-----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, WHv7spdd/2+KvGr8YzfshKg8nC8y2bAVvMWtLXj6ArV1zTFhIgP/ZfR9eeqqc2a0 Sv8oaX6rO05yQ8ykk9x15Q== 0000935069-04-002208.txt : 20041228 0000935069-04-002208.hdr.sgml : 20041228 20041228154933 ACCESSION NUMBER: 0000935069-04-002208 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041031 FILED AS OF DATE: 20041228 DATE AS OF CHANGE: 20041228 EFFECTIVENESS DATE: 20041228 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03346 FILM NUMBER: 041228615 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-CSR 1 ra205_11975.txt RA205_11975.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-3346 Oppenheimer Disciplined Allocation Fund (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. Two World Financial Center, New York, New York 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: October 31 Date of reporting period: November 1, 2003 - October 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. - -------------------------------------------------------------------------------- TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- UnitedGlobalCom, Inc., Cl. A 3.2% - -------------------------------------------------------------------------------- Raytheon Co. 2.4 - -------------------------------------------------------------------------------- Cendant Corp. 2.1 - -------------------------------------------------------------------------------- BP plc, ADR 1.9 - -------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 1.8 - -------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1.8 - -------------------------------------------------------------------------------- Altria Group, Inc. 1.7 - -------------------------------------------------------------------------------- Citigroup, Inc. 1.6 - -------------------------------------------------------------------------------- IDT Corp., Cl. B 1.6 - -------------------------------------------------------------------------------- Bank of America Corp. 1.6 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2004, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- Media 6.0% - -------------------------------------------------------------------------------- Software 4.0 - -------------------------------------------------------------------------------- Diversified Financial Services 4.0 - -------------------------------------------------------------------------------- Aerospace & Defense 3.4 - -------------------------------------------------------------------------------- Oil & Gas 3.3 - -------------------------------------------------------------------------------- Commercial Banks 3.2 - -------------------------------------------------------------------------------- Insurance 2.8 - -------------------------------------------------------------------------------- Pharmaceuticals 2.6 - -------------------------------------------------------------------------------- Commercial Services & Supplies 2.1 - -------------------------------------------------------------------------------- Biotechnology 2.0 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2004, and are based on net assets. 8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- [GRAPHIC] EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC PORTFOLIO ALLOCATION Bonds and Notes 48.4% Stocks 45.1 Cash Equivalents 6.5 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2004, and are based on total investments. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2004, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED MARKET INDICES. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Security selection and asset allocation between equities and fixed income contributed equally to the Fund's performance during the reporting period ended October 31, 2004. Early in the year, when equities were rising, we had a higher allocation to equities. We subsequently lowered this weighting and increased the fixed income allocation to take advantage of this market's volatility during the second half. The fixed income side of the portfolio appreciated owing to our decisions on mortgages, the direction of interest rates and corporate credit risk. In mortgages, we emphasized high coupon mortgages, which did quite well, particularly in the second half, a period marked by uneasiness about the economy and rising interest rates. During the course of the year, we also managed the duration of the portfolio to take advantage of market volatility resulting from investor sentiment that we felt was out of sync with reality. In corporate bonds, we decided to emphasize corporate credit risk, particularly high yield and lower investment grade bonds (DDD-rated), both of which did particularly well during the period. The Fund performed well in seven of the 10 equity sectors we follow. In consumer staples, there were two notable contributors to performance. One was a wholesale club operator, which did well despite increases in the costs of materials and packaging. The other was an alcoholic beverages distributor, which benefited from surging sales from its imported beer brands, especially Corona. In financials, we took advantage of inefficient pricing in the IPO of Genworth Financial, Inc., a spin off from GE Co. The equipment and services component of the healthcare sector, particularly a managed healthcare provider, benefited Fund performance, as did our decision to realize gains early in the year from our biotechnology holdings. Our performance in the industrial sector was due in large part to positions in Raytheon Co., a manufacturing conglomerate and an aerospace company, among others. Strong stock selection across the board, with an emphasis on semiconductor companies, drove our performance in the information technology sector. The Fund's position in Take-Two Interactive Software, Inc., which develops and manufactures third party video games, contributed meaningfully to performance in the software and services sector. The same was true of a position in a leading industrial gas manufacturer, which enabled us to perform well in the materials sector. 10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND Conversely, the Fund's slight underperformance in the energy sector resulted from our limited stake in this sector, despite stellar performance from investments in BP plc, ADR and a Russian integrated oil company. Underperformance in the telecommunications sector, our largest detractor, was due to our limited exposure in the wireless sub-sector, which did very well over the period, and to our remaining faithful to long distance provider IDT Corp., which declined significantly. Finally, undermining performance the most in the consumer discretionary sector was an investment in a diversified internet services company, which suffered from negative growth in on-line travel bookings. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 2004. In the case of Class A shares, performance is measured over a ten-fiscal-year period. In the case of Class B, performance is measured from inception of the class on October 2, 1995. In the case of Class C, performance is measured from inception of the class on May 1, 1996. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. The Fund's performance is also compared to Merrill Lynch Corporate and Government Master Index, a broad-based index of U.S. Treasury and government agency securities, corporate and Yankee bonds regarded as a general measurement of the performance of the domestic debt securities market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the indices. 11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class A) S&P 500 Index Merrill Lynch Corporate and Government Master Index [GRAPHIC] EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC Oppenheimer Merrill Lynch Disciplined Corporate and Allocation Fund Government Date (Class A) S&P 500 Index Master Index 12/31/1993 $ 9,425.00 $10,000.00 $10,000.00 03/31/1994 9,185.00 9,621.00 9,706.00 06/30/1994 9,028.00 9,662.00 9,590.00 09/30/1994 9,281.00 10,133.00 9,632.00 12/31/1994 9,226.00 10,131.00 9,673.00 03/31/1995 9,789.00 11,117.00 10,145.00 06/30/1995 10,430.00 12,176.00 10,801.00 09/30/1995 10,909.00 13,143.00 11,000.00 12/31/1995 11,436.00 13,934.00 11,510.00 03/31/1996 11,628.00 14,682.00 11,256.00 06/30/1996 11,707.00 15,340.00 11,303.00 09/30/1996 11,933.00 15,814.00 11,499.00 10/31/1996 1 12,153.00 16,250.00 11,763.00 01/31/1997 12,818.00 18,201.00 11,867.00 04/30/1997 12,854.00 18,641.00 11,933.00 07/31/1997 14,571.00 22,303.00 12,552.00 10/31/1997 14,441.00 21,466.00 12,818.00 01/31/1998 14,719.00 23,097.00 13,200.00 04/30/1998 15,716.00 26,295.00 13,275.00 07/31/1998 15,296.00 26,609.00 13,575.00 10/31/1998 15,296.00 26,191.00 14,140.00 01/31/1999 16,523.00 30,606.00 14,353.00 04/30/1999 16,579.00 32,035.00 14,126.00 07/31/1999 16,299.00 31,985.00 13,890.00 10/31/1999 15,697.00 32,913.00 14,035.00 01/31/2000 15,401.00 33,771.00 13,954.00 04/30/2000 16,270.00 35,278.00 14,266.00 07/31/2000 16,381.00 34,852.00 14,679.00 10/31/2000 16,996.00 34,913.00 15,047.00 01/31/2001 17,188.00 33,467.00 15,856.00 04/30/2001 16,190.00 30,704.00 15,977.00 07/31/2001 16,200.00 29,861.00 16,553.00 10/31/2001 15,276.00 26,224.00 17,360.00 01/31/2002 15,595.00 28,067.00 17,042.00 04/30/2002 15,472.00 26,830.00 17,168.00 07/31/2002 14,237.00 22,809.00 17,723.00 10/31/2002 14,381.00 22,265.00 18,327.00 01/31/2003 14,293.00 21,610.00 18,787.00 04/30/2003 14,832.00 23,260.00 19,283.00 07/31/2003 15,823.00 25,235.00 18,945.00 10/31/2003 16,418.00 26,893.00 19,400.00 01/31/2004 17,470.00 29,075.00 19,824.00 04/30/2004 17,116.00 28,579.00 19,634.00 07/31/2004 17,027.00 28,556.00 19,821.00 10/31/2004 17,588.00 29,424.00 20,475.00 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year 0.97% 5-Year 1.10% 10-Year 5.91% 1. The Fund changed its fiscal year end from 12/31 to 10/31. 12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class B) S&P 500 Index Merrill Lynch Corporate and Government Master Index [GRAPHIC] EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC Oppenheimer Merrill Lynch Disciplined Corporate and Allocation Fund Government Date (Class B) S&P 500 Index Master Index 10/02/1995 $10,000.00 $10,000.00 $10,000.00 12/31/1995 10,493.00 10,602.00 10,463.00 03/31/1996 10,647.00 11,170.00 10,232.00 06/30/1996 10,697.00 11,671.00 10,275.00 09/30/1996 10,880.00 12,032.00 10,453.00 10/31/1996 1 11,072.00 12,364.00 10,693.00 01/31/1997 11,651.00 13,848.00 10,788.00 04/30/1997 11,664.00 14,183.00 10,848.00 07/31/1997 13,198.00 16,969.00 11,411.00 10/31/1997 13,060.00 16,332.00 11,652.00 01/31/1998 13,283.00 17,573.00 11,999.00 04/30/1998 14,159.00 20,007.00 12,068.00 07/31/1998 13,749.00 20,245.00 12,341.00 10/31/1998 13,726.00 19,928.00 12,854.00 01/31/1999 14,805.00 23,286.00 13,048.00 04/30/1999 14,821.00 24,374.00 12,841.00 07/31/1999 14,546.00 24,335.00 12,627.00 10/31/1999 13,978.00 25,041.00 12,758.00 01/31/2000 13,687.00 25,694.00 12,685.00 04/30/2000 14,437.00 26,841.00 12,968.00 07/31/2000 14,507.00 26,517.00 13,344.00 10/31/2000 15,023.00 26,563.00 13,678.00 01/31/2001 15,171.00 25,463.00 14,414.00 04/30/2001 14,259.00 23,360.00 14,524.00 07/31/2001 14,239.00 22,719.00 15,047.00 10/31/2001 13,407.00 19,952.00 15,781.00 01/31/2002 13,686.00 21,354.00 15,492.00 04/30/2002 13,579.00 20,413.00 15,606.00 07/31/2002 12,495.00 17,354.00 16,111.00 10/31/2002 12,621.00 16,940.00 16,660.00 01/31/2003 12,544.00 16,442.00 17,079.00 04/30/2003 13,017.00 17,697.00 17,529.00 07/31/2003 13,887.00 19,200.00 17,222.00 10/31/2003 14,409.00 20,461.00 17,635.00 01/31/2004 15,332.00 22,121.00 18,021.00 04/30/2004 15,021.00 21,744.00 17,848.00 07/31/2004 14,943.00 21,727.00 18,018.00 10/31/2004 15,436.00 22,387.00 18,613.00 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year 1.13% 5-Year 1.12% Since Inception (10/2/95) 4.90% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from 12/31 to 10/31. 