies (cost $4,062) 4,062
- -----------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $9,594)--
see accompanying statement of investments 1,020
- -----------------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 7,850
- -----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $14,026,664 purchased
on a when-issued basis or forward commitment) 15,023,331
Shares of capital stock redeemed 110,285
Directors' compensation 27,968
Distribution and service plan fees 26,073
Shareholder communications 20,362
Transfer and shareholder servicing agent fees 19,838
Futures margins 6,778
Other 49,107
----------------
Total liabilities 15,296,674
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS $ 127,988,473
================
- -----------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 8,576
- -----------------------------------------------------------------------------------------------------------------
Additional paid-in capital 121,845,773
- -----------------------------------------------------------------------------------------------------------------
Accumulated net investment income 275,488
- -----------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (2,694,259)
- -----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies 8,552,895
----------------
NET ASSETS $ 127,988,473
================
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $106,012,750 and 7,106,059 shares of capital stock outstanding) $ 14.92
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $ 15.83
- -----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets
of $11,655,294 and 769,909 shares of capital stock outstanding) $ 15.14
- -----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $8,496,906 and 577,668 shares of capital stock outstanding) $ 14.71
- -----------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets
of $1,823,523 and 122,712 shares of capital stock outstanding) $ 14.86
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2006
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------
Interest $ 1,571,678
- -----------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $8,700) 453,946
----------------
Total investment income 2,025,624
- -----------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------
Management fees 404,809
- -----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 130,855
Class B 60,513
Class C 43,381
Class N 4,472
- -----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 84,968
Class B 14,664
Class C 10,589
Class N 2,978
- -----------------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A 25,689
Class B 4,452
Class C 2,174
Class N 299
- -----------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 17,881
- -----------------------------------------------------------------------------------------------------------------
Accounting service fees 7,500
- -----------------------------------------------------------------------------------------------------------------
Directors' compensation 1,109
- -----------------------------------------------------------------------------------------------------------------
Other 32,296
----------------
Total expenses 848,629
Less waivers and reimbursements of expenses (24)
----------------
Net expenses 848,605
- -----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,177,019
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENT OF OPERATIONS Unaudited / Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments $ 2,342,295
Closing and expiration of option contracts written 15,589
Closing and expiration of futures contracts 298,311
Foreign currency transactions 4,240
Swap contracts (4,458)
----------------
Net realized gain 2,655,977
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 236,990
Translation of assets and liabilities denominated in foreign currencies 47,165
Futures contracts (215,705)
Option contracts (665)
Swap contracts 8,539
----------------
Net change in unrealized appreciation 76,324
- -----------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,909,320
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCTOBER 31,
(UNAUDITED) 2005
- ---------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------
Net investment income $ 1,177,019 $ 1,925,400
- ---------------------------------------------------------------------------------------------------------
Net realized gain 2,655,977 6,583,116
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 76,324 744,947
-------------------------------
Net increase in net assets resulting from operations 3,909,320 9,253,463
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (1,187,738) (1,991,668)
Class B (78,071) (127,951)
Class C (61,899) (73,018)
Class N (16,220) (22,788)
- ---------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from capital stock
transactions:
Class A (3,903,126) (1,298,550)
Class B (1,285,605) (1,695,759)
Class C 26,056 1,529,758
Class N 47,571 167,777
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Total increase (decrease) (2,549,712) 5,741,264
- ---------------------------------------------------------------------------------------------------------
Beginning of period 130,538,185 124,796,921
-------------------------------
End of period (including accumulated net investment income
of $275,488 and $442,397, respectively) $ 127,988,473 $ 130,538,185
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS A (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.63 $ 13.85 $ 13.04 $ 11.56 $ 12.54 $ 14.23
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 1 .24 1 .12 1 .14 .22 .26
Net realized and unrealized gain (loss) .31 .81 .81 1.48 (.94) (1.69)
----------------------------------------------------------------------------------------
Total from investment operations .45 1.05 .93 1.62 (.72) (1.43)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.16) (.27) (.12) (.14) (.26) (.26)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.92 $ 14.63 $ 13.85 $ 13.04 $ 11.56 $ 12.54
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.12% 7.59% 7.12% 14.17% (5.86)% (10.12)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 106,013 $ 107,800 $ 103,268 $ 100,032 $ 92,806 $112,864
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 107,763 $ 108,141 $ 103,979 $ 94,811 $ 104,415 $128,477
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.96% 1.62% 0.88% 1.18% 1.73% 1.88%
Total expenses 1.17% 1.10% 1.13% 4,5 1.26% 4,5 1.21% 4,5 1.19% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 38% 6 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
- --------------------------------------------------------------------------------
Six Months Ended April 30, 2006 $110,429,729 $118,969,401
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.
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS B (UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.84 $ 14.04 $ 13.23 $ 11.73 $ 12.72 $ 14.43
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .08 1 .11 1 -- 1 .04 .11 .15
Net realized and unrealized gain (loss) .32 .83 .81 1.50 (.94) (1.70)
---------------------------------------------------------------------------------------
Total from investment operations .40 .94 .81 1.54 (.83) (1.55)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.10) (.14) -- 2 (.04) (.16) (.16)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.14 $ 14.84 $ 14.04 $ 13.23 $ 11.73 $ 12.72
=======================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.68% 6.68% 6.13% 13.21% (6.61)% (10.79)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 11,655 $ 12,692 $ 13,619 $ 14,747 $ 12,204 $ 14,770
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 12,240 $ 13,568 $ 14,875 $ 12,776 $ 13,639 $ 16,569
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 1.10% 0.74% (0.01)% 0.31% 0.94% 1.14%
Total expenses 2.03% 1.98% 2.02% 2.15% 2.00% 1.94%
Expenses after payments and waivers
and reduction to custodian expenses 2.03% 1.98% 2.02% 2.11% 2.00% 1.94%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 38% 5 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
- --------------------------------------------------------------------------------
Six Months Ended April 30, 2006 $110,429,729 $118,969,401
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.
