-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CejzGKyIyZWKviZ61MQyTLdVzGm9Ktt0MjaCJwh3jhyvF/P3CpBDax7kFl3ziGta xMV0+HcDOvAoolVRY+5OWQ== 0000935069-02-001352.txt : 20021219 0000935069-02-001352.hdr.sgml : 20021219 20021219153855 ACCESSION NUMBER: 0000935069-02-001352 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021031 FILED AS OF DATE: 20021219 EFFECTIVENESS DATE: 20021219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER SERIES FUND INC CENTRAL INDEX KEY: 0000356865 IRS NUMBER: 061207374 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03346 FILM NUMBER: 02863102 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC DATE OF NAME CHANGE: 19920703 N-30D 1 ra0375_5990vef.txt RA0375_5990VEF October 31, 2002 ================================================================================ Oppenheimer Annual Report Value Fund -------- Management Commentaries ================================================================================ Fund Highlights Performance Update Investment Strategy Discussion Financial Statements "In an environment characterized by a weak economy, corporate scandals and heightened international tensions, our stock selection strategy enabled the Fund to avoid the full brunt of the stock market's general decline in several industry groups, most notably technology, financial services and industrials." [LOGO] OppenheimerFunds[R] The Right Way to Invest HIGHLIGHTS CONTENTS 1 Letter to Shareholders 3 An Interview with Your Fund's Manager 7 Fund Performance 13 Financial Statements 31 Independent Auditors' Report 32 Federal Income Tax Information 35 Directors and Officers Fund Objective Oppenheimer Value Fund seeks long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. Realization of income is a secondary consideration. Fund Highlight According to Lipper, Inc., the Fund's Class A shares ranked in the top 10% (18/352) of large-cap value funds for the one-year period ended October 31, 2002.1 Average Annual Total Returns* For the 1-Year Period Ended 10/31/02 Without With Sales Chg. Sales Chg. - --------------------------------- Class A -7.15% -12.49% - --------------------------------- Class B -7.87 -12.47 - --------------------------------- Class C -7.85 -8.77 - --------------------------------- Class N -7.41 -8.33 - --------------------------------- Class Y -7.18 Top Ten Common Stock Holdings 2 AT&T Corp. 6.6% Bank of America Corp. 5.6 American International Group, Inc. 5.4 SLM Corp. 5.2 BP plc, ADR 4.9 Boeing Co. 4.5 Sappi Ltd., Sponsored ADR 4.5 Freddie Mac 3.8 Lockheed Martin Corp. 3.5 Nike, Inc., Cl. B 3.5 For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. *See Notes on page 11 for further details. 1. Source: Lipper, Inc. Lipper rankings are based on total returns, but do not consider sales charges. The Fund's Class A shares ranked, in the Lipper Large-Cap Value Fund category, 123/180 for the five-year and 32/60 for the ten-year period ended 10/31/02. Past performance is no guarantee of future results. 2. Portfolio's holdings and strategies are subject to change. Percentages are as of October 31, 2002, and are based on net assets. LETTER TO SHAREHOLDERS Dear Shareholder, In the last 100 years, there have been about 30 bear markets--each one ultimately followed by a recovery. Although markets in 2002 proved to be challenging and extremely volatile, we now find ourselves in a changing economic environment punctuated by moderate growth and the lowest interest rates we've seen in 40 years. At OppenheimerFunds, we continue to believe in the growth, ingenuity, and underlying strength of our economy and the markets for the long haul. We also understand that your investments with us may represent retirement, a future home or a college education. We take very seriously the responsibility of helping you work toward your goals. In good markets and in bad, we are committed to providing you with the investment products and services that can help you achieve your financial objectives. In recent years, many of us have seen the assets we count on for the future decrease in value, sometimes significantly, making it extremely difficult to stick to long-term investing plans. Yet basic investment principles of asset allocation and diversification are most important precisely at the times when we seem most ready to abandon them. As a valued shareholder, we encourage you to stay the course and focus on your long-term goals. Of course that doesn't mean ignoring your portfolio. When the financial markets make major moves, portfolio changes may be necessary to adjust risk, rebalance allocations or seek to maintain sufficient income flows. Monitor your investments, stay informed and most importantly, work closely with your financial advisor to ensure that any changes you make fit within your long-term investing plan. [SIDEBAR] [PHOTO OF JOHN V. MURPHY] John V. Murphy President Oppenheimer Value Fund 1 | OPPENHEIMER VALUE FUND LETTER TO SHAREHOLDERS With that said, we also expect the road ahead to present new and unique challenges. It is our belief that adhering to core investment principles can help you reach your goals. The principles of investing aren't exciting or easy. All they are is true. We hope you share the same convictions as we greet the start of the New Year and thank you for your continued faith in OppenheimerFunds, The Right Way to Invest. Sincerely, /s/John V. Murphy - ----------------- John V. Murphy November 21, 2002 These general market views represent opinions of OppenheimerFunds, Inc. and are not intended to predict performance of the securities markets or any particular fund. Specific information that applies to your Fund is contained in the pages that follow. For more current information regarding your Fund, please access the OppenheimerFunds website at www.oppenheimerfunds.com where you will find weekly Market Updates, and monthly Fund updates including the most recent list of top holdings. 2 | OPPENHEIMER VALUE FUND AN INTERVIEW WITH YOUR FUND'S MANAGER Q How did Oppenheimer Value Fund perform over the 12-month period that ended October 31, 2002? A. The reporting period saw a very difficult investment environment, in which stocks within virtually every economic sector declined. Nonetheless, we are pleased that the Fund's -7.15% Class A total return without sales charge exceeded the -15.10% return produced by its benchmark, the S&P 500 Index.3 The Fund also produced higher returns (without sales charge) than the average return of the 352 funds in its peer group (-14.27%), the Lipper Large Cap Value category. We attribute the Fund's relatively strong performance to our stock selection strategy, which enabled the Fund to beat the averages in eight of ten industry sectors. What external events influenced the Fund's performance? The entire stock market was adversely influenced by a lackluster economy and negative investor sentiment related to high-profile accounting irregularities, corporate scandals, September 11th and heightened international tension in the Middle East. When the reporting period began, the events of September 11th had intensified the 2001 economic recession. In response, the Federal Reserve Board continued to reduce interest rates aggressively, driving the federal funds rate to 1.75%, its lowest level in 40 years. Stocks responded positively to these moves, rallying off the lows established after the attacks as investors increasingly looked forward to the end of the recession. When the economic recovery arrived in early 2002, however, it proved to be weaker than most investors expected. Although consumer spending remained strong, corporations continued to cancel or postpone capital spending plans, which put pressure on their vendors' earnings. As a result, stocks fell sharply during the second and third quarters of 2002. [SIDEBAR] Portfolio Manager Chris Leavy 3. For more information on the Fund's benchmark, please see "Comparing the Fund's Performance to the Market" on page 7. 3 | OPPENHEIMER VALUE FUND AN INTERVIEW WITH YOUR FUND'S MANAGER Lackluster economic conditions were aggravated by widespread concerns related to the war on terrorism and possible U.S. military action in Iraq. In addition, a number of corporate scandals among some major U.S. corporations caused investors to question the veracity of companies' financial statements, putting further downward pressure on stock prices. Where did you find the most compelling opportunities in this challenging investment environment? Our stock selection strategy enabled the Fund to avoid the full brunt of the stock market's general decline in several industry groups, most notably technology, financial services and industrials. In the technology area, the Fund received particularly good performance from wireless communications provider QUALCOMM, Inc., whose CDMA (Code Division Multiple Access) standard captured a larger market share. Similarly, Pinnacle Systems, Inc. benefited from rising demand for computer-based video editing and distribution systems. In the financial services group, strong relative returns were driven by stocks such as SLM Corp. ("Sallie Mae"), the leading provider of student loans, which rose as the company gained market share amid strong loan demand. Insurance giant American International Group, Inc. also performed well in a favorable pricing environment. In the industrials sector, the Fund's relatively heavy exposure to defense contractors boosted returns when defense spending increased after September 11th. However, our stock selection strategy caused the Fund to lag in two of the ten major economic sectors, albeit modestly. In the energy group, asbestos-related litigation concerns hurt the stock of Ashland, Inc., offsetting good performance from other energy holdings. Similarly, in the healthcare area, deteriorating business fundamentals at Bristol Myers Squibb Co. detracted from overall performance. [SIDEBAR] While we're never satisfied with negative returns, we are nonetheless pleased that we successfully picked the right stocks in eight out of the ten major market sectors represented in our benchmark. 