13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class C) S&P 500 Index Merrill Lynch Corporate and Government Master Index [GRAPHIC] EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC Oppenheimer Merrill Lynch Disciplined Corporate and Allocation Fund Government Date (Class C) S&P 500 Index Master Index 05/01/1996 $10,000.00 $10,000.00 $10,000.00 06/30/1996 10,062.00 10,297.00 10,113.00 09/30/1996 10,225.00 10,615.00 10,288.00 10/31/1996 1 10,408.00 10,908.00 10,524.00 01/31/1997 10,955.00 12,217.00 10,618.00 04/30/1997 10,965.00 12,512.00 10,677.00 07/31/1997 12,406.00 14,971.00 11,231.00 10/31/1997 12,274.00 14,409.00 11,469.00 01/31/1998 12,489.00 15,503.00 11,810.00 04/30/1998 13,304.00 17,650.00 11,878.00 07/31/1998 12,921.00 17,861.00 12,146.00 10/31/1998 12,901.00 17,581.00 12,651.00 01/31/1999 13,912.00 20,544.00 12,842.00 04/30/1999 13,927.00 21,503.00 12,639.00 07/31/1999 13,664.00 21,469.00 12,428.00 10/31/1999 13,138.00 22,092.00 12,557.00 01/31/2000 12,858.00 22,668.00 12,485.00 04/30/2000 13,561.00 23,679.00 12,764.00 07/31/2000 13,628.00 23,394.00 13,134.00 10/31/2000 14,115.00 23,435.00 13,463.00 01/31/2001 14,248.00 22,464.00 14,187.00 04/30/2001 13,400.00 20,609.00 14,295.00 07/31/2001 13,373.00 20,043.00 14,810.00 10/31/2001 12,596.00 17,602.00 15,533.00 01/31/2002 12,835.00 18,839.00 15,248.00 04/30/2002 12,704.00 18,009.00 15,360.00 07/31/2002 11,666.00 15,310.00 15,857.00 10/31/2002 11,760.00 14,945.00 16,397.00 01/31/2003 11,658.00 14,505.00 16,809.00 04/30/2003 12,073.00 15,613.00 17,253.00 07/31/2003 12,856.00 16,939.00 16,951.00 10/31/2003 13,310.00 18,051.00 17,357.00 01/31/2004 14,310.00 19,516.00 17,737.00 04/30/2004 13,809.00 19,183.00 17,567.00 07/31/2004 13,707.00 19,168.00 17,734.00 10/31/2004 14,125.00 19,750.00 18,319.00 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year 5.13% 5-Year 1.46% Since Inception (5/1/96) 4.15% 1. The Fund changed its fiscal year end from 12/31 to 10/31. 14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class N) S&P 500 Index Merrill Lynch Corporate and Government Master Index [GRAPHIC] EDGAR REPRESENTATION OF PRINTED NUMBERS USED IN GRAPHIC Oppenheimer Merrill Lynch Disciplined Corporate and Allocation Fund Government Date (Class N) S&P 500 Index Master Index 03/01/2001 $10,000 $10,000 $10,000 04/30/2001 9,793 10,094 9,968 07/31/2001 9,785 9,817 10,328 10/31/2001 9,210 8,621 10,831 01/31/2002 9,399 9,227 10,633 04/30/2002 9,317 8,821 10,711 07/31/2002 8,570 7,499 11,058 10/31/2002 8,642 7,320 11,435 01/31/2003 8,581 7,104 11,722 04/30/2003 8,897 7,647 12,031 07/31/2003 9,484 8,296 11,820 10/31/2003 9,835 8,841 12,104 01/31/2004 10,458 9,559 12,368 04/30/2004 10,229 9,396 12,250 07/31/2004 10,167 9,388 12,367 10/31/2004 10,493 9,674 12,775 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 10/31/04 1-Year 5.68% 5-Year N/A Since Inception (3/1/01) 1.32% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 9/16/85. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "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. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended October 31, 2004. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FUND EXPENSES - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (5/1/04) (10/31/04) OCTOBER 31, 2004 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,027.60 $ 5.72 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.51 5.70 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,022.60 10.32 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,014.98 10.28 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,022.90 10.27 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.03 10.23 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,025.80 7.92 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.34 7.89 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended October 31, 2004 are as follows: CLASS EXPENSE RATIOS - ------------------------ Class A 1.12% - ------------------------ Class B 2.02 - ------------------------ Class C 2.01 - ------------------------ Class N 1.55 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Manager and Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS OCTOBER 31, 2004 - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- COMMON STOCKS--53.3% - -------------------------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.0% - -------------------------------------------------------------------------------------------------------- AUTO COMPONENTS--0.1% TRW Automotive Holdings Corp. 1 5,600 $ 102,816 - -------------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & Leisure--0.8% McDonald's Corp. 33,900 988,185 - -------------------------------------------------------------------------------------------------------- HOUSEHOLD DURABLES--0.3% WCI Communities, Inc. 1 16,600 391,760 - -------------------------------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.8% IAC/InterActiveCorp 1 49,000 1,059,380 - -------------------------------------------------------------------------------------------------------- MEDIA--6.0% EchoStar Communications Corp., Cl. A 1 24,400 771,528 - -------------------------------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1 247,300 2,205,916 - -------------------------------------------------------------------------------------------------------- Liberty Media International, Inc., A Shares 1 13,938 502,465 - -------------------------------------------------------------------------------------------------------- UnitedGlobalCom, Inc., Cl. A 1 534,150 3,995,442 ------------ 7,475,351 - -------------------------------------------------------------------------------------------------------- CONSUMER STAPLES--3.1% - -------------------------------------------------------------------------------------------------------- BEVERAGES--0.6% Constellation Brands, Inc., Cl. A 1 17,200 674,756 - -------------------------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--0.8% Wal-Mart Stores, Inc. 18,600 1,002,912 - -------------------------------------------------------------------------------------------------------- TOBACCO--1.7% Altria Group, Inc. 44,600 2,161,316 - -------------------------------------------------------------------------------------------------------- ENERGY--4.0% - -------------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.7% Halliburton Co. 20,400 755,616 - -------------------------------------------------------------------------------------------------------- Talisman Energy, Inc. 6,300 169,281 ------------ 924,897 - -------------------------------------------------------------------------------------------------------- OIL & GAS--3.3% BP plc, ADR 39,800 2,318,350 - -------------------------------------------------------------------------------------------------------- Kinder Morgan, Inc. 7,700 495,649 - -------------------------------------------------------------------------------------------------------- LUKOIL, Sponsored ADR 10,400 1,297,400 ------------ 4,111,399 - -------------------------------------------------------------------------------------------------------- FINANCIALS--10.8% - -------------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--3.2% Bank of America Corp. 43,202 1,935,018 - -------------------------------------------------------------------------------------------------------- Commerce Bancorp, Inc. 7,800 462,072 - -------------------------------------------------------------------------------------------------------- SouthTrust Corp. 19,200 836,544 - -------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 12,800 764,416 ------------ 3,998,050
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - --------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--4.0% Assured Guaranty Ltd. 40,500 $ 665,010 - -------------------------------------------------------------------------------------------------------- Citigroup, Inc. 45,277 2,008,940 - -------------------------------------------------------------------------------------------------------- JPMorgan Chase & Co. 19,500 752,700 - -------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. 12,000 985,800 - -------------------------------------------------------------------------------------------------------- Morgan Stanley 10,400 531,336 ------------ 4,943,786 - -------------------------------------------------------------------------------------------------------- INSURANCE--2.8% Aspen Insurance Holdings Ltd. 14,500 333,500 - -------------------------------------------------------------------------------------------------------- Genworth Financial, Inc., Cl. A 59,400 1,417,284 - -------------------------------------------------------------------------------------------------------- Prudential Financial, Inc. 30,500 1,417,335 - -------------------------------------------------------------------------------------------------------- UnumProvident Corp. 27,200 371,552 ------------ 3,539,671 - -------------------------------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--0.8% Freddie Mac 14,900 992,340 - -------------------------------------------------------------------------------------------------------- HEALTH CARE--6.8% - -------------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--2.0% MedImmune, Inc. 1 38,300 1,088,486 - -------------------------------------------------------------------------------------------------------- Wyeth 36,100 1,431,365 ------------ 2,519,851 - -------------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--0.6% Boston Scientific Corp. 1 22,600 797,780 - -------------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.6% Manor Care, Inc. 10,600 347,044 - -------------------------------------------------------------------------------------------------------- PacifiCare Health Systems, Inc. 1 14,300 509,366 - -------------------------------------------------------------------------------------------------------- Tenet Healthcare Corp. 1 108,900 1,167,408 ------------ 2,023,818 - -------------------------------------------------------------------------------------------------------- PHARMACEUTICALS--2.6% Pfizer, Inc. 45,900 1,328,805 - -------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 44,800 811,328 - -------------------------------------------------------------------------------------------------------- Watson Pharmaceuticals, Inc. 1 38,000 1,065,140 ------------ 3,205,273 - -------------------------------------------------------------------------------------------------------- INDUSTRIALS--7.5% - -------------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.4% Orbital Sciences Corp. 1 131,300 1,358,955 - -------------------------------------------------------------------------------------------------------- Raytheon Co. 81,300 2,965,824 ------------ 4,324,779
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.1% Cendant Corp. 124,300 $ 2,559,337 - -------------------------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--2.0% General Electric Co. 24,500 835,940 - -------------------------------------------------------------------------------------------------------- Tyco International Ltd. 53,000 1,650,950 ------------ 2,486,890 - -------------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--8.2% - -------------------------------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.0% Geotek Communications, Inc., Series B, Escrow Shares 1,2,3 100 -- - -------------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--2.0% Dell, Inc. 1 23,500 823,910 - -------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. 86,300 1,610,358 ------------ 2,434,268 - -------------------------------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4% Flextronics International Ltd. 1 44,700 538,635 - -------------------------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.3% Net2Phone, Inc. 1 118,500 411,195 - -------------------------------------------------------------------------------------------------------- IT SERVICES--0.4% CSG Systems International, Inc. 1 27,900 468,999 - -------------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.1% Freescale Semiconductor, Inc., Cl. A 1 62,500 971,250 - -------------------------------------------------------------------------------------------------------- Intel Corp. 19,300 429,618 ------------ 1,400,868 - -------------------------------------------------------------------------------------------------------- SOFTWARE--4.0% Compuware Corp. 1 60,800 352,032 - -------------------------------------------------------------------------------------------------------- Microsoft Corp. 63,300 1,771,767 - -------------------------------------------------------------------------------------------------------- Oracle Corp. 1 47,100 596,286 - -------------------------------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 1 68,400 2,254,464 ------------ 4,974,549 - -------------------------------------------------------------------------------------------------------- MATERIALS--1.4% - -------------------------------------------------------------------------------------------------------- CHEMICALS--0.8% Dow Chemical Co. 9,800 440,412 - -------------------------------------------------------------------------------------------------------- Praxair, Inc. 14,300 603,460 ------------ 1,043,872 - -------------------------------------------------------------------------------------------------------- METALS & MINING--0.3% GrafTech International Ltd. 1 41,100 380,586 - -------------------------------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.3% Bowater, Inc. 8,100 298,404