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS C (UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.43 $ 13.66 $ 12.88 $ 11.43 $ 12.41 $ 14.08
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .08 1 .10 1 -- 1 .07 .13 .13
Net realized and unrealized gain (loss) .30 .82 .79 1.43 (.94) (1.64)
---------------------------------------------------------------------------------------
Total from investment operations .38 .92 .79 1.50 (.81) (1.51)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.10) (.15) (.01) (.05) (.17) (.16)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.71 $ 14.43 $ 13.66 $ 12.88 $ 11.43 $ 12.41
=======================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.66% 6.71% 6.13% 13.18% (6.64)% (10.76)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 8,497 $ 8,305 $ 6,422 $ 4,666 $ 2,984 $ 2,893
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 8,779 $ 7,524 $ 5,726 $ 3,806 $ 2,961 $ 3,280
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.12% 0.71% 0.00% 0.29% 0.93% 1.14%
Total expenses 2.01% 2.00% 2.02% 2.17% 2.00% 1.94%
Expenses after payments and waivers
and reduction to custodian expenses 2.01% 2.00% 2.02% 2.12% 2.00% 1.94%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 38% 4 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
- --------------------------------------------------------------------------------
Six Months Ended April 30, 2006 $110,429,729 $118,969,401
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.
30 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS N (UNAUDITED) 2005 2004 2003 2002 2001 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.57 $ 13.80 $ 13.00 $ 11.52 $ 12.52 $ 13.74
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .11 2 .17 2 .06 2 .12 .16 .12
Net realized and unrealized gain (loss) .31 .81 .81 1.46 (.91) (1.20)
---------------------------------------------------------------------------------------
Total from investment operations .42 .98 .87 1.58 (.75) (1.08)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.13) (.21) (.07) (.10) (.25) (.14)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.86 $ 14.57 $ 13.80 $ 13.00 $ 11.52 $ 12.52
=======================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.92% 7.09% 6.68% 13.81% (6.17)% (7.90)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,823 $ 1,741 $ 1,488 $ 392 $ 241 $ 2
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,816 $ 1,647 $ 1,030 $ 342 $ 160 $ 1
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.55% 1.17% 0.46% 0.79% 1.28% 1.04%
Total expenses 1.58% 1.54% 1.61% 2.04% 1.60% 1.68%
Expenses after payments and waivers
and reduction to custodian expenses 1.57% 1.54% 1.55% 1.58% 1.60% 1.68%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 38% 5 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
- --------------------------------------------------------------------------------
Six Months Ended April 30, 2006 $110,429,729 $118,969,401
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.
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, as 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 such principal
exchange at its
32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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 April 30, 2006, the Fund had purchased $14,026,664
of securities issued on a when-issued basis or forward commitment and sold
$3,480,880 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.
- --------------------------------------------------------------------------------
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
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
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,
34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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.
As of April 30, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $2,394,965 expiring by 2014.
This estimated capital loss carryforward represents carryforward as of the end
of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year. As of
April 30, 2006, it is estimated that the Fund will utilize $2,655,977 of capital
loss carryforward to offset realized capital gains. During the year ended
October 31, 2005, the Fund utilized $6,206,177 of capital loss carryforward to
offset capital gains realized in that fiscal year.
As of October 31, 2005, the Fund had available for federal income tax purposes
unused capital loss carryforward as follows:
EXPIRING
--------------------------
2010 $5,050,942
- --------------------------------------------------------------------------------
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 six months
ended April 30, 2006, the Fund's projected benefit obligations were decreased
by $884 and payments of $1,986 were made to retired directors, resulting in an
accumulated liability of $19,983 as of April 30, 2006.
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
35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At April 30, 2006, the Fund had $458 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
directors and officers with a limited indemnification against liabilities
arising in connection with the performance of their duties to the Fund. In the
normal course of business, the Fund may also enter into contracts that provide
general indemnifications. The Fund's maximum exposure under these arrangements
is unknown as this would be dependent on future claims that may be made against
the Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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:
SIX MONTHS ENDED APRIL 30, 2006 YEAR ENDED OCTOBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS A
Sold 329,451 $ 4,892,198 818,855 $ 11,945,822
Dividends and/or
distributions reinvested 75,618 1,117,332 131,047 1,915,494
Redeemed (666,464) (9,912,656) (1,040,110) (15,159,866)
-------------------------------------------------------------
Net decrease (261,395) $ (3,903,126) (90,208) $ (1,298,550)
=============================================================
36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
SIX MONTHS ENDED APRIL 30, 2006 YEAR ENDED OCTOBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS B
Sold 65,497 $ 987,361 215,428 $ 3,183,426
Dividends and/or
distributions reinvested 4,768 71,550 8,063 119,409
Redeemed (155,518) (2,344,516) (338,238) (4,998,594)
-------------------------------------------------------------
Net decrease (85,253) $ (1,285,605) (114,747) $ (1,695,759)
=============================================================
- --------------------------------------------------------------------------------------------------------------
CLASS C
Sold 104,657 $ 1,528,414 210,886 $ 3,045,208
Dividends and/or
distributions reinvested 3,874 56,495 4,885 70,489
Redeemed (106,466) (1,558,853) (110,147) (1,585,939)
-------------------------------------------------------------
Net increase 2,065 $ 26,056 105,624 $ 1,529,758
=============================================================
- --------------------------------------------------------------------------------------------------------------
CLASS N
Sold 13,437 $ 198,174 33,998 $ 492,558
Dividends and/or
distributions reinvested 1,101 16,211 1,563 22,772
Redeemed (11,279) (166,814) (23,994) (347,553)
-------------------------------------------------------------
Net increase 3,259 $ 47,571 11,567 $ 167,777
=============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2006, were as
follows:
PURCHASES SALES
-------------------------------------------------------------------------
Investment securities $ 39,735,509 $ 41,883,835
U.S. government and government
agency obligations 4,395,657 4,117,667
To Be Announced (TBA)
mortgage-related securities 110,429,729 118,969,401
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
-------------------------------------------------
Up to $300 million of net assets 0.625%
Next $100 million of net assets 0.500
Over $400 million of net assets 0.450
- --------------------------------------------------------------------------------
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
37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
account fee. For the six months ended April 30, 2006, the Fund paid $113,705 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
periodically 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 periodically 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
periods. 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 April 30, 2006 for Class B, Class C and
Class N shares were $415,380, $165,795 and $15,411, 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 following table for the period
indicated.
