-----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, CZ6jfvEiBkWTFFuEmNvqrL599j7BjwvRZ3/mUwvrESwO24dxxdzXZtlnd+4p3DYd Yw3U8bXbAWjYMqphoBPvXg== 0000935069-06-000009.txt : 20060103 0000935069-06-000009.hdr.sgml : 20060102 20060103160849 ACCESSION NUMBER: 0000935069-06-000009 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20060103 DATE AS OF CHANGE: 20060103 EFFECTIVENESS DATE: 20060103 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: 06502645 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_18614ncsr.txt RA205_18614NCSR.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 SERIES FUND, INC. (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 (Address of principal executive offices) (Zip code) ROBERT G. ZACK, ESQ. OPPENHEIMERFUNDS, INC. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: October 31 Date of reporting period: October 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. OPPENHEIMER DISCIPLINED ALLOCATION FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PORTFOLIO ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Bonds and Notes 48.3% Stocks 45.2 Cash Equivalents 6.5 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on the total market value of investments. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- Software 7.2% - -------------------------------------------------------------------------------- Media 6.0 - -------------------------------------------------------------------------------- Pharmaceuticals 4.0 - -------------------------------------------------------------------------------- Aerospace & Defense 3.3 - -------------------------------------------------------------------------------- Diversified Financial Services 3.1 - -------------------------------------------------------------------------------- Oil & Gas 3.1 - -------------------------------------------------------------------------------- Insurance 2.9 - -------------------------------------------------------------------------------- Tobacco 2.6 - -------------------------------------------------------------------------------- Electric Utilities 2.1 - -------------------------------------------------------------------------------- Commercial Services & Supplies 2.0 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 3.1% - -------------------------------------------------------------------------------- Altria Group, Inc. 2.6 - -------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 2.3 - -------------------------------------------------------------------------------- Microsoft Corp. 2.2 - -------------------------------------------------------------------------------- Cendant Corp. 2.0 - -------------------------------------------------------------------------------- BP plc, ADR 2.0 - -------------------------------------------------------------------------------- Liberty Global, Inc., Series A 1.9 - -------------------------------------------------------------------------------- Liberty Global, Inc., Series C 1.8 - -------------------------------------------------------------------------------- Honeywell International, Inc. 1.6 - -------------------------------------------------------------------------------- AES Corp. (The) 1.5 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 7 | 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, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED MARKET INDICES. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. As stocks outperformed bonds in the twelve months ended October 31, 2005, Oppenheimer Disciplined Allocation Fund, which can invest in stocks, bonds, cash equivalents or any combination of these, benefited from a moderate tilt toward equities which represented approximately 52% of the Fund's assets at period end. In managing the equity portfolio, we strove, as always, to achieve above-average total returns while seeking to maintain overall portfolio risk at market-like levels. Because we do not believe that investors can consistently add value by significantly over- or underweighting equity market sectors, we limit sector variances so that these weightings can have no more effect on performance than any of the Fund's 50 - 70 individual stock holdings would have. To add value, we seek to identify within each sector those companies that have the strongest three-year earnings power. We believe this time-tested, traditional value investor's metric is the single most reliable predictor of stocks that outperform. In nine of 10 sectors, the stock portfolio's positive results can be attributed to our individual stock selections rather than sector weightings; over- or underweightings in those sectors were negligible while our holdings delivered above-average total returns. Among the largest individual contributors was Liberty Global, Inc., a U.S. company that operates cable TV systems in Europe and Japan. Our research showed that Liberty Global faced fewer structural competitive issues and may have more growth opportunities than U.S. cable operators. Few stocks detracted from performance. The notable exception was IDT Corp., Cl. B, a multinational communications company that did not stay focused on its core growth opportunities in telephone services, prepaid phone cards and animation media. Nonetheless, we maintained the position; the release of a new animated film in 2006 could help to get the company back on track. The one area where we might have added more value was the market-leading energy sector. We intentionally underweighted energy stocks, because we could not identify a significant supply-demand issue that justified current prices. As we see it, a bottleneck at the U.S. refining level has been extrapolated throughout the energy industry on a global basis and is unlikely to be sustainable. We remain slightly underexposed to energy-related investments. The loss of performance in energy stocks was partially offset by the Fund's bond portfolio, which was positioned to enhance yield while limiting principal erosion in a rising-rate environment. Toward that end, we maintained a short duration (i.e., a lower sensitivity to changing interest rates than the benchmark index). Last May and again in September, our analysis told us that investors expected interest rates to remain at historically low levels for some years to 8 | OPPENHEIMER DISCIPLINED ALLOCATION FUND come. Yet our quantitative analysis suggested that, given the fundamental strength of the economy and the Fed's commitment to keeping inflation low, interest rates were likely to rise more significantly than investors anticipated. In response, we briefly shortened the Fund's duration even more. In both May and September, this proved beneficial, limiting the negative impact on principal as rates continued to climb. This interest-rate management approach was the major contributor to the bond portfolio's positive returns during the six-month period. Another positive factor was our decision to trim the portfolio's exposure to mortgage-backed securities. Within this sector, we continued to favor higher-coupon mortgages. In our view the market had priced in too high a level of expected prepayments which led to these securities offering value. As rates rose these prepayment assumptions of the market moved closer to our expectations, leading to these high-coupon mortgage pools adding significantly to the Fund's current income during the past six months. Our corporate bond allocation had little net effect on performance. An emphasis on shorter-term corporates was a boon as these are less sensitive to the widening in credit spread that occurred during the period but was more or less offset by a larger investment in BBB-rated securities, the lowest echelon of the investment-grade universe. These BBB securities boosted current yield but were also more sensitive to widening in credit spreads. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 2005. In the case of Class A and Class B shares, performance is measured over a ten-fiscal-year period. In the case of Class C, performance is measured from inception of the class on May 1, 1996. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. The Fund's performance is also compared to the Merrill Lynch Corporate/Government Master Index, a broad-based index of U.S. Treasury and government agency securities, corporate and Yankee bonds regarded as a general measurement of the performance of the domestic debt securities market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the indices. 9 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class A) S&P 500 Index Merrill Lynch Corporate/Government Master Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Merrill Lynch Corporate/ Oppenheimer Disciplined Government Allocation Fund (Class A) S&P 500 Index Master Index 12/31/1994 9,425 10,000 10,000 03/31/1995 10,000 10,973 10,488 06/30/1995 10,654 12,019 11,166 09/30/1995 11,144 12,973 11,372 12/31/1995 11,682 13,753 11,898 03/31/1996 11,879 14,491 11,636 06/30/1996 11,959 15,141 11,685 09/30/1996 12,190 15,609 11,887 10/31/1996 1 12,803 16,039 12,160 01/31/1997 13,094 17,965 12,268 04/30/1997 13,131 18,399 12,336 07/31/1997 14,885 22,014 12,976 10/31/1997 14,752 21,188 13,251 01/31/1998 15,036 22,798 13,646 04/30/1998 16,055 25,955 13,724 07/31/1998 15,625 26,264 14,034 10/31/1998 15,626 25,852 14,617 01/31/1999 16,879 30,209 14,838 04/30/1999 16,937 31,620 14,603 07/31/1999 16,650 31,570 14,359 10/31/1999 16,035 32,486 14,509 01/31/2000 15,733 33,333 14,425 04/30/2000 16,620 34,820 14,748 07/31/2000 16,734 34,400 15,175 10/31/2000 17,362 34,461 15,555 01/31/2001 17,558 33,033 16,391 04/30/2001 16,539 30,306 16,516 07/31/2001 16,549 29,473 17,112 10/31/2001 15,605 25,884 17,946 01/31/2002 15,930 27,703 17,617 04/30/2002 15,806 26,482 17,747 07/31/2002 14,544 22,513 18,322 10/31/2002 14,690 21,976 18,946 01/31/2003 14,600 21,330 19,422 04/30/2003 15,151 22,959 19,934 07/31/2003 16,164 24,908 19,585 10/31/2003 16,772 26,544 20,055 01/31/2004 17,846 28,698 20,493 04/30/2004 17,485 28,209 20,296 07/31/2004 17,393 28,186 20,490 10/31/2004 17,967 29,043 21,166 01/31/2005 18,943 30,484 21,305 04/30/2005 18,712 29,995 21,356 07/31/2005 19,641 32,145 21,512 10/31/2005 19,331 31,574 21,382 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 1.41% 5-Year 0.97% 10-Year 5.05% 1. The Fund changed its fiscal year end from 12/31 to 10/31. 10 | OPPENHEIMER DISCIPLINED ALLOCATION FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class B) S&P 500 Index Merrill Lynch Corporate/Government Master Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined Allocation fund Merrill Lynch Corporate/ (Class B) S&P 500 Index Government Master Index 10/02/1995 10,000 10,000 10,000 12/31/1995 10,493 10,602 10,463 03/31/1996 10,647 11,170 10,232 06/30/1996 10,697 11,671 10,275 09/30/1996 10,880 12,032 10,453 10/31/1996 1 11,072 12,364 10,693 01/31/1997 11,651 13,848 10,788 04/30/1997 11,664 14,183 10,848 07/31/1997 13,198 16,969 11,411 10/31/1997 13,060 16,332 11,652 01/31/1998 13,283 17,573 11,999 04/30/1998 14,159 20,007 12,068 07/31/1998 13,749 20,245 12,341 10/31/1998 13,726 19,928 12,854 01/31/1999 14,805 23,286 13,048 04/30/1999 14,821 24,374 12,841 07/31/1999 14,546 24,335 12,627 10/31/1999 13,978 25,041 12,758 01/31/2000 13,687 25,694 12,685 04/30/2000 14,437 26,841 12,968 07/31/2000 14,507 26,517 13,344 10/31/2000 15,023 26,563 13,678 01/31/2001 15,171 25,463 14,414 04/30/2001 14,259 23,360 14,524 07/31/2001 14,239 22,719 15,047 10/31/2001 13,407 19,952 15,781 01/31/2002 13,686 21,354 15,492 04/30/2002 13,579 20,413 15,606 07/31/2002 12,495 17,354 16,111 10/31/2002 12,621 16,940 16,660 01/31/2003 12,544 16,442 17,079 04/30/2003 13,017 17,697 17,529 07/31/2003 13,887 19,200 17,222 10/31/2003 14,409 20,461 17,635 01/31/2004 15,332 22,121 18,021 04/30/2004 15,021 21,744 17,848 07/31/2004 14,943 21,727 18,018 10/31/2004 15,436 22,387 18,613 01/31/2005 16,274 23,498 18,735 04/30/2005 16,076 23,121 18,779 07/31/2005 16,874 24,778 18,916 10/31/2005 16,608 24,338 18,803