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.6% - -------------------------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.6% IDT Corp., Cl. B 1 141,400 $ 1,954,148 - -------------------------------------------------------------------------------------------------------- UTILITIES--1.9% - -------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.5% AES Corp. (The) 1 115,200 1,255,680 - -------------------------------------------------------------------------------------------------------- PG&E Corp. 1 19,500 624,780 ------------ 1,880,460 - -------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.4% Sempra Energy 12,800 429,312 ------------ Total Common Stocks (Cost $59,837,209) 66,499,643 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES--7.3% Bank One Auto Securitization Trust, Automobile Receivable Certificates, Series 2003-1, Cl. A2, 1.29%, 8/21/06 $117,526 117,294 - -------------------------------------------------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2004-A, Cl. A2, 1.88%, 10/25/06 270,000 269,447 - -------------------------------------------------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts., Series 2002-3, Cl. A2A, 3.05%, 9/15/05 53,125 53,210 - -------------------------------------------------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2003-C, Cl. AF1, 2.14%, 7/25/18 103,679 103,550 Series 2004-A, Cl. AF1, 2.03%, 6/25/19 97,391 97,206 Series 2004-D, Cl. AF1, 2.98%, 4/25/20 2 127,796 127,818 - -------------------------------------------------------------------------------------------------------- Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations: Series 2002-4, Cl. 1A3, 3.44%, 4/25/23 58,050 58,152 Series 2003-1, Cl. 1A3, 3.14%, 7/25/23 141,543 141,629 Series 2003-3, Cl. 1A1, 2.013%, 8/25/17 4 8,272 8,277 Series 2003-4, Cl. 1A1, 2.053%, 9/25/17 4 70,868 70,910 Series 2003-4, Cl. 1A2, 2.138%, 7/25/18 100,000 99,716 Series 2004-1, Cl. 2A1, 2.043%, 9/25/21 4 300,943 301,105 - -------------------------------------------------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2002-A, Cl. A4, 4.24%, 9/15/08 57,555 58,152 Series 2003-A, Cl. A2, 1.26%, 1/16/06 13,494 13,497 Series 2003-B, Cl. A2, 1.28%, 3/15/06 47,129 47,109 - -------------------------------------------------------------------------------------------------------- CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 2 190,000 189,970 - -------------------------------------------------------------------------------------------------------- Citibank Credit Card Issuance Trust, Credit Card Receivable Nts., Series 2002-A3, Cl. A3, 4.40%, 5/15/07 200,000 202,282
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg. Obligations: Series 2003-2, Cl. AF1, 2.033%, 5/25/33 4 $ 26,326 $ 26,340 Series 2003-3, Cl. AF1, 2.053%, 8/25/33 4 70,534 70,577 - -------------------------------------------------------------------------------------------------------- Citigroup Mortgage Loan Trust, Inc., Home Equity Mtg. Obligations, Series 2004-OPT1, Cl. A1B, 2.388%, 9/1/34 2 305,000 305,000 - -------------------------------------------------------------------------------------------------------- DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2002-A, Cl. A3, 3.85%, 4/6/06 104,599 104,812 Series 2003-A, Cl. A2, 1.52%, 12/8/05 147,828 147,838 Series 2003-B, Cl. A2, 1.61%, 7/10/06 381,030 380,657 Series 2004-B, Cl. A2, 2.48%, 2/8/07 2 100,000 100,074 - -------------------------------------------------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2003-A, Cl. A2A, 1.62%, 8/15/05 4,075 4,077 Series 2004-A, Cl. A2, 2.13%, 10/15/06 350,000 349,526 - -------------------------------------------------------------------------------------------------------- Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.: Series 2002-2, Cl. A1, 1.91%, 4/15/07 2 15,804 15,804 Series 2003-3, Cl. A1, 1.50%, 1/15/08 180,522 180,060 - -------------------------------------------------------------------------------------------------------- Honda Auto Receivables Owner Trust, Automobile Receivable Obligations: Series 2003-3, Cl. A2, 1.52%, 4/21/06 238,047 237,796 Series 2003-4, Cl. A2, 1.58%, 7/17/06 292,488 292,063 - -------------------------------------------------------------------------------------------------------- Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 2 694,719 712,087 - -------------------------------------------------------------------------------------------------------- M&I Auto Loan Trust, Automobile Loan Certificates: Series 2002-1, Cl. A3, 2.49%, 10/22/07 127,079 127,266 Series 2003-1, Cl. A2, 1.60%, 7/20/06 373,342 373,017 - -------------------------------------------------------------------------------------------------------- National City Auto Receivables Trust, Automobile Receivable Obligations, Series 2004-A, Cl. A2, 1.50%, 2/15/07 190,000 189,516 - -------------------------------------------------------------------------------------------------------- Nissan Auto Lease Trust, Automobile Lease Obligations: Series 2003-A, Cl. A2, 1.69%, 12/15/05 97,642 97,689 Series 2004-A, Cl. A2, 2.55%, 1/15/07 180,000 179,876 - -------------------------------------------------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.: Series 2002-A, Cl. A4, 4.28%, 10/16/06 49,730 50,119 Series 2003-C, Cl. A2, 1.62%, 4/17/06 91,227 91,164 Series 2004-A, Cl. A2, 1.40%, 7/17/06 210,000 209,361 - -------------------------------------------------------------------------------------------------------- Option One Mortgage Loan Trust, Home Equity Mtg. Obligations, Series 2004-3, Cl. A2, 1.99%, 11/25/34 2,4 130,000 130,081 - -------------------------------------------------------------------------------------------------------- Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations: Series 2002-B, Cl. A3, 3.76%, 6/15/06 27,268 27,363 Series 2003-B, Cl. A2, 1.43%, 2/15/06 124,975 124,935 - -------------------------------------------------------------------------------------------------------- USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2002-1, Cl. A3, 2.41%, 10/16/06 57,082 57,154 Series 2003-1, Cl. A2, 1.22%, 4/17/06 25,805 25,811 Series 2004-1, Cl. A2, 1.43%, 9/15/06 510,000 508,710 Series 2004-2, Cl. A2, 2.41%, 2/15/07 210,000 210,016
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities, Series 2004-A, Cl. A2, 2.47%, 1/22/07 $220,000 $ 219,785 - -------------------------------------------------------------------------------------------------------- Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivable Certificates: Series 2003-1, Cl. A2, 1.11%, 12/20/05 41,367 41,352 Series 2003-2, Cl. A2, 1.55%, 6/20/06 169,374 169,149 - -------------------------------------------------------------------------------------------------------- Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B, Cl. A2, 2.40%, 5/21/07 160,000 159,904 - -------------------------------------------------------------------------------------------------------- Wells Fargo Home Equity Trust, Collateralized Mtg. Obligations, Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 344,996 344,625 - -------------------------------------------------------------------------------------------------------- Whole Auto Loan Trust, Automobile Loan Receivable Certificates: Series 2002-1, Cl. A3, 2.60%, 8/15/06 315,155 315,742 Series 2003-1, Cl. A2A, 1.40%, 4/15/06 293,040 292,701 Series 2004-1, Cl. A2A, 2.59%, 5/15/07 5 230,000 230,000 ----------- Total Asset-Backed Securities (Cost $9,054,365) 9,061,371 - -------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--29.7% - -------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY--26.5% - -------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED--26.1% Federal Home Loan Mortgage Corp.: 5%, 12/1/34 5 2,584,000 2,570,274 5.50%, 1/1/34 132,810 135,475 5.50%, 11/1/34-12/1/34 5 1,842,000 1,873,515 6.50%, 11/1/28 142,417 150,189 7%, 11/1/32-9/1/33 314,888 335,314 7%, 3/1/31-11/1/34 5 1,994,736 2,118,469 8%, 4/1/16 124,929 132,962 9%, 8/1/22-5/1/25 35,916 40,300 - -------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations, Structured Pass-Through Securities, Series T-42, Cl. A2, 5.50%, 2/25/42 2 10 10 - -------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Series 1669, Cl. G, 6.50%, 2/15/23 65,339 66,023 Series 2034, Cl. Z, 6.50%, 2/15/28 102,367 106,602 Series 2053, Cl. Z, 6.50%, 4/15/28 117,457 122,581 Series 2055, Cl. ZM, 6.50%, 5/15/28 161,566 168,551 Series 2075, Cl. D, 6.50%, 8/15/28 317,190 331,205 Series 2080, Cl. Z, 6.50%, 8/15/28 101,467 104,981 Series 2387, Cl. PD, 6%, 4/15/30 218,090 226,318 Series 2466, Cl. PD, 6.50%, 4/15/30 89,209 89,919 Series 2498, Cl. PC, 5.50%, 10/15/14 32,683 33,056 Series 2500, Cl. FD, 2.37%, 3/15/32 4 58,890 59,049 Series 2526, Cl. FE, 2.27%, 6/15/29 4 68,850 69,293 Series 2551, Cl. FD, 2.27%, 1/15/33 4 56,364 56,695 Series 2551, Cl. TA, 4.50%, 2/15/18 83,324 83,360
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED Continued Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, (2.40)%, 6/1/26 6 $ 99,372 $ 18,587 Series 183, Cl. IO, (3.043)%, 4/1/27 6 159,976 29,563 Series 184, Cl. IO, (0.737)%, 12/1/26 6 160,042 30,633 Series 192, Cl. IO, 1.541%, 2/1/28 6 47,091 8,179 Series 200, Cl. IO, 0.982%, 1/1/29 6 57,162 10,064 Series 2130, Cl. SC, 14.971%, 3/15/29 6 129,117 13,094 Series 2796, Cl. SD, 23.275%, 7/15/26 6 166,021 15,402 - -------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed Security, Series 176, Cl. PO, 7.358%, 6/1/26 7 55,484 49,361 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 4.50%, 11/1/19 5 1,138,000 1,141,200 5%, 6/1/17-7/1/17 741,789 758,487 5%, 11/1/34 5 854,000 851,064 5.50%, 3/1/33-9/1/34 1,725,599 1,760,844 5.50%, 11/1/19-11/1/34 5 6,437,000 6,630,363 6%, 11/1/34 5 168,000 174,195 6.50%, 3/1/26-10/1/30 126,104 133,083 6.50%, 11/1/34 5 390,000 410,109 7%, 2/25/22-8/1/34 2,493,213 2,641,061 7%, 11/1/34 5 6,297,000 6,686,627 7.50%, 1/1/08-6/1/08 36,517 38,298 8.50%, 7/1/32 15,268 16,614 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1993-87, Cl. Z, 6.50%, 6/25/23 263,549 277,713 Trust 1996-35, Cl. Z, 7%, 7/25/26 408,101 428,811 Trust 1998-63, Cl. PG, 6%, 3/25/27 63,421 63,853 Trust 2001-50, Cl. NE, 6%, 8/25/30 123,068 124,305 Trust 2001-70, Cl. LR, 6%, 9/25/30 111,284 113,722 Trust 2001-72, Cl. NH, 6%, 4/25/30 96,125 99,187 Trust 2001-74, Cl. PD, 6%, 5/25/30 38,272 38,882 Trust 2002-50, Cl. PD, 6%, 9/25/27 109,713 110,063 Trust 2002-77, Cl. WF, 2.289%, 12/18/32 4 91,653 92,075 Trust 2002-94, Cl. MA, 4.50%, 8/25/09 175,986 176,678 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security: Trust 319, Cl. 2, (1.708)%, 2/1/32 6 110,812 20,290 Trust 2002-38, Cl. SO, 27.335%, 4/25/32 6 141,484 10,440 Trust 2002-47, Cl. NS, 16.262%, 4/25/32 6 217,654 21,102 Trust 2002-51, Cl. S, 16.591%, 8/25/32 6 199,954 19,389 Trust 2002-77, Cl. IS, 21.643%, 12/18/32 6 241,046 22,674 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 222, Cl. 2, (5.431)%, 6/1/23 6 319,335 56,837 Trust 240, Cl. 2, (3.008)%, 9/1/23 6 491,331 92,007 Trust 252, Cl. 2, (3.173)%, 11/1/23 6 243,866 48,175 Trust 254, Cl. 2, (0.384)%, 1/1/24 6 118,308 23,065 Trust 273, Cl. 2, (2.295)%, 7/1/26 6 71,697 12,580
