UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-3346
OPPENHEIMER SERIES FUND, INC.
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
ROBERT G. ZACK, ESQ.
OPPENHEIMERFUNDS, INC.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: OCTOBER 31
Date of reporting period: OCTOBER 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Media 7.7%
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Oil & Gas 7.0
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Capital Markets 6.9
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Semiconductors & Semiconductor Equipment 5.8
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Aerospace & Defense 5.8
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Industrial Conglomerates 5.7
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Software 5.7
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Insurance 5.1
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Tobacco 4.8
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Pharmaceuticals 4.3
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2006, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Exxon Mobil Corp. 7.0%
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Siemens AG, Sponsored ADR 5.7
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UBS AG 4.9
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Texas Instruments, Inc. 4.9
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Altria Group, Inc. 4.8
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Liberty Global, Inc., Series C 4.7
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Capital One Financial Corp. 4.2
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Bank of America Corp. 4.2
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Everest Re Group Ltd. 4.2
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United Technologies Corp. 3.7
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2006, and are based on net assets. For up-to-date Top 10 Fund
holdings, please visit www.oppenheimerfunds.com.
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8 | OPPENHEIMER VALUE FUND
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Financials 28.7%
Capital Markets 7.5
Insurance 5.5
Consumer Finance 4.6
Diversified Financial Services 4.6
Thrifts & Mortgage Finance 3.4
Commercial Banks 3.1
Information Technology 13.2
Industrials 12.5
Consumer Staples 10.0
Consumer Discretionary 9.4
Energy 8.7
Health Care 6.9
Utilities 6.6
Materials 2.2
Telecommunication Services 1.8
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2006, and are based on the total market value of common stocks.
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9 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2006, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund's Class A shares (without
sales charge) returned 15.20% for the 12-month period ended October 31, 2006.
The Fund underperformed its benchmark, the S&P 500 Index, which returned 16.33%,
as well as the Russell 1000 Value Index, which returned 21.46% over the same
period. Fund performance was hurt by holdings in the information technology and
telecommunications sectors. Underperformance in these sectors more than offset
outperformance in the healthcare, consumer staples, financial services and
energy sectors. Early in the reporting period, investors became concerned about
what effects rising interest rates and high energy costs might have on future
economic growth. In this environment, many stock prices fell, particularly
small-cap stocks. This Fund was somewhat cushioned from those declines as most
of its holdings are large-cap stocks. When inflation and economic concerns eased
during the summer months, the Fund enjoyed healthier equity returns.
Most of the Fund's best relative gains were achieved in the health care,
consumer staples, financials and energy areas. Within health care, the Fund
benefited from its underweight position to managed care providers. Consumer
staples stocks also posted strong gains for the Fund. The Fund benefited from
our holdings in ConAgra Foods, Inc., the global retail food products firm.
Management has effectively created a turnaround story by improving its execution
on costs, thereby increasing the company's stock price. The Fund also benefited
by having a position in Wal-Mart Stores, Inc., during a period when the stock
performed well.
The financials sector also produced attractive relative returns for the
Fund. Here, our holdings in UBS AG, which happens to be one of the Fund's
largest holdings, benefited from robust asset gathering in its private wealth
business. What's more, the company is positioned to experience a meaningful
operating leverage in Europe, where they have invested a great deal of money to
create a comprehensive client service infrastructure. Banking firms Bank of
America Corp. and Wells Fargo & Co. prospered due to a healthy U.S. economy and
low loan default rates in light of the strong labor market. We sold our position
in Wells Fargo and took profits.
Within energy, the Fund benefited from its underweight position to a
number of small and medium-sized oil and natural gas companies at a time when
falling energy prices hurt stock returns. In addition, our overweight position
in Exxon Mobil Corp. also greatly aided performance during the reporting period.
10 | OPPENHEIMER VALUE FUND
On the other hand, virtually all of the Fund's negative performance can be
traced to its holdings in two areas: information technology and
telecommunications. Within information technology, the Fund's holdings in
Take-Two Interactive Software, Inc. hindered performance as investors' concerns
mounted over the company's expense management and near-term revenue viability.
However, we continue to believe that Take-Two's earnings power is substantial in
light of their video game development talent. Novell, Inc. also disappointed
during the reporting period, where its transition from its previous operating
system, NETWARE, to its new system, OES, has not gone as well as we had hoped.
The stock has been punished and our holdings there hurt the Fund's relative
performance. Compuware Corp. also detracted from the Fund's relative
performance. Two of the company's key non-mainframe products failed to meet our
expectations. Consequently, we sold the stock. Hutchinson Technology, Inc., a
leading manufacturer of suspension assemblies for hard disk drives, suffered
during the reporting period due to a slowdown in PC sales.
A lot of the Fund's negative performance in the telecommunications area
can be attributed to NOT owning AT&T, Inc. and Verizon Communications, Inc., at
a time when both companies performed well, and instead choosing to invest in
Sprint Nextel Corp. During the reporting period, Sprint came under pressure due
to its inability to attract enough subscribers as well a lack of progress
addressing "churn," which is defined as a percentage of customers that leave.
Generally speaking, when churn levels increase, profitability decreases. We
trimmed our position in Sprint during the reporting period, but remain
optimistic regarding the company's long-term potential.
As of the end of the reporting period, the Fund has underweight positions
relative to the S&P 500 Index in the health care and energy areas. Conversely,
the Fund's most significant relative overweight positions are within the
financials and utilities areas.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until October 31, 2006. In the case of Class A, Class B and Class C
shares, performance is measured over a ten-fiscal-year period. In the case of
Class N shares, performance is measured from inception of the Class on March 1,
2001. In the case of Class Y, performance is mea-sured from inception of the
class on December 16, 1996. The Fund's performance reflects the deduction of the
maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B, Class C and Class N shares, and reinvestments
of all dividends and capital gains distributions. Past performance cannot
guarantee future results.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
Index performance
11 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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reflects the reinvestment of income but does not consider the effect of
transaction costs, and none of the data in the graphs shows the effect of taxes.
The Fund's performance reflects the effects of the Fund's business and operating
expenses. While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not limited
to the investments in the index.