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 1.68% 5-Year 0.94% 10-Year 5.19% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 14 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from 12/31 to 10/31. 11 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class C) S&P 500 Index Merrill Lynch Corporate/Government Master Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined Allocation Fund Merrill Lynch Corporate/ (Class C) S&P 500 Index Government Master Index 05/01/1996 10,000 10,000 10,000 06/30/1996 10,062 10,297 10,113 09/30/1996 10,225 10,615 10,288 10/31/1996 1 10,408 10,908 10,524 01/31/1997 10,955 12,217 10,618 04/30/1997 10,965 12,512 10,677 07/31/1997 12,406 14,971 11,231 10/31/1997 12,274 14,409 11,469 01/31/1998 12,489 15,503 11,810 04/30/1998 13,304 17,650 11,878 07/31/1998 12,921 17,861 12,146 10/31/1998 12,901 17,581 12,651 01/31/1999 13,912 20,544 12,842 04/30/1999 13,927 21,503 12,639 07/31/1999 13,664 21,469 12,428 10/31/1999 13,138 22,092 12,557 01/31/2000 12,858 22,668 12,485 04/30/2000 13,561 23,679 12,764 07/31/2000 13,628 23,394 13,134 10/31/2000 14,115 23,435 13,463 01/31/2001 14,248 22,464 14,187 04/30/2001 13,400 20,609 14,295 07/31/2001 13,373 20,043 14,810 10/31/2001 12,596 17,602 15,533 01/31/2002 12,835 18,839 15,248 04/30/2002 12,704 18,009 15,360 07/31/2002 11,666 15,310 15,857 10/31/2002 11,760 14,945 16,397 01/31/2003 11,658 14,505 16,809 04/30/2003 12,073 15,613 17,253 07/31/2003 12,856 16,939 16,951 10/31/2003 13,310 18,051 17,357 01/31/2004 14,130 19,516 17,737 04/30/2004 13,809 19,183 17,567 07/31/2004 13,707 19,168 17,734 10/31/2004 14,125 19,750 18,319 01/31/2005 14,866 20,730 18,440 04/30/2005 14,645 20,398 18,483 07/31/2005 15,341 21,860 18,618 10/31/2005 15,073 21,472 18,506
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 5.71% 5-Year 1.32% Since Inception (5/1/96) 4.41% 1. The Fund changed its fiscal year end from 12/31 to 10/31. 12 | OPPENHEIMER DISCIPLINED ALLOCATION FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Disciplined Allocation Fund (Class N) S&P 500 Index Merrill Lynch Corporate/Government Master Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Disciplined Allocation Fund Merrill Lynch Corporate/ (Class N) S&P 500 Index Government Master Index 03/01/2001 10,000 10,000 10,000 04/30/2001 9,793 10,094 9,968 07/31/2001 9,785 9,817 10,328 10/31/2001 9,210 8,621 10,831 01/31/2002 9,399 9,227 10,633 04/30/2002 9,317 8,821 10,711 07/31/2002 8,570 7,499 11,058 10/31/2002 8,642 7,320 11,435 01/31/2003 8,581 7,104 11,722 04/30/2003 8,897 7,647 12,031 07/31/2003 9,484 8,296 11,820 10/31/2003 9,835 8,841 12,104 01/31/2004 10,458 9,559 12,368 04/30/2004 10,229 9,396 12,250 07/31/2004 10,167 9,388 12,367 10/31/2004 10,493 9,674 12,775 01/31/2005 11,051 10,154 12,859 04/30/2005 10,899 9,991 12,889 07/31/2005 11,431 10,707 12,983 10/31/2005 11,236 10,517 12,905
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 6.09% 5-Year N/A Since Inception (3/1/01) 2.53% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE-INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 14 FOR FURTHER INFORMATION. 13 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 9/16/85. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 5/1/96. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. 14 | OPPENHEIMER DISCIPLINED ALLOCATION FUND CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 15 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended October 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 16 | OPPENHEIMER DISCIPLINED ALLOCATION FUND the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (5/1/05) (10/31/05) OCTOBER 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,033.10 $ 5.65 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.66 5.62 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,028.80 10.17 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.22 10.11 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,029.20 10.33 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.07 10.26 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,031.00 8.02 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.34 7.96 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended October 31, 2005 are as follows: CLASS EXPENSE RATIOS - ------------------------ Class A 1.10% - ------------------------ Class B 1.98 - ------------------------ Class C 2.01 - ------------------------ Class N 1.56 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 17 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS October 31, 2005 - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCKS--51.7% - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY--6.3% - ------------------------------------------------------------------------------------------------------------------------------------ HOUSEHOLD DURABLES--0.3% WCI Communities, Inc. 1 17,500 $ 437,850 - ------------------------------------------------------------------------------------------------------------------------------------ MEDIA--6.0% Liberty Global, Inc., Series A 99,731 2,470,337 - ------------------------------------------------------------------------------------------------------------------------------------ Liberty Global, Inc., Series C 1 99,731 2,365,619 - ------------------------------------------------------------------------------------------------------------------------------------ Liberty Media Corp., Cl. A 1 375,200 2,990,344 -------------- 7,826,300 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES--3.9% - ------------------------------------------------------------------------------------------------------------------------------------ BEVERAGES--0.6% Constellation Brands, Inc., Cl. A 1 36,300 854,502 - ------------------------------------------------------------------------------------------------------------------------------------ FOOD & STAPLES RETAILING--0.7% Wal-Mart Stores, Inc. 18,600 879,966 - ------------------------------------------------------------------------------------------------------------------------------------ TOBACCO--2.6% Altria Group, Inc. 44,600 3,347,230 - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY--4.0% - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY EQUIPMENT & SERVICES--0.9% Halliburton Co. 20,400 1,205,640 - ------------------------------------------------------------------------------------------------------------------------------------ OIL & GAS--3.1% BP plc, ADR 39,800 2,642,720 - ------------------------------------------------------------------------------------------------------------------------------------ Kinder Morgan, Inc. 4,000 363,600 - ------------------------------------------------------------------------------------------------------------------------------------ LUKOIL, Sponsored ADR 18,100 995,500 -------------- 4,001,820 - ------------------------------------------------------------------------------------------------------------------------------------ FINANCIALS--10.3% - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL MARKETS--1.4% UBS AG 21,311 1,809,869 - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL BANKS--2.0% Bank of America Corp. 16,102 704,301 - ------------------------------------------------------------------------------------------------------------------------------------ Wachovia Corp. 14,788 747,090 - ------------------------------------------------------------------------------------------------------------------------------------ Wells Fargo & Co. 19,200 1,155,840 -------------- 2,607,231 - ------------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL SERVICES--3.1% Capital One Financial Corp. 15,800 1,206,330 - ------------------------------------------------------------------------------------------------------------------------------------ Citigroup, Inc. 21,377 978,639 - ------------------------------------------------------------------------------------------------------------------------------------ JPMorgan Chase & Co. 32,200 1,179,164 - ------------------------------------------------------------------------------------------------------------------------------------ Lehman Brothers Holdings, Inc. 6,200 741,954 -------------- 4,106,087
18 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ INSURANCE--2.9% American International Group, Inc. 7,100 $ 460,080 - ------------------------------------------------------------------------------------------------------------------------------------ Aspen Insurance Holdings Ltd. 15,300 370,107 - ------------------------------------------------------------------------------------------------------------------------------------ Everest Re Group Ltd. 8,300 825,435 - ------------------------------------------------------------------------------------------------------------------------------------ Genworth Financial, Inc., Cl. A 42,400 1,343,656 - ------------------------------------------------------------------------------------------------------------------------------------ Phoenix Cos., Inc. (The) 28,600 370,370 - ------------------------------------------------------------------------------------------------------------------------------------ Platinum Underwriters Holdings Ltd. 12,700 361,823 -------------- 3,731,471 - ------------------------------------------------------------------------------------------------------------------------------------ THRIFTS & MORTGAGE FINANCE--0.9% Countrywide Financial Corp. 22,100 702,117 - ------------------------------------------------------------------------------------------------------------------------------------ Freddie Mac 8,500 521,475 -------------- 1,223,592 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE--6.6% - ------------------------------------------------------------------------------------------------------------------------------------ BIOTECHNOLOGY--1.3% MedImmune, Inc. 1 16,000 559,680 - ------------------------------------------------------------------------------------------------------------------------------------ Wyeth 25,300 1,127,368 -------------- 1,687,048 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE EQUIPMENT & SUPPLIES--0.7% Boston Scientific Corp. 1 22,600 567,712 - ------------------------------------------------------------------------------------------------------------------------------------ Cooper Cos., Inc. (The) 6,000 413,040 -------------- 980,752 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE PROVIDERS & SERVICES--0.6% Manor Care, Inc. 11,200 417,200 - ------------------------------------------------------------------------------------------------------------------------------------ Tenet Healthcare Corp. 1 45,900 386,478 -------------- 803,678 - ------------------------------------------------------------------------------------------------------------------------------------ PHARMACEUTICALS--4.0% GlaxoSmithKline plc, ADR 18,900 982,611 - ------------------------------------------------------------------------------------------------------------------------------------ Pfizer, Inc. 48,400 1,052,216 - ------------------------------------------------------------------------------------------------------------------------------------ Sanofi-Aventis SA, ADR 31,900 1,279,828 - ------------------------------------------------------------------------------------------------------------------------------------ Schering-Plough Corp. 2 44,800 911,232 - ------------------------------------------------------------------------------------------------------------------------------------ Watson Pharmaceuticals, Inc. 1 27,500 950,400 -------------- 5,176,287