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED Continued Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Continued Trust 321, Cl. 2, (7.333)%, 3/1/32 5,6 $1,083,192 $ 201,166 Trust 333, Cl. 2, 1.99%, 3/1/33 6 156,148 33,096 Trust 334, Cl. 17, (36.239)%, 2/1/33 6 179,118 30,910 Trust 1993-223, Cl. PM, 0.823%, 10/25/23 6 96,073 10,041 Trust 2001-81, Cl. S, 22.192%, 1/25/32 6 112,431 11,935 Trust 2002-9, Cl. MS, 17.603%, 3/25/32 6 155,737 16,046 Trust 2002-52, Cl. SD, 13.708%, 9/25/32 6 256,703 23,915 Trust 2002-77, Cl. SH, 24.146%, 12/18/32 6 138,911 14,231 Trust 2004-54, Cl. DS, 25.719%, 11/25/30 6 215,379 18,655 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed Security, Trust 1993-184, Cl. M, 10.518%, 9/25/23 7 101,525 89,787 ------------ 32,592,599 - -------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED--0.4% Government National Mortgage Assn.: 7%, 4/15/09-2/15/24 168,830 180,418 7.50%, 3/15/09 92,131 98,270 8%, 5/15/17 57,086 62,907 8.50%, 8/15/17-12/15/17 43,649 48,205 - -------------------------------------------------------------------------------------------------------- Government National Mortgage Assn. , Interest-Only Stripped Mtg.-Backed Security: Series 2001-21, Cl. SB, 16.854%, 1/16/27 6 303,162 27,292 Series 2002-76, Cl. SY, 11.456%, 12/16/26 6 404,593 40,706 Series 2004-11, Cl. SM, 13.01%, 1/17/30 6 164,085 15,249 ------------ 473,047 - -------------------------------------------------------------------------------------------------------- PRIVATE--3.2% - -------------------------------------------------------------------------------------------------------- COMMERCIAL--3.2% Bank of America Mortgage Securities, Inc., Collateralized Mtg. Obligations Pass-Through Certificates: Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 216,744 217,117 Series 2004-G, Cl. 2A1, 2.469%, 8/25/34 199,697 199,257 Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 360,877 375,788 Series 2004-8, Cl. 5A1, 6.50%, 9/25/34 306,406 317,609 - -------------------------------------------------------------------------------------------------------- Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations, Series 2004-J9, Cl. 1A1, 2.113%, 10/25/34 4 307,413 307,292 - -------------------------------------------------------------------------------------------------------- First Union National Bank/Lehman Brothers/Bank of America Commercial Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 140,000 152,400 - -------------------------------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through Certificates, Series 1997-C1, Cl. A3, 6.869%, 7/15/29 101,870 109,691 - -------------------------------------------------------------------------------------------------------- GSR Mortgage Loan Trust, Collateralized Mtg. Obligations, Series 04-12, Cl. 3A1, 4.593%, 12/25/34 520,000 520,000 - -------------------------------------------------------------------------------------------------------- MASTR Asset Securitization Trust, Pass-Through Collateralized Mtg. Obligations, Series 2004-9, Cl. A3, 4.70%, 8/25/34 543,496 546,019
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- COMMERCIAL Continued Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 $160,000 $ 175,328 - -------------------------------------------------------------------------------------------------------- Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 224,195 - -------------------------------------------------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Pass-Through Certificates, Series 2003-AR12, Cl. A2, 2.446%, 2/25/34 4 168,984 169,126 - -------------------------------------------------------------------------------------------------------- Wells Fargo Mortgage Backed Securities Trust, Collateralized Mtg. Obligations: Series 2004-N, Cl. A10, 3.803%, 8/25/34 2 390,239 391,336 Series 2004-W, Cl. A2, 4.641%, 11/25/34 270,000 271,086 ------------ 3,976,244 - -------------------------------------------------------------------------------------------------------- OTHER--0.0% CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 47,451 47,447 ------------ Total Mortgage-Backed Obligations (Cost $36,931,368) 37,089,337 - -------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--6.2% Federal Home Loan Bank Unsec. Bonds, 2.75%, 10/15/06 520,000 519,891 - -------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Unsec. Nts.: 2.375%, 4/15/06 545,000 543,414 6.625%, 9/15/09 470,000 532,628 - -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4.25%, 7/15/07 1,010,000 1,043,294 7.25%, 5/15/30 245,000 313,274 7.25%, 1/15/10 8 1,350,000 1,574,656 - -------------------------------------------------------------------------------------------------------- Tennessee Valley Authority Bonds: 5.375%, 11/13/08 122,000 130,926 7.125%, 5/1/30 128,000 160,881 Series A, 6.79%, 5/23/12 910,000 1,057,758 Series C, 4.75%, 8/1/13 15,000 15,405 Series C, 6%, 3/15/13 15,000 16,771 - -------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 5.375%, 2/15/31 104,000 112,990 STRIPS, 2.99%, 2/15/10 9 125,000 104,260 STRIPS, 3.37%, 2/15/11 9 101,000 80,153 STRIPS, 4.96%, 2/15/16 9 171,000 103,243 - -------------------------------------------------------------------------------------------------------- U.S. Treasury Nts., 2.50%, 9/30/06 1,370,000 1,369,305 ------------ Total U.S. Government Obligations (Cost $7,627,336) 7,678,849 - -------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--0.1% United Mexican States Nts., 7.50%, 1/14/12 (Cost $110,961) 110,000 125,235
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES--12.3% Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 $250,000 $ 263,623 - -------------------------------------------------------------------------------------------------------- Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 110,000 117,150 - -------------------------------------------------------------------------------------------------------- Allstate Financial Global Funding LLC, 4.25% Nts., 9/10/08 10 50,000 51,079 - -------------------------------------------------------------------------------------------------------- Allstate Life Global Funding II, 3.50% Nts., 7/30/07 65,000 65,413 - -------------------------------------------------------------------------------------------------------- American Express Centurion Bank, 4.375% Nts., 7/30/09 250,000 256,826 - -------------------------------------------------------------------------------------------------------- American Honda Finance Corp., 3.85% Nts., 11/6/08 10 60,000 60,598 - -------------------------------------------------------------------------------------------------------- AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 175,000 193,014 - -------------------------------------------------------------------------------------------------------- AXA, 8.60% Unsec. Sub. Nts., 12/15/30 190,000 248,597 - -------------------------------------------------------------------------------------------------------- Bank of America Corp., 4.875% Sr. Unsec. Nts., 1/15/13 3,000 3,069 - -------------------------------------------------------------------------------------------------------- Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 20,000 22,524 - -------------------------------------------------------------------------------------------------------- Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 115,000 126,500 - -------------------------------------------------------------------------------------------------------- Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 19,000 19,827 - -------------------------------------------------------------------------------------------------------- British Telecommunications plc: 7.875% Nts., 12/15/05 155,000 163,777 8.125% Nts., 12/15/10 85,000 103,271 - -------------------------------------------------------------------------------------------------------- Canadian National Railway Co., 4.25% Nts., 8/1/09 32,000 32,597 - -------------------------------------------------------------------------------------------------------- CenterPoint Energy, Inc.: 5.875% Sr. Nts., 6/1/08 135,000 142,274 8.125% Unsec. Nts., Series B, 7/15/05 60,000 62,232 - -------------------------------------------------------------------------------------------------------- Chesapeake Energy Corp., 7.50% Sr. Nts., 6/15/14 120,000 134,100 - -------------------------------------------------------------------------------------------------------- CIGNA Corp., 7.40% Unsec. Nts., 5/15/07 295,000 321,595 - -------------------------------------------------------------------------------------------------------- CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 120,000 143,055 - -------------------------------------------------------------------------------------------------------- Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 60,000 69,300 - -------------------------------------------------------------------------------------------------------- Clear Channel Communications, Inc., 8% Sr. Unsec. Nts., 11/1/08 230,000 261,718 - -------------------------------------------------------------------------------------------------------- ConAgra Foods, Inc., 6% Nts., 9/15/06 130,000 136,953 - -------------------------------------------------------------------------------------------------------- Conectiv, Inc., 5.30% Unsec. Unsub. Nts., Series B, 6/1/05 33,000 33,437 - -------------------------------------------------------------------------------------------------------- Cox Communications, Inc., 6.40% Sr. Unsec. Nts., 8/1/08 165,000 177,592 - -------------------------------------------------------------------------------------------------------- CSX Corp., 6.25% Unsec. Nts., 10/15/08 120,000 130,755 - -------------------------------------------------------------------------------------------------------- D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 105,000 117,338 - -------------------------------------------------------------------------------------------------------- DaimlerChrysler North America Holding Corp., 4.75% Unsec. Nts., 1/15/08 235,000 242,290 - -------------------------------------------------------------------------------------------------------- Delphi Automotive Systems Corp., 6.50% Nts., 5/1/09 130,000 136,351 - -------------------------------------------------------------------------------------------------------- Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 155,000 186,952 - -------------------------------------------------------------------------------------------------------- Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 135,000 160,885 - -------------------------------------------------------------------------------------------------------- DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 120,000 126,104 - -------------------------------------------------------------------------------------------------------- Duke Capital LLC, 5.668% Nts., 8/15/14 135,000 140,052 - -------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 160,000 176,423 - -------------------------------------------------------------------------------------------------------- FedEx Corp., 2.65% Unsec. Nts., 4/1/07 275,000 271,770