12 | OPPENHEIMER VALUE FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class A)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund
(Class A) S&P 500 Index
---------------------- -------------
10/31/1996 9,425 10,000
01/31/1997 10,427 11,200
04/30/1997 10,432 11,471
07/31/1997 12,310 13,725
10/31/1997 12,027 13,210
01/31/1998 12,200 14,213
04/30/1998 13,743 16,182
07/31/1998 12,902 16,375
10/31/1998 12,297 16,118
01/31/1999 13,669 18,834
04/30/1999 13,779 19,714
07/31/1999 13,545 19,683
10/31/1999 12,739 20,254
01/31/2000 11,985 20,782
04/30/2000 12,902 21,709
07/31/2000 12,618 21,447
10/31/2000 12,407 21,485
01/31/2001 13,485 20,595
04/30/2001 13,205 18,894
07/31/2001 13,374 18,376
10/31/2001 11,713 16,138
01/31/2002 12,847 17,272
04/30/2002 12,862 16,511
07/31/2002 10,846 14,036
10/31/2002 10,875 13,701
01/31/2003 11,113 13,298
04/30/2003 11,460 14,314
07/31/2003 12,816 15,529
10/31/2003 13,613 16,549
01/31/2004 15,368 17,892
04/30/2004 14,821 17,587
07/31/2004 14,895 17,573
10/31/2004 15,634 18,107
01/31/2005 17,065 19,005
04/30/2005 16,870 18,701
07/31/2005 18,046 20,041
10/31/2005 17,821 19,685
01/31/2006 18,940 20,977
04/30/2006 19,460 21,581
07/31/2006 19,011 21,118
10/31/2006 20,531 22,899
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/06
1-Year 8.58% 5-Year 10.56% 10-Year 7.46%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE 10-YEAR RETURN FOR CLASS B USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER
INFORMATION.
13 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class B)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund
(Class B) S&P 500 Index
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10/31/1996 10,000 10,000
01/31/1997 11,038 11,200
04/30/1997 11,016 11,471
07/31/1997 12,982 13,725
10/31/1997 12,661 13,210
01/31/1998 12,814 14,213
04/30/1998 14,407 16,182
07/31/1998 13,507 16,375
10/31/1998 12,847 16,118
01/31/1999 14,251 18,834
04/30/1999 14,341 19,714
07/31/1999 14,065 19,683
10/31/1999 13,205 20,254
01/31/2000 12,404 20,782
04/30/2000 13,328 21,709
07/31/2000 13,005 21,447
10/31/2000 12,772 21,485
01/31/2001 13,852 20,595
04/30/2001 13,544 18,894
07/31/2001 13,687 18,376
10/31/2001 11,963 16,138
01/31/2002 13,099 17,272
04/30/2002 13,092 16,511
07/31/2002 11,014 14,036
10/31/2002 11,025 13,701
01/31/2003 11,266 13,298
04/30/2003 11,618 14,314
07/31/2003 12,993 15,529
10/31/2003 13,801 16,549
01/31/2004 15,580 17,892
04/30/2004 15,026 17,587
07/31/2004 15,101 17,573
10/31/2004 15,850 18,107
01/31/2005 17,301 19,005
04/30/2005 17,103 18,701
07/31/2005 18,295 20,041
10/31/2005 18,068 19,685
01/31/2006 19,202 20,977
04/30/2006 19,729 21,581
07/31/2006 19,274 21,118
10/31/2006 20,814 22,899
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/06
1-Year 9.19% 5-Year 10.66% 10-Year 7.61%
14 | OPPENHEIMER VALUE FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class C)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund
(Class C) S&P 500 Index
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10/31/1996 10,000 10,000
01/31/1997 11,039 11,200
04/30/1997 11,017 11,471
07/31/1997 12,982 13,725
10/31/1997 12,664 13,210
01/31/1998 12,822 14,213
04/30/1998 14,415 16,182
07/31/1998 13,511 16,375
10/31/1998 12,850 16,118
01/31/1999 14,250 18,834
04/30/1999 14,348 19,714
07/31/1999 14,069 19,683
10/31/1999 13,212 20,254
01/31/2000 12,407 20,782
04/30/2000 13,336 21,709
07/31/2000 13,016 21,447
10/31/2000 12,780 21,485
01/31/2001 13,859 20,595
04/30/2001 13,546 18,894
07/31/2001 13,691 18,376
10/31/2001 11,965 16,138
01/31/2002 13,103 17,272
04/30/2002 13,095 16,511
07/31/2002 11,018 14,036
10/31/2002 11,026 13,701
01/31/2003 11,240 13,298
04/30/2003 11,576 14,314
07/31/2003 12,912 15,529
10/31/2003 13,691 16,549
01/31/2004 15,417 17,892
04/30/2004 14,844 17,587
07/31/2004 14,882 17,573
10/31/2004 15,585 18,107
01/31/2005 16,985 19,005
04/30/2005 16,762 18,701
07/31/2005 17,894 20,041
10/31/2005 17,632 19,685
01/31/2006 18,704 20,977
04/30/2006 19,179 21,581
07/31/2006 18,704 21,118
10/31/2006 20,155 22,899
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/06
1-Year 13.31% 5-Year 10.99% 10-Year 7.26%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE 10-YEAR RETURN FOR CLASS B USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class N)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund
(Class N) S&P 500 Index
---------------------- -------------
03/01/2001 $10,000 $10,000
04/30/2001 $ 9,928 $10,094
07/31/2001 $10,050 $ 9,817
10/31/2001 $ 8,794 $ 8,621
01/31/2002 $ 9,635 $ 9,227
04/30/2002 $ 9,640 $ 8,821
07/31/2002 $ 8,126 $ 7,499
10/31/2002 $ 8,143 $ 7,320
01/31/2003 $ 8,307 $ 7,104
04/30/2003 $ 8,563 $ 7,647
07/31/2003 $ 9,564 $ 8,296
10/31/2003 $10,154 $ 8,841
01/31/2004 $11,453 $ 9,559
04/30/2004 $11,034 $ 9,396
07/31/2004 $11,079 $ 9,388
10/31/2004 $11,615 $ 9,674
01/31/2005 $12,667 $10,154
04/30/2005 $12,514 $ 9,991
07/31/2005 $13,379 $10,707
10/31/2005 $13,203 $10,517
01/31/2006 $14,022 $11,207
04/30/2006 $14,389 $11,530
07/31/2006 $14,046 $11,282
10/31/2006 $15,148 $12,234
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/06
1-Year 13.73% 5-Year 11.49% Since Inception (3/1/01) 7.60%
16 | OPPENHEIMER VALUE FUND
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Value Fund (Class Y)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund
(Class Y) S&P 500 Index
---------------------- -------------
12/16/1996 $10,000 $10,000
01/31/1997 $10,699 $10,624
04/30/1997 $10,693 $10,881
07/31/1997 $12,637 $13,019
10/31/1997 $12,362 $12,531
01/31/1998 $12,552 $13,482
04/30/1998 $14,145 $15,349
07/31/1998 $13,292 $15,532
10/31/1998 $12,687 $15,289
01/31/1999 $14,111 $17,866
04/30/1999 $14,238 $18,700
07/31/1999 $13,984 $18,670
10/31/1999 $13,170 $19,212
01/31/2000 $12,392 $19,713
04/30/2000 $13,355 $20,593
07/31/2000 $13,062 $20,344
10/31/2000 $12,851 $20,380
01/31/2001 $13,980 $19,536
04/30/2001 $13,709 $17,923
07/31/2001 $13,905 $17,431
10/31/2001 $12,196 $15,308
01/31/2002 $13,387 $16,383
04/30/2002 $13,409 $15,661
07/31/2002 $11,321 $13,314
10/31/2002 $11,321 $12,997
01/31/2003 $11,557 $12,614
04/30/2003 $11,981 $13,578
07/31/2003 $13,391 $14,730
10/31/2003 $14,240 $15,698
01/31/2004 $16,090 $16,972
04/30/2004 $15,541 $16,683
07/31/2004 $15,633 $16,669
10/31/2004 $16,418 $17,176
01/31/2005 $17,942 $18,028
04/30/2005 $17,756 $17,739
07/31/2005 $19,003 $19,010
10/31/2005 $18,779 $18,673
01/31/2006 $19,976 $19,898
04/30/2006 $20,539 $20,472
07/31/2006 $20,082 $20,032
10/31/2006 $21,705 $21,721
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/06
1-Year 15.58% 5-Year 12.22% Since Inception (12/16/96) 8.16%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE 10-YEAR RETURN FOR CLASS B USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 18 FOR FURTHER
INFORMATION.