38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------------------
April 30, 2006 $41,851 $60 $13,523 $1,163 $544
- --------------------------------------------------------------------------------
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 six months ended April 30, 2006,
OFS waived $24 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 April 30, 2006, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
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.
39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
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 April 30, 2006, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS APRIL 30, 2006 (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 6/21/06 32 $ 3,419,000 $ (119,098)
-------------
CONTRACTS TO SELL
Euro-Bundesobligation, 10 yr. 6/8/06 14 2,041,431 49,392
U.S. Treasury Nts., 2 yr. 6/30/06 51 10,390,453 27,207
U.S. Treasury Nts., 5 yr. 6/30/06 14 1,458,188 13,243
U.S. Treasury Nts., 10 yr. 6/21/06 10 1,055,781 20,687
-------------
110,529
-------------
$ (8,569)
=============
- --------------------------------------------------------------------------------
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
40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
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 six months ended April 30, 2006 was as follows:
CALL OPTIONS
----------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- --------------------------------------------------------------------
Options outstanding as of
October 31, 2005 127 $ 15,589
Options written 102 9,594
Options closed or expired (127) (15,589)
----------------------------
Options outstanding as of
April 30, 2006 102 $ 9,594
============================
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS
The Fund may enter into a credit default swap contract to seek to maintain a
total return on a particular investment or portion of its portfolio, or for
other non-speculative purposes. Credit default swap contracts are subject to
credit risks (for example if the counterparty fails to meet its obligations).
As a purchaser of a credit default swap contract, the Fund pays a periodic
interest fee on the notional amount to the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized loss upon payment. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
Upon occurrence of a specific credit event with respect to the underlying
referenced debt obligation, the Fund is obligated to deliver that security to
the counterparty in exchange for receipt of the notional amount from the
counterparty. The difference between the value of the security delivered and the
notional amount received is recorded as realized gain.
41 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS Continued
Information regarding such credit default swaps as of April 30, 2006 is as
follows:
NOTIONAL ANNUAL
AMOUNT INTEREST
RECEIVED BY THE RATE UNREALIZED
FUND UPON PAID BY APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT THE FUND (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
Barclays Bank plc Whirlpool Corp. $ 200,000 0.430% $ (602)
- ----------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Dow Jones CDX High Yield Index 160,000 2.100 1,994
Kohl's Corp. 130,000 0.260 (185)
Kohl's Corp. 130,000 0.270 (242)
Vernado Realty LP 130,000 0.320 (118)
Vernado Realty LP 130,000 0.330 49
Whirlpool Corp. 190,000 0.430 (720)
- ----------------------------------------------------------------------------------------------------------------
GOLDMAN SACHS GROUP, INC.:
Dow Jones CDX High Yield Index 160,000 2.100 2,089
Dow Jones CDX High Yield Index 160,000 2.100 2,089
Eastman Chemical Co. 160,000 0.550 (681)
Tribune Co. 200,000 0.640 (1,760)
- ----------------------------------------------------------------------------------------------------------------
MORGAN STANLEY
Capital Services, Inc.:
Belo Corp. 145,000 0.650 (331)
Belo Corp. 80,000 0.670 (275)
Belo Corp. 165,000 0.675 (592)
Dow Jones CDX High Yield Index 80,000 2.100 1,158
Eastman Chemical Co. 230,000 0.560 (824)
Marriott International, Inc. 130,000 0.300 (60)
Marriott International, Inc. 130,000 0.290 --
Tribune Co. 190,000 0.640 (1,460)
-------------
$ (471)
=============
- --------------------------------------------------------------------------------
9. 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 unrealized gain (loss) related to the daily change
in the valuation of the notional amount of the swap, as well as the amount due
to (owed by) the Fund at termination or settlement, is combined and separately
disclosed as an asset (liability). The Fund also records any periodic payments
received from (paid to) the counterparty, including at termination, under such
contracts as realized gain (loss). Total return swaps are subject to risks (if
the counterparty fails to meet its obligations).
42 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
As of April 30, 2006, the Fund had entered into the following total return swap
agreements:
SWAP NOTIONAL TERMINATION UNREALIZED
COUNTERPARTY SWAP DESCRIPTION AMOUNT DATE APPRECIATION
- ------------------------------------------------------------------------------------------------------------------------------------
Received or paid monthly. If the sum of the Lehman
Brothers CMBS Index Payer Payment Amount and the
Floating Rate Payer Payment Amount is positive, the
Counterparty will pay such amount to the Fund. If the
Goldman Sachs sums are negative, then the Fund shall pay the
Group, Inc. (The) absolute value of such amount to the Counterparty. $1,000,000 6/1/06 $2,418
Abbreviations are as follows:
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
10. ILLIQUID SECURITIES
As of April 30, 2006, investments in securities included issues that are
illiquid. A security may 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 securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
11. FUND REORGANIZATION
On December 15, 2005, the Board of Directors of Oppenheimer Disciplined
Allocation Fund (the "Fund") approved a proposal to reorganize the Fund with and
into the Oppenheimer Balanced Fund ("Balanced Fund"). In a special meeting held
on April 20, 2006, Shareholders of the Fund approved a Plan of Reorganization
between the Fund and Balanced Fund, and the transactions contemplated thereby,
including (a) the transfer of substantially all the assets of the Fund to
Balanced Fund in exchange for Class A, Class B, Class C and Class N shares of
Balanced Fund, (b) the distribution of Class A, Class B, Class C and Class N
shares of Balanced Fund to the Class A, Class B, Class C and Class N
shareholders of the Fund in complete liquidation of the Fund and (c) the
cancellation of the outstanding shares of the Fund.