4 | OPPENHEIMER VALUE FUND Did the Fund's composition change significantly during the reporting period? By design, changes were modest. Our investment approach focuses primarily on security selection. We may then emphasize those areas we believe will perform best and de-emphasize those that we expect to lag. However, the bulk of the Fund's relative returns are derived from our stock selection strategy, in which we conduct company-by-company research to identify what we believe to be the most promising value-oriented stocks within each sector. With that said, we slightly reduced the Fund's exposure to the industrials sector by taking profits in defense contractors that had gained value. We redeployed some of those proceeds to the healthcare sector, where we found an attractively valued health insurance company with strong future earnings power. Where are you currently finding opportunities, and how is the Fund positioned for the future? After almost 2-1/2 years of deteriorating business fundamentals and steep stock price declines, we have recently begun to find attractive values among certain technology stocks that, in our view, enjoy sound business fundamentals. We believe that these stocks will be among the long-term survivors of the "tech wreck," and their stock prices should rebound strongly when the economy gains momentum. On the other hand, we are finding relatively few compelling values among consumer-oriented stocks, many of which have appreciated over the past 12 months. Average Annual Total Returns with Sales Charge For the Periods Ended 9/30/02 4 Class A 1-Year 5-Year 10-Year - ------------------------- - -15.86% -5.42% 7.37% Class B Since 1-Year 5-Year Inception - ------------------------- - -15.83% -5.29% 3.00% Class C Since 1-Year 5-Year Inception - ------------------------- - -12.25% -5.00% 1.20% Class N Since 1-Year 5-Year Inception - ------------------------- - -11.78% N/A -16.18% Class Y Since 1-Year 5-Year Inception - ------------------------- - -10.35% -3.97% 0.93% 4. See Notes on page 11 for further details. 5 | OPPENHEIMER VALUE FUND AN INTERVIEW WITH YOUR FUND'S MANAGER Overall, we have maintained our focus on companies that have demonstrated their ability to generate strong earnings, even during trying economic times. In our view, paying close attention to business fundamentals is key to what makes Oppenheimer Value Fund an important part of The Right Way to Invest. Top Five Common Stock Industries 6 - ---------------------------------------------- Diversified Financials 14.3% - ---------------------------------------------- Insurance 9.9 - ---------------------------------------------- Aerospace & Defense 8.0 - ---------------------------------------------- Banks 7.6 - ---------------------------------------------- Wireless Telecommunication Services 6.6 [SIDEBAR] Sector Allocation 5 [PIE CHART] o Financials 34.3% Diversified Financials 15.4 Insurance 10.7 Banks 8.2 o Information Technology 12.5 o Industrials 10.8 o Telecommunication Services 9.5 o Consumer Discretionary 9.1 o Energy 7.2 o Materials 6.3 o Health Care 5.9 o Utilities 3.1 o Consumer Staples 1.3 5. Portfolio's holdings and allocations are subject to change. Percentages are as of October 31, 2002, and are based on total market value of common stock holdings. 6. Portfolio's holdings and allocations are subject to change. Percentages are as of October 31, 2002, and are based on net assets. 6 | OPPENHEIMER VALUE FUND FUND PERFORMANCE How Has the Fund Performed? Below is a discussion by OppenheimerFunds, Inc., of the Fund's performance during its fiscal year ended October 31, 2002, followed by a graphical comparison of the Fund's performance to an appropriate broad-based market index. Management's Discussion of Performance. During the Fund's fiscal year that ended October 31, 2002, Oppenheimer Value Fund's strong performance relative to its benchmark, the S&P 500 and peer group was driven by its security selection strategy. The Fund particularly benefited from its holdings of technology, industrial and financial services stocks, which performed better in the aggregate than their respective components on the value side of the S&P 500 Index. Only the Fund's energy and health care holdings trailed their respective Index components (10 sectors in all), and in each case the margin of difference was minimal. The Fund slightly reduced its exposure to the industrials group after taking profits in stocks of defense contractors that had gained value, and it modestly increased its exposure to health care stocks. The Fund's portfolio holdings and allocations are subject to change. 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, 2002. In the case of Class A shares, performance is measured over a 10-year period. In the case of Class B, performance is measured from inception of the class on October 2, 1995. In the case of Class C, performance is measured from inception of the class on May 1, 1996. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. In the case of Class Y, performance is measured from inception of the class on December 16, 1996. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C shares and Class N, and reinvestments of all dividends and capital gains distributions. There is no sales charge applicable for Class Y shares. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of Fund business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the securities in the index. 7 | OPPENHEIMER VALUE FUND FUND PERFORMANCE Class A Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [LINE CHART] Oppenheimer Value Fund (Class A) S&P 500 Index 12/31/1992 9,425 10,000 03/31/1993 10,182 10,436 06/30/1993 10,757 10,486 09/30/1993 11,238 10,757 12/31/1993 11,396 11,006 03/31/1994 11,132 10,589 06/30/1994 10,914 10,633 09/30/1994 11,472 11,152 12/31/1994 11,321 11,150 03/31/1995 12,318 12,235 06/30/1995 13,363 13,401 09/30/1995 14,499 14,465 12/31/1995 15,442 15,335 03/31/1996 16,178 16,158 06/30/1996 16,381 16,883 09/30/1996 16,836 17,405 10/31/1996 7 17,204 17,884 01/31/1997 19,033 20,031 04/30/1997 19,043 20,515 07/31/1997 22,471 24,546 10/31/1997 21,953 23,625 01/31/1998 22,270 25,420 04/30/1998 25,086 28,940 07/31/1998 23,551 29,285 10/31/1998 22,446 28,826 01/31/1999 24,950 33,684 04/30/1999 25,152 35,257 07/31/1999 24,725 35,201 10/31/1999 23,253 36,223 01/31/2000 21,877 37,167 04/30/2000 23,550 38,825 07/31/2000 23,032 38,357 10/31/2000 22,647 38,424 01/31/2001 24,614 36,832 04/30/2001 24,104 33,791 07/31/2001 24,412 32,864 10/31/2001 21,379 28,861 01/31/2002 23,450 30,889 04/30/2002 23,477 29,528 07/31/2002 19,797 25,103 10/31/2002 19,851 24,504 Average Annual Total Returns of Class A Shares of the Fund at 10/31/02* 1-Year -12.49% 5-Year -3.15% 10-Year 7.86% Class B Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [LINE CHART] Oppenheimer Value Fund (Class B) S&P 500 Index 10/02/1995 10,000 10,000 12/31/1995 10,804 10,602 03/31/1996 11,294 11,170 06/30/1996 11,399 11,671 09/30/1996 11,683 12,032 10/31/1996 7 11,930 12,364 01/31/1997 13,169 13,848 04/30/1997 13,143 14,183 07/31/1997 15,487 16,969 10/31/1997 15,105 16,332 01/31/1998 15,287 17,573 04/30/1998 17,188 20,007 07/31/1998 16,114 20,245 10/31/1998 15,327 19,928 01/31/1999 17,002 23,286 04/30/1999 17,109 24,374 07/31/1999 16,780 24,335 10/31/1999 15,754 25,041 01/31/2000 14,798 25,694 04/30/2000 15,901 26,841 07/31/2000 15,515 26,517 10/31/2000 15,237 26,563 01/31/2001 16,526 25,463 04/30/2001 16,158 23,360 07/31/2001 16,328 22,719 10/31/2001 14,280 19,952 01/31/2002 15,663 21,354 04/30/2002 15,680 20,413 07/31/2002 13,223 17,354 10/31/2002 13,258 16,940 Average Annual Total Returns of Class B Shares of the Fund at 10/31/02* 1-Year -12.47% 5-Year -3.02% Since Inception 4.05% 7. The Fund changed its fiscal year end from 12/31 to 10/31. * See Notes on page 11 for further details. 