17 | OPPENHEIMER VALUE FUND
NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 9/16/85. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the 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.
18 | OPPENHEIMER VALUE FUND
CLASS Y shares of the Fund were first publicly offered on 12/16/96. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
19 | OPPENHEIMER VALUE FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended October 31, 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
20 | OPPENHEIMER VALUE FUND
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(5/1/06) (10/31/06) OCTOBER 31, 2006
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,055.00 $4.78
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.57 4.70
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,050.60 9.29
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,016.18 9.14
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,050.90 8.82
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,016.64 8.68
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,052.70 7.06
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.35 6.94
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,056.80 2.86
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,022.43 2.81
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding affiliated fund indirect expenses, based on the 6-month period ended
October 31, 2006 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.92%
- -----------------------------
Class B 1.79
- -----------------------------
Class C 1.70
- -----------------------------
Class N 1.36
- -----------------------------
Class Y 0.55
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager and 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.
- --------------------------------------------------------------------------------
21 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2006
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--92.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.7%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.5%
Wyndham
Worldwide Corp. 1 364,948 $ 10,765,966
- --------------------------------------------------------------------------------
MEDIA--7.7%
Liberty Global, Inc.,
Series A 1 1,275,077 33,458,020
- --------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1 4,135,308 105,160,882
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 1,608,200 33,530,970
--------------
172,149,872
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.5%
Office Depot, Inc. 1 243,000 10,203,570
- --------------------------------------------------------------------------------
CONSUMER STAPLES--9.2%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.4%
CVS Corp. 712,950 22,372,371
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 181,783 8,958,266
--------------
31,330,637
- --------------------------------------------------------------------------------
FOOD PRODUCTS--3.0%
ConAgra Foods, Inc. 2,548,000 66,630,200
- --------------------------------------------------------------------------------
TOBACCO--4.8%
Altria Group, Inc. 1,329,300 108,111,969
- --------------------------------------------------------------------------------
ENERGY--8.0%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.0%
Schlumberger Ltd. 362,000 22,834,960
- --------------------------------------------------------------------------------
OIL & GAS--7.0%
Exxon Mobil Corp. 2,172,400 155,152,808
- --------------------------------------------------------------------------------
FINANCIALS--26.5%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--6.9%
E*TRADE
Financial Corp. 1 1,954,171 45,493,101
- --------------------------------------------------------------------------------
UBS AG 1,829,450 109,474,288
--------------
154,967,389
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--2.9%
Wachovia Corp. 1,153,500 64,019,250
- --------------------------------------------------------------------------------
CONSUMER FINANCE--4.3%
Capital One
Financial Corp. 1,195,100 94,807,283
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.2%
Bank of America
Corp. 1,756,578 $ 94,626,857
- --------------------------------------------------------------------------------
INSURANCE--5.1%
Everest Re Group Ltd. 944,900 93,715,182
- --------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd. 685,570 20,471,120
--------------
114,186,302
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--3.1%
Countrywide
Financial Corp. 601,340 22,923,081
- --------------------------------------------------------------------------------
Freddie Mac 668,070 46,090,149
--------------
69,013,230
- --------------------------------------------------------------------------------
HEALTH CARE--6.3%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.0%
WellPoint, Inc. 1 583,280 44,515,930
- --------------------------------------------------------------------------------
PHARMACEUTICALS--4.3%
Abbott Laboratories 673,200 31,983,732
- --------------------------------------------------------------------------------
Pfizer, Inc. 1,319,300 35,159,345
- --------------------------------------------------------------------------------
Sanofi-Aventis
SA, ADR 705,955 30,137,219
--------------
97,280,296
- --------------------------------------------------------------------------------
INDUSTRIALS--11.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--5.8%
Rockwell Collins, Inc. 782,100 45,424,368
- --------------------------------------------------------------------------------
United
Technologies Corp. 1,261,900 82,932,068
--------------
128,356,436
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--5.7%
Siemens AG,
Sponsored ADR 1,427,700 128,221,737
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.1%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.6%
Hutchinson
Technology, Inc. 1 564,900 13,077,435
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.8%
ASML Holding NV 1 984,200 22,479,128
22 | OPPENHEIMER VALUE FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Continued
Texas
Instruments, Inc. 3,586,958 $ 108,254,392
--------------
130,733,520
- --------------------------------------------------------------------------------
SOFTWARE--5.7%
Microsoft Corp. 1,170,860 33,615,391
- --------------------------------------------------------------------------------
Novell, Inc. 1 4,030,034 24,180,204
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 1,675,457 37,714,537
- --------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 2,258,125 31,591,169
--------------
127,101,301
- --------------------------------------------------------------------------------
MATERIALS--2.1%
- --------------------------------------------------------------------------------
CHEMICALS--1.0%
Praxair, Inc. 347,680 20,947,720
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--1.1%
Martin Marietta
Materials, Inc. 94,900 8,351,200
- --------------------------------------------------------------------------------
Vulcan Materials Co. 206,800 16,850,064
--------------
25,201,264
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.6%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.6%
IDT Corp., Cl. B 1 1,069,303 13,890,246
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Sprint Nextel Corp. 1,185,490 22,156,808
- --------------------------------------------------------------------------------
UTILITIES--6.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.0%
Entergy Corp. 132,400 11,363,892
- --------------------------------------------------------------------------------
Reliant Energy, Inc. 1 795,130 10,082,248
--------------
21,446,140
- --------------------------------------------------------------------------------
ENERGY TRADERS--2.0%
AES Corp. (The) 1 2,045,880 44,988,901
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--3.1%
CMS Energy Corp. 1 1,527,800 22,748,942
- --------------------------------------------------------------------------------
PG&E Corp. 539,230 23,262,382
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER Continued
Sempra Energy 436,930 $ 23,174,769
--------------
69,186,093
--------------
Total Common Stocks
(Cost $1,816,103,327) 2,055,904,120
- --------------------------------------------------------------------------------
MONEY MARKET FUND--5.1%
- --------------------------------------------------------------------------------
Oppenheimer
Institutional Money
Market Fund, Cl. E, 5.23% 2,3
(Cost $112,899,057) 112,899,057 112,899,057
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $1,929,002,384) 97.2% 2,168,803,177
- --------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 2.8 62,150,089
-------------------------------
NET ASSETS 100.0% $2,230,953,266
===============================
23 | OPPENHEIMER VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2006
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Rate shown is the 7-day yield as of October 31, 2006.