- --------------------------------------------------------------------------------
12. SUBSEQUENT EVENT
Oppenheimer Disciplined Allocation Fund merged into Oppenheimer Balanced Fund on
May 11, 2006.
- --------------------------------------------------------------------------------
13. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New
43 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13. LITIGATION Continued
York on January 10, 2005 and was amended on March 4, 2005. The complaint
alleged, among other things, that the Manager charged excessive fees for
distribution and other costs, and that by permitting and/or participating in
those actions, the Directors/ Trustees and the Officers of the funds breached
their fiduciary duties to fund shareholders under the Investment Company Act of
1940 and at common law. The plaintiffs sought unspecified damages, an accounting
of all fees paid, and an award of attorneys' fees and litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to it, the funds, the Directors/Trustees or
the Officers on the appeal of the decisions of the district court, and that no
estimate can yet be made with any degree of certainty as to the amount or range
of any potential loss. However, the Manager believes that the allegations
contained in the complaint are without merit and that there are substantial
grounds to sustain the district court's rulings.
44 | 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.
45 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
OPPENHEIMER VALUE FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
- --------------------------------------------------------------------------------
Software 10.5%
- --------------------------------------------------------------------------------
Oil & Gas 9.9
- --------------------------------------------------------------------------------
Commercial Banks 8.6
- --------------------------------------------------------------------------------
Diversified Financial Services 8.1
- --------------------------------------------------------------------------------
Media 7.2
- --------------------------------------------------------------------------------
Aerospace & Defense 6.9
- --------------------------------------------------------------------------------
Pharmaceuticals 5.6
- --------------------------------------------------------------------------------
Capital Markets 5.0
- --------------------------------------------------------------------------------
Electric Utilities 5.0
- --------------------------------------------------------------------------------
Tobacco 4.7
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
United Technologies Corp. 5.8%
- --------------------------------------------------------------------------------
UBS AG 5.0
- --------------------------------------------------------------------------------
Altria Group, Inc. 4.7
- --------------------------------------------------------------------------------
Wells Fargo & Co. 4.6
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 4.3
- --------------------------------------------------------------------------------
Wachovia Corp. 4.0
- --------------------------------------------------------------------------------
Siemens AG, Sponsored ADR 3.9
- --------------------------------------------------------------------------------
BP plc, ADR 3.7
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 3.5
- --------------------------------------------------------------------------------
Synopsys, Inc. 3.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
9 | OPPENHEIMER VALUE FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Financials 31.1%
Commercial Banks 9.0
Diversified Financial Services 8.6
Capital Markets 5.3
Insurance 4.4
Thrifts & Mortgage Finance 3.8
Industrials 13.4
Information Technology 11.8
Energy 10.5
Consumer Staples 8.3
Consumer Discretionary 7.6
Utilities 6.1
Health Care 5.9
Materials 3.5
Telecommunication Services 1.8
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2006, and are based on the total market value of common stocks.
- --------------------------------------------------------------------------------
10 | OPPENHEIMER VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns 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.
CLASS Y shares of the Fund were first publicly offered on 12/16/96. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER VALUE FUND
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 April 30, 2006.
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 the
Statement of Additional Information). Therefore, the
12 | OPPENHEIMER VALUE FUND
"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
(11/1/05) (4/30/06) APRIL 30, 2006
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,091.90 $4.89
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.13 4.72
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,086.90 9.51
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.72 9.19
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,087.70 8.99
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,016.22 8.69
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,089.80 6.50
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.60 6.28
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,093.70 3.17
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,021.77 3.06
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended April 30, 2006 are as follows:
CLASS EXPENSE RATIOS
- ------------------------
Class A 0.94%
- ------------------------
Class B 1.83
- ------------------------
Class C 1.73
- ------------------------
Class N 1.25
- ------------------------
Class Y 0.61
- --------------------------------------------------------------------------------
13 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS April 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--94.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--7.2%
- --------------------------------------------------------------------------------
MEDIA--7.2%
Comcast Corp., Cl. A
Special, Non-Vtg. 1 972,700 $ 29,988,341
- --------------------------------------------------------------------------------
Liberty Global, Inc.,
Series A 1 1,424,546 29,502,348
- --------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1 3,327,131 66,442,806
- --------------------------------------------------------------------------------
News Corp., Inc.,
Cl. A 539,100 9,250,956
----------------
135,184,451
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.9%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.5%
Wal-Mart Stores, Inc. 612,800 27,594,384
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.7%
ConAgra Foods, Inc. 1,431,400 32,464,152
- --------------------------------------------------------------------------------
TOBACCO--4.7%
Altria Group, Inc. 1,220,800 89,313,728
- --------------------------------------------------------------------------------
ENERGY--9.9%
- --------------------------------------------------------------------------------
OIL & GAS--9.9%
BP plc, ADR 953,230 70,272,116
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 1,289,500 81,341,660
- --------------------------------------------------------------------------------
TotalFinaElf SA,
Sponsored ADR 257,300 35,512,546
----------------
187,126,322
- --------------------------------------------------------------------------------
FINANCIALS--29.5%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--5.0%
UBS AG 811,475 94,820,854
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--8.6%
Wachovia Corp. 1,253,100 74,998,035
- --------------------------------------------------------------------------------
Wells Fargo & Co. 1,262,510 86,721,812
----------------
161,719,847
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--8.1%
Bank of America