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued FirstEnergy Corp.: 5.50% Sr. Unsub. Nts., Series A, 11/15/06 $105,000 $ 109,308 7.375% Sr. Unsub. Nts., Series C, 11/15/31 120,000 137,159 - -------------------------------------------------------------------------------------------------------- Food Lion, Inc., 7.55% Nts., 4/15/07 165,000 179,289 - -------------------------------------------------------------------------------------------------------- Ford Holdings, Inc., 9.30% Unsec. Unsub. Debs., 3/1/30 95,000 107,903 - -------------------------------------------------------------------------------------------------------- Ford Motor Co., 8.90% Unsec. Unsub. Debs., 1/15/32 65,000 72,889 - -------------------------------------------------------------------------------------------------------- France Telecom SA: 7.95% Sr. Unsec. Nts., 3/1/06 80,000 85,134 8.50% Sr. Unsec. Nts., 3/1/11 80,000 96,203 9.25% Sr. Unsec. Nts., 3/1/31 4 45,000 60,927 - -------------------------------------------------------------------------------------------------------- Franklin Resources, Inc., 3.70% Nts., 4/15/08 80,000 80,577 - -------------------------------------------------------------------------------------------------------- Gap, Inc. (The), 6.90% Nts., 9/15/07 2 100,000 109,000 - -------------------------------------------------------------------------------------------------------- General Mills, Inc., 3.875% Nts., 11/30/07 190,000 192,800 - -------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 7.25% Nts., 3/2/11 340,000 361,479 - -------------------------------------------------------------------------------------------------------- General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 45,000 46,957 - -------------------------------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 70,000 68,955 - -------------------------------------------------------------------------------------------------------- Hertz Corp. (The), 6.35% Nts., 6/15/10 290,000 301,407 - -------------------------------------------------------------------------------------------------------- Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 95,000 104,919 - -------------------------------------------------------------------------------------------------------- Hutchison Whampoa International Ltd., 7.45% Sr. Bonds, 11/24/33 10 100,000 104,973 - -------------------------------------------------------------------------------------------------------- IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 2,4 110,000 123,475 - -------------------------------------------------------------------------------------------------------- iStar Financial, Inc.: 4.875% Sr. Unsec. Nts., Series B, 1/15/09 115,000 117,509 8.75% Sr. Unsec. Nts., 8/15/08 85,000 98,692 - -------------------------------------------------------------------------------------------------------- J.C. Penney Co., Inc., 8% Nts., 3/1/10 240,000 276,000 - -------------------------------------------------------------------------------------------------------- John Hancock Global Funding II, 7.90% Nts., 7/2/10 10 111,000 131,861 - -------------------------------------------------------------------------------------------------------- Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 150,000 166,400 - -------------------------------------------------------------------------------------------------------- Kraft Foods, Inc., 5.25% Nts., 6/1/07 300,000 314,432 - -------------------------------------------------------------------------------------------------------- Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 180,000 200,363 - -------------------------------------------------------------------------------------------------------- Lear Corp.: 7.96% Sr. Unsec. Nts., Series B, 5/15/05 110,000 112,920 8.11% Sr. Unsec. Nts., Series B, 5/15/09 122,000 140,227 - -------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 7% Nts., 2/1/08 165,000 182,353 - -------------------------------------------------------------------------------------------------------- Lehman Brothers, Inc., 6.625% Sr. Sub. Nts., 2/15/08 25,000 27,400 - -------------------------------------------------------------------------------------------------------- Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 125,000 132,963 - -------------------------------------------------------------------------------------------------------- Liberty Media Corp., 3.50% Nts., 9/25/06 110,000 110,159 - -------------------------------------------------------------------------------------------------------- Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 130,000 134,382 - -------------------------------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc., 5.375% Nts., 7/15/14 155,000 151,779 - -------------------------------------------------------------------------------------------------------- May Department Stores Co. (The), 3.95% Nts., 7/15/07 10 16,000 16,175 - -------------------------------------------------------------------------------------------------------- MBNA America Bank NA, 5.375% Nts., 1/15/08 185,000 195,076 - -------------------------------------------------------------------------------------------------------- McDonnell Douglas Corp., 6.875% Unsec. Unsub. Nts., 11/1/06 34,000 36,487
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued Merrill Lynch & Co., Inc., 4.125% Nts., 9/10/09 $255,000 $ 256,971 - -------------------------------------------------------------------------------------------------------- MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 265,000 284,024 - -------------------------------------------------------------------------------------------------------- Morgan Stanley, 6.60% Nts., 4/1/12 155,000 174,953 - -------------------------------------------------------------------------------------------------------- National City Bank, 6.20% Sub. Nts., 12/15/11 17,000 18,881 - -------------------------------------------------------------------------------------------------------- Nationwide Financial Services, Inc., 5.90% Nts., 7/1/12 125,000 133,663 - -------------------------------------------------------------------------------------------------------- NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 225,813 - -------------------------------------------------------------------------------------------------------- Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 150,000 173,176 - -------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 70,000 86,450 - -------------------------------------------------------------------------------------------------------- PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 10 73,294 72,190 - -------------------------------------------------------------------------------------------------------- Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 10 195,000 251,773 - -------------------------------------------------------------------------------------------------------- Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 10 260,000 329,523 - -------------------------------------------------------------------------------------------------------- PSEG Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 115,000 123,625 - -------------------------------------------------------------------------------------------------------- Safeway, Inc.: 2.50% Nts., 11/1/05 75,000 74,779 4.80% Sr. Unsec. Nts., 7/16/07 170,000 175,738 - -------------------------------------------------------------------------------------------------------- Spieker Properties LP, 6.75% Unsec. Unsub. Nts., 1/15/08 195,000 213,556 - -------------------------------------------------------------------------------------------------------- Sprint Capital Corp.: 7.125% Sr. Unsec. Nts., 1/30/06 135,000 142,036 8.75% Nts., 3/15/32 100,000 131,432 - -------------------------------------------------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 48,000 51,900 - -------------------------------------------------------------------------------------------------------- SunTrust Banks, Inc.: 4% Nts., 10/15/08 135,000 137,438 7.75% Unsec. Sub. Nts., 5/1/10 11,000 12,974 - -------------------------------------------------------------------------------------------------------- TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 245,000 316,124 - -------------------------------------------------------------------------------------------------------- Telefonos de Mexico SA de CV, 4.50% Nts., 11/19/08 105,000 106,189 - -------------------------------------------------------------------------------------------------------- Texas Utilities Co., 6.375% Sr. Unsec. Nts., Series C, 1/1/08 105,000 113,806 - -------------------------------------------------------------------------------------------------------- Time Warner Cos., Inc., 9.125% Debs., 1/15/13 130,000 166,871 - -------------------------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 65,000 85,310 - -------------------------------------------------------------------------------------------------------- Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 115,000 129,375 - -------------------------------------------------------------------------------------------------------- Tyco International Group SA: 5.875% Unsec. Unsub. Nts., 11/1/04 25,000 25,000 6.375% Sr. Unsec. Unsub. Nts., 2/15/06 180,000 187,972 6.75% Sr. Unsub. Nts., 2/15/11 76,000 86,068 - -------------------------------------------------------------------------------------------------------- Univision Communications, Inc.: 2.875% Sr. Unsec. Nts., 10/15/06 32,000 31,721 3.50% Sr. Unsec. Nts., 10/15/07 165,000 164,451 - -------------------------------------------------------------------------------------------------------- Volkswagen Credit, Inc., 2.33% Nts., 7/21/05 4,10 245,000 245,027 - -------------------------------------------------------------------------------------------------------- Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 245,000 257,492 - -------------------------------------------------------------------------------------------------------- Walt Disney Co. (The), 5.375% Sr. Unsec. Nts., 6/1/07 145,000 152,181 - -------------------------------------------------------------------------------------------------------- Waste Management, Inc., 7% Sr. Nts., 7/15/28 90,000 100,741
30 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 $ 52,000 $ 52,548 - -------------------------------------------------------------------------------------------------------- Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 260,000 280,211 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $14,762,823) 15,359,555 - -------------------------------------------------------------------------------------------------------- STRUCTURED NOTES--1.5% Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts., Series 2003-1, 3.78%, 1/7/05 2,4 950,000 947,435 - -------------------------------------------------------------------------------------------------------- UBS AG, High Grade Credit Linked Nts., 3.503%, 12/10/04 2 950,000 954,940 ------------ Total Structured Notes (Cost $1,900,000) 1,902,375 - -------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES--2.1% Federal Home Loan Bank, 1.69%, 11/1/04 (Cost $2,600,000) 2,600,000 2,600,000 - -------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--5.5% Undivided interest of 11.95% in joint repurchase agreement (Principal Amount/ Value $57,987,000, with a maturity value of $57,995,553) with Zions Bank/Capital Markets Group, 1.77%, dated 10/29/04, to be repurchased at $6,929,022 on 11/1/04, collateralized by U.S. Treasury Nts., 2.375%, 8/15/06, with a value of $59,191,443 (Cost $6,928,000) 6,928,000 6,928,000 - -------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $139,752,062) 118.0% 147,244,365 - -------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (18.0) (22,447,444) ------------------------- NET ASSETS 100.0% $124,796,921 ========================= FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Illiquid or restricted security. See Note 8 of Notes to Financial Statements. 3. Received as the result of issuer reorganization. 4. Represents the current interest rate for a variable or increasing rate security. 5. When-issued security or forward commitment to be delivered and settled after October 31, 2004. See Note 1 of Notes to Financial Statements. 6. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $895,323 or 0.72% of the Fund's net assets as of October 31, 2004.