3. Represents ownership of an affiliated fund, at or during the period ended
October 31, 2006. Transactions during the period in which the issuer was an
affiliate are as follows:
SHARES GROSS GROSS SHARES
OCTOBER 31, 2005 ADDITIONS REDUCTIONS OCTOBER 31, 2006
- ----------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.23%* -- 302,152,902 189,253,845 112,899,057
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ----------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.23%* $112,899,057 $582,952
* The Money Market fund and the Fund are affiliated by having the same
investment advisor.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value--
see accompanying statement of investments:
Unaffiliated companies (cost $1,816,103,327) $ 2,055,904,120
Affiliated companies (cost $112,899,057) 112,899,057
---------------
2,168,803,177
- --------------------------------------------------------------------------------
Cash 118,273
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 87,165,542
Shares of capital stock sold 5,205,994
Dividends 1,933,759
Other 27,260
---------------
Total assets 2,263,254,005
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 28,194,823
Shares of capital stock redeemed 3,127,317
Distribution and service plan fees 369,195
Transfer and shareholder servicing agent fees 316,329
Directors' compensation 143,412
Shareholder communications 94,674
Other 54,989
---------------
Total liabilities 32,300,739
- --------------------------------------------------------------------------------
NET ASSETS $ 2,230,953,266
===============
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of capital stock $ 85,893
- --------------------------------------------------------------------------------
Additional paid-in capital 1,906,032,197
- --------------------------------------------------------------------------------
Accumulated net investment income 12,781,028
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments 72,253,355
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 239,800,793
---------------
NET ASSETS $ 2,230,953,266
===============
25 | OPPENHEIMER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $1,282,691,644 and 49,189,415 shares of capital
stock outstanding) $ 26.08
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $ 27.67
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $147,033,752 and 5,805,086 shares of
capital stock outstanding) $ 25.33
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $247,730,492 and 9,909,637 shares of
capital stock outstanding) $ 25.00
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on
net assets of $122,587,684 and 4,795,698 shares of capital
stock outstanding) $ 25.56
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $430,909,694 and 16,193,220 shares of
capital stock outstanding) $ 26.61
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding
taxes of $561,845) $ 30,865,997
Affiliated companies 582,952
- --------------------------------------------------------------------------------
Interest 3,500,499
- --------------------------------------------------------------------------------
Other income 25,613
---------------
Total investment income 34,975,061
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 8,630,257
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,590,785
Class B 1,360,272
Class C 2,118,114
Class N 519,811
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,797,837
Class B 377,274
Class C 429,041
Class N 349,357
Class Y 220,389
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 200,585
Class B 56,288
Class C 45,149
Class N 7,649
- --------------------------------------------------------------------------------
Directors' compensation 94,766
- --------------------------------------------------------------------------------
Accounting service fees 15,000
- --------------------------------------------------------------------------------
Custodian fees and expenses 11,999
- --------------------------------------------------------------------------------
Other 78,647
---------------
Total expenses 18,903,220
Less reduction to custodian expenses (1,564)
Less waivers and reimbursements of expenses (39,639)
---------------
Net expenses 18,862,017
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 16,113,044
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on investments 84,152,807
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 154,457,168
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 254,723,019
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2006 2005
- --------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income $ 16,113,044 $ 6,154,255
- --------------------------------------------------------------------------------------------------
Net realized gain 84,152,807 70,292,725
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 154,457,168 20,234,425
---------------------------------
Net increase in net assets resulting from operations 254,723,019 96,681,405
- --------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (6,280,289) (2,034,104)
Class B -- --
Class C (257,682) --
Class N (403,059) (98,987)
Class Y (1,646,648) (289,396)
- --------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (37,624,988) (3,563,988)
Class B (5,717,096) (799,560)
Class C (7,961,584) (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 339,532,658 401,024,642
Class B 7,356,215 30,568,616
Class C 56,840,156 80,170,490
Class N 35,703,304 38,290,520
Class Y 256,201,657 103,772,486
- --------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------
Total increase 879,645,731 742,324,530
- --------------------------------------------------------------------------------------------------
Beginning of period 1,351,307,535 608,983,005
---------------------------------
End of period (including accumulated net investment income
of $12,781,028 and $5,255,662, respectively) $ 2,230,953,266 $1,351,307,535
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.79 $ 21.15 $ 18.46 $ 14.78 $ 15.93
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 1 .19 1 .13 1 .04 .07
Net realized and unrealized gain (loss) 3.24 2.75 2.61 3.67 (1.21)
-------------------------------------------------------------------------------
Total from investment operations 3.49 2.94 2.74 3.71 (1.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.17) (.11) (.05) (.03) (.01)
Distributions from net realized gain (1.03) (.19) -- -- --
-------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (1.20) (.30) (.05) (.03) (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.08 $ 23.79 $ 21.15 $ 18.46 $ 14.78
===============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.20% 13.99% 14.85% 25.18% (7.15)%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,282,691 $ 835,793 $ 378,785 $ 215,019 $ 141,563
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,052,054 $ 600,426 $ 303,560 $ 166,143 $ 166,319
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.03% 0.83% 0.66% 0.37% 0.38%
Total expenses 0.93% 4,5 0.99% 4 1.07% 4,6 1.22% 4,6 1.22% 4,6
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 72% 85% 117% 150%
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. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2006 0.93%
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.17 $ 20.68 $ 18.18 $ 14.64 $ 15.89
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .04 1 (.01) 1 (.05) 1 (.06) (.10)
Net realized and unrealized gain (loss) 3.15 2.69 2.55 3.60 (1.15)
----------------------------------------------------------------------------
Total from investment operations 3.19 2.68 2.50 3.54 (1.25)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- --
Distributions from net realized gain (1.03) (.19) -- -- --
----------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (1.03) (.19) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.33 $ 23.17 $ 20.68 $ 18.18 $ 14.64
============================================================================
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.19% 13.02% 13.75% 24.18% (7.87)%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 147,034 $ 127,258 $ 85,683 $ 60,858 $ 47,323
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 136,256 $ 109,545 $ 77,341 $ 51,476 $ 56,200
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.19% (0.03)% (0.24)% (0.44)% (0.40)%
Total expenses 1.81% 4 1.87% 1.98% 2.14% 2.01%
Expenses after payments and waivers