Corp. 787,578 39,315,894
- --------------------------------------------------------------------------------
Bear Stearns Cos.,
Inc. (The) 134,400 19,153,344
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Capital One
Financial Corp. 660,100 $ 57,191,064
- --------------------------------------------------------------------------------
Citigroup, Inc. 757,266 37,825,437
----------------
153,485,739
- --------------------------------------------------------------------------------
INSURANCE--4.2%
Everest Re Group Ltd. 206,500 18,791,500
- --------------------------------------------------------------------------------
Genworth Financial,
Inc., Cl. A 1,268,870 42,126,484
- --------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd. 685,570 18,901,165
----------------
79,819,149
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--3.6%
Countrywide
Financial Corp. 721,440 29,333,750
- --------------------------------------------------------------------------------
Freddie Mac 622,270 37,995,806
----------------
67,329,556
- --------------------------------------------------------------------------------
HEALTH CARE--5.6%
- --------------------------------------------------------------------------------
PHARMACEUTICALS--5.6%
Pfizer, Inc. 2,346,600 59,439,378
- --------------------------------------------------------------------------------
Sanofi-Aventis SA,
ADR 987,600 46,456,704
----------------
105,896,082
- --------------------------------------------------------------------------------
INDUSTRIALS--12.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--6.9%
Honeywell
International, Inc. 483,600 20,553,000
- --------------------------------------------------------------------------------
United Technologies
Corp. 1,731,100 108,730,391
----------------
129,283,391
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.0%
Cendant Corp. 2,155,540 37,571,062
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--3.9%
Siemens AG,
Sponsored ADR 781,000 73,913,840
14 | OPPENHEIMER VALUE FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--11.2%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.7%
Hutchinson
Technology, Inc. 1 564,900 $ 13,427,673
- --------------------------------------------------------------------------------
SOFTWARE--10.5%
Compuware Corp. 1 3,381,691 25,971,387
- --------------------------------------------------------------------------------
Microsoft Corp. 2,062,660 49,813,239
- --------------------------------------------------------------------------------
Novell, Inc. 1 3,466,040 28,490,849
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 2,745,825 59,941,360
- --------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 2,014,225 34,342,536
----------------
198,559,371
- --------------------------------------------------------------------------------
MATERIALS--3.3%
- --------------------------------------------------------------------------------
CHEMICALS--2.3%
Dow Chemical Co.
(The) 392,100 15,923,181
- --------------------------------------------------------------------------------
Praxair, Inc. 491,680 27,597,998
----------------
43,521,179
- --------------------------------------------------------------------------------
METALS & MINING--1.0%
Phelps Dodge Corp. 226,100 19,487,559
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.7%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.7%
IDT Corp., Cl. B 1 1,277,203 14,176,953
- --------------------------------------------------------------------------------
Sprint Nextel Corp. 692,000 17,161,600
----------------
31,338,553
- --------------------------------------------------------------------------------
UTILITIES--5.8%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--5.0%
AES Corp. (The) 1 2,045,980 34,720,281
- --------------------------------------------------------------------------------
CMS Energy Corp. 1 1,401,600 18,669,312
- --------------------------------------------------------------------------------
PG&E Corp. 539,230 21,482,923
- --------------------------------------------------------------------------------
Reliant Energy, Inc. 1 1,582,730 17,963,986
----------------
92,836,502
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
GAS UTILITIES--0.8%
Sempra Energy 336,430 $ 15,482,507
----------------
Total Common Stocks
(Cost $1,598,797,787) 1,790,175,901
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.1%
- --------------------------------------------------------------------------------
Undivided interest of 6.37% in joint
repurchase agreement (Principal
Amount/Value $912,364,000,
with a maturity value of
$912,721,343) with UBS
Warburg LLC, 4.70%,
dated 4/28/06, to be
repurchased at
$58,163,772 on 5/1/06,
collateralized by
Federal National
Mortgage Assn.,
5%, 3/1/34, with
a value of
$933,734,744
(Cost $58,141,000) $58,141,000 58,141,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $1,656,938,787) 98.0% 1,848,316,901
- --------------------------------------------------------------------------------
OTHER ASSETS NET
OF LIABILITIES 2.0 38,223,053
---------------------------------
NET ASSETS 100.0% $ 1,886,539,954
=================================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
April 30, 2006
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $1,656,938,787)
--see accompanying statement of investments $ 1,848,316,901
- --------------------------------------------------------------------------------
Cash 82,768
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 82,497,131
Shares of capital stock sold 6,160,776
Interest and dividends 1,573,854
Other 30,000
----------------
Total assets 1,938,661,430
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 42,963,581
Shares of capital stock redeemed 8,290,480
Distribution and service plan fees 309,146
Transfer and shareholder servicing agent fees 266,800
Directors' compensation 108,105
Shareholder communications 108,023
Other 75,341
----------------
Total liabilities 52,121,476
- --------------------------------------------------------------------------------
NET ASSETS $ 1,886,539,954
================
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of capital stock $ 76,655
- --------------------------------------------------------------------------------
Additional paid-in capital 1,667,151,275
- --------------------------------------------------------------------------------
Accumulated net investment income 5,831,404
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 22,102,506
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 191,378,114
----------------
NET ASSETS $ 1,886,539,954
================
16 | OPPENHEIMER VALUE FUND
- -----------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,093,464,763 and 44,240,204 shares of capital stock outstanding) $24.72
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $26.23
- -----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $142,177,891
and 5,896,509 shares of capital stock outstanding) $24.11
- -----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $221,764,744
and 9,322,155 shares of capital stock outstanding) $23.79
- -----------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $103,166,000
and 4,248,488 shares of capital stock outstanding) $24.28
- -----------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $325,966,556 and 12,947,764 shares of capital stock outstanding) $25.18
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER VALUE FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2006
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $383,180) $ 16,317,383
- --------------------------------------------------------------------------------
Interest 1,453,854
----------------
Total investment income 17,771,237
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 3,838,631
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,175,108