19 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS--5.8% - ------------------------------------------------------------------------------------------------------------------------------------ AEROSPACE & DEFENSE--3.3% Honeywell International, Inc. 61,500 $ 2,103,300 - ------------------------------------------------------------------------------------------------------------------------------------ Orbital Sciences Corp. 1 131,300 1,527,019 - ------------------------------------------------------------------------------------------------------------------------------------ United Technologies Corp. 14,000 717,920 -------------- 4,348,239 - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL SERVICES & SUPPLIES--2.0% Cendant Corp. 152,500 2,656,550 - ------------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED CONSUMER SERVICES--0.3% Corinthian Colleges, Inc. 1 26,700 332,148 - ------------------------------------------------------------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT--0.2% GrafTech International Ltd. 1 41,100 201,390 - ------------------------------------------------------------------------------------------------------------------------------------ INFORMATION TECHNOLOGY--10.8% - ------------------------------------------------------------------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT--0.6% Cisco Systems, Inc. 1 42,500 741,625 - ------------------------------------------------------------------------------------------------------------------------------------ Geotek Communications, Inc., Series B, Escrow Shares 1,3,4 100 -- -------------- 741,625 - ------------------------------------------------------------------------------------------------------------------------------------ COMPUTERS & PERIPHERALS--1.2% Hewlett-Packard Co. 45,400 1,273,016 - ------------------------------------------------------------------------------------------------------------------------------------ Hutchinson Technology, Inc. 1 14,100 349,680 -------------- 1,622,696 - ------------------------------------------------------------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS--0.3% Flextronics International Ltd. 1 44,700 415,263 - ------------------------------------------------------------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES--0.1% Net2Phone, Inc. 1 118,500 177,750 - ------------------------------------------------------------------------------------------------------------------------------------ SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.4% ATI Technologies, Inc. 1 52,500 758,625 - ------------------------------------------------------------------------------------------------------------------------------------ Freescale Semiconductor, Inc., Cl. A 1 44,200 1,047,098 -------------- 1,805,723 - ------------------------------------------------------------------------------------------------------------------------------------ SOFTWARE--7.2% Compuware Corp. 1 48,000 388,320 - ------------------------------------------------------------------------------------------------------------------------------------ Microsoft Corp. 113,200 2,909,240 - ------------------------------------------------------------------------------------------------------------------------------------ Novell, Inc. 1 153,900 1,172,718 - ------------------------------------------------------------------------------------------------------------------------------------ Synopsys, Inc. 1 44,400 841,380 - ------------------------------------------------------------------------------------------------------------------------------------ Take-Two Interactive Software, Inc. 1 197,150 4,071,148 -------------- 9,382,806
20 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS--0.6% - ------------------------------------------------------------------------------------------------------------------------------------ CHEMICALS--0.6% Praxair, Inc. 15,100 $ 746,091 - ------------------------------------------------------------------------------------------------------------------------------------ TELECOMMUNICATION SERVICES--1.3% - ------------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED TELECOMMUNICATION SERVICES--1.3% IDT Corp., Cl. B 1 141,400 1,688,316 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES--2.1% - ------------------------------------------------------------------------------------------------------------------------------------ ELECTRIC UTILITIES--2.1% AES Corp. (The) 1 121,500 1,930,635 - ------------------------------------------------------------------------------------------------------------------------------------ Reliant Energy, Inc. 1 58,200 739,140 -------------- 2,669,775 -------------- Total Common Stocks (Cost $58,477,600) 67,467,695 PRINCIPAL AMOUNT - ------------------------------------------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES--6.7% Aesop Funding II LLC, Automobile Asset-Backed Certificates, Series 2005-1A, Cl. A2, 4.06%, 4/20/08 5 $ 80,000 80,061 - ------------------------------------------------------------------------------------------------------------------------------------ BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2005-A, Cl. A2, 3.66%, 12/26/07 276,299 275,493 - ------------------------------------------------------------------------------------------------------------------------------------ Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.: Series 2004-2, Cl. A3, 3.58%, 1/15/09 270,000 264,371 Series 2005-1, Cl. A2B, 3.73%, 7/16/07 130,000 129,820 - ------------------------------------------------------------------------------------------------------------------------------------ Capital One Prime Auto Receivables Trust, Automobile Loan Asset-Backed Securities, Series 2005-1, Cl. A2, 4.24%, 11/15/07 310,000 309,345 - ------------------------------------------------------------------------------------------------------------------------------------ Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2004-D, Cl. AF1, 2.98%, 4/25/20 39,671 39,455 Series 2005-B, Cl. AF1, 4.02%, 3/26/35 56,092 55,755 Series 2005-C, Cl. AF1, 4.196%, 6/25/35 154,730 153,968 Series 2005-D, Cl. AF1, 5.04%, 10/25/35 270,000 270,000 Series 2005-D, Cl. AV2, 4.21%, 10/25/35 5 220,000 220,000 - ------------------------------------------------------------------------------------------------------------------------------------ Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations: Series 2003-5, Cl. 1A2, 2.451%, 11/25/18 3,810 3,801 Series 2004-1, Cl. 1A2, 2.427%, 6/25/19 43,028 42,899 - ------------------------------------------------------------------------------------------------------------------------------------ Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2002-A, Cl. A4, 4.24%, 9/15/08 23,584 23,576 Series 2005-A, Cl. A2, 3.72%, 12/15/07 230,000 228,885 - ------------------------------------------------------------------------------------------------------------------------------------ CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2004-DFS, Cl. A2, 2.66%, 11/20/06 142,803 142,247 - ------------------------------------------------------------------------------------------------------------------------------------ Citibank Credit Card Issuance Trust, Credit Card Receivable Nts., Series 2003-C4, Cl. C4, 5%, 6/10/15 40,000 38,957 - ------------------------------------------------------------------------------------------------------------------------------------ Citigroup Mortgage Loan Trust, Inc., Collateralized Mtg. Obligations, Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 5 338,504 337,020
21 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES Continued - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07 3 $ 70,000 $ 72,861 - ------------------------------------------------------------------------------------------------------------------------------------ Countrywide Asset-Backed Certificates, Inc., Home Equity Asset-Backed Certificates: Series 2002-4, Cl. A1, 4.408%, 2/25/33 5 4,125 4,167 Series 2005-7, Cl. AF1B, 4.317%, 11/25/35 5 178,828 177,958 - ------------------------------------------------------------------------------------------------------------------------------------ DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2002-A, Cl. A4, 4.49%, 10/6/08 48,983 49,009 Series 2004-B, Cl. A2, 2.48%, 2/8/07 20,251 20,236 Series 2004-C, Cl. A2, 2.62%, 6/8/07 188,987 188,346 Series 2005-A, Cl. A2, 3.17%, 9/8/07 236,095 235,285 Series 2005-B, Cl. A2, 3.75%, 12/8/07 230,000 229,464 - ------------------------------------------------------------------------------------------------------------------------------------ Equity One ABS, Inc., Home Equity Mtg. Pass-Through Certificates, Series 2004-3, Cl. AF2, 3.80%, 7/25/34 5 230,000 228,875 - ------------------------------------------------------------------------------------------------------------------------------------ First Franklin Mortgage Loan Asset-Backed Certificates, Home Equity Receivables, Series 2005-FF10, Cl. A3, 4.248%, 11/25/39 5 330,000 330,000 - ------------------------------------------------------------------------------------------------------------------------------------ Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2004-A, Cl. A2, 2.13%, 10/15/06 49,536 49,482 Series 2005-A, Cl. A3, 3.48%, 11/17/08 190,000 187,565 Series 2005-B, Cl. A2, 3.77%, 9/15/07 171,315 170,968 - ------------------------------------------------------------------------------------------------------------------------------------ GS Auto Loan Trust, Automobile Loan Asset-Backed Securities, Series 2005-1, Cl. A2, 4.32%, 5/15/08 590,000 588,444 - ------------------------------------------------------------------------------------------------------------------------------------ Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts., Series 2003-3, Cl. A1, 1.50%, 1/15/08 17,776 17,764 - ------------------------------------------------------------------------------------------------------------------------------------ Honda Auto Receivables Owner Trust, Automobile Receivable Obligations: Series 2005-1, Cl. A2, 3.21%, 5/21/07 107,281 106,940 Series 2005-3, Cl. A2, 3.73%, 10/18/07 210,000 208,870 - ------------------------------------------------------------------------------------------------------------------------------------ Lehman XS Trust, Home Equity Obligations, Series 2005-2, Cl. 2A1B, 5.18%, 8/25/35 290,226 290,668 - ------------------------------------------------------------------------------------------------------------------------------------ Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates, Series 2001-1A, Cl. A1, 8.33%, 4/25/31 3 596,634 606,276 - ------------------------------------------------------------------------------------------------------------------------------------ MBNA Credit Card Master Note Trust, Credit Card Receivables, Series 2003-C7, Cl. C7, 5.32%, 3/15/16 5 360,000 382,538 - ------------------------------------------------------------------------------------------------------------------------------------ Nissan Auto Lease Trust, Automobile Lease Obligations, Series 2004-A, Cl. A2, 2.55%, 1/15/07 65,248 65,122 - ------------------------------------------------------------------------------------------------------------------------------------ Onyx Acceptance Owner Trust, Automobile Receivable Obligations: Series 2002-B, Cl. A4, 4.71%, 3/15/09 117,871 117,804 Series 2005-B, Cl. A2, 4.03%, 4/15/08 170,000 169,380 - ------------------------------------------------------------------------------------------------------------------------------------ Popular ABS Mortgage Pass-Through Trust, Home Equity Pass-Through Certificates: Series 2004-5, Cl. A F2, 3.735%, 11/10/34 5 70,000 69,023 Series 2005-1, Cl. A F2, 3.914%, 5/25/35 5 60,000 59,039 Series 2005-2, Cl. A F2, 4.415%, 4/25/35 5 90,000 89,025 - ------------------------------------------------------------------------------------------------------------------------------------ Residential Asset Mortgage Products, Inc., Home Equity Asset-Backed Pass-Through Certificates, Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 170,000 168,674