8 | OPPENHEIMER VALUE FUND Class C Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [LINE CHART] Oppenheimer Value Fund (Class C) S&P 500 Index 05/01/1996 10,000 10,000 06/30/1996 10,061 10,297 09/30/1996 10,314 10,615 10/31/1996 7 10,535 10,908 01/31/1997 11,629 12,217 04/30/1997 11,606 12,512 07/31/1997 13,676 14,971 10/31/1997 13,341 14,409 01/31/1998 13,508 15,503 04/30/1998 15,186 17,650 07/31/1998 14,233 17,861 10/31/1998 13,537 17,581 01/31/1999 15,012 20,544 04/30/1999 15,115 21,503 07/31/1999 14,821 21,469 10/31/1999 13,918 22,092 01/31/2000 13,070 22,668 04/30/2000 14,049 23,679 07/31/2000 13,712 23,394 10/31/2000 13,463 23,435 01/31/2001 14,600 22,464 04/30/2001 14,270 20,609 07/31/2001 14,423 20,043 10/31/2001 12,605 17,602 01/31/2002 13,804 18,839 04/30/2002 13,795 18,009 07/31/2002 11,607 15,310 10/31/2002 11,616 14,945 Average Annual Total Returns of Class C Shares of the Fund at 10/31/02* 1-Year -8.77% 5-Year -2.73% Since Inception 2.33% Class N Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [LINE CHART] Oppenheimer Value Fund (Class N) S&P 500 Index 03/01/2001 10,000 10,000 04/30/2001 9,928 10,094 07/31/2001 10,050 9,817 10/31/2001 8,794 8,621 01/31/2002 9,635 9,227 04/30/2002 9,640 8,821 07/31/2002 8,126 7,499 10/31/2002 8,143 7,320 Average Annual Total Returns of Class N Shares of the Fund at 10/31/02* 1-Year -8.33% Since Inception -11.60% 9 | OPPENHEIMER VALUE FUND FUND PERFORMANCE Class Y Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [LINE CHART] Oppenheimer Value Fund (Class Y) S&P 500 Index 12/16/1996 10,000 10,000 01/31/1997 10,699 10,624 04/30/1997 10,693 10,881 07/31/1997 12,637 13,019 10/31/1997 12,362 12,531 01/31/1998 12,552 13,482 04/30/1998 14,145 15,349 07/31/1998 13,292 15,532 10/31/1998 12,687 15,289 01/31/1999 14,111 17,866 04/30/1999 14,238 18,700 07/31/1999 13,984 18,670 10/31/1999 13,170 19,212 01/31/2000 12,392 19,713 04/30/2000 13,355 20,593 07/31/2000 13,062 20,344 10/31/2000 12,851 20,380 01/31/2001 13,980 19,536 04/30/2001 13,709 17,923 07/31/2001 13,905 17,431 10/31/2001 12,196 15,308 01/31/2002 13,387 16,383 04/30/2002 13,409 15,661 07/31/2002 11,321 13,314 10/31/2002 11,321 12,997 Average Annual Total Returns of Class Y Shares of the Fund at 10/31/02* 1-Year -7.18% 5-Year -1.74% Since Inception 2.13% * See Notes on page 11 for further details. The performance information for the S&P 500 Index in the graphs begins on 12/31/92 for Class A, 9/30/95 for Class B, 4/30/96 for Class C, 2/28/01 for Class N and 12/31/96 for Class Y. Past performance cannot guarantee future results. Graphs are not drawn to same scale. 10 | OPPENHEIMER VALUE FUND NOTES In reviewing performance and rankings, please remember that past performance cannot guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Because of ongoing market volatility, the Fund's performance may be subject to substantial fluctuations, and current performance may be more or less than the results shown. For updates on the Fund's performance, visit our website at www.oppenheimerfunds.com. Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. For more complete information about the Fund, including charges, expenses and risks, please refer to the prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus carefully before you invest or send money. Class A shares of the Fund were first publicly offered on 9/16/85. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. Class B shares of the Fund were first publicly offered on 10/2/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. Class C shares of the Fund were first publicly offered on 5/1/96. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. Class Y shares of the Fund were first publicly offered on 12/16/96. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 11 | OPPENHEIMER VALUE FUND Financial Statements Pages 13-30 12 | OPPENHEIMER VALUE FUND STATEMENT OF INVESTMENTS October 31, 2002 Market Value Shares See Note 1 ==================================================== Common Stocks--92.7% - ---------------------------------------------------- Consumer Discretionary--8.5% - ---------------------------------------------------- Auto Components--0.7% Delphi Corp. 214,500 $ 1,492,920 - ---------------------------------------------------- Leisure Equipment & Products--1.0% Mattel, Inc. 110,800 2,034,288 - ---------------------------------------------------- Media--3.3% News Corp. Ltd. (The), Sponsored ADR, Preference 336,300 6,648,651 - ---------------------------------------------------- Textiles & Apparel--3.5% Nike, Inc., Cl. B 151,000 7,125,690 - ---------------------------------------------------- Consumer Staples--1.2% - ---------------------------------------------------- Tobacco--1.2% Philip Morris Cos., Inc. 59,600 2,428,700 - ---------------------------------------------------- Energy--6.7% - ---------------------------------------------------- Energy Equipment & Services--0.5% Noble Corp. 1 30,800 995,456 - ---------------------------------------------------- Oil & Gas--6.2% Ashland, Inc. 70,200 1,842,750 - ---------------------------------------------------- BP plc, ADR 258,200 9,927,790 ChevronTexaco Corp. 14,000 946,820 ------------ 12,717,360 - ---------------------------------------------------- Financials--31.8% - ---------------------------------------------------- Banks--7.6% Bank of America Corp. 163,600 11,419,280 - ---------------------------------------------------- Wachovia Corp. 119,800 4,167,842 ------------ 15,587,122 - ---------------------------------------------------- Diversified Financials--14.3% Capital One Financial Corp. 71,000 2,163,370 - ---------------------------------------------------- Citigroup, Inc. 39,966 1,476,744 - ---------------------------------------------------- Franklin Resources, Inc. 176,100 5,809,539 - ---------------------------------------------------- Freddie Mac 127,200 7,832,976 - ---------------------------------------------------- Merrill Lynch & Co., Inc. 35,400 1,343,430 - ---------------------------------------------------- SLM Corp. 102,600 10,541,124 ------------ 29,167,183 - ---------------------------------------------------- Insurance--9.9% Allstate Corp. 76,500 3,043,170 - ---------------------------------------------------- American International Group, Inc. 175,200 10,958,760 Market Value Shares See Note 1 - ---------------------------------------------------- Insurance Continued Hartford Financial Services Group, Inc. 36,200 $ 1,429,900 - ---------------------------------------------------- Prudential Financial, Inc. 1 162,600 4,747,920 - ---------------------------------------------------- Travelers Property Casualty Corp., Cl. A 1 3,368 44,963 - ---------------------------------------------------- Travelers Property Casualty Corp., Cl. B 1 6,920 93,558 ------------ 20,318,271 - ---------------------------------------------------- Health Care--5.4% - ---------------------------------------------------- Health Care Providers & Services--3.7% Aetna, Inc. 171,800 6,923,540 - ---------------------------------------------------- Service Corp. International 1 224,200 706,230 ------------ 7,629,770 - ---------------------------------------------------- Pharmaceuticals--1.7% Pharmacia Corp. 62,600 2,691,800 - ---------------------------------------------------- Schering-Plough Corp. 39,100 834,785 ------------ 3,526,585 - ---------------------------------------------------- Industrials--10.0% - ---------------------------------------------------- Aerospace & Defense--8.0% Boeing Co. 310,500 9,237,375 - ---------------------------------------------------- Lockheed Martin Corp. 124,400 7,202,760 ------------ 16,440,135 - ---------------------------------------------------- Industrial Conglomerates--1.7% Tyco International Ltd. 235,000 3,398,100 - ---------------------------------------------------- Machinery--0.3% Navistar International Corp. 1 125,800 578,436 - ---------------------------------------------------- Information Technology--11.6% - ---------------------------------------------------- Communications Equipment--4.6% JDS Uniphase Corp. 1,2 1,458,800 3,283,759 - ---------------------------------------------------- QUALCOMM, Inc 1 177,900 6,141,108 ------------ 9,424,867 - ---------------------------------------------------- Computers & Peripherals--3.9% Hewlett-Packard Co. 371,800 5,874,440 - ---------------------------------------------------- Lexmark International, Inc., Cl. A 1 26,800 1,592,456 13 | OPPENHEIMER VALUE FUND STATEMENT OF INVESTMENTS Continued Market Value Shares See Note 1 - ---------------------------------------------------- Computers & Peripherals Continued Pinnacle Systems, Inc. 1 40,600 $ 482,734 -------------- 7,949,630 - ---------------------------------------------------- Electronic Equipment & Instruments--3.1% Thermo Electron Corp. 1 343,700 6,320,643 - ---------------------------------------------------- Materials--5.8% - ---------------------------------------------------- Chemicals--0.9% FMC Corp. 1 53,700 1,642,683 - ---------------------------------------------------- Monsanto Co. 13,357 220,791 -------------- 1,863,474 - ---------------------------------------------------- Metals & Mining--0.4% Alcoa, Inc. 42,000 926,520 - ---------------------------------------------------- Paper & Forest Products--4.5% Sappi Ltd., Sponsored ADR 743,300 9,112,858 - ---------------------------------------------------- Telecommunication Services--8.8% - ---------------------------------------------------- Diversified Telecommunication Services--2.2% Verizon Communications, Inc. 121,600 4,591,616 - ---------------------------------------------------- Wireless Telecommunication Services--6.6% AT&T Corp. 1,033,200 13,472,928 - ---------------------------------------------------- Utilities--2.9% - ---------------------------------------------------- Electric Utilities--2.9% Dominion Resources, Inc. 125,200 6,009,600 -------------- Total Common Stocks (Cost $186,306,877) 189,760,803 Principal Market Value Amount See Note 1 ==================================================== Short-Term Notes--2.1% Federal Home Loan Bank, 1.65%, 11/1/02 (Cost $4,200,000) $4,200,000 $ 4,200,000 ==================================================== Joint Repurchase Agreements--4.5% Undivided interest of 49.65% in joint repurchase agreement (Market Value $18,754,000) with Zion Bank/Capital Markets Group, 1.85%, dated 10/31/02, to be repurchased at $9,311,478 on 11/1/02, collateralized by U.S. Treasury Bonds, 2.125%, 10/31/04, with a value of $19,178,339 (Cost $9,311,000) 9,311,000 9,311,000 - ---------------------------------------------------- Total Investments, at Value (Cost $199,817,877) 99.3% 203,271,803 - ---------------------------------------------------- Other Assets Net of Liabilities 0.7 1,355,812 --------------------- Net Assets 100.0% $204,627,615 ===================== Footnotes to Statement of Investments 1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