Class B 662,587
Class C 979,270
Class N 243,920
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 820,387
Class B 185,938
Class C 199,627
Class N 117,104
Class Y 104,386
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 96,689
Class B 30,556
Class C 21,976
Class N 3,482
- --------------------------------------------------------------------------------
Directors' compensation 43,719
- --------------------------------------------------------------------------------
Accounting service fees 7,500
- --------------------------------------------------------------------------------
Custodian fees and expenses 4,819
- --------------------------------------------------------------------------------
Other 72,239
----------------
Total expenses 8,607,938
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 9,163,299
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 22,886,064
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 106,034,489
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 138,083,852
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCTOBER 31,
(UNAUDITED) 2005
- ---------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------
Net investment income $ 9,163,299 $ 6,154,255
- ---------------------------------------------------------------------------------------------------
Net realized gain 22,886,064 70,292,725
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 106,034,489 20,234,425
-----------------------------------
Net increase in net assets resulting from operations 138,083,852 96,681,405
- ---------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (6,280,139) (2,034,104)
Class B -- --
Class C (257,711) --
Class N (403,059) (98,987)
Class Y (1,646,648) (289,396)
- ---------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (37,624,088) (3,563,988)
Class B (5,717,075) (799,560)
Class C (7,962,476) (788,223)
Class N (3,484,148) (319,960)
Class Y (7,335,784) (289,411)
- ---------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- ---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital
stock transactions:
Class A 218,197,732 401,024,642
Class B 9,500,162 30,568,616
Class C 42,905,064 80,170,490
Class N 22,706,638 38,290,520
Class Y 174,550,099 103,772,486
- ---------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------
Total increase 535,232,419 742,324,530
- ---------------------------------------------------------------------------------------------------
Beginning of period 1,351,307,535 608,983,005
-----------------------------------
End of period (including accumulated net investment
income of $5,831,404 and $5,255,662, respectively) $ 1,886,539,954 $ 1,351,307,535
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS A (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.79 $ 21.15 $ 18.46 $ 14.78 $ 15.93 $ 17.06
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .15 1 .19 1 .13 1 .04 .07 .03
Net realized and unrealized gain (loss) 1.98 2.75 2.61 3.67 (1.21) (.98)
----------------------------------------------------------------------------------------
Total from investment operations 2.13 2.94 2.74 3.71 (1.14) (.95)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.17) (.11) (.05) (.03) (.01) (.18)
Distributions from net realized gain (1.03) (.19) -- -- -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.20) (.30) (.05) (.03) (.01) (.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.72 $ 23.79 $ 21.15 $ 18.46 $ 14.78 $ 15.93
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 9.19% 13.99% 14.85% 25.18% (7.15)% (5.60)%
- ----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,093,465 $ 835,793 $ 378,785 $ 215,019 $ 141,563 $ 166,285
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 959,430 $ 600,426 $ 303,560 $ 166,143 $ 166,319 $ 181,631
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.30% 0.83% 0.66% 0.37% 0.38% 0.19%
Total expenses 0.94% 0.99% 4 1.07% 4,5 1.22% 4,5 1.22% 4,5 1.26% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
20 | OPPENHEIMER VALUE FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS B (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.17 $ 20.68 $ 18.18 $ 14.64 $ 15.89 $ 16.99
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 1 (.01) 1 (.05) 1 (.06) (.10) (.11)
Net realized and unrealized gain (loss) 1.92 2.69 2.55 3.60 (1.15) (.97)
----------------------------------------------------------------------------------------
Total from investment operations 1.97 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 (1.03) (.19) -- -- -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.03) (.19) -- -- -- (.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.11 $ 23.17 $ 20.68 $ 18.18 $ 14.64 $ 15.89
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.69% 13.02% 13.75% 24.18% (7.87)% (6.34)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 142,178 $ 127,258 $ 85,683 $ 60,858 $ 47,323 $ 57,584
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 133,886 $ 109,545 $ 77,341 $ 51,476 $ 56,200 $ 65,115
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.43% (0.03)% (0.24)% (0.44)% (0.40)% (0.57)%
Total expenses 1.83% 1.87% 1.98% 2.14% 2.01% 2.01%
Expenses after payments and waivers
and reduction to custodian expenses 1.83% 1.87% 1.98% 2.05% 2.01% 2.01%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
21 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS C (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.89 $ 20.41 $ 17.93 $ 14.44 $ 15.67 $ 16.77
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 1 .01 1 (.03) 1 .03 (.01) (.08)
Net realized and unrealized gain (loss) 1.90 2.66 2.51 3.46 (1.22) (.99)
----------------------------------------------------------------------------------------
Total from investment operations 1.96 2.67 2.48 3.49 (1.23) (1.07)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.03) -- -- -- -- (.03)
Distributions from net realized gain (1.03) (.19) -- -- -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.06) (.19) -- -- -- (.03)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.79 $ 22.89 $ 20.41 $ 17.93 $ 14.44 $ 15.67
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.77% 13.14% 13.83% 24.17% (7.85)% (6.38)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 221,765 $ 170,710 $ 79,501 $ 32,625 $ 13,466 $ 10,494
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 197,838 $ 124,605 $ 61,387 $ 21,366 $ 12,977 $ 11,088
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.52% 0.04% (0.17)% (0.49)% (0.41)% (0.56)%
Total expenses 1.73% 1.77% 4 1.89% 4,5 2.07% 4,5 2.00% 4,5 2.01% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
22 | OPPENHEIMER VALUE FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS N (UNAUDITED) 2005 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.38 $ 20.80 $ 18.25 $ 14.68 $ 15.90 $ 18.08
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .12 2 .11 2 .06 2 .03 .05 (.02)
Net realized and unrealized gain (loss) 1.93 2.72 2.56 3.59 (1.22) (2.16)
----------------------------------------------------------------------------------------
Total from investment operations 2.05 2.83 2.62 3.62 (1.17) (2.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.12) (.06) (.07) (.05) (.05) --
Distributions from net realized gain (1.03) (.19) -- -- -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.15) (.25) (.07) (.05) (.05) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.28 $ 23.38 $ 20.80 $ 18.25 $ 14.68 $ 15.90
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.98% 13.68% 14.39% 24.70% (7.41)% (12.06)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 103,166 $ 76,058 $ 33,100 $ 7,417 $ 1,201 $ 12
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 98,605 $ 53,166 $ 23,344 $ 3,275 $ 508 $ 5
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 1.00% 0.50% 0.28% (0.03)% 0.00% (0.45)%