22 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES Continued - ------------------------------------------------------------------------------------------------------------------------------------ Structured Asset Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35 $ 365,644 $ 365,416 - ------------------------------------------------------------------------------------------------------------------------------------ USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2004-2, Cl. A2, 2.41%, 2/15/07 42,993 42,942 Series 2004-3, Cl. A2, 2.79%, 6/15/07 100,362 100,107 - ------------------------------------------------------------------------------------------------------------------------------------ Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed Securities: Series 2004-A, Cl. A2, 2.47%, 1/22/07 98,496 98,241 Series 2005-A, Cl. A2, 3.52%, 4/20/07 230,000 229,169 - ------------------------------------------------------------------------------------------------------------------------------------ Wachovia Auto Owner Trust, Automobile Receivable Nts., Series 2004-B, Cl. A2, 2.40%, 5/21/07 54,790 54,650 - ------------------------------------------------------------------------------------------------------------------------------------ Wells Fargo Home Equity Trust, Collateralized Mtg. Obligations, Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 5 142,847 141,655 - ------------------------------------------------------------------------------------------------------------------------------------ WFS Financial Owner Trust, Automobile Receivable Obligations, Series 2002-2, Cl. A4, 4.50%, 2/20/10 57,594 57,638 - ------------------------------------------------------------------------------------------------------------------------------------ Whole Auto Loan Trust, Automobile Loan Receivable Certificates, Series 2004-1, Cl. A2A, 2.59%, 5/15/07 125,576 125,010 -------------- Total Asset-Backed Securities (Cost $8,736,282) 8,714,264 - ------------------------------------------------------------------------------------------------------------------------------------ MORTGAGE-BACKED OBLIGATIONS--30.0% - ------------------------------------------------------------------------------------------------------------------------------------ GOVERNMENT AGENCY--25.2% - ------------------------------------------------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED--24.9% Federal Home Loan Mortgage Corp.: 6%, 4/1/17-7/1/24 882,392 900,312 6.50%, 4/1/18-4/1/34 315,925 325,333 7%, 6/1/29-11/1/32 848,162 885,850 8%, 4/1/16 87,416 93,403 9%, 8/1/22-5/1/25 24,613 26,725 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Series 1669, Cl. G, 6.50%, 2/15/23 8,707 8,700 Series 2034, Cl. Z, 6.50%, 2/15/28 70,358 72,358 Series 2053, Cl. Z, 6.50%, 4/15/28 80,700 82,952 Series 2055, Cl. ZM, 6.50%, 5/15/28 112,178 114,944 Series 2075, Cl. D, 6.50%, 8/15/28 221,691 227,648 Series 2080, Cl. Z, 6.50%, 8/15/28 68,806 70,342 Series 2387, Cl. PD, 6%, 4/15/30 93,010 93,557 Series 2456, Cl. BD, 6%, 3/15/30 40,232 40,349 Series 2498, Cl. PC, 5.50%, 10/15/14 3,485 3,484 Series 2500, Cl. FD, 4.47%, 3/15/32 5 36,998 37,379 Series 2526, Cl. FE, 4.37%, 6/15/29 5 46,665 47,041 Series 2551, Cl. FD, 4.37%, 1/15/33 5 36,408 36,702 Series 2583, Cl. KA, 5.50%, 3/15/22 213,127 213,724 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, 12.125%, 6/1/26 6 66,743 14,607
23 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED Continued Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Continued Series 183, Cl. IO, 9.65%, 4/1/27 6 $ 104,113 $ 23,669 Series 184, Cl. IO, 15.59%, 12/1/26 6 111,933 23,127 Series 192, Cl. IO, 13.946%, 2/1/28 6 32,408 6,359 Series 200, Cl. IO, 12.592%, 1/1/29 6 38,758 8,698 Series 2003-118, Cl. S, 22.81%, 12/25/33 6 534,233 57,489 Series 2130, Cl. SC, 8.269%, 3/15/29 6 88,102 7,062 Series 2796, Cl. SD, 13.706%, 7/15/26 6 115,984 9,060 Series 2920, Cl. S, 16.676%, 1/15/35 6 730,791 37,569 Series 3000, Cl. SE, 27.85%, 7/15/25 6 695,883 28,119 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed Security, Series 176, Cl. PO, 4.781%, 6/1/26 7 37,266 31,010 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn.: 4.50%, 12/1/20 8 2,037,000 1,968,251 5%, 6/1/18-7/1/18 677,324 668,836 5%, 11/1/35 8 3,925,000 3,777,813 5.50%, 2/1/33-11/1/34 2,249,870 2,223,605 5.50%, 11/1/33-11/1/35 8 3,594,823 3,548,302 6%, 7/1/16-11/1/32 1,796,831 1,835,988 6%, 11/1/20-11/1/35 8 5,797,000 5,862,882 6.50%, 3/1/26-10/1/30 88,840 91,589 6.50%, 10/1/34-12/1/35 8 4,343,000 4,456,911 7%, 11/1/17-2/25/22 407,053 421,098 7.50%, 1/1/08-8/1/29 100,303 105,459 8.50%, 7/1/32 8,728 9,472 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1, Cl. A2, 7%, 11/25/31 244,405 253,080 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1993-87, Cl. Z, 6.50%, 6/25/23 187,435 192,952 Trust 1996-35, Cl. Z, 7%, 7/25/26 281,572 292,313 Trust 1998-63, Cl. PG, 6%, 3/25/27 12,792 12,770 Trust 2001-50, Cl. NE, 6%, 8/25/30 49,237 49,495 Trust 2001-51, Cl. OD, 6.50%, 10/25/31 272,204 280,904 Trust 2001-70, Cl. LR, 6%, 9/25/30 55,562 56,054 Trust 2001-72, Cl. NH, 6%, 4/25/30 36,758 36,935 Trust 2001-74, Cl. PD, 6%, 5/25/30 13,868 13,911 Trust 2002-77, Cl. WF, 4.38%, 12/18/32 5 56,618 57,014 Trust 2002-94, Cl. MA, 4.50%, 8/25/09 1,411 1,408 Trust 2003-10, Cl. HP, 5%, 2/25/18 350,000 343,407 Trust 2004-101, Cl. BG, 5%, 1/25/20 236,000 231,839 Trust 2005-71, Cl. DB, 4.50%, 8/25/25 160,000 150,232 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security: Trust 1993-223, Cl. PM, 2.758%, 10/25/23 6 63,120 6,387
24 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED Continued Federal National Mortgage Assn., CMO, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security: Continued Trust 2002-38, Cl. SO, 8.938%, 4/25/32 6 $ 87,399 $ 5,185 Trust 2002-47, Cl. NS, 10.012%, 4/25/32 6 140,108 12,058 Trust 2002-51, Cl. S,10.203%, 8/25/32 6 128,714 9,887 Trust 2002-77, Cl. IS, 10.288%, 12/18/32 6 148,903 12,636 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 222, Cl. 2, 10.91%, 6/1/23 6 227,110 45,983 Trust 240, Cl. 2, 14.07%, 9/1/23 6 357,107 80,851 Trust 247, Cl. 2, 12.803%, 10/1/23 6 391,454 83,654 Trust 252, Cl. 2, 2.975%, 11/1/23 6 171,257 39,533 Trust 254, Cl. 2, 6.781%, 1/1/24 6 84,793 19,421 Trust 273, Cl. 2, 12.538%, 8/1/26 6 49,190 10,436 Trust 319, Cl. 2, 12.063%, 2/1/32 6 71,277 17,563 Trust 321, Cl. 2, 6.79%, 3/1/32 6 697,272 169,960 Trust 329, Cl. 2, 9.491%, 1/1/33 6 113,158 27,618 Trust 331, Cl. 9, (12.619)%, 2/1/33 6 193,828 43,795 Trust 333, Cl. 2, 10.34%, 3/1/33 6 813,531 200,968 Trust 334, Cl. 17, (4.23)%, 2/1/33 6 115,821 25,730 Trust 350, Cl. 2, 10.96%, 2/1/34 6 764,947 187,292 Trust 2001-65, Cl. S, 22.94%, 11/25/31 6 318,298 29,652 Trust 2001-81, Cl. S, 12.685%, 1/25/32 6 71,405 6,434 Trust 2002-9, Cl. MS, 11.025%, 3/25/32 6 100,174 8,114 Trust 2002-52, Cl. SD, 5.444%, 9/25/32 6 158,575 13,064 Trust 2002-77, Cl. SH, 13.63%, 12/18/32 6 92,257 8,994 Trust 2002-96, Cl. SK, 23.313%, 4/25/32 6 823,718 70,332 Trust 2003-4, Cl. S, 21.729%, 2/25/33 6 175,876 20,821 Trust 2004-54, Cl. DS, 8.44%, 11/25/30 6 132,803 8,652 Trust 2005-6, Cl. SE, 15.893%, 2/25/35 6 496,012 26,103 Trust 2005-19, Cl. SA, 14.36%, 3/25/35 6 1,964,881 103,754 Trust 2005-40, Cl. SA, 15.993%, 5/25/35 6 426,530 22,210 Trust 2005-71, Cl. SA, 24.563%, 8/25/25 6 443,384 26,095 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed Security: Trust 352, Cl. 1, 4.58%, 7/1/34 7 817,358 603,951 Trust 1993-184, Cl. M, 6.327%, 9/25/23 7 74,031 61,559 -------------- 32,478,784 - ------------------------------------------------------------------------------------------------------------------------------------ GNMA/GUARANTEED--0.3% Government National Mortgage Assn.: 7%, 4/15/09-2/15/24 125,003 131,035 7.50%, 3/15/09 72,912 75,964 8%, 5/15/17 51,032 54,583 8.50%, 8/15/17-12/15/17 31,681 34,339 - ------------------------------------------------------------------------------------------------------------------------------------ Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Series 2001-21, Cl. SB, 6.189%, 1/16/27 6 217,015 15,472
25 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ GNMA/GUARANTEED Continued Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Continued Series 2002-76, Cl. SY, 5.791%, 12/16/26 6 $ 289,844 $ 21,359 Series 2004-11, Cl. SM, 1.808%, 1/17/30 6 108,416 6,899 -------------- 339,651 - ------------------------------------------------------------------------------------------------------------------------------------ NON-AGENCY--4.8% - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL--4.3% Banc of America Commercial Mortgage, Inc., Commercial Mtg. Pass-Through Certificates: Series 2004-6, Cl. A3, 4.512%, 12/10/42 210,000 202,709 Series 2005-2, Cl. A4, 4.783%, 7/10/43 5 280,000 273,783 Series 2005-3, Cl. A2, 4.501%, 7/10/43 230,000 223,994 - ------------------------------------------------------------------------------------------------------------------------------------ Banc of America Funding Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 210,695 211,352 - ------------------------------------------------------------------------------------------------------------------------------------ Banc of America Mortgage Securities, Inc., Collateralized Mtg. Obligations Pass-Through Certificates: Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 173,437 176,309 Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 5 35,628 35,612 Series 2005-E, Cl. 2A2, 4.99%, 6/25/35 5 57,502 57,339 - ------------------------------------------------------------------------------------------------------------------------------------ Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg. Obligations, Series 2005-PWR7, Cl. A2, 4.945%, 2/11/41 100,000 98,390 - ------------------------------------------------------------------------------------------------------------------------------------ Citigroup/Deutsche Bank Commercial Mortgage Trust, Commercial Mtg. Obligations, Series 2005-CD1, Cl. A4, 5.224%, 9/15/20 8 260,000 260,163 - ------------------------------------------------------------------------------------------------------------------------------------ Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations, Series 2004-J9, Cl. 1A1, 4.218%, 10/25/34 5 88,461 88,532 - ------------------------------------------------------------------------------------------------------------------------------------ First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, Cl. D, 7.64%, 4/29/39 5,9 170,000 170,425 - ------------------------------------------------------------------------------------------------------------------------------------ First Union National Bank/Lehman Brothers/Bank of America Commercial Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35 129,302 133,355 - ------------------------------------------------------------------------------------------------------------------------------------ GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations: Series 2005-CA, Cl. A3, 4.578%, 6/10/48 90,000 87,286 Series 2005-C3, Cl. A2, 4.853%, 7/10/45 140,000 138,803 - ------------------------------------------------------------------------------------------------------------------------------------ GMAC Commercial Mortgage Securities, Inc., Commercial Mtg. Pass-Through Certificates: Series 1997-C1, Cl. A3, 6.869%, 7/15/29 80,548 82,651 Series 2004-C3, Cl. A4, 4.547%, 12/10/41 140,000 135,100 - ------------------------------------------------------------------------------------------------------------------------------------ Greenwich Capital Commercial Funding Corp., Commercial Mtg. Pass-Through Certificates, Series 2005-GG3, Cl. A2, 4.305%, 8/10/42 190,000 184,699 - ------------------------------------------------------------------------------------------------------------------------------------ GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates, Series 2004-C1, Cl. A1, 3.659%, 10/10/28 147,611 142,828 - ------------------------------------------------------------------------------------------------------------------------------------ GSR Mortgage Loan Trust, Collateralized Mtg. Obligations, Series 2004-12, Cl. 3A1, 4.469%, 12/25/34 5 123 123