Contracts Expiration Exercise Premium Market Value Subject to Call Date Price Received See Note 1 - --------------------------------------------------------------------------------------- JDS Uniphase Corp. 14 3/24/03 $2.50 $742 $700
See accompanying Notes to Financial Statements. 14 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2002
=================================================================================== Assets Investments, at value (cost $199,817,877)--see accompanying statement $203,271,803 - ----------------------------------------------------------------------------------- Cash 56,772 - ----------------------------------------------------------------------------------- Receivables and other assets: Investments sold 5,466,226 Shares of capital stock sold 124,254 Interest and dividends 115,849 Other 1,660 ------------- Total assets 209,036,564 =================================================================================== Liabilities Options written, at value (premiums received $742)--see accompanying statement 700 - ----------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 3,976,112 Shares of capital stock redeemed 148,740 Shareholder reports 87,054 Transfer and shareholder servicing agent fees 69,827 Directors' compensation 47,526 Distribution and service plan fees 41,070 Other 37,920 ------------- Total liabilities 4,408,949 =================================================================================== Net Assets $204,627,615 ============= =================================================================================== Composition of Net Assets Par value of shares of capital stock $ 13,895 - ----------------------------------------------------------------------------------- Additional paid-in capital 245,650,297 - ----------------------------------------------------------------------------------- Undistributed net investment income 177,268 - ----------------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (44,667,813) - ----------------------------------------------------------------------------------- Net unrealized appreciation on investments 3,453,968 ------------- Net Assets $204,627,615 =============
15 | 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 $141,562,779 and 9,576,254 shares of capital stock outstanding) $14.78 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $15.68 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $47,323,320 and 3,232,435 shares of capital stock outstanding) $14.64 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $13,466,078 and 932,473 shares of capital stock outstanding) $14.44 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,201,397 and 81,857 shares of capital stock outstanding) $14.68 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $1,074,041 and 71,781 shares of capital stock outstanding) $14.96 See accompanying Notes to Financial Statements. 16 | OPPENHEIMER VALUE FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2002
=================================================================================== Investment Income Dividends (net of foreign withholding taxes of $21,725) $ 3,535,454 - ----------------------------------------------------------------------------------- Interest 240,249 ------------- Total investment income 3,775,703 =================================================================================== Expenses Management fees 1,481,518 - ----------------------------------------------------------------------------------- Distribution and service plan fees: Class A 405,280 Class B 562,278 Class C 129,685 Class N 2,521 - ----------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 497,606 Class B 184,551 Class C 41,558 Class N 1,600 Class Y 29,516 - ----------------------------------------------------------------------------------- Shareholder reports 75,031 - ----------------------------------------------------------------------------------- Accounting service fees 15,000 - ----------------------------------------------------------------------------------- Directors' compensation 14,722 - ----------------------------------------------------------------------------------- Custodian fees and expenses 2,227 - ----------------------------------------------------------------------------------- Other 15,310 ------------- Total expenses 3,458,403 Less reduction to custodian expenses (485) Less voluntary waiver of transfer and shareholder servicing agent fees--Classes A, B, C and N (19,021) Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (24,241) ------------- Net expenses 3,414,656 =================================================================================== Net Investment Income 361,047 =================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) (28,016,793) Closing and expiration of option contracts written 875,186 ------------- Net realized loss (27,141,607) - ----------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 10,745,185 ------------- Net realized and unrealized loss (16,396,422) =================================================================================== Net Decrease in Net Assets Resulting from Operations $(16,035,375) =============
See accompanying Notes to Financial Statements. 17 | OPPENHEIMER VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS
Year Ended October 31, 2002 2001 =================================================================================== Operations Net investment income (loss) $ 361,047 $ (91,479) - ----------------------------------------------------------------------------------- Net realized loss (27,141,607) (7,841,920) - ----------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 10,745,185 (7,812,172) --------------------------- Net decrease in net assets resulting from operations (16,035,375) (15,745,571) =================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income: Class A (135,466) (1,847,746) Class B -- (87,334) Class C -- (18,346) Class N (43) -- Class Y (3,575) -- =================================================================================== Capital Stock Transactions Net increase (decrease) in net assets resulting from capital stock transactions: Class A (14,210,177) (3,267,773) Class B (6,150,602) (2,239,487) Class C 4,299,663 1,787,816 Class N 1,286,579 13,360 Class Y 563,632 716,127 =================================================================================== Net Assets Total decrease (30,385,364) (20,688,954) - ----------------------------------------------------------------------------------- Beginning of period 235,012,979 255,701,933 --------------------------- End of period [including undistributed (overdistributed) net investment income of $177,268 and $(44,695), respectively] $204,627,615 $235,012,979 ===========================
See accompanying Notes to Financial Statements. 18 | OPPENHEIMER VALUE FUND FINANCIAL highlights
Class A Year Ended October 31, 2002 2001 2000 1999 1998 =========================================================================================== Per Share Operating Data Net asset value, beginning of period $ 15.93 $ 17.06 $ 20.69 $ 20.91 $ 23.31 - ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .07 .03 .16 .17 .16 Net realized and unrealized gain (loss) (1.21) (.98) (.65) .64 .32 ------------------------------------------------- Total from investment operations (1.14) (.95) (.49) .81 .48 - ------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.01) (.18) (.16) (.17) (.12) Distributions from net realized gain -- -- (2.98) (.86) (2.76) ------------------------------------------------- Total dividends and/or distributions to shareholders (.01) (.18) (3.14) (1.03) (2.88) - ------------------------------------------------------------------------------------------- Net asset value, end of period $14.78 $15.93 $17.06 $20.69 $20.91 ================================================= =========================================================================================== Total Return, at Net Asset Value 1 (7.15)% (5.60)% (2.60)% 3.60% 2.24% =========================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $141,563 $166,285 $181,566 $392,483 $456,264 - ------------------------------------------------------------------------------------------- Average net assets (in thousands) $166,319 $181,631 $234,840 $448,884 $442,138 - ------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 0.38% 0.19% 0.66% 0.68% 0.84% Expenses 1.22% 1.26% 1.17% 1.02% 0.98% 3 - ------------------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 86% 135% 106%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 19 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued
Class B Year Ended October 31, 2002 2001 2000 1999 1998 =========================================================================================== Per Share Operating Data Net asset value, beginning of period $ 15.89 $ 16.99 $ 20.58 $ 20.83 $ 23.32 - ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.10) (.11) (.05) (.03) .02 Net realized and unrealized gain (loss) (1.15) (.97) (.56) .66 .30 ------------------------------------------------- Total from investment operations (1.25) (1.08) (.61) .63 .32 - ------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.02) -- (.02) (.05) Distributions from net realized gain -- -- (2.98) (.86) (2.76) ------------------------------------------------- Total dividends and/or distributions to shareholders -- (.02) (2.98) (.88) (2.81) - ------------------------------------------------------------------------------------------- Net asset value, end of period $14.64 $15.89 $16.99 $20.58 $20.83 ================================================= =========================================================================================== Total Return, at Net Asset Value 1 (7.87)% (6.34)% (3.28)% 2.79% 1.47% =========================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $47,323 $57,584 $64,287 $102,736 $123,260 - ------------------------------------------------------------------------------------------- Average net assets (in thousands) $56,200 $65,115 $79,239 $123,616 $110,240 - ------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income (loss) (0.40)% (0.57)% (0.14)% (0.08)% 0.08% Expenses 2.01% 2.01% 1.93% 1.77% 1.73% 3 - ------------------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 86% 135% 106%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 20 | OPPENHEIMER VALUE FUND
Class C Year Ended October 31, 2002 2001 2000 1999 1998 =========================================================================================== Per Share Operating Data Net asset value, beginning of period $ 15.67 $ 16.77 $ 20.35 $ 20.60 $ 23.07 - ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.01) (.08) (.04) (.02) .01 Net realized and unrealized gain (loss) (1.22) (.99) (.56) .65 .31 ------------------------------------------------- Total from investment operations (1.23) (1.07) (.60) .63 .32 - ------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.03) -- (.02) (.03) Distributions from net realized gain -- -- (2.98) (.86) (2.76) ------------------------------------------------- Total dividends and/or distributions to shareholders -- (.03) (2.98) (.88) (2.79) - ------------------------------------------------------------------------------------------- Net asset value, end of period $14.44 $15.67 $16.77 $20.35 $20.60 ================================================= =========================================================================================== Total Return, at Net Asset Value 1 (7.85)% (6.38)% (3.27)% 2.82% 1.47% =========================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $13,466 $10,494 $ 9,849 $14,582 $18,204 - ------------------------------------------------------------------------------------------- Average net assets (in thousands) $12,977 $11,088 $11,975 $17,746 $15,355 - ------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income (loss) (0.41)% (0.56)% (0.14)% (0.07)% 0.06% Expenses 2.00% 2.01% 1.93% 1.77% 1.73% 3 - ------------------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 86% 135% 106%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 21 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued Class N Year Ended October 31, 2002 2001 1 ================================================================================ Per Share Operating Data Net asset value, beginning of period $ 15.90 $ 18.08 - -------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .05 (.02) Net realized and unrealized loss (1.22) (2.16) -------------------- Total from investment operations (1.17) (2.18) - -------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.05) -- Distributions from net realized gain -- -- -------------------- Total dividends and/or distributions to shareholders (.05) -- - -------------------------------------------------------------------------------- Net asset value, end of period $14.68 $15.90 ==================== ================================================================================ Total Return, at Net Asset Value 2 (7.41)% (12.06)% ================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $1,201 $12 - -------------------------------------------------------------------------------- Average net assets (in thousands) $ 508 $ 5 - -------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) 0.00% (0.45)% Expenses 1.49% 1.61% - -------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 22 | OPPENHEIMER VALUE FUND
Class Y Year Ended October 31, 2002 2001 2000 1999 1998 =========================================================================================== Per Share Operating Data Net asset value, beginning of period $ 16.20 $ 17.07 $ 20.72 $ 20.97 $ 23.34 - ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .06 1 .10 1 .17 1 .22 .22 Net realized and unrealized gain (loss) (1.21) 1 (.97) 1 (.63) 1 .64 .34 ------------------------------------------------- Total from investment operations (1.15) (.87) (.46) .86 .56 - ------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.09) -- (.21) (.25) (.17) Distributions from net realized gain -- -- (2.98) (.86) (2.76) ------------------------------------------------- Total dividends and/or distributions to shareholders (.09) -- (3.19) (1.11) (2.93) - ------------------------------------------------------------------------------------------- Net asset value, end of period $14.96 $16.20 $17.07 $20.72 $20.97 ================================================= =========================================================================================== Total Return, at Net Asset Value 2 (7.18)% (5.10)% (2.42)% 3.81% 2.63% =========================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $1,074 $638 $ 1 $76,571 $136,729 - ------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 955 $155 $48,714 $95,765 $118,010 - ------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.33% 0.62% 1.06% 0.90% 1.19% Expenses 3.77% 1.20% 0.97% 0.76% 0.62% 4 Expenses, net of voluntary waiver of transfer agent fees and/or reduction to custodian expenses 1.23% 0.83% 0.97% 0.76% 0.62% - ------------------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 86% 135% 106%
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. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 23 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the prevailing exchange rates on the valuation date. Amounts related to the purchase and sale of foreign securities and investment income are translated at the prevailing exchange rates on the respective dates of such transactions. 24 | OPPENHEIMER VALUE FUND The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- Joint Repurchase Agreements. The Fund, along with other affiliated funds of the Manager, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily 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. - -------------------------------------------------------------------------------- Directors' Compensation. The Fund has adopted a nonfunded 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, 2002, the Fund's projected benefit obligations were increased by $5,725 and payments of $3,821 were made to retired directors, resulting in an accumulated liability of $46,599 as of October 31, 2002. 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 annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is invested for the Board of Directors in shares of one or more Oppenheimer funds selected by the director. The amount paid to the Board of Directors under the plan will be determined based upon the performance of the selected funds. 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. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its 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. During the fiscal year ended October 31, 2002, the Fund did not utilize any capital loss carryforward. 25 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued As of October 31, 2002, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows: Expiring ---------------------- 2008 $ 9,239,162 2009 5,386,519 2010 27,168,039 ----------- Total $41,793,720 =========== - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for 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. The tax character of distributions paid during the year ended October 31, 2002 and year ended October 31, 2001 was as follows: Year Ended Year Ended October 31, 2002 October 31, 2001 ------------------------------------------------------ Distributions paid from: Ordinary income $139,084 $1,953,426 Long-term capital gain -- -- Return of capital -- -- -------------------------- Total $139,084 $1,953,426 ========================== As of October 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed net investment income $ 177,268 Accumulated net realized loss (44,667,813) Net unrealized appreciation 3,453,968 ------------ Total $(41,036,577) ============ - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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. 26 | OPPENHEIMER VALUE FUND - -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. ================================================================================ 2. Shares of Capital Stock The Fund has authorized 600 million shares of $0.001 par value capital stock. Transactions in shares of capital stock were as follows:
Year Ended October 31, 2002 Year Ended October 31, 2001 1 Shares Amount Shares Amount - ----------------------------------------------------------------------------------- Class A Sold 1,908,060 $ 31,560,410 2,495,305 $43,546,414 Dividends and/or distributions reinvested 7,395 129,115 110,601 1,770,750 Redeemed (2,777,138) (45,899,702) (2,809,551) (48,584,937) ------------------------------------------------------- Net decrease (861,683) $(14,210,177) (203,645) $(3,267,773) ======================================================= - ----------------------------------------------------------------------------------- Class B Sold 849,996 $ 13,980,805 1,321,460 $23,155,557 Dividends and/or distributions reinvested -- -- 5,009 80,552 Redeemed (1,241,241) (20,131,407) (1,487,290) (25,475,596) ------------------------------------------------------- Net decrease (391,245) $ (6,150,602) (160,821) $(2,239,487) ======================================================= - ----------------------------------------------------------------------------------- Class C Sold 508,463 $ 8,150,546 535,330 $ 9,404,405 Dividends and/or distributions reinvested -- -- 1,085 17,218 Redeemed (245,484) (3,850,883) (454,363) (7,633,807) ------------------------------------------------------- Net increase 262,979 $ 4,299,663 82,052 $ 1,787,816 ======================================================= - ----------------------------------------------------------------------------------- Class N Sold 91,314 $ 1,447,129 763 $ 13,364 Dividends and/or distributions reinvested 2 40 -- -- Redeemed (10,222) (160,590) -- (4) ------------------------------------------------------- Net increase 81,094 $ 1,286,579 763 $ 13,360 ======================================================= - ----------------------------------------------------------------------------------- Class Y Sold 46,172 $ 771,487 42,200 $ 765,652 Dividends and/or distributions reinvested 201 3,570 -- -- Redeemed (13,958) (211,425) (2,892) (49,525) ------------------------------------------------------- Net increase 32,415 $ 563,632 39,308 $ 716,127 =======================================================
1. For the year ended October 31, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001 (inception of offering) to October 31, 2001, for Class N shares. 27 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 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, 2002, were $334,479,987 and $333,369,595, respectively. As of October 31, 2002, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $202,691,968 was composed of: Gross unrealized appreciation $ 16,413,941 Gross unrealized depreciation (15,834,106) ------------ Net unrealized appreciation $ 579,835 ============ The difference between book-basis and tax-basis unrealized appreciation and depreciation, if applicable, is attributable primarily to the tax deferral of losses on wash sales, or return of capital dividends, and the realization for tax purposes of unrealized gain (loss) on certain futures contracts, investments in passive foreign investment companies, and forward foreign currency exchange contracts. ================================================================================ 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 of 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million. - -------------------------------------------------------------------------------- Accounting Fees. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. - -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. Additionally, Class Y shares are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.25% of average net assets of Class Y shares and for all other classes, up to an annual rate of 0.35% of average net assets of each class. Beginning November 1, 2002, transfer agent fees for Class Y shares are limited to 0.35% of the Fund's average daily net assets. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- Distribution and Service Plan (12b-1) Fees. Under its General Distributor's Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund. 28 | OPPENHEIMER VALUE FUND The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions Front-End Front-End on Class A on Class B on Class C on Class N Sales Charges Sales Charges Shares Shares Shares Shares on Class A Retained by Advanced by Advanced by Advanced by Advanced by Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1 - --------------------------------------------------------------------------------------------------------- October 31, 2002 $328,773 $140,953 $24,890 $321,368 $55,902 $13,817
1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale. Class A Class B Class C Class N Contingent Contingent Contingent Contingent Deferred Deferred Deferred Deferred Sales Charges Sales Charges Sales Charges Sales Charges Retained by Retained by Retained by Retained by Year Ended Distributor Distributor Distributor Distributor - ------------------------------------------------------------------------------ October 31, 2002 $5,940 $147,720 $2,050 $782 - -------------------------------------------------------------------------------- Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. For the year ended October 31, 2002, payments under the Class A Plan totaled $405,280, all of which were paid by the Distributor to recipients, and included $119,416 paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. - -------------------------------------------------------------------------------- Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and the Fund pays the Distributor an annual asset-based sales charge of 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. Distribution fees paid to the Distributor for the year ended October 31, 2002, were as follows: Distributor's Distributor's Aggregate Aggregate Unreimbursed Unreimbursed Expenses as % Total Payments Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class - -------------------------------------------------------------------------------- Class B Plan $562,278 $439,448 $2,197,410 4.64% Class C Plan 129,685 34,048 374,036 2.78 Class N Plan 2,521 2,218 20,528 1.71 29 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued ================================================================================ 5. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended October 31, 2002 was as follows: Call Options ------------------------ Number of Amount of Contracts Premiums - ------------------------------------------------------------------- Options outstanding as of October 31, 2001 2,600 $ 267,991 Options written 9,176 1,216,250 Options closed or expired (11,312) (1,373,347) Options exercised (450) (110,152) ------------------------ Options outstanding as of October 31, 2002 14 $ 742 ======================== ================================================================================ 6. Bank Borrowings Effective November 13, 2001 the Fund no longer participated in an agreement with other Oppenheimer funds in an unsecured line of credit with a bank. The Fund may borrow from a bank for temporary or emergency purposes, provided asset coverage for borrowings exceeds 300%. The Fund had no borrowings outstanding during the year ended October 31, 2002. 30 | OPPENHEIMER VALUE FUND INDEPENDENT AUDITORS' REPORT ================================================================================ The Board of Directors and Shareholders of Oppenheimer Value Fund: We have audited the accompanying statement of assets and liabilities of Oppenheimer Value Fund, including the statement of investments, as of October 31, 2002, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2002, 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, 2002, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Denver, Colorado November 21, 2002 31 | OPPENHEIMER VALUE FUND FEDERAL INCOME TAX INFORMATION Unaudited ================================================================================ In early 2003, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2002. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends of $0.0128, $0.0496 and $0.0917 per share were paid to Class A, Class N and Class Y shareholders, respectively, on December 7, 2001, all of which was designated as a "ordinary income" for federal income tax purposes. Dividends paid by the Fund during the fiscal year ended October 31, 2002 which are not designated as capital gain distributions should be multiplied by 100% to arrive at the amount eligible for the corporate dividend-received deduction. 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. 32 | OPPENHEIMER VALUE FUND SHAREHOLDER MEETING Unaudited ================================================================================ On September 24, 2002, a special shareholder meeting of the Fund was held at which all of the nominees for Director of Oppenheimer Series Fund, Inc. (the "Corporation") on behalf of its series, Oppenheimer Value Fund were elected and all proposals were approved by shareholders as described in the Fund's proxy statement for that meeting. The following is a report of the votes cast: - -------------------------------------------------------------------------------- Proposal No. 1 The following eleven persons were elected to serve as Director of the Corporation1 until their successors are elected and shall qualify: Nominee For Against Total - ------------------------------------------------------------------------------- Leon Levy 13,583,623.209 476,148.281 14,059,771.490 Donald W. Spiro 13,633,611.516 426,159.974 14,059,771.490 John V. Murphy 13,659,242.576 400,528.914 14,059,771.490 Robert G. Galli 13,614,810.277 444,961.213 14,059,771.490 Phillip A. Griffiths 13,664,597.884 395,176.606 14,059,771.490 Benjamin Lipstein 13,617,938.322 441,833.168 14,059,771.490 Elizabeth B. Moynihan 13,655,782.047 403,989.443 14,059,771.490 Kenneth A. Randall 13,648,925.235 410,846.255 14,059,771.490 Edward V. Regan 13,664,856.007 394,915.483 14,059,771.490 Russell S. Reynolds, Jr. 13,645,375.820 414,395.670 14,059,771.490 Clayton K. Yeutter 13,646,989.416 412,782.074 14,059,771.490 1. The Fund, along with Oppenheimer Disciplined Allocation Fund (the "Funds"), are series of the Corporation. Therefore the Funds have the same Board of Directors and the voting results for the election of Directors reflects the combined vote of the shares of both funds.