Total expenses 1.25% 1.30% 1.45% 1.61% 1.49% 1.61%
Expenses after payments and waivers and
reduction to custodian expenses 1.25% 1.30% 1.45% 1.55% 1.49% 1.61%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
23 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2006 OCT. 31,
CLASS Y (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 24.23 $ 21.54 $ 18.79 $ 14.96 $ 16.20 $ 17.07
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 1 .20 .26 .24 (1.86) .06 .10
Net realized and unrealized gain (loss) 2.01 2.81 2.62 5.71 1 (1.21) 1 (.97) 1
----------------------------------------------------------------------------------------
Total from investment operations 2.21 3.07 2.86 3.85 (1.15) (.87)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.23) (.19) (.11) (.02) (.09) --
Distributions from net realized gain (1.03) (.19) -- -- -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (1.26) (.38) (.11) (.02) (.09) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.18 $ 24.23 $ 21.54 $ 18.79 $ 14.96 $ 16.20
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 9.37% 14.38% 15.30% 25.78% (7.18)% (5.10)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 325,966 $ 141,489 $ 31,914 $ 2,617 $ 1,074 $ 638
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 205,623 $ 83,000 $ 8,398 $ 1,558 $ 955 $ 155
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.64% 1.10% 1.17% 0.76% 0.33% 0.62%
Total expenses 0.61% 0.70% 0.61% 1.19% 3.77% 1.20%
Expenses after payments and waivers
and reduction to custodian expenses 0.61% 0.70% 0.61% 0.80% 1.23% 0.83%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 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.
24 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, as 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
25 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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.
26 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
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.
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.
As of April 30, 2006, the Fund had no unused capital loss carryforward
available for federal income tax purposes. During the 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.
- --------------------------------------------------------------------------------
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 six months
ended April 30, 2006, the Fund's projected benefit obligations were increased
by $28,940 and payments of $7,245 were made to retired directors, resulting in
an accumulated liability of $84,783 as of April 30, 2006.
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.
27 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS unaudited / continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At April 30, 2006, the Fund had $1,256 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and
former directors and officers with a limited indemnification against
liabilities arising in connection with the performance of their duties to the
Fund. In the normal course of business, the Fund may also enter into contracts
that provide general indemnifications. The Fund's maximum exposure under these
arrangements is unknown as this would be dependent on future claims that may be
made against the Fund. The risk of material loss from such claims is considered
remote.
- --------------------------------------------------------------------------------
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.
Transactions in shares of capital stock were as follows:
28 | OPPENHEIMER VALUE FUND
SIX MONTHS ENDED APRIL 30, 2006 YEAR ENDED OCTOBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS A
Sold 13,044,675 $ 312,710,703 21,899,954 $ 510,001,541
Dividends and/or
distributions reinvested 1,598,827 37,700,336 224,061 5,016,717
Redeemed (5,533,578) (132,213,307) (4,906,749) (113,993,616)
-------------------------------------------------------------
Net increase 9,109,924 $ 218,197,732 17,217,266 $ 401,024,642
=============================================================
- -----------------------------------------------------------------------------------------
CLASS B
Sold 1,276,868 $ 29,954,559 2,699,016 $ 61,263,523
Dividends and/or
distributions reinvested 229,579 5,300,973 33,852 744,025
Redeemed (1,102,153) (25,755,370) (1,384,112) (31,438,932)
-------------------------------------------------------------
Net increase 404,294 $ 9,500,162 1,348,756 $ 30,568,616
=============================================================
- -----------------------------------------------------------------------------------------
CLASS C
Sold 2,506,529 $ 57,803,838 4,592,560 $ 103,383,454
Dividends and/or
distributions reinvested 288,014 6,558,085 31,946 693,237
Redeemed (928,830) (21,456,859) (1,062,520) (23,906,201)
-------------------------------------------------------------
Net increase 1,865,713 $ 42,905,064 3,561,986 $ 80,170,490
=============================================================
- -----------------------------------------------------------------------------------------
CLASS N
Sold 2,166,878 $ 50,825,881 2,243,821 $ 51,659,803
Dividends and/or
distributions reinvested 158,150 3,669,069 18,560 409,435
Redeemed (1,329,912) (31,788,312) (600,186) (13,778,718)
-------------------------------------------------------------
Net increase 995,116 $ 22,706,638 1,662,195 $ 38,290,520
=============================================================
- -----------------------------------------------------------------------------------------
CLASS Y
Sold 8,071,428 $ 197,913,016 5,325,506 $ 127,221,723
Dividends and/or
distributions reinvested 366,523 8,792,882 25,451 578,749
Redeemed (1,329,570) (32,155,799) (992,963) (24,027,986)
-------------------------------------------------------------
Net increase 7,108,381 $ 174,550,099 4,357,994 $ 103,772,486
=============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2006, were as
follows:
PURCHASES SALES
- ---------------------------------------------------------------------------
Investment securities $903,998,761 $ 548,511,248
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
29 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS unaudited / continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
FEE SCHEDULE
-----------------------------------------
Up to $300 million of net assets 0.625%
Next $100 million of net assets 0.500
Over $400 million of net assets 0.450
- --------------------------------------------------------------------------------
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 six months ended April 30, 2006, the
Fund paid $1,379,255 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
periodically 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 periodically
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
periods. 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 April 30, 2006 for Class B,
30 | OPPENHEIMER VALUE FUND
Class C and Class N shares were $3,178,105, $2,215,327 and $964,878,
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 following table 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
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------
April 30, 2006 $ 565,079 $ 2,654 $ 123,438 $ 23,376 $ 11,139
- --------------------------------------------------------------------------------
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. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to it, the funds, the Directors/Trustees or
the Officers on the appeal of the decisions of the district court, and that no
estimate can yet be made with any degree of certainty as to the amount or range
of any potential loss. However, the Manager believes that the allegations
contained in the complaint are without merit and that there are substantial
grounds to sustain the district court's rulings.