and reduction to custodian expenses 1.81% 1.87% 1.98% 2.05% 2.01%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 72% 85% 117% 150%
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. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2006 1.81%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER VALUE FUND
CLASS C YEAR ENDED OCTOBER 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.89 $ 20.41 $ 17.93 $ 14.44 $ 15.67
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 1 .01 1 (.03) 1 .03 (.01)
Net realized and unrealized gain (loss) 3.11 2.66 2.51 3.46 (1.22)
----------------------------------------------------------------------------
Total from investment operations 3.17 2.67 2.48 3.49 (1.23)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) -- -- -- --
Distributions from net realized gain (1.03) (.19) -- -- --
----------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (1.06) (.19) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.00 $ 22.89 $ 20.41 $ 17.93 $ 14.44
============================================================================
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.31% 13.14% 13.83% 24.17% (7.85)%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 247,730 $ 170,710 $ 79,501 $ 32,625 $ 13,466
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 212,087 $ 124,605 $ 61,387 $ 21,366 $ 12,977
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.25% 0.04% (0.17)% (0.49)% (0.41)%
Total expenses 1.72% 4 1.77% 1.89% 2.07% 2.00%
Expenses after payments and waivers
and reduction to custodian expenses 1.71% 1.77% 1.89% 2.07% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 72% 85% 117% 150%
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. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2006 1.72%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER VALUE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 23.38 $ 20.80 $ 18.25 $ 14.68 $ 15.90
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .16 1 .11 1 .06 1 .03 .05
Net realized and unrealized gain (loss) 3.17 2.72 2.56 3.59 (1.22)
----------------------------------------------------------------------------
Total from investment operations 3.33 2.83 2.62 3.62 (1.17)
- ------------------------------------------------------------------------------------------------------------------------------
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 $ 25.56 $ 23.38 $ 20.80 $ 18.25 $ 14.68
============================================================================
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 14.73% 13.68% 14.39% 24.70% (7.41)%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 122,588 $ 76,058 $ 33,100 $ 7,417 $ 1,201
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 104,142 $ 53,166 $ 23,344 $ 3,275 $ 508
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.66% 0.50% 0.28% (0.03)% 0.00%
Total expenses 1.33% 4 1.30% 1.45% 1.61% 1.49%
Expenses after payments and waivers
and reduction to custodian expenses 1.31% 1.30% 1.45% 1.55% 1.49%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 72% 85% 117% 150%
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. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2006 1.33%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER VALUE FUND
CLASS Y YEAR ENDED OCTOBER 31, 2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 24.23 $ 21.54 $ 18.79 $ 14.96 $ 16.20
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 1 .33 .26 .24 (1.86) .06
Net realized and unrealized gain (loss) 3.31 2.81 2.62 5.71 1 (1.21) 1
-----------------------------------------------------------------------------
Total from investment operations 3.64 3.07 2.86 3.85 (1.15)
- -------------------------------------------------------------------------------------------------------------------------------
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 $ 26.61 $ 24.23 $ 21.54 $ 18.79 $ 14.96
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.58% 14.38% 15.30% 25.78% (7.18)%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 430,910 $ 141,489 $ 31,914 $ 2,617 $ 1,074
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 287,929 $ 83,000 $ 8,398 $ 1,558 $ 955
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.32% 1.10% 1.17% 0.76% 0.33%
Total expenses 0.57% 4 0.70% 0.61% 1.19% 3.77%
Expenses after payments and waivers
and reduction to custodian expenses 0.57% 0.70% 0.61% 0.80% 1.23%
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 101% 72% 85% 117% 150%
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. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2006 0.57%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc.
(the Company), is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The Fund's investment
objective is to seek long-term growth of capital by investing primarily in
common stocks with low price-earnings ratios and better-than-anticipated
earnings. Realization of current income is a secondary consideration. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Directors. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) 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
34 | OPPENHEIMER VALUE FUND
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. Investments in
open-end registered investment companies are valued at that fund's net asset
value. 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.
- --------------------------------------------------------------------------------
AFFILIATED FUNDS. The Fund is permitted to invest daily available cash balances
in affiliated money market funds. Each day, the Fund invests the available cash
in Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current
income and stability of principal. The Manager is also the investment advisor of
IMMF. The Fund's investment in IMMF is included in the Statement of Investments.
Included in the net earnings received from IMMF is a 0.10% management fee paid
to the Manager by IMMF. The Manager will waive fees and/or reimburse Fund
expenses in an amount equal to the indirect management fees incurred through the
Fund's investment in IMMF.
35 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
---------------------------------------------------------------------
$ 37,181,308 $ 50,764,189 $ 237,010 $ 237,267,612
1. The Fund had $237,010 of straddle losses which were deferred.
2. During the fiscal year ended October 31, 2006, the Fund utilized $444,391 of
capital loss carryforward to offset capital gains realized in that fiscal year.
3. During the fiscal year ended October 31, 2005, the Fund utilized $1,620,254
of capital loss carryforward to offset capital gains realized in that fiscal
year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2006. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO
ACCUMULATED NET
INCREASE TO REALIZED GAIN ON
PAID-IN CAPITAL INVESTMENTS 4
-----------------------------------
$ 11,115,865 $ 11,115,865
4. $10,671,474, including $7,220,783 of long-term capital gain, was distributed
in connection with Fund share redemptions.
36 | OPPENHEIMER VALUE FUND
The tax character of distributions paid during the years ended October 31, 2006
and October 31, 2005 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2006 OCTOBER 31, 2005
---------------------------------------------------------------
Distributions paid from:
Ordinary income $ 30,485,063 $ 2,422,487
Long-term capital gain 40,226,215 5,761,142
--------------------------------
Total $ 70,711,278 $ 8,183,629
================================
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2006 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $ 1,931,535,565
===============
Gross unrealized appreciation $ 265,918,677
Gross unrealized depreciation (28,651,065)
---------------
Net unrealized appreciation $ 237,267,612
===============
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the year ended
October 31, 2006, the Fund's projected benefit obligations were increased by
$59,502 and payments of $7,245 were made to retired directors, resulting in an
accumulated liability of $115,345 as of October 31, 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 and capital gain distributions, if
any, are declared and paid annually.
37 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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. Such interest expense and other custodian fees may be paid
with these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
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.