Broker For Against Abstain Non-Votes Total - --------------------------------------------------------------------------------------- Proposal No. 2 2(a). Replacement of the fundamental investment policy with a non-fundamental investment policy with respect to purchasing restricted or illiquid securities: 5,400,534.779 841,726.821 561,312.255 777,365.000 7,580,938.855 2(b). Elimination of the fundamental investment policy with respect to purchasing securities on margin and making short sales: 5,262,376.500 989,775.577 551,421.778 777,365.000 7,580,938.855 2(c). Elimination of the fundamental investment policy with respect to investing in a company of the purpose of exercising control: 5,433,317.897 831,175.292 539,080.666 777,365.000 7,580,938.855 2(d). Elimination of the fundamental investment policy with respect to investing in oil, gas or other mineral exploration or development programs, and amendment of the fundamental policy with respect to commodities and real estate: 5,763,275.267 527,514.319 511,784.269 778,365.000 7,580,938.855 2(e). Elimination of the fundamental investment policy with respect to entering in reverse repurchase agreements: 5,285,759.833 865,568.458 652,245.564 777,365.000 7,580,938.855 2(f). Elimination of the fundamental investment policy with respect to investing in securities of foreign issuers: 5,468,463.167 783,693.354 551,417.334 777,365.000 7,580,938.855 2(g). Amendment of the fundamental investment policy with respect to industry concentration: 5,554,474.487 692,189.830 556,909.538 777,365.000 7,580,938.855
33 | OPPENHEIMER VALUE FUND SHAREHOLDER MEETING Continued
Broker For Against Abstain Non-Votes Total - --------------------------------------------------------------------------------------- Proposal No. 2 Continued 2(h). Replacement of the fundamental investment policy with a non-fundamental investment policy with respect to investing in other investment companies: 5,407,363.194 807,077.873 589,132.788 777,365.000 7,580,938.855 2(i). Elimination of the fundamental investment policy with respect to writing, purchasing or selling puts, calls of combinations thereof: 5,371,001.443 803,911.172 628,661.240 777,365.000 7,580,938.855 2(j). Amendment of the fundamental investment policy with respect to borrowing: 5,201,189.744 1,041,006.344 561,377.767 777,365.000 7,580,938.855 2(k). Elimination of the fundamental investment policy with respect to pledging, mortgaging or hypothecating of assets: 5,206,888.365 964,368.894 632,316.596 777,365.000 7,580,938.855 2(l). Amendment of the fundamental investment policy with respect to lending: 5,431,098.275 813,830.942 558,644.638 777,365.000 7,580,938.855 2(m). Amendment of the fundamental investment policy with respect to diversification: 5,839,318.342 459,466.892 504,788.621 777,365.000 7,580,938.855
34 | OPPENHEIMER VALUE FUND DIRECTORS AND OFFICERS
============================================================================================ Name, Age, Position(s) Held Principal Occupation(s) During Past 5 Years / Other with Fund and Length Trusteeships/Directorships Held by Director / Number of of Service Portfolios in Fund Complex Currently Overseen by Director INDEPENDENT The address of each Director in the chart below is 6803 S. DIRECTORS Tucson Way, Centennial, CO 80112-3924. Each Director serves for an indefinite term, until his or her resignation, retirement, death or removal. Leon Levy, General Partner (since 1982) of Odyssey Partners, L.P. Chairman of the Board (investment partnership) and Chairman of the Board (since of Directors (since 1985) 1981) of Avatar Holdings, Inc. (real estate development). Age: 77 Oversees 31 portfolios in the OppenheimerFunds complex. Robert G. Galli, A trustee or director of other Oppenheimer funds. Formerly Director (since 1993) Vice Chairman (October 1995-December 1997) of Age: 69 OppenheimerFunds, Inc. (the Manager). Oversees 41 portfolios in the OppenheimerFunds complex. Phillip A. Griffiths, The Director (since 1991) of the Institute for Advanced Director (since 1999) Study, Princeton, N.J., director (since 2001) of GSI Age: 64 Lumonics and a member of the National Academy of Sciences (since 1979); formerly (in descending chronological order) a director of Bankers Trust Corporation, Provost and Professor of Mathematics at Duke University, a director of Research Triangle Institute, Raleigh, N.C., and a Professor of Mathematics at Harvard University. Oversees 31 portfolios in the OppenheimerFunds complex. Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate School of Director (since 1985) Business Administration, New York University. Oversees 31 Age: 79 portfolios in the OppenheimerFunds complex. Joel W. Motley, Director (January 2002-present), Columbia Equity Financial Director (since 2002) Corp. (privately-held financial adviser); Managing Director Age: 50 (January 2002-present), Carmona Motley Inc. (privately-held financial adviser); Formerly he held the following positions: Managing Director (January 1998-December 2001), Carmona Motley Hoffman Inc. (privately-held financial adviser); Managing Director (January 1992-December 1997), Carmona Motley & Co. (privately-held financial adviser). Oversees 31 portfolios in the OppenheimerFunds complex. Elizabeth B. Moynihan, Author and architectural historian; a trustee of the Freer Director (since 1992) Gallery of Art and Arthur M. Sackler Gallery (Smithsonian Age: 73 Institute), Trustees Council of the National Building Museum; a member of the Trustees Council, Preservation League of New York State. Oversees 31 portfolios in the OppenheimerFunds complex. Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility Director (since 1985) holding company) and Prime Retail, Inc. (real estate Age: 75 investment trust); formerly a director of Dominion Energy, Inc. (electric power and oil & gas producer), President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research) and a director of Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company. Oversees 31 portfolios in the OppenheimerFunds complex.
35 | OPPENHEIMER VALUE FUND DIRECTORS AND OFFICERS Continued
Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset (real Director (since 1993) estate manager); a director of OffitBank; formerly Trustee, Age: 72 Financial Accounting Foundation (FASB and GASB), Senior Fellow of Jerome Levy Economics Institute, Bard College, Chairman of Municipal Assistance Corporation for the City of New York, New York State Comptroller and Trustee of New York State and Local Retirement Fund. Oversees 31 investment companies in the OppenheimerFunds complex. Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship Search Group, Inc. Director (since 1989) (corporate governance consulting and executive recruiting); Age: 70 a life trustee of International House (non-profit educational organization), and a trustee (since 1996) of the Greenwich Historical Society. Oversees 31 portfolios in the OppenheimerFunds complex. Donald W. Spiro, Chairman Emeritus (since January 1991) of OppenheimerFunds, Vice Chairman of the Board Inc. (the Manager). Formerly a director (January 1969-August of Directors (since 1985) 1999) of the Manager. Oversees 31 portfolios in the Age: 76 OppenheimerFunds complex. Clayton K. Yeutter, Of Counsel (since 1993), Hogan & Hartson (a law firm). Other Director (since 1991) directorships: Caterpillar, Inc. (since 1993) and Age: 71 Weyerhaeuser Co. (since 1999). Oversees 31 portfolios in the OppenheimerFunds complex. ============================================================================================ INTERESTED DIRECTOR The address of Mr. Murphy in the chart below is 498 Seventh AND OFFICER Avenue, New York, NY 10018. Mr. Murphy serves for an indefinite term, until his resignation, death or removal. John V. Murphy, Chairman, Chief Executive Officer and director (since June President and Director 2001) and President (since September 2000) of the Manager; (since 2001) President and a director or trustee of other Oppenheimer Age: 53 funds; President and a director (since July 2001) of Oppenheimer Acquisition Corp., the Manager's parent holding company, and of Oppenheimer Partnership Holdings, Inc., a holding company subsidiary of the Manager; a director (since November 2001) of OppenheimerFunds Distributor, Inc., the Fund's distributor; Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc., transfer agent subsidiaries of the Manager; President and a director (since July 2001) of OppenheimerFunds Legacy Program, a charitable trust program established by the Manager; a director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc. and Centennial Asset Management Corporation (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; a director (since November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc., investment advisory affiliates of the Manager; Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company, the Manager's parent company; a director (since June 1995) of DLB Acquisition Corporation (a holding company that holds the shares of David L. Babson & Company, Inc.); formerly, Chief Operating Officer (from September 2000 to June 2001) of the Manager; President and trustee (from November 1999 to November 2001) of MML Series Investment Fund and MassMutual Institutional Funds, open-end investment companies; a director (from September 1999 to August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director (from September 1999 to August 2000) of MML Bay State Life Insurance Company; a director (from June 1989 to June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank, a wholly-owned subsidiary of Emerald Isle Bancorp. Oversees 69 portfolios in the OppenheimerFunds complex.