31 | 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.
32 | OPPENHEIMER VALUE FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Directors (the "Board"), including a majority of the
independent Directors, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services by the Manager and its affiliates,
(v) the extent to which economies of scale are realized as the Fund grows and
whether fee levels reflect these economies of scale for Fund investors and (vi)
other benefits to the Manager from its relationship with the Fund. The Board was
aware that there are alternatives to retaining the Manager.
NATURE AND EXTENT OF SERVICES. The Board considered information on the
nature and extent of the services provided to the Fund and information regarding
the Manager's key personnel that provide such services. The Manager's duties
include providing the Fund with the services of the portfolio manager and the
Manager's investment team, who provide research, analysis and other advisory
services in regard to the Fund's investments; securities trading services;
oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing, and supervising
the activities of, all administrative and clerical personnel that are necessary
in order to provide effective corporate administration for the Fund; compiling
and maintaining records with respect to the Fund's operations; preparing and
filing reports required by the Securities and Exchange Commission; preparing
periodic reports regarding the operations of the Fund for its shareholders;
preparing proxy materials for shareholder meetings; and preparing the
registration statements required by Federal and state securities laws for the
sale of the Fund's shares. The Manager also provides the Fund with office space,
facilities and equipment.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board took
33 | OPPENHEIMER VALUE FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
account of the facts that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services, and information the
Board has received regarding the experience and professional qualifications of
the Manager's personnel and the size and functions of its staff. In its
evaluation of the quality of the portfolio management services provided, the
Board considered the experience of Christopher Leavy and the Manager's Value
investment team and analysts. Mr. Leavy has had over 13 years of experience
managing equity investments. The Board members also considered their experiences
with the Manager and its officers and other personnel through their service as
directors or trustees of the Fund and other funds advised by the Manager. The
Board considered information regarding the quality of services provided by
affiliates of the Manager, which it also reviews at other times during the year
in connection with the renewal of the Fund's service agreements. In light of the
foregoing, the Board concluded that the Fund benefits from the services provided
under the Agreement as a result of the Manager's experience, reputation,
personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each Board meeting, including comparative performance information.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other large-cap value funds advised by
the Manager and by other investment advisers. The Board noted that the Fund's
one-year, three-year, and five-year performance were better than its peer group
average. However its ten-year performance was below its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the
Manager and its affiliates and the other expenses borne by the Fund. The Board
also evaluated the comparability of the fees charged and the services provided
to the Fund to those of other clients or accounts advised by the Manager. The
independent consultant provided comparative data in regard to the fees and
expenses of the Fund, other large-cap value funds and other funds with
comparable asset levels and distribution features. The Board noted that the
Fund's contractual and actual management fees and total expenses were all lower
than its peer group median and average.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund, to what extent
those economies of scale benefit the Fund shareholders and the current level of
Fund assets in
34 | OPPENHEIMER VALUE FUND
relation to the Fund's breakpoint schedule for its management fees. The Board
also noted the Fund's breakpoints, which are intended to share economies of
scale that may exist as the Fund grows with its shareholders.
PROFITS AND OTHER BENEFITS TO THE MANAGER. The Board considered
information regarding the Manager's costs in serving as the Fund's investment
adviser, including the costs associated with the personnel and systems necessary
to manage the Fund, and information regarding the Manager's profitability from
its relationship with the Fund. The Board considered that the Manager must be
able to pay and retain experienced professional personnel at competitive rates
to provide services to the Fund and that maintaining the financial viability of
the Manager is important in order for the Manager to continue to provide
significant services to the Fund and its shareholders. In addition to
considering the profits realized by the Manager, the Board considered
information regarding the direct and indirect benefits the Manager receives as a
result of its relationship with the Fund, including compensation paid to the
Manager's affiliates for services provided and research provided to the Manager
in connection with permissible brokerage arrangements (soft dollar
arrangements).
CONCLUSIONS. These factors were also considered by the independent
Directors meeting separately from the full Board, assisted by experienced
counsel to the Fund and the independent Directors. Fund counsel is independent
of the Manager within the meaning and intent of the Securities and Exchange
Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Directors,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the Agreement for
another year. In arriving at this decision, the Board did not single out any
factor or factors as being more important than others, but considered all of the
factors together. The Board judged the terms and conditions of the Agreement,
including the management fee, in light of all of the surrounding circumstances.
35 | OPPENHEIMER VALUE FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
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 Goverance 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 April 30, 2006, 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) Not applicable to semiannual reports.
(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: June 15, 2006
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: June 15, 2006
By: /s/ BRIAN W. WIXTED
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: June 15, 2006