26 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ COMMERCIAL Continued JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42 $ 60,000 $ 58,665 - ------------------------------------------------------------------------------------------------------------------------------------ LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2005-C5, Cl. A2, 4.885%, 9/15/40 160,000 158,651 - ------------------------------------------------------------------------------------------------------------------------------------ Mastr Alternative Loan Trust, Pass-Through Collateralized Mtg. Obligations, Series 2004-6, Cl. 10A1, 6%, 7/25/34 301,441 304,127 - ------------------------------------------------------------------------------------------------------------------------------------ Mastr Asset Securitization Trust, Pass-Through Collateralized Mtg. Obligations, Series 2004-9, Cl. A3, 4.70%, 8/25/34 5 543,496 540,446 - ------------------------------------------------------------------------------------------------------------------------------------ Mastr Seasoned Securities Trust, Collateralized Mtg. Obligations, Series 2004-2, Cl. A1, 6.50%, 8/25/32 431,565 436,150 - ------------------------------------------------------------------------------------------------------------------------------------ Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30 160,000 165,908 - ------------------------------------------------------------------------------------------------------------------------------------ Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 192,000 210,287 - ------------------------------------------------------------------------------------------------------------------------------------ Residential Accredit Loans, Inc., Mtg. Asset-Backed Pass-Through Certificates, Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 157,239 157,535 - ------------------------------------------------------------------------------------------------------------------------------------ Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Obligations: Series 2005-C17, Cl. A2, 4.782%, 3/15/42 300,000 296,213 Series 2005-C20, Cl. A5, 5.087%, 7/15/42 5 160,000 158,466 - ------------------------------------------------------------------------------------------------------------------------------------ Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Pass-Through Certificates, Series 2005-AR5, Cl. A1, 4.683%, 5/25/35 5 214,248 214,214 - ------------------------------------------------------------------------------------------------------------------------------------ Wells Fargo Mortgage-Backed Securities Trust, Collateralized Mtg. Obligations: Series 2004-DD, Cl. 2 A1, 4.528%, 1/25/35 5 213,850 213,241 Series 2004-N, Cl. A10, 3.803%, 8/25/34 5 29,070 29,079 Series 2004-W, Cl. A2, 4.59%, 11/25/34 5 13,525 13,487 -------------- 5,659,922 - ------------------------------------------------------------------------------------------------------------------------------------ OTHER--0.2% JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42 200,000 196,937 - ------------------------------------------------------------------------------------------------------------------------------------ RESIDENTIAL--0.3% Countrywide Alternative Loan Trust, Collateralized Mtg. Obligations, Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 444,553 450,388 -------------- Total Mortgage-Backed Obligations (Cost $39,493,021) 39,125,682 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS--5.3% Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 140,000 136,881 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp. Unsec. Nts.: 3.625%, 9/15/06 1,065,000 1,056,991 4.125%, 7/12/10 250,000 243,299 6.625%, 9/15/09 240,000 255,860 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn. Unsec. Nts.: 4%, 2/28/07 320,000 317,596
27 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS Continued - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn. Unsec. Nts.: Continued 4.25%, 7/15/07 $ 550,000 $ 546,745 6%, 5/15/11 600,000 634,034 7.25%, 5/15/30 170,000 220,009 7.25%, 1/15/10 10 750,000 821,131 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee Valley Authority Bonds: 4.65%, 6/15/35 280,000 260,033 5.375%, 11/13/08 109,000 111,256 Series A, 6.79%, 5/23/12 950,000 1,052,294 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Bonds: 5.375%, 2/15/31 269,000 293,462 STRIPS, 4.96%, 2/15/16 11 171,000 105,600 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Nts.: 3.625%, 6/30/07 86,000 84,962 3.875%, 7/15/10-9/15/10 397,000 386,969 4%, 9/30/07 110,000 109,252 4.25%, 10/15/10-8/15/15 297,000 291,032 5%, 2/15/11 76,000 77,906 -------------- Total U.S. Government Obligations (Cost $7,138,702) 7,005,312 - ------------------------------------------------------------------------------------------------------------------------------------ FOREIGN GOVERNMENT OBLIGATIONS--0.2% - ------------------------------------------------------------------------------------------------------------------------------------ United Mexican States Nts., 7.50%, 1/14/12 (Cost $249,845) 235,000 260,968 - ------------------------------------------------------------------------------------------------------------------------------------ NON-CONVERTIBLE CORPORATE BONDS AND NOTES--13.0% - ------------------------------------------------------------------------------------------------------------------------------------ Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 250,000 252,232 - ------------------------------------------------------------------------------------------------------------------------------------ Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31 155,000 142,257 - ------------------------------------------------------------------------------------------------------------------------------------ Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 125,000 130,938 - ------------------------------------------------------------------------------------------------------------------------------------ Allstate Financial Global Funding LLC, 4.25% Nts., 9/10/08 9 50,000 49,111 - ------------------------------------------------------------------------------------------------------------------------------------ AOL Time Warner, Inc., 7.70% Debs., 5/1/32 145,000 165,640 - ------------------------------------------------------------------------------------------------------------------------------------ Archer Daniels Midland Co., 5.375% Nts., 9/15/35 135,000 126,985 - ------------------------------------------------------------------------------------------------------------------------------------ ASIF Global Financing XXIII, 3.90% Nts., 10/22/08 9 160,000 155,318 - ------------------------------------------------------------------------------------------------------------------------------------ AT&T Wireless Services, Inc., 8.125% Sr. Unsec. Nts., 5/1/12 180,000 207,271 - ------------------------------------------------------------------------------------------------------------------------------------ Bank of America Corp., 4.875% Sr. Unsec. Nts., 1/15/13 3,000 2,950 - ------------------------------------------------------------------------------------------------------------------------------------ Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 20,000 21,123 - ------------------------------------------------------------------------------------------------------------------------------------ Barclays Bank plc, 6.278% Perpetual Bond 12 220,000 208,558 - ------------------------------------------------------------------------------------------------------------------------------------ Beazer Homes USA, Inc., 6.875% Sr. Nts., 7/15/15 9 130,000 119,925 - ------------------------------------------------------------------------------------------------------------------------------------ British Telecommunications plc, 8.875% Bonds, 12/15/30 115,000 150,671 - ------------------------------------------------------------------------------------------------------------------------------------ Canadian National Railway Co., 4.25% Nts., 8/1/09 32,000 31,271 - ------------------------------------------------------------------------------------------------------------------------------------ CenterPoint Energy, Inc., 7.25% Sr. Nts., Series B, 9/1/10 145,000 155,476 - ------------------------------------------------------------------------------------------------------------------------------------ Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08 240,000 255,854
28 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ------------------------------------------------------------------------------------------------------------------------------------ CIGNA Corp.: 7% Sr. Unsec. Nts., 1/15/11 $ 90,000 $ 97,192 7.40% Unsec. Nts., 5/15/07 180,000 186,359 - ------------------------------------------------------------------------------------------------------------------------------------ CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 100,000 113,262 - ------------------------------------------------------------------------------------------------------------------------------------ Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32 105,000 115,224 - ------------------------------------------------------------------------------------------------------------------------------------ ConAgra Foods, Inc., 6% Nts., 9/15/06 130,000 131,262 - ------------------------------------------------------------------------------------------------------------------------------------ Constellation Energy Group, Inc., 7% Unsec. Nts., 4/1/12 205,000 222,171 - ------------------------------------------------------------------------------------------------------------------------------------ Countrywide Financial Corp., 4.50% Nts., Series A, 6/15/10 135,000 130,716 - ------------------------------------------------------------------------------------------------------------------------------------ Cox Communications, Inc., 4.625% Unsec. Nts., 1/15/10 270,000 260,785 - ------------------------------------------------------------------------------------------------------------------------------------ Credit Suisse First Boston, Inc., (USA), 5.50% Nts., 8/15/13 250,000 253,808 - ------------------------------------------------------------------------------------------------------------------------------------ CSX Corp., 6.25% Unsec. Nts., 10/15/08 120,000 124,062 - ------------------------------------------------------------------------------------------------------------------------------------ D.R. Horton, Inc., 6.125% Nts., 1/15/14 115,000 113,289 - ------------------------------------------------------------------------------------------------------------------------------------ DaimlerChrysler