38 | OPPENHEIMER VALUE FUND
- --------------------------------------------------------------------------------
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:
YEAR ENDED OCTOBER 31, 2006 YEAR ENDED OCTOBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
CLASS A
Sold 23,919,621 $ 579,171,413 21,899,954 $ 510,001,541
Dividends and/or
distributions reinvested 1,598,871 37,701,387 224,061 5,016,717
Redeemed (11,459,357) (277,340,142) (4,906,749) (113,993,616)
---------------------------------------------------------------
Net increase 14,059,135 $ 339,532,658 17,217,266 $ 401,024,642
===============================================================
- ------------------------------------------------------------------------------------------
CLASS B
Sold 2,381,194 $ 56,210,847 2,699,016 $ 61,263,523
Dividends and/or
distributions reinvested 229,580 5,300,995 33,852 744,025
Redeemed (2,297,903) (54,155,627) (1,384,112) (31,438,932)
---------------------------------------------------------------
Net increase 312,871 $ 7,356,215 1,348,756 $ 30,568,616
===============================================================
- ------------------------------------------------------------------------------------------
CLASS C
Sold 4,078,571 $ 94,942,821 4,592,560 $ 103,383,454
Dividends and/or
distributions reinvested 287,974 6,557,164 31,946 693,237
Redeemed (1,913,350) (44,659,829) (1,062,520) (23,906,201)
---------------------------------------------------------------
Net increase 2,453,195 $ 56,840,156 3,561,986 $ 80,170,490
===============================================================
- ------------------------------------------------------------------------------------------
CLASS N
Sold 3,285,579 $ 77,644,333 2,243,821 $ 51,659,803
Dividends and/or
distributions reinvested 158,150 3,669,069 18,560 409,435
Redeemed (1,901,403) (45,610,098) (600,186) (13,778,718)
---------------------------------------------------------------
Net increase 1,542,326 $ 35,703,304 1,662,195 $ 38,290,520
===============================================================
- ------------------------------------------------------------------------------------------
CLASS Y
Sold 13,353,906 $ 330,058,444 5,325,506 $ 127,221,723
Dividends and/or
distributions reinvested 366,523 8,792,882 25,451 578,749
Redeemed (3,366,592) (82,649,669) (992,963) (24,027,986)
---------------------------------------------------------------
Net increase 10,353,837 $ 256,201,657 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 year ended October 31, 2006, were as
follows:
PURCHASES SALES
---------------------------------------------------------------
Investment securities $ 2,349,110,211 $ 1,724,648,799
39 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
-------------------------------------
Up to $300 million 0.625%
Next $100 million 0.500
Over $400 million 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 year ended October 31, 2006, the Fund paid
$3,047,950 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 up to 0.25% per year under each plan. If either the Class B,
Class C or Class N plan is terminated by the Fund or by the shareholders of a
class, the Board of Directors and its independent directors must determine
whether the Distributor shall be entitled to payment from the Fund of all or a
portion of the service
40 | OPPENHEIMER VALUE FUND
fee and/or asset-based sales charge in respect to shares sold prior to the
effective date of such termination. The Distributor determines its uncompensated
expenses under the plan at calendar quarter ends. The Distributor's aggregate
uncompensated expenses under the plan at September 30, 2006 for Class B, Class C
and Class N shares were $3,027,643, $2,183,475 and $1,031,928, 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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -------------------------------------------------------------------------------------------
October 31, 2006 $ 958,911 $ 8,741 $ 242,480 $ 47,747 $ 39,201
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended October 31, 2006, OFS
waived $28,232 for Class N shares. This undertaking may be amended or withdrawn
at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended October 31, 2006, the Manager waived $11,407 for
IMMF management fees.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpre-tation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
October 31, 2006, the Manager is evaluating the implications of FIN 48. Its
impact in the Fund's financial statements has not yet been determined.
In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard
41 | OPPENHEIMER VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENTS Continued
establishes a single authoritative definition of fair value, sets out a
framework for mea-suring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of October 31, 2006, the Manager
does not believe the adoption of SFAS No. 157 will materially impact the
financial statement amounts; however, additional disclosures may be required
about the inputs used to develop the measurements and the effect of certain of
the measurements on changes in net assets for the period.
- --------------------------------------------------------------------------------
6. 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 the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also 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.
42 | OPPENHEIMER VALUE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF OPPENHEIMER SERIES FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Value Fund (a portfolio of the Oppenheimer Series Fund, Inc.),
including the statement of investments, as of October 31, 2006, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2006, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Value Fund as of October 31, 2006, the results of its operations for
the year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended, in conformity with U.S. generally accepted
accounting principles.
KPMG LLP
Denver, Colorado
December 12, 2006
43 | OPPENHEIMER VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2007, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2006. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Capital gain distributions of $0.6654 per share were paid to Class A,
Class B, Class C, Class N and Class Y shareholders, respectively, on December 5,
2005. Whether received in stock or in cash, the capital gain distribution should
be treated by shareholders as a gain from the sale of the capital assets held
for more than one year (long-term capital gains).
Dividends, if any, paid by the Fund during the fiscal year ended October
31, 2006 which are not designated as capital gain distributions should be
multiplied by 57.89% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended October 31, 2006 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $30,937,790 of the Fund's fiscal year taxable income may be
eligible for the lower individual income tax rates. In early 2007, shareholders
of record will receive information regarding the percentage of distributions
that are eligible for lower individual income tax rates.
Recent tax legislation allows a regulated investment company to designate
distributions not designated as capital gain distributions, as either interest
related dividends or short-term capital gain dividends, both of which are exempt
from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal
year ended October 31, 2006, $1,620,253 or 18.87% of the ordinary distributions
paid by the Fund qualifies as an interest related dividend and $27,810,626 or
100% of the short-term capital gain distribution paid by the Fund qualifies as a
short-term capital gain dividend.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
44 | 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.
45 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER
FUND, LENGTH OF SERVICE, AGE TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE
FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S.
DIRECTORS TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH DIRECTOR
SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since
Chairman of the Board of January 2005); Attorney at Hogan & Hartson (law firm) (since
Directors (since 2003) and June 1993); Director of Covanta Holding Corp. (waste-to-energy
Director (since 1996) company) (since 2002); Director of Weyerhaeuser Corp.
Age: 76 (1999-April 2004); Director of Caterpillar, Inc.
(1993-December 2002); Director of ConAgra Foods (1993-2001);
Director of Texas Instruments (1993- 2001); Director of FMC
Corporation (1993-2001). Oversees 45 portfolios in the
OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy
Director (since 2005) research foundation) (since 2005); Director of ICI Education
Age: 65 Foundation (education foundation) (October 1991-August 2006);
President of the Investment Company Institute (trade
association) (October 1991-June 2004); Director of ICI Mutual
Insurance Company (insurance company) (October 1991-June
2004). Oversees 45 portfolios in the OppenheimerFunds
complex.
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 55
Director (since 1996) portfolios in the OppenheimerFunds complex.