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Continued 7. Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. These securities amount to $139,148 or 0.11% of the Fund's net assets as of October 31, 2004. 8. All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures sales contracts with an aggregate market value of $256,611. See Note 6 of Notes to Financial Statements. 9. Zero coupon bond reflects effective yield on the date of purchase. 10. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $1,263,199 or 1.01% of the Fund's net assets as of October 31, 2004. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES October 31, 2004 - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $139,752,062)--see accompanying statement of investments $147,244,365 - -------------------------------------------------------------------------------------------------------- Cash 745,950 - -------------------------------------------------------------------------------------------------------- Unrealized appreciation on swap contracts 8,105 - -------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold (including $7,417,981 sold on a when-issued basis or forward commitment) 7,814,066 Interest, dividends and principal paydowns 474,478 Shares of capital stock sold 56,306 Futures margins 45,868 Other 5,316 ------------- Total assets 156,394,454 - -------------------------------------------------------------------------------------------------------- LIABILITIES Payables and other liabilities: Investments purchased (including $30,019,114 purchased on a when-issued basis or forward commitment) 31,413,780 Shareholder communications 39,595 Shares of capital stock redeemed 36,308 Directors' compensation 29,519 Distribution and service plan fees 26,098 Transfer and shareholder servicing agent fees 23,879 Other 28,354 ------------- Total liabilities 31,597,533 - -------------------------------------------------------------------------------------------------------- NET ASSETS $124,796,921 ============= - -------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Par value of shares of capital stock $ 9,005 - -------------------------------------------------------------------------------------------------------- Additional paid-in capital 128,257,222 - -------------------------------------------------------------------------------------------------------- Accumulated net investment income 388,283 - -------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (11,589,213) - -------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 7,731,624 ------------- NET ASSETS $124,796,921 =============
33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES Continued - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $103,268,166 and 7,457,662 shares of capital stock outstanding) $13.85 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $14.69 - -------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $13,618,529 and 969,909 shares of capital stock outstanding) $14.04 - -------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $6,421,873 and 469,979 shares of capital stock outstanding) $13.66 - -------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,488,353 and 107,886 shares of capital stock outstanding) $13.80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS For the Year Ended October 31, 2004 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 1,585,957 - -------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $6,582) 939,982 - -------------------------------------------------------------------------------- Fee income 822 ------------ Total investment income 2,526,761 - -------------------------------------------------------------------------------- EXPENSES Management fees 785,321 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 256,773 Class B 148,547 Class C 57,073 Class N 5,131 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 212,136 Class B 41,636 Class C 16,887 Class N 3,747 - -------------------------------------------------------------------------------- Shareholder communications: Class A 18,816 Class B 11,653 Class C 3,563 Class N 694 - -------------------------------------------------------------------------------- Accounting service fees 15,000 - -------------------------------------------------------------------------------- Directors' compensation 5,834 - -------------------------------------------------------------------------------- Custodian fees and expenses 3,220 - -------------------------------------------------------------------------------- Other 23,323 ------------ Total expenses 1,609,354 Less reduction to custodian expenses (1,574) Less payments and waivers of expenses (1,512) ------------ Net expenses 1,606,268 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 920,493 35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Continued - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain on: Investments $11,860,457 Closing of futures contracts 204,251 Foreign currency transactions 426 Swap contracts 46,324 Net increase from payment by affiliate 18,298 ------------ Net realized gain 12,129,756 - ----------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments (5,131,630) Translation of assets and liabilities denominated in foreign currencies (113) Futures contracts 284,725 Swap contracts (13,491) ------------ Net change in unrealized appreciation (4,860,509) - ----------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,189,740 ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2004 2003 - -------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 920,493 $ 1,173,188 - -------------------------------------------------------------------------------------------------------- Net realized gain 12,129,756 1,451,451 - -------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (4,860,509) 11,944,104 ---------------------------- Net increase in net assets resulting from operations 8,189,740 14,568,743 - -------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Class A (888,024) (1,140,244) Class B (1,401) (45,309) Class C (3,750) (15,476) Class N (4,892) (2,774) - -------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS Net increase (decrease) in net assets resulting from capital stock transactions: Class A (2,841,650) (4,085,561) Class B (1,999,035) 1,001,740 Class C 1,447,054 1,212,712 Class N 1,061,292 109,096 - -------------------------------------------------------------------------------------------------------- NET ASSETS Total increase 4,959,334 11,602,927 - -------------------------------------------------------------------------------------------------------- Beginning of period 119,837,587 108,234,660 ---------------------------- End of period (including accumulated net investment income of $388,283 and $170,158, respectively) $124,796,921 $119,837,587 ============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $ 13.04 $ 11.56 $ 12.54 $ 14.23 $ 15.03 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .12 1 .14 .22 .26 .44 Net realized and unrealized gain (loss) .81 1.48 (.94) (1.69) .68 -------------------------------------------------------------------- Total from investment operations .93 1.62 (.72) (1.43) 1.12 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.12) (.14) (.26) (.26) (.44) Distributions from net realized gain -- -- -- -- (1.48) -------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.12) (.14) (.26) (.26) (1.92) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 13.85 $ 13.04 $ 11.56 $ 12.54 $ 14.23 ==================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 7.12% 14.17% (5.86)% (10.12)% 8.27% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $103,268 $100,032 $ 92,806 $112,864 $144,244 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $103,979 $ 94,811 $104,415 $128,477 $172,514 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 0.88% 1.18% 1.73% 1.88% 2.88% Total expenses 1.13% 4,5 1.26% 4,5 1.21% 4,5 1.19% 4 1.11% 4 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 79% 6 275% 193% 164% 34% 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 distribu- tions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. 6. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA) mortgage-related securities of $316,759,702 and $306,486,129, respectively. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS B YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $ 13.23 $ 11.73 $ 12.72 $ 14.43 $ 15.20 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) -- 1 .04 .11 .15 .30 Net realized and unrealized gain (loss) .81 1.50 (.94) (1.70) .73 -------------------------------------------------------------------- Total from investment operations .81 1.54 (.83) (1.55) 1.03 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- 2 (.04) (.16) (.16) (.32) Distributions from net realized gain -- -- -- -- (1.48) -------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.04) (.16) (.16) (1.80) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $14.04 $13.23 $11.73 $12.72 $14.43 ==================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 6.13% 13.21% (6.61)% (10.79)% 7.48% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $13,619 $14,747 $12,204 $14,770 $17,892 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $14,875 $12,776 $13,639 $16,569 $19,643 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) (0.01)% 0.31% 0.94% 1.14% 2.12% Total expenses 2.02% 2.15% 2.00% 1.94% 1.87% Expenses after payments and waivers and reduction to custodian expenses N/A 5 2.11% N/A 5,6 N/A 5 N/A 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 79% 7 275% 193% 164% 34% 1. Per share amounts calculated based on the average shares outstanding during the period. 2. Less than $0.005 per share. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distribu- tions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. 7. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA) mortgage-related securities of $316,759,702 and $306,486,129, respectively. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 2000 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $ 12.88 $ 11.43 $ 12.41 $ 14.08 $ 14.88 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income -- 1 .07 .13 .13 .28 Net realized and unrealized gain (loss) .79 1.43 (.94) (1.64) .72 -------------------------------------------------------------------- Total from investment operations .79 1.50 (.81) (1.51) 1.00 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.01) (.05) (.17) (.16) (.32) Distributions from net realized gain -- -- -- -- (1.48) -------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.01) (.05) (.17) (.16) (1.80) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $13.66 $12.88 $11.43 $12.41 $14.08 ==================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 6.13% 13.18% (6.64)% (10.76)% 7.44% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $6,422 $4,666 $2,984 $2,893 $3,931 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $5,726 $3,806 $2,961 $3,280 $4,255 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 0.00% 0.29% 0.93% 1.14% 2.13% Total expenses 2.02% 2.17% 2.00% 1.94% 1.86% Expenses after payments and waivers and reduction to custodian expenses N/A 4 2.12% N/A 4,5 N/A 4 N/A 4 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 79% 6 275% 193% 164% 34% 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 distribu- tions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. 6. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA) mortgage-related securities of $316,759,702 and $306,486,129, respectively. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS N YEAR ENDED OCTOBER 31, 2004 2003 2002 2001 1 - ----------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $ 13.00 $ 11.52 $ 12.52 $ 13.74 - ----------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .06 2 .12 .16 .12 Net realized and unrealized gain (loss) .81 1.46 (.91) (1.20) ------------------------------------------------------- Total from investment operations .87 1.58 (.75) (1.08) - ----------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.07) (.10) (.25) (.14) Distributions from net realized gain -- -- -- -- ------------------------------------------------------- Total dividends and/or distributions to shareholders (.07) (.10) (.25) (.14) - ----------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $13.80 $13.00 $11.52 $12.52 ======================================================= - ----------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 6.68% 13.81% (6.17)% (7.90)% - ----------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $1,488 $392 $241 $2 - ----------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,030 $342 $160 $1 - ----------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.46% 0.79% 1.28% 1.04% Total expenses 1.61% 2.04% 1.60% 1.68% Expenses after payments and waivers and reduction to custodian expenses 1.55% 1.58% N/A 5,6 N/A 5 - ----------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 79% 7 275% 193% 164% 1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distribu- tions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. 7. The portfolio turnover rate excludes purchase and sales transactions of To Be Announced (TBA) mortgage-related securities of $316,759,702 and $306,486,129, respectively. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek to maximize total investment return (including capital appreciation and income) principally by allocating its assets among stocks, corporate bonds, U.S. government securities and money market instruments, according to changing market conditions. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Corporate, government and municipal debt instruments having a remaining maturity in excess of 60 days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Directors. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with 42 | OPPENHEIMER DISCIPLINED ALLOCATION FUND remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- STRUCTURED NOTES. The Fund invests in structured notes whose market values, interest rates and/or redemption prices are linked to the performance of underlying foreign currencies, interest rate spreads, stock market indices, prices of individual securities, commodities or other financial instruments or the occurrence of other specific events. The structured notes are often leveraged, increasing the volatility of each note's market value relative to the change in the underlying linked financial element or event. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of October 31, 2004, the market value of these securities comprised 1.5% of the Fund's net assets and resulted in unrealized cumulative gains of $2,375. - -------------------------------------------------------------------------------- SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis or forward commitment can take place up to ten days or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis or forward commitment may increase the volatility of the Fund's net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. The Fund may also sell securities that it purchased on a when-issued basis or forward commitment prior to settlement of the original purchase. As of October 31, 2004, the Fund had purchased $30,019,114 of securities on a when-issued basis or forward commitment and sold $7,417,981 of securities issued on a when-issued basis or forward commitment. In connection with its ability to purchase or sell securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the incremental difference between the forward purchase and sale of each forward roll as realized gain (loss) on investments or as fee income in the case of such transactions that have an associated fee in lieu of a difference in the forward purchase and sale price. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. 43 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Directors. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. 44 | OPPENHEIMER DISCIPLINED ALLOCATION FUND The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3,4 TAX PURPOSES ----------------------------------------------------------------------- $565,546 $-- $11,266,279 $7,260,689 1. As of October 31, 2004, the Fund had $11,257,119 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of October 31, 2004, details of the capital loss carryforwards were as follows: EXPIRING -------- 2009 $ 1,037,238 2010 10,219,881 ----------- Total $11,257,119 =========== 2. The Fund had $9,160 of straddle losses which were deferred. 3. During the fiscal year ended October 31, 2004, the Fund utilized $11,697,830 of capital loss carryforward to offset capital gains realized in that fiscal year. 4. During the fiscal year ended October 31, 2003, the Fund utilized $1,129,404 of capital loss carryforward to offset capital gains realized in that fiscal year. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for October 31, 2004. Net assets of the Fund were unaffected by the reclassifications. INCREASE TO INCREASE TO ACCUMULATED ACCUMULATED NET NET INVESTMENT REALIZED LOSS INCOME ON INVESTMENTS --------------------------------- $195,699 $195,699 The tax character of distributions paid during the years ended October 31, 2004 and October 31, 2003 was as follows: YEAR ENDED YEAR ENDED OCTOBER 31, 2004 OCTOBER 31, 2003 -------------------------------------------------------- Distributions paid from: Ordinary income $898,067 $1,203,803 45 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of October 31, 2004 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $139,975,604 Federal tax cost of other investments (626,231) ------------ Total federal tax cost $139,349,373 ============ Gross unrealized appreciation $ 10,216,319 Gross unrealized depreciation (2,955,630) ------------ Net unrealized appreciation $ 7,260,689 ============ - -------------------------------------------------------------------------------- DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the year ended October 31, 2004, the Fund's projected benefit obligations were increased by $2,351 and payments of $1,482 were made to retired directors, resulting in an accumulated liability of $24,909 as of October 31, 2004. The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Director. The Fund purchases shares of the funds selected for deferral by the Director in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of directors' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared and paid quarterly. Capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. 46 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF CAPITAL STOCK The Fund has authorized 550 million shares of $0.001 par value capital stock. Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003 SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------- CLASS A Sold 1,031,614 $ 14,122,521 999,373 $ 12,060,988 Dividends and/or distributions reinvested 62,731 854,672 91,508 1,096,971 Redeemed (1,307,401) (17,818,843) (1,446,531) (17,243,520) ------------------------------------------------------------ Net decrease (213,056) $ (2,841,650) (355,650) $ (4,085,561) ============================================================ - ---------------------------------------------------------------------------------------- CLASS B Sold 290,346 $ 4,026,294 443,368 $ 5,482,870 Dividends and/or distributions reinvested 96 1,314 3,597 42,750 Redeemed (435,276) (6,026,643) (372,443) (4,523,880) ------------------------------------------------------------ Net increase (decrease) (144,834) $ (1,999,035) 74,522 $ 1,001,740 ============================================================ - ---------------------------------------------------------------------------------------- CLASS C Sold 221,557 $ 2,977,259 186,268 $ 2,221,285 Dividends and/or distributions reinvested 267 3,610 1,273 14,766 Redeemed (114,094) (1,533,815) (86,326) (1,023,339) ------------------------------------------------------------ Net increase 107,730 $ 1,447,054 101,215 $ 1,212,712 ============================================================
47 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF CAPITAL STOCK Continued
YEAR ENDED OCTOBER 31, 2004 YEAR ENDED OCTOBER 31, 2003 SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------- Class N Sold 85,506 $ 1,165,275 21,478 $ 261,761 Dividends and/or distributions reinvested 357 4,887 230 2,766 Redeemed (8,146) (108,870) (12,426) (155,431) ------------------------------------------------------------ Net increase 77,717 $ 1,061,292 9,282 $ 109,096 ============================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than U.S. government obligations and short-term obligations, for the year ended October 31, 2004, were $76,733,133 and $84,881,502, respectively. There were purchases of $12,340,077 and sales of $8,930,209 of U.S. government and government agency obligations for the year ended October 31, 2004. In addition, there were purchases of $316,759,702 and sales of $306,486,129 of To Be Announced (TBA) mortgage-related securities for the year ended October 31, 2004. - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million. - -------------------------------------------------------------------------------- ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended October 31, 2004, the Fund paid $274,415 to OFS for services to the Fund. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor - -------------------------------------------------------------------------------- 48 | OPPENHEIMER DISCIPLINED ALLOCATION FUND incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B and Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of up to 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Directors and its independent directors must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at October 31, 2004 for Class B, Class C and Class N shares were $428,108, $131,782 and $15,505, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------ October 31, 2004 $68,502 $814 $40,394 $1,835 $601 - ------------------------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage commissions for sales that is permitted under its investment advisory agreement, the Fund's Manager terminated that practice in July 2003. Subsequently, the Manager paid the Fund $18,298, an amount equivalent to certain of such commissions incurred in prior years. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended October 31, 2004 OFS waived $941 and $571 for Class A and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts 49 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of October 31, 2004, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices (financial futures) or debt securities (interest rate futures) in order to gain exposure to or protection from changes in market value of stocks and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported in the Statement of Operations as the closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported in the Statement of Operations. 50 | OPPENHEIMER DISCIPLINED ALLOCATION FUND Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of October 31, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS OCTOBER 31, 2004 (DEPRECIATION) - -------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Long Bonds 12/20/04 67 $7,627,531 $ 209,078 U.S. Treasury Nts., 10 yr. 12/20/04 55 6,245,938 92,365 ----------- 301,443 ----------- CONTRACTS TO SELL U.S. Treasury Nts., 2 yr. 12/30/04 27 5,717,672 969 U.S. Treasury Nts., 5 yr. 12/20/04 79 8,798,625 (71,617) ----------- (70,648) ----------- $ 230,795 ===========
- -------------------------------------------------------------------------------- 7. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to unrealized gain (loss), in the amount due to or owed by the Fund at termination or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of October 31, 2004, the Fund had entered into the following total return swap agreements:
PAID BY RECEIVED BY THE FUND AT THE FUND AT SWAP NOTIONAL OCTOBER 31, OCTOBER 31, TERMINATION UNREALIZED COUNTERPARTY AMOUNT 2004 2004 DATES APPRECIATION - --------------------------------------------------------------------------------------------------- Value of One-Month total return of LIBOR less 50 Lehman Brothers Deutsche Bank AG $850,000 basis points CMBS Index 1/1/05 $4,200 Value of One-Month total return of Goldman Sachs LIBOR Lehman Brothers Capital Markets LP 850,000 BBA Rate CMBS Index 3/31/05 3,905 ------ $8,105 ====== Index abbreviations are as follows: CMBS Commercial Mortgage Backed Securities Markets LIBOR London-Interbank Offered Rate LIBOR BBA London-Interbank Offered Rate British Bankers Association
51 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 8. ILLIQUID OR RESTRICTED SECURITIES As of October 31, 2004, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Directors as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of October 31, 2004 was $4,107,030, which represents 3.29% of the Fund's net assets. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST OCTOBER 31, 2004 DEPRECIATION - ------------------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Geotek Communications, Inc., Series B, Escrow Shares 1/4/01 $400 $-- $400 - -------------------------------------------------------------------------------------------------