NA Holdings Corp.: 7.20% Unsec. Nts., 9/1/09 135,000 142,596 8% Nts., 6/15/10 96,000 104,945 - ------------------------------------------------------------------------------------------------------------------------------------ Dana Corp., 6.50% Unsec. Nts., 3/1/09 175,000 149,188 - ------------------------------------------------------------------------------------------------------------------------------------ Delhaize America, Inc., 9% Unsub. Debs., 4/15/31 170,000 191,111 - ------------------------------------------------------------------------------------------------------------------------------------ Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 160,000 178,723 - ------------------------------------------------------------------------------------------------------------------------------------ Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 190,000 211,940 - ------------------------------------------------------------------------------------------------------------------------------------ DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 120,000 121,136 - ------------------------------------------------------------------------------------------------------------------------------------ EOP Operating LP, 8.10% Unsec. Nts., 8/1/10 205,000 227,642 - ------------------------------------------------------------------------------------------------------------------------------------ Federated Department Stores, Inc., 6.625% Sr. Unsec. Nts., 9/1/08 170,000 176,710 - ------------------------------------------------------------------------------------------------------------------------------------ FedEx Corp., 2.65% Unsec. Nts., 4/1/07 275,000 266,714 - ------------------------------------------------------------------------------------------------------------------------------------ FirstEnergy Corp.: 5.50% Sr. Unsub. Nts., Series A, 11/15/06 105,000 105,635 7.375% Sr. Unsub. Nts., Series C, 11/15/31 130,000 148,497 - ------------------------------------------------------------------------------------------------------------------------------------ Ford Motor Credit Co.: 5.80% Sr. Unsec. Nts., 1/12/09 225,000 206,212 6.25% Unsec. Nts., 12/8/05 110,000 109,983 7.375% Nts., 10/28/09 55,000 52,524 - ------------------------------------------------------------------------------------------------------------------------------------ France Telecom SA: 7.75% Sr. Unsec. Nts., 3/1/11 5 125,000 139,384 8.50% Sr. Unsec. Nts., 3/1/31 5 40,000 52,423 - ------------------------------------------------------------------------------------------------------------------------------------ Franklin Resources, Inc., 3.70% Nts., 4/15/08 80,000 77,832 - ------------------------------------------------------------------------------------------------------------------------------------ Gap, Inc. (The): 6.90% Nts., 9/15/07 135,000 138,405 9.55% Unsub. Nts., 12/15/08 5 29,000 32,378 - ------------------------------------------------------------------------------------------------------------------------------------ General Mills, Inc., 3.875% Nts., 11/30/07 195,000 191,059 - ------------------------------------------------------------------------------------------------------------------------------------ General Motors Acceptance Corp.: 6.125% Unsec. Unsub. Nts., 2/1/07 360,000 356,566 8% Bonds, 11/1/31 190,000 196,690
29 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ------------------------------------------------------------------------------------------------------------------------------------ Goldman Sachs Group, Inc. (The), 5.70% Sr. Unsec. Nts., 9/1/12 $ 245,000 $ 250,601 - ------------------------------------------------------------------------------------------------------------------------------------ Harrah's Operating Co., Inc., 5.625% Bonds, 6/1/15 9 135,000 129,778 - ------------------------------------------------------------------------------------------------------------------------------------ HCA, Inc., 7.125% Sr. Unsec. Nts., 6/1/06 125,000 126,981 - ------------------------------------------------------------------------------------------------------------------------------------ Hertz Corp. (The), 6.35% Nts., 6/15/10 59,000 58,985 - ------------------------------------------------------------------------------------------------------------------------------------ Hilton Hotels Corp., 8.25% Sr. Unsec. Nts., 2/15/11 114,000 123,647 - ------------------------------------------------------------------------------------------------------------------------------------ HSBC Finance Corp., 4.75% Sr. Unsec. Nts., 7/15/13 265,000 255,004 - ------------------------------------------------------------------------------------------------------------------------------------ IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 5 110,000 114,950 - ------------------------------------------------------------------------------------------------------------------------------------ iStar Financial, Inc.: 4.875% Sr. Unsec. Nts., Series B, 1/15/09 100,000 98,336 5.125% Sr. Unsec. Nts., Series B, 4/1/11 85,000 82,451 - ------------------------------------------------------------------------------------------------------------------------------------ J.C. Penney Co., Inc. (Holding Co.), 7.40% Nts., 4/1/37 235,000 248,500 - ------------------------------------------------------------------------------------------------------------------------------------ JPMorgan Capital XV, 5.875% Nts., 3/15/35 180,000 171,188 - ------------------------------------------------------------------------------------------------------------------------------------ K. Hovnanian Enterprises, Inc., 6.50% Sr. Nts., 1/15/14 130,000 121,805 - ------------------------------------------------------------------------------------------------------------------------------------ KB Home, 5.75% Sr. Unsec. Unsub. Nts., 2/1/14 165,000 153,448 - ------------------------------------------------------------------------------------------------------------------------------------ Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 145,000 153,654 - ------------------------------------------------------------------------------------------------------------------------------------ Kraft Foods, Inc., 5.25% Nts., 6/1/07 300,000 301,932 - ------------------------------------------------------------------------------------------------------------------------------------ Kroger Co. (The), 6.80% Sr. Unsec. Nts., 4/1/11 190,000 198,779 - ------------------------------------------------------------------------------------------------------------------------------------ Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09 210,000 197,547 - ------------------------------------------------------------------------------------------------------------------------------------ Lehman Brothers, Inc., 6.625% Sr. Sub. Nts., 2/15/08 25,000 25,941 - ------------------------------------------------------------------------------------------------------------------------------------ Lennar Corp., 5.95% Sr. Unsec. Nts., 3/1/13 130,000 130,569 - ------------------------------------------------------------------------------------------------------------------------------------ Liberty Media Corp., 5.70% Sr. Unsec. Nts., 5/15/13 140,000 126,995 - ------------------------------------------------------------------------------------------------------------------------------------ Liberty Property Trust, 5.65% Sr. Nts., 8/15/14 130,000 130,663 - ------------------------------------------------------------------------------------------------------------------------------------ Marsh & McLennan Cos., Inc., 5.875% Sr. Unsec. Bonds, 8/1/33 170,000 152,704 - ------------------------------------------------------------------------------------------------------------------------------------ May Department Stores Co., 7.90% Unsec. Debs., 10/15/07 90,000 94,212 - ------------------------------------------------------------------------------------------------------------------------------------ MBNA Corp., 7.50% Sr. Nts., Series F, 3/15/12 200,000 224,574 - ------------------------------------------------------------------------------------------------------------------------------------ Merrill Lynch & Co., Inc., 5% Sr. Unsub. Nts., Series C, 2/3/14 265,000 259,981 - ------------------------------------------------------------------------------------------------------------------------------------ MetLife, Inc., 5.70% Sr. Unsec. Nts., 6/15/35 135,000 130,799 - ------------------------------------------------------------------------------------------------------------------------------------ MidAmerican Energy Holdings Co., 5.875% Sr. Unsec. Nts., 10/1/12 220,000 225,770 - ------------------------------------------------------------------------------------------------------------------------------------ Morgan Stanley, 6.60% Nts., 4/1/12 125,000 134,206 - ------------------------------------------------------------------------------------------------------------------------------------ National City Bank, 6.20% Sub. Nts., 12/15/11 17,000 18,040 - ------------------------------------------------------------------------------------------------------------------------------------ Nationwide Financial Services, Inc.: 5.90% Nts., 7/1/12 95,000 98,255 6.25% Sr. Unsec. Nts., 11/15/11 30,000 31,796 - ------------------------------------------------------------------------------------------------------------------------------------ NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 190,000 211,434 - ------------------------------------------------------------------------------------------------------------------------------------ Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 160,000 174,898 - ------------------------------------------------------------------------------------------------------------------------------------ Pemex Project Funding Master Trust, 5.75% Unsec. Unsub. Nts., Series 12, 12/15/15 9 215,000 209,034 - ------------------------------------------------------------------------------------------------------------------------------------ Petroleum Export Ltd. Cayman SPV, 4.623% Sr. Nts., Cl. A1, 6/15/10 9 395,000 391,488 - ------------------------------------------------------------------------------------------------------------------------------------ PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 9 66,281 61,999