36 | OPPENHEIMER VALUE FUND
============================================================================================ OFFICERS The address of the Officers in the chart below is as follows: for Messrs. Leavy and Zack, 498 Seventh Avenue, New York, NY 10018, for Mr. Wixted, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for an annual term or until his or her earlier resignation, death or removal. Christopher Leavy, Senior Vice President (since September 2000) of the Manager; Vice President (since 2000) prior to joining the Manager in September 2000, he was a Age: 31 portfolio manager of Morgan Stanley Dean Witter Investment Management (from 1997) prior to which he was a portfolio manager and equity analyst of Crestar Asset Management (from 1995). An officer of 5 portfolios in the OppenheimerFunds complex Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of Treasurer, Principal Financial the Manager; Treasurer (since March 1999) of HarbourView and Accounting Officer Asset Management Corporation, Shareholder Services, Inc., (since 1999) Oppenheimer Real Asset Management Corporation, Shareholder Age: 43 Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since May 2000) and OFI Institutional Asset Management, Inc. (since November 2000) (offshore fund management subsidiaries of the Manager); Treasurer and Chief Financial Officer (since May 2000) of Oppenheimer Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program (since April 2000); formerly Principal and Chief Operating Officer (March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An officer of 85 portfolios in the OppenheimerFunds complex. Robert G. Zack, Senior Vice President (since May 1985) and General Counsel Secretary (since 2001) (since February 2002) of the Manager; General Counsel and a Age: 54 director (since November 2001) of OppenheimerFunds Distributor, Inc.; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Vice President and a director (since November 2000) of Oppenheimer Partnership Holdings, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Services, Inc., Shareholder Financial Services, Inc., OFI Private Investments, Inc., Oppenheimer Trust Company and OFI Institutional Asset Management, Inc.; General Counsel (since November 2001) of Centennial Asset Management Corporation; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director (since November 2001) of OppenheimerFunds International Ltd.; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Secretary (since November 2001) of Oppenheimer Acquisition Corp.; formerly Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001); OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (October 1997-November 2001). An officer of 85 portfolios in the OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information about the Fund's Directors and is available without charge upon request. 37 | OPPENHEIMER VALUE FUND OPPENHEIMER VALUE FUND A Series of Oppenheimer Series Fund, Inc. ================================================================================ Investment Advisor OppenheimerFunds, Inc. ================================================================================ Distributor OppenheimerFunds Distributor, Inc. ================================================================================ Transfer and Shareholder OppenheimerFunds Services Servicing Agent ================================================================================ Independent Auditors KPMG LLP ================================================================================ Legal Counsel Mayer Brown Rowe & Maw (C)Copyright 2002 OppenheimerFunds, Inc. All rights reserved. 38 | OPPENHEIMER VALUE FUND OPPENHEIMERFUNDS FAMILY
========================================================================================================== Global Equity Developing Markets Fund Global Fund International Small Company Fund Quest Global Value Fund Europe Fund Global Growth & Income Fund International Growth Fund - --------------------------------------------------------------------------------------------------------- Equity Stock Stock & Bond Emerging Technologies Fund Quest Opportunity Value Fund Emerging Growth Fund Total Return Fund Enterprise Fund Quest Balanced Value Fund Discovery Fund Capital Income Fund Main Street(R)Small Cap Fund Multiple Strategies Fund Small Cap Value Fund Disciplined Allocation Fund MidCap Fund Convertible Securities Fund Main Street(R)Opportunity Fund Specialty Growth Fund Real Asset Fund(R) Capital Appreciation Fund Gold & Special Minerals Fund Main Street(R)Growth & Income Fund Tremont Market Neutral Fund, LLC 1 Value Fund Tremont Opportunity Fund, LLC 1 Quest Capital Value Fund Quest Value Fund Trinity Large Cap Growth Fund Trinity Core Fund Trinity Value Fund - --------------------------------------------------------------------------------------------------------- Income Taxable Rochester Division International Bond Fund California Municipal Fund 3 High Yield Fund New Jersey Municipal Fund 3 Champion Income Fund New York Municipal Fund 3 Strategic Income Fund Municipal Bond Fund Bond Fund Limited Term Municipal Fund 4 Senior Floating Rate Fund Rochester National Municipals U.S. Government Trust Rochester Fund Municipals Limited-Term Government Fund Limited Term New York Municipal Fund Capital Preservation Fund 2 Pennsylvania Municipal Fund 3 - --------------------------------------------------------------------------------------------------------- Select Managers Stock Stock & Bond Mercury Advisors Focus Growth Fund QM Active Balanced Fund 2 Gartmore Millennium Growth Fund II Jennison Growth Fund Salomon Brothers All Cap Fund 5 Mercury Advisors S&P 500(R) Index Fund 2 - --------------------------------------------------------------------------------------------------------- Money Market 6 Money Market Fund Cash Reserves
1. Special investor qualification and minimum investment requirements apply. See the prospectus for details. 2. Available only through qualified retirement plans. 3. Available to investors only in certain states. 4. The Fund's name was changed from "Oppenheimer Intermediate Municipal Fund" on October 31, 2002. 5. The Fund's name was changed from "Oppenheimer Select Managers Salomon Brothers Capital Fund" on May 1, 2002. 6. An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although these funds may seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. 39 | OPPENHEIMER VALUE FUND 1.800.CALL OPP PHONELINK Call 1.800.CALL OPP (1.800.225.5677) for answers to many of your questions. Our automated speech recognition system provides you access to all the information and services you need. With PhoneLink you can: o Obtain account balances, share price (NAV) and dividends paid o Verify your most recent transactions o Buy, redeem or exchange mutual fund shares o Create custom lists of your accounts, funds or market indices o Order duplicate statements or Form 1099 DIV o Obtain market data (closing market information for Dow Jones Industrial Average, Nasdaq Composite and S&P 500 Index) o Speak to a Customer Service Representative 1 by saying "Agent" when prompted o And more! Quick list of PhoneLink commands Say To: [Account # or Social Security # + PIN] Get dollar and share balances, NAVs, transaction history or request transactions [Fund name, share class] Get current price/dividend information Balance Hear your balance/list of accounts History Hear your most recent transactions Purchase or buy Buy shares Exchange Exchange shares Liquidation or redemption Sell shares Dow Jones or Market Indices Hear closing market information (Dow Jones Industrial Average, Nasdaq Composite and S&P 500) Custom list Create, play or edit custom list of your accounts, funds or market indices 1. You may speak to a Customer Service Representative during normal business hours. 40 | OPPENHEIMER VALUE FUND THIS PAGE INTENTIONALLY LEFT BLANK. INFORMATION AND SERVICES eDocsDirect Get This Report Online! You can quickly view, download and print this report at your convenience. It's EASY, FAST, CONVENIENT, and FREE! With OppenheimerFunds eDocs Direct, you'll receive email notification when shareholder reports, prospectuses or prospectus supplements for your fund(s) become available online, instead of receiving them through the mail. You'll cut down on paper mail and help reduce fund expenses! Sign up for eDocs Direct today at www.oppenheimerfunds.com Internet 24-hr access to account information and transactions 1 www.oppenheimerfunds.com - -------------------------------------------------------------------------------- PhoneLink 1 and General Information 24-hr automated information and automated transactions Representatives also available Mon-Fri 8am-9pm ET Sat (January-April) 10am-4pm ET 1.800.CALL OPP (1.800.225.5677) - -------------------------------------------------------------------------------- Written Correspondence and Transaction Requests OppenheimerFunds Services P.O. Box 5270, Denver, CO 80217-5270 For Overnight Delivery OppenheimerFunds Services 10200 East Girard Avenue, Building D Denver, CO 80231 - -------------------------------------------------------------------------------- Ticker Symbols Class A: CGRWX Class B: CGRBX Class C: CGRCX Class N: CGRNX Class Y: CGRYX 1. At times the website or PhoneLink may be inaccessible or their transaction features may be unavailable. [LOGO] OppenheimerFunds[R] Distributor, Inc. RA0375.001.1002 December 30, 2002 -----END PRIVACY-ENHANCED MESSAGE-----