9. LITIGATION Six complaints have been filed as putative derivative and class actions against the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund, and nine Directors/ Trustees of certain of the Funds (collectively, the "Directors/Trustees"). The complaints allege that the Manager charged excessive fees for distribution and other costs, improperly used assets of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the Funds, and failed to properly disclose the use of Fund assets to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. The complaints further allege that by permitting and/or participating in those actions, the Directors/Trustees breached their fiduciary duties to Fund shareholders under the Investment Company Act of 1940 and at common law. By order dated October 27, 2004, these six actions, and future related actions, were consolidated by the U.S. District Court for the Southern District of New York into a single consolidated proceeding in contemplation of the filing of a superseding consolidated and amended complaint. OppenheimerFunds believes that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them, the Funds or the Directors/Trustees and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. However, OppenheimerFunds, the Funds and the Directors/Trustees believe that the allegations contained in the complaints are without merit and intend to defend these lawsuits vigorously. 52 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER SERIES FUND, INC.: We have audited the accompanying statement of assets and liabilities of Oppenheimer Disciplined Allocation Fund, (one of the portfolios constituting the Oppenheimer Series Fund, Inc.) including the statement of investments, as of October 31, 2004, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2004, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Allocation Fund as of October 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado December 16, 2004 53 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2005, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2004. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends, if any, paid by the Fund during the fiscal year ended October 31, 2004 which are not designated as capital gain distributions should be multiplied by 61.93% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended October 31, 2004 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $945,027 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2005, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 54 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file new Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 55 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- DIRECTORS AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY FUND, LENGTH OF SERVICE, AGE DIRECTOR; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY DIRECTOR INDEPENDENT THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO DIRECTORS 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CLAYTON K. YEUTTER, Of Counsel (since June 1993) Hogan & Hartson (a law firm); a director (since 2002) of Chairman of the Board of Danielson Holding Corp. Formerly a director of Weyerhaeuser Corp. (1999-April 2004), Directors (since 2003); Caterpillar, Inc. (1993-December 2002), ConAgra Foods (1993-2001), Texas Instruments Director (since 1996) (1993-2001) and FMC Corporation (1993-2001). Oversees 25 portfolios in the OppenheimerFunds Age: 73 complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the Director (since 1996) OppenheimerFunds complex. Age: 71 PHILLIP A. GRIFFITHS, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J., a director Director (since 1999) (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward Academy, a Senior Advisor Age: 66 (since 2001) of The Andrew W. Mellon Foundation. A member of: the National Academy of Sciences (since 1979), American Academy of Arts and Sciences (since 1995), American Philosophical Society (since 1996) and Council on Foreign Relations (since 2002). Formerly a director of Bankers Trust New York Corporation (1994-1999). Oversees 25 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Formerly a Senior Vice President and General Auditor, American Express Company Director (since 2004) (July 1998-February 2003). Member of Trustees of the American Symphony Orchestra Age: 62 (October 1998 to present). Oversees 25 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director (since January 2002) Columbia Equity Financial Corp. (privately-held financial Director (since 2002) adviser); Managing Director (since January 2002) Carmona Motley, Inc. (privately-held Age: 52 financial adviser). Formerly a Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001). Oversees 25 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, A director (since February 1972) of Dominion Resources, Inc. (electric utility holding Director (since 1996) company); formerly a director of Prime Retail, Inc. (real estate investment trust) and Age: 77 Dominion Energy, Inc. (electric power and oil & gas producer), President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research) and a director of Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company. Oversees 25 portfolios in the OppenheimerFunds complex. EDWARD V. REGAN, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a director of Director (since 1996) OffitBank; formerly Trustee, Financial Accounting Foundation (FASB and GASB), Senior Fellow Age: 74 of Jerome Levy Economics Institute, Bard College, Chairman of Municipal Assistance Corporation for the City of New York, New York State Comptroller and Trustee of New York State and Local Retirement Fund. Oversees 25 investment companies in the OppenheimerFunds complex.
56 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
RUSSELL S. REYNOLDS, JR., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate governance consulting Director (since 1996) and executive recruiting); a Life Trustee of International House (non-profit educational Age: 72 a former trustee of The Historical Society of the Town of Greenwich. Oversees 25 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY AND OFFICER STREET NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL. JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since President and Director, September 2000) of the Manager; President and a director or trustee of other Oppenheimer Director (since 2001) funds; President and a director (since July 2001) of Oppenheimer Acquisition Corp. (the Age: 55 Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager); President and a director (since July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent company); a director (since June 1995) of DLB Acquisition Corporation (a holding company that owns the shares of Babson Capital Management LLC); a member of the Investment Company Institute's Board of Governors (elected to serve from October 3, 2003 through September 30, 2006). Formerly, Chief Operating Officer (September 2000-June 2001) of the Manager; President and trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end investment companies); a director (September 1999-August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 63 portfolios as Trustee/Director and 21 additional portfolios as Officer in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. FERREIRA, LEVY, MANIOUDAKIS, AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS EARLIER RESIGNATION, DEATH OR REMOVAL. EMMANUEL FERREIRA, Vice President of the Manager since January 2003. An officer of 4 portfolios in the Vice President and Portfolio OppenheimerFunds complex. Formerly, Portfolio Manager at Lashire Investments (July Manager (since 2003) 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999). Age: 37
57 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- DIRECTORS AND OFFICERS Unaudited / Continued - --------------------------------------------------------------------------------
CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000; an officer of 7 portfolios in the Vice President and Portfolio OppenheimerFunds complex. Formerly a portfolio manager of Morgan Stanley Dean Witter Manager (since 2000) Investment Management (1997 - September 2000). Age: 33 ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView Asset Management Vice President and Corporation (since April, 2002 and of OFI Institutional Asset Management, Inc. (since June Portfolio Manager 2002); an officer of 14 portfolios in the OppenheimerFunds complex. Formerly Executive (since 2002) Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Age: 38 Investment Management (August 1993-April 2002). BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Age: 44 Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since November 2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June 2003); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An officer of 84 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February 2002) of Secretary (since 2001) the Manager; General Counsel and a director (since November 2001) of the Distributor; General Age: 56 Counsel (since November 2001) of Centennial Asset Management Corporation; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Secretary and General Counsel (since November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and a director (since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Senior Vice President and General Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001); and OppenheimerFunds International Ltd. (October 1997-November 2001). An officer of 84 portfolios in the OppenheimerFunds complex.
58 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the Manager; Vice Vice President and President (since June 1983) of OppenheimerFunds Distributor, Inc., Centennial Asset Chief Compliance Officer Management Corporation and Shareholder Services, Inc. Formerly (until February 2004) Vice (since 2004) President and Director of Internal Audit of the Manager. An officer of 84 portfolios in the Age: 54 OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S DIRECTORS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 59 | OPPENHEIMER DISCIPLINED ALLOCATION FUND ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Directors of the registrant has determined that Edward V. Regan, the Chairman of the Board's Audit Committee, possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mr. Regan as the Audit Committee's financial expert. Mr. Regan is an "independent" Director pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $13,000 in fiscal 2004 and $10,000 in fiscal 2003. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $39,500 in fiscal 2004 and no such fees in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include, among others: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $6,000 in fiscal 2004 and $5,000 in fiscal 2003 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include, among others: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2004 and $26 in fiscal 2003. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees include consultations regarding the registrant's retirement plan with respect to its directors. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Pre-approval of non-audit services is waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $45,500 in fiscal 2004 and $5,026 in fiscal 2003 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal account's independence. No such services were rendered. ITEM 5. NOT APPLICABLE ITEM 6. SCHEDULE OF INVESTMENTS Not applicable ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At a meeting of the Board of Directors of the registrant held on February 18, 2004, the Board adopted (1) a policy that, should the Board determine that a vacancy exists or is likely to exist on the Board, the Governance Committee of the Board, which is comprised entirely of independent directors, shall consider any candidates for Board membership recommended by the registrant's security holders and (2) a policy that security holders wishing to submit a nominee for election to the Board may do so by mailing their submission to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance Committee. Prior to February 18, 2004, the Board did not have a formalized policy with respect to consideration of security holder nominees or a procedure by which security holders may make their submissions. In addition to security holder nominees, the Governance Committee may also consider nominees recommended by independent Board members or recommended by any other Board members and is authorized under its Charter, upon Board approval, to retain an executive search firm to assist in screening potential candidates. Upon Board approval, the Governance Committee may also obtain legal, financial, or other external counsel that may be necessary or desirable in the screening process. ITEM 10. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of October 31, 2004, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT APPLICABLE TO SEMIANNUAL REPORTS) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 2 ra205_11975ex99code-eth.txt RA205_11975EX99CODE.TXT EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.1 1. PURPOSE OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. - ---------- 1. The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: : (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.2 6. ANNUAL RENEWAL At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator - ---------- 2. An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra205_11975ex99cert.txt RA205_11975EX99CERT.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, JOHN V. MURPHY, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Disciplined Allocation Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 12/16/04 /S/ John V. Murphy ---------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, BRIAN W. WIXTED, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Disciplined Allocation Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 12/16/04 /S/ Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 4 ra205_11975ex99-906cert.txt RA205_11975EX99-906CERT.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer Disciplined Allocation Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2004 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Disciplined Oppenheimer Disciplined Allocation Fund Allocation Fund /S/ John V. Murphy /S/ Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 12/16/04 Date: 12/16/04 -----END PRIVACY-ENHANCED MESSAGE-----