30 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ------------------------------------------------------------------------------------------------------------------------------------ Portland General Electric Co., 8.125% First Mortgage Nts., 2/1/10 9 $ 95,000 $ 104,975 - ------------------------------------------------------------------------------------------------------------------------------------ Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 9 295,000 370,493 - ------------------------------------------------------------------------------------------------------------------------------------ Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 9 260,000 330,229 - ------------------------------------------------------------------------------------------------------------------------------------ PSE&G Energy Holdings LLC, 7.75% Unsec. Nts., 4/16/07 115,000 117,300 - ------------------------------------------------------------------------------------------------------------------------------------ PSE&G Power LLC, 6.875% Sr. Unsec. Nts., 4/15/06 130,000 131,230 - ------------------------------------------------------------------------------------------------------------------------------------ Safeway, Inc., 7.50% Sr. Unsec. Nts., 9/15/09 175,000 186,620 - ------------------------------------------------------------------------------------------------------------------------------------ Sempra Energy, 7.95% Sr. Unsec. Unsub. Nts., 3/1/10 127,000 139,628 - ------------------------------------------------------------------------------------------------------------------------------------ Simon Property Group LP: 5.45% Unsec. Nts., 3/15/13 115,000 114,542 5.625% Unsec. Unsub. Nts., 8/15/14 85,000 85,429 - ------------------------------------------------------------------------------------------------------------------------------------ Sprint Capital Corp., 8.75% Nts., 3/15/32 160,000 207,569 - ------------------------------------------------------------------------------------------------------------------------------------ Starwood Hotels & Resorts Worldwide, Inc., 7.375% Nts., 5/1/07 190,000 195,463 - ------------------------------------------------------------------------------------------------------------------------------------ SunTrust Banks, Inc.: 4% Nts., 10/15/08 135,000 131,662 7.75% Unsec. Sub. Nts., 5/1/10 11,000 12,200 - ------------------------------------------------------------------------------------------------------------------------------------ TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 245,000 296,900 - ------------------------------------------------------------------------------------------------------------------------------------ Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 65,000 80,263 - ------------------------------------------------------------------------------------------------------------------------------------ Travelers Property Casualty Corp., 3.75% Sr. Unsec. Nts., 3/15/08 195,000 189,272 - ------------------------------------------------------------------------------------------------------------------------------------ Tyco International Group SA, 6.375% Sr. Unsec. Unsub. Nts., 2/15/06 165,000 165,841 - ------------------------------------------------------------------------------------------------------------------------------------ Univision Communications, Inc., 3.50% Sr. Unsec. Nts., 10/15/07 210,000 203,386 - ------------------------------------------------------------------------------------------------------------------------------------ Verizon Global Funding Corp., 5.85% Nts., 9/15/35 135,000 126,685 - ------------------------------------------------------------------------------------------------------------------------------------ Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 260,000 262,376 - ------------------------------------------------------------------------------------------------------------------------------------ Waste Management, Inc., 6.875% Sr. Unsec. Nts., 5/15/09 150,000 158,382 - ------------------------------------------------------------------------------------------------------------------------------------ Yum! Brands, Inc., 8.50% Sr. Unsec. Nts., 4/15/06 260,000 264,346 ------------- Total Non-Convertible Corporate Bonds and Notes (Cost $17,206,382) 16,997,738 - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM NOTES--1.9% - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Bank, 3.65%, 11/1/05 (Cost $2,500,000) 2,500,000 2,500,000 - ------------------------------------------------------------------------------------------------------------------------------------ JOINT REPURCHASE AGREEMENTS--5.5% - ------------------------------------------------------------------------------------------------------------------------------------ Undivided interest of 1.11% in joint repurchase agreement (Principal Amount/ Value $647,082,000, with a maturity value of $647,153,179) with UBS Warburg LLC, 3.96%, dated 10/31/05, to be repurchased at $7,186,790 on 11/1/05, collateralized by Federal National Mortgage Assn., 5%, 10/1/35, with a value of $661,717,556 (Cost $7,186,000) 7,186,000 7,186,000 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $140,987,832) 114.3% 149,257,659 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES IN EXCESS OF OTHER ASSETS (14.3) (18,719,474) ------------------------- NET ASSETS 100.0% $130,538,185 =========================
31 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1 - --------------------------------------------------------------------------------------- Schering-Plough Corp. 127 1/23/06 $ 22.50 $ 15,589 $ 6,350
3. Illiquid or restricted security. The aggregate value of illiquid or restricted securities as of October 31, 2005 was $679,137, which represents 0.52% of the Fund's net assets, none of which is considered restricted. See Note 9 of Notes to Financial Statements. 4. Received as the result of issuer reorganization. 5. Represents the current interest rate for a variable or increasing rate security. 6. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $1,602,671 or 1.23% of the Fund's net assets as of October 31, 2005. 7. Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. These securities amount to $696,520 or 0.53% of the Fund's net assets as of October 31, 2005. 8. When-issued security or forward commitment to be delivered and settled after October 31, 2005. See Note 1 of Notes to Financial Statements. 9. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $2,092,775 or 1.60% of the Fund's net assets as of October 31, 2005. 10. All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures sales contracts. The aggregate market value of such securities is $240,865. See Note 6 of Notes to Financial Statements. 11. Zero coupon bond reflects effective yield on the date of purchase. 12. This bond has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value (cost $140,987,832)-- see accompanying statement of investments $ 149,257,659 - -------------------------------------------------------------------------------- Cash 628,687 - -------------------------------------------------------------------------------- Receivables and other assets: Investments sold on a when-issued or forward commitment 6,049,128 Interest, dividends and principal paydowns 547,604 Shares of capital stock sold 54,309 Other 6,612 -------------- Total assets 156,543,999 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Options written, at value (premiums received $15,589)-- see accompanying statement of investments 6,350 - -------------------------------------------------------------------------------- Unrealized depreciation on swap contracts 9,892 - -------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $25,509,481 purchased on a when-issued basis or forward commitment) 25,652,782 Shares of capital stock redeemed 210,818 Directors' compensation 29,013 Distribution and service plan fees 27,515 Shareholder communications 21,921 Transfer and shareholder servicing agent fees 20,368 Futures margins 6,584 Other 20,571 -------------- Total liabilities 26,005,814 - -------------------------------------------------------------------------------- NET ASSETS $ 130,538,185 ============== - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------- Par value of shares of capital stock $ 8,918 - -------------------------------------------------------------------------------- Additional paid-in capital 126,960,535 - -------------------------------------------------------------------------------- Accumulated net investment income 442,397 - -------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (5,350,236) - -------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 8,476,571 -------------- NET ASSETS $ 130,538,185 ============== 33 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF ASSETS AND LIABILITIES Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $107,800,101 and 7,367,454 shares of capital stock outstanding) $ 14.63 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 15.52 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $12,692,022 and 855,162 shares of capital stock outstanding) $ 14.84 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $8,305,105 and 575,603 shares of capital stock outstanding) $ 14.43 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,740,957 and 119,453 shares of capital stock outstanding) $ 14.57 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Interest $ 2,453,870 - -------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $4,137) 1,094,359 - -------------------------------------------------------------------------------- Other income 5,926 ------------ Total investment income 3,554,155 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 817,529 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 265,963 Class B 135,165 Class C 74,900 Class N 8,220 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 168,207 Class B 33,651 Class C 20,457 Class N 5,650 - -------------------------------------------------------------------------------- Shareholder communications: Class A 34,861 Class B 9,977 Class C 4,947 Class N 716 - -------------------------------------------------------------------------------- Accounting service fees 15,000 - -------------------------------------------------------------------------------- Directors' compensation 3,037 - -------------------------------------------------------------------------------- Custodian fees and expenses 2,641 - -------------------------------------------------------------------------------- Other 29,638 ------------ Total expenses 1,630,559 Less reduction to custodian expenses (1,762) Less waivers and reimbursements of expenses (42) ------------ Net expenses 1,628,755 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 1,925,400 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - -------------------------------------------------------------------------------- Net realized gain (loss) on: Investments 6,051,754 Closing of futures contracts 554,923 Foreign currency transactions 117 Swap contracts (23,678) ------------ Net realized gain 6,583,116 - -------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 837,485 Translation of assets and liabilities denominated in foreign currencies (41,643) Futures contracts (23,659) Option contracts (9,239) Swap contracts (17,997) ------------ Net change in unrealized appreciation 744,947 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,253,463 ============ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 35 | OPPENHEIMER DISCIPLINED ALLOCATION FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004 - ------------------------------------------------------------------------------------------------------------------ OPERATIONS - ------------------------------------------------------------------------------------------------------------------ Net investment income $ 1,925,400 $ 920,493 - ------------------------------------------------------------------------------------------------------------------ Net realized gain 6,583,116 12,129,756 - ------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation 744,947 (4,860,509) ------------------------------- Net increase in net assets resulting from operations 9,253,463 8,189,740 - ------------------------------------------------------------------------------------------------------------------ DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ------------------------------------------------------------------------------------------------------------------ Dividends from net investment income: Class A (1,991,668) (888,024) Class B (127,951) (1,401) Class C (73,018) (3,750) Class N (22,788) (4,892) - ------------------------------------------------------------------------------------------------------------------ CAPITAL STOCK TRANSACTIONS - ------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from capital stock transactions: Class A (1,298,550) (2,841,650) Class B (1,695,759) (1,999,035) Class C 1,529,758 