Age: 73
PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs
Director (since 1999) (since 2002) and Member (since 1979) of the National Academy
Age: 68 of Sciences; Council on Foreign Relations (since 2002);
Director of GSI Lumonics Inc. (precision medical equipment
supplier) (since 2001); Senior Advisor of The Andrew W. Mellon
Foundation (since 2001); Chair of Science Initiative Group
(since 1999); Member of the American Philosophical Society
(since 1996); Trustee of Woodward Academy (since 1983);
Foreign Associate of Third World Academy of Sciences; Director
of the Institute for Advanced Study (1991-2004); Director of
Bankers Trust New York Corporation (1994-1999); Provost at
Duke University (1983-1991). Oversees 45 portfolios in the
OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit)
Director (since 2004) (since October 1998); and Senior Vice President and General
Age: 64 Auditor of American Express Company (financial services
company) (July 1998-February 2003). Oversees 45 portfolios in
the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held
Director (since 2002) financial adviser) (since 2002); Managing Director of Carmona
Age: 54 Motley, Inc. (privately-held financial adviser) (since January
2002); Managing Director of Carmona Motley Hoffman Inc.
(privately-held financial adviser) (January 1998-December
2001); Member of the Finance and Budget Committee of the
Council on Foreign Relations, the Investment Committee of the
Episcopal Church of America, the Investment Committee and
Board of Human Rights Watch and the Investment Committee of
Historic Hudson Valley. Oversees 45 portfolios in the
OppenheimerFunds complex.
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding
Director (since 1995) company) (February 1972-October 2005); Former Director of
Age: 79 Prime Retail, Inc. (real estate investment trust), Dominion
Energy Inc. (electric power and oil & gas producer), Lumber-
man's Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company;
Former President and Chief
46 | OPPENHEIMER VALUE FUND
KENNETH A. RANDALL, Executive Officer of The Conference Board, Inc. (international
Continued economic and business research). Oversees 45 portfolios in
the OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate
Director (since 1996) governance consulting and executive recruiting) (since
Age: 75 1993); Life Trustee of International House (non-profit
educational organization); Founder, Chairman and Chief
Executive Officer of Russell Reynolds Associates, Inc.
(1969-1993); Banker at J.P. Morgan & Co. (1958-1966); 1st Lt.
Strategic Air Command, U.S. Air Force (1954-1958). Oversees 45
portfolios in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec
Director (since 2005) (since 1992) and Cathco (since 1996); Director of Lakes
Age: 65 Environmental Association (since 1996); Member of the
Investment Committee of the Associated Jewish Charities of
Baltimore (since 1994); Director of Fortis/Hartford mutual
funds (1994-December 2001). Oversees 45 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas
Director (since 2005) exploration and production company) (since 1994); Vice
Age: 58 President, Secretary and Treasurer of Wold Trona Company, Inc.
(soda ash processing and production) (since 1996); Vice
President of Wold Talc Company, Inc. (talc mining) (since
1999); Managing Member of Hole-in-the-Wall Ranch (cattle
ranching) (since 1979); Director and Chairman of the Denver
Branch of the Federal Reserve Bank of Kansas City (1993-1999);
and Director of PacifiCorp. (electric utility) (1995-1999).
Oversees 45 portfolios in the OppenheimerFunds complex.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since
Director (since 2005) September 1995); Director of Special Value Opportunities Fund,
Age: 63 LLC (registered investment company) (since September 2004);
Member of Zurich Financial Investment Advisory Board
(insurance) (since October 2004); Board of Governing Trustees
of The Jackson Laboratory (non-profit) (since August 1990);
Trustee of the Institute for Advanced Study (non-profit
educational institute) (since May 1992); Special Limited
Partner of Odyssey Investment Partners, LLC (private equity
investment) (January 1999-September 2004); Trustee of Research
Foundation of AIMR (2000- 2002) (investment research,
non-profit); Governor, Jerome Levy Economics Institute of Bard
College (August 1990-September 2001) (economics research);
Director of Ray & Berendtson, Inc. (May 2000-April 2002)
(executive search firm). Oversees 55 portfolios in the
OppenheimerFunds complex.
- --------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225
AND OFFICER LIBERTY STREET, 11TH FLOOR, NEW YORK, NEW YORK 10281-1008. MR.
MURPHY SERVES AS A DIRECTOR FOR AN INDEFINITE TERM, OR UNTIL
HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER
FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH
OR REMOVAL. MR. MURPHY IS AN INTERESTED DIRECTOR DUE TO HIS
POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June
Director and President and 2001) and President (since September 2000) of the Manager;
Principal Executive Officer President and a director or trustee of other Oppenheimer funds;
(since 2001) President and Director of Oppenheimer Acquisition Corp. ("OAC")
Age: 57 (the Manager's parent holding company) and of Oppenheimer
Partnership Holdings, Inc. (holding company subsidiary of the
Manager) (since July 2001); Director of OppenheimerFunds
Distributor, Inc. (subsidiary of the Manager) (since November
2001); Chairman and Director of Shareholder Services, Inc. and
of Shareholder Financial Services, Inc. (transfer agent
subsidiaries of the Manager) (since July 2001); President and
Director of OppenheimerFunds Legacy Program (charitable trust
program established by the Manager) (since July 2001); Director
of the following investment advisory subsidiaries of the
Manager: OFI
47 | OPPENHEIMER VALUE FUND
DIRECTORS AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JOHN V. MURPHY, Institutional Asset Management, Inc., Centennial Asset
Continued Management Corporation, Trinity Investment Management
Corporation and Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Management Corporation and
OFI Private Investments, Inc. (since July 2001); President
(since November 1, 2001) and Director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; Executive Vice
President of Massachusetts Mutual Life Insurance Company (OAC's
parent company) (since February 1997); Director of DLB
Acquisition Corporation (holding company parent of Babson
Capital Management LLC) (since June 1995); Member of the
Investment Company Institute's Board of Governors (since
October 3, 2003); Chief Operating Officer of the Manager
(September 2000-June 2001); President and Trustee of MML Series
Investment Fund and MassMutual Select Funds (open-end
investment companies) (November 1999-November 2001); Director
of C.M. Life Insurance Company (September 1999-August 2000);
President, Chief Executive Officer and Director of MML Bay
State Life Insurance Company (September 1999-August 2000);
Director of Emerald Isle Bancorp and Hibernia Savings Bank
(wholly-owned subsidiary of Emerald Isle Bancorp) (June
1989-June 1998). Oversees 92 portfolios in the OppenheimerFunds
complex.
- --------------------------------------------------------------------------------------------------------
OTHER OFFICERS OF THE THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS:
FUND FOR MESSRS. LEAVY, GILLESPIE, ZACK AND MS. BLOOMBERG, TWO WORLD
FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK
10281-1008, FOR MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND
MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924.
EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CHRISTOPHER LEAVY, Senior Vice President of the Manager (since September 2000);
Vice President and Portfolio portfolio manager of Morgan Stanley Dean Witter Investment
Manager (since 2000) Management (1997-September 2000). An officer of 7 portfolios in
Age: 35 the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the
Vice President and Chief Manager (since March 2004); Vice President of OppenheimerFunds
Compliance Officer Distributor, Inc., Centennial Asset Management Corporation and
(since 2004) Shareholder Services, Inc. (since June 1983). Former Vice
Age: 56 President and Director of Internal Audit of the Manager (1997-
February 2004). An officer of 92 portfolios in the
OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March
Treasurer and Principal 1999); Treasurer of the following: HarbourView Asset Management
Financial and Accounting Corporation, Shareholder Financial Services, Inc., Shareholder
Officer (since 1999) Services, Inc., Oppenheimer Real Asset Management Corporation,
Age: 47 and Oppenheimer Partnership Holdings, Inc. (since March 1999),
OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. (since May 2000),
OppenheimerFunds plc (since May 2000), OFI Institutional Asset
Management, Inc. (since November 2000), and OppenheimerFunds
Legacy Program (charitable trust program established by the
Manager) (since June 2003); Treasurer and Chief Financial
Officer of OFI Trust Company (trust company subsidiary of the
Manager) (since May 2000); Assistant Treasurer of the
following: OAC (since March 1999), Centennial Asset Management
Corporation (March 1999-October 2003) and OppenheimerFunds
Legacy Program (April 2000-June 2003); Principal and Chief
Operating Officer of Bankers Trust Company-Mutual Fund Services
Division (March 1995-March 1999). An officer of 92 portfolios
in the OppenheimerFunds complex.
BRIAN S. PETERSEN, Assistant Vice President of the Manager (since August 2002);
Assistant Treasurer Manager/Financial Product Accounting of the Manager (November
(since 2004) 1998-July 2002). An officer of 92 portfolios in the
Age: 36 OppenheimerFunds complex.
48 | OPPENHEIMER VALUE FUND
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004);
Assistant Treasurer Director of Financial Reporting and Compliance of First Data
(since 2005) Corporation (April 2003-July 2004); Manager of Compliance of
Age: 36 Berger Financial Group LLC (May 2001-March 2003); Director of
Mutual Fund Operations at American Data Services, Inc.
(September 2000-May 2001). An officer of 92 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General
Secretary (since 2001) Counsel (since March 2002) of the Manager; General Counsel and
Age: 58 Director of the Distributor (since December 2001); General
Counsel of Centennial Asset Management Corporation (since
December 2001); Senior Vice President and General Counsel of
HarbourView Asset Management Corporation (since December 2001);
Secretary and General Counsel of OAC (since November 2001);
Assistant Secretary (since September 1997) and Director (since
November 2001) of OppenheimerFunds International Ltd. and
OppenheimerFunds plc; Vice President and Director of
Oppenheimer Partnership Holdings, Inc. (since December 2002);
Director of Oppenheimer Real Asset Management, Inc. (since
November 2001); Senior Vice President, General Counsel and
Director of Shareholder Financial Services, Inc. and
Shareholder Services, Inc. (since December 2001); Senior Vice
President, General Counsel and Director of OFI Private
Investments, Inc. and OFI Trust Company (since November 2001);
Vice President of OppenheimerFunds Legacy Program (since June
2003); Senior Vice President and General Counsel of OFI
Institutional Asset Management, Inc. (since November 2001);
Director of OppenheimerFunds (Asia) Limited (since December
2003); Senior Vice President (May 1985- December 2003), Acting
General Counsel (November 2001-February 2002) and Associate
General Counsel (May 1981-October 2001) of the Manager;
Assistant Secretary of the following: Shareholder Services,
Inc. (May 1985-November 2001), Shareholder Financial Services,
Inc. (November 1989-November 2001), and OppenheimerFunds
International Ltd. (September 1997-November 2001). An officer
of 92 portfolios in the OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and
Assistant Secretary Assistant Secretary (since October 2003) of the Manager; Vice
(since 2001) President (since 1999) and Assistant Secretary (since October
Age: 40 2003) of the Distributor; Assistant Secretary of Centennial
Asset Management Corporation (since October 2003); Vice
President and Assistant Secretary of Shareholder Services, Inc.
(since 1999); Assistant Secretary of OppenheimerFunds Legacy
Program and Shareholder Financial Services, Inc. (since
December 2001); Assistant Counsel of the Manager (August
1994-October 2003). An officer of 92 portfolios in the
OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May
Assistant Secretary 2004); First Vice President (April 2001-April 2004), Associate
(since 2004) General Counsel (December 2000-April 2004), Corporate Vice
Age: 38 President (May 1999-April 2001) and Assistant General Counsel
(May 1999-December 2000) of UBS Financial Services Inc.
(formerly, PaineWebber Incorporated). An officer of 92
portfolios in the OppenheimerFunds complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager
Assistant Secretary (since September 2004); First Vice President (2001-September
(since 2004) 2004); Director (2000- September 2004) and Vice President
Age: 42 (1998-2000) of Merrill Lynch Investment Management. An officer
of 92 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND,S DIRECTORS AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST, BY CALLING 1.800.525.7048.
49 | OPPENHEIMER VALUE FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that the registrant does
not have an audit committee financial expert serving on its Audit Committee. In
this regard, no member of the Audit Committee was identified as having all of
the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR
to qualify as an "audit committee
financial expert," whether through the type of specialized education or
experience described in that Instruction. The Board has concluded that while the
members of the Audit Committee collectively have the necessary attributes and
experience required to serve effectively as an Audit Committee, no single member
possesses all of the required technical attributes through the particular
methods of education or experience set forth in the Instructions to be
designated as an audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $15,000 in fiscal 2006 and $13,000 in fiscal 2005.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $195,954 in fiscal 2006 and $156,805 in fiscal 2005 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2006 and $6,536 in fiscal 2005 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services include: Preparation of form 5500
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser
or any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $195,954 in fiscal 2006 and $163,341 in fiscal
2005 to the registrant and the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
(h) No such services were rendered.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by
executive search firms which the Committee may engage from time to time
and may also consider shareholder recommendations. The Committee may
consider the advice and recommendation of the Funds' investment manager
and its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the
Board and, in such cases where required, to shareholders. Recommendations
for trustee nominees should, at a minimum, be accompanied by the
following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of October 31, 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) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Series Fund, Inc.
By: /s/ John V. Murphy
_______________________________
John V. Murphy
Principal Executive Officer
Date: December 12, 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: December 12, 2006
By: /s/ Brian W. Wixted
_______________________________
Brian W. Wixted
Principal Financial Officer
Date: December 12, 2006