1,447,054 Class N 167,777 1,061,292 - ------------------------------------------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------------------------------------------ Total increase 5,741,264 4,959,334 - ------------------------------------------------------------------------------------------------------------------ Beginning of period 124,796,921 119,837,587 ------------------------------- End of period (including accumulated net investment income of $442,397 and $388,283, respectively) $130,538,185 $ 124,796,921 ===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 36 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.85 $ 13.04 $ 11.56 $ 12.54 $ 14.23 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .24 1 .12 1 .14 .22 .26 Net realized and unrealized gain (loss) .81 .81 1.48 (.94) (1.69) ---------------------------------------------------------------------------- Total from investment operations 1.05 .93 1.62 (.72) (1.43) - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.27) (.12) (.14) (.26) (.26) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 14.63 $ 13.85 $ 13.04 $ 11.56 $ 12.54 ============================================================================ - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 7.59% 7.12% 14.17% (5.86)% (10.12)% - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 107,800 $ 103,268 $ 100,032 $ 92,806 $ 112,864 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 108,141 $ 103,979 $ 94,811 $ 104,415 $ 128,477 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 1.62% 0.88% 1.18% 1.73% 1.88% Total expenses 1.10% 4 1.13% 4,5 1.26% 4,5 1.21% 4,5 1.19% 4 - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 68% 6 79% 6 275% 193% 164%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. 6. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS - -------------------------------------------------------------------------------- Year Ended October 31, 2005 $ 288,196,124 $ 291,611,924 Year Ended October 31, 2004 316,759,702 306,486,129 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 37 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.04 $ 13.23 $ 11.73 $ 12.72 $ 14.43 - ---------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .11 1 -- 1 .04 .11 .15 Net realized and unrealized gain (loss) .83 .81 1.50 (.94) (1.70) -------------------------------------------------------------- Total from investment operations .94 .81 1.54 (.83) (1.55) - ---------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.14) -- 2 (.04) (.16) (.16) - ---------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 14.84 $ 14.04 $ 13.23 $ 11.73 $ 12.72 ============================================================== - ---------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 6.68% 6.13% 13.21% (6.61)% (10.79)% - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 12,692 $ 13,619 $ 14,747 $ 12,204 $ 14,770 - ---------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 13,568 $ 14,875 $ 12,776 $ 13,639 $ 16,569 - ---------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) 0.74% (0.01)% 0.31% 0.94% 1.14% Total expenses 1.98% 2.02% 2.15% 2.00% 1.94% Expenses after payments and waivers and reduction to custodian expenses 1.98% 2.02% 2.11% 2.00% 1.94% - ---------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 68% 5 79% 5 275% 193% 164%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Less than $0.005 per share. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS - -------------------------------------------------------------------------------- Year Ended October 31, 2005 $288,196,124 $291,611,924 Year Ended October 31, 2004 316,759,702 306,486,129 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 38 | OPPENHEIMER DISCIPLINED ALLOCATION FUND
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ----------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.66 $ 12.88 $ 11.43 $ 12.41 $ 14.08 - ----------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .10 1 -- 1 .07 .13 .13 Net realized and unrealized gain (loss) .82 .79 1.43 (.94) (1.64) --------------------------------------------------------------- Total from investment operations .92 .79 1.50 (.81) (1.51) - ----------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.15) (.01) (.05) (.17) (.16) - ----------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 14.43 $ 13.66 $ 12.88 $ 11.43 $ 12.41 =============================================================== - ----------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 6.71% 6.13% 13.18% (6.64)% (10.76)% - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 8,305 $ 6,422 $ 4,666 $ 2,984 $ 2,893 - ----------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 7,524 $ 5,726 $ 3,806 $ 2,961 $ 3,280 - ----------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.71% 0.00% 0.29% 0.93% 1.14% Total expenses 2.00% 2.02% 2.17% 2.00% 1.94% Expenses after payments and waivers and reduction to custodian expenses 2.00% 2.02% 2.12% 2.00% 1.94% - ----------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 68% 4 79% 4 275% 193% 164%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS - -------------------------------------------------------------------------------- Year Ended October 31, 2005 $288,196,124 $291,611,924 Year Ended October 31, 2004 316,759,702 306,486,129 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 39 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 1 - ---------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.80 $ 13.00 $ 11.52 $ 12.52 $ 13.74 - ---------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .17 2 .06 2 .12 .16 .12 Net realized and unrealized gain (loss) .81 .81 1.46 (.91) (1.20) -------------------------------------------------------------- Total from investment operations .98 .87 1.58 (.75) (1.08) - ---------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.21) (.07) (.10) (.25) (.14) - ---------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 14.57 $ 13.80 $ 13.00 $ 11.52 $ 12.52 ============================================================== - ---------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 7.09% 6.68% 13.81% (6.17)% (7.90)% - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,741 $ 1,488 $ 392 $ 241 $ 2 - ---------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,647 $ 1,030 $ 342 $ 160 $ 1 - ---------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 1.17% 0.46% 0.79% 1.28% 1.04% Total expenses 1.54% 1.61% 2.04% 1.60% 1.68% Expenses after payments and waivers and reduction to custodian expenses 1.54% 1.55% 1.58% 1.60% 1.68% - ---------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 68% 5 79% 5 275% 193% 164%
1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. The portfolio turnover rate excludes purchases and sales of To Be Announced (TBA) mortgage-related securities as follows: PURCHASE TRANSACTIONS SALE TRANSACTIONS - -------------------------------------------------------------------------------- Year Ended October 31, 2005 $288,196,124 $291,611,924 Year Ended October 31, 2004 316,759,702 306,486,129 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 40 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek to maximize total investment return (including capital appreciation and income) principally by allocating its assets among stocks, corporate bonds, U.S. government securities and money market instruments, according to changing market conditions. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Directors. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by 41 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis or forward commitment can take place up to ten days or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis or forward commitment may increase the volatility of the Fund's net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. The Fund may also sell securities that it purchased on a when-issued basis or forward commitment prior to settlement of the original purchase. As of October 31, 2005, the Fund had purchased $25,509,481 of securities issued on a when-issued basis or forward commitment and sold $6,049,128 of securities issued on a when-issued basis or forward commitment. In connection with its ability to purchase or sell securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the incremental difference between the forward purchase and sale of each forward roll as realized gain (loss) on investments or as fee income in the case of such transactions that have an associated fee in lieu of a difference in the forward purchase and sale price. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. 42 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Directors. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. 43 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND OTHER UNDISTRIBUTED NET UNDISTRIBUTED ACCUMULATED LOSS INVESTMENTS FOR FEDERAL INVESTMENT INCOME LONG-TERM GAIN CARRYFORWARD 1,2,3 INCOME TAX PURPOSES - -------------------------------------------------------------------------------- $460,079 $-- $5,050,942 $8,188,248 1. As of October 31, 2005, the Fund had $5,050,942 of net capital loss carryforwards available to offset furure realized capital gains, if any, and thereby reduce future taxable gain distributions. As of October 31, 2005, details of the capital loss carryforward were as follows: EXPIRING ------------------------- 2010 $ 5,050,942 2. During the fiscal year ended October 31, 2005, the Fund utilized $6,206,177 of capital loss carryforward to offset capital gains realized in that fiscal year. 3. During the fiscal year ended October 31, 2004, the Fund utilized $11,697,830 of capital loss carryforward to offset capital gains realized in that fiscal year. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for October 31, 2005. Net assets of the Fund were unaffected by the reclassifications. INCREASE TO INCREASE TO ACCUMULATED NET ACCUMULATED NET REALIZED LOSS ON INVESTMENT INCOME INVESTMENTS - ------------------------------------ $344,139 $344,139 The tax character of distributions paid during the years ended October 31, 2005 and October 31, 2004 was as follows: YEAR ENDED YEAR ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 - -------------------------------------------------------------------------------- Distributions paid from: Ordinary income $2,215,425 $898,067 The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of October 31, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. 44 | OPPENHEIMER DISCIPLINED ALLOCATION FUND Federal tax cost of securities $ 141,079,972 Federal tax cost of other investments (24,645,155) ---------------- Total federal tax cost $ 116,434,817 ================ Gross unrealized appreciation $ 12,535,928 Gross unrealized depreciation (4,347,680) ---------------- Net unrealized appreciation $ 8,188,248 ================ - -------------------------------------------------------------------------------- DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the year ended October 31, 2005, the Fund's projected benefit obligations were decreased by $622 and payments of $1,434 were made to retired directors, resulting in an accumulated liability of $22,853 as of October 31, 2005. The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Director under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Director. The Fund purchases shares of the funds selected for deferral by the Director in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of directors' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared and paid quarterly. Capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian 45 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF CAPITAL STOCK The Fund has authorized 550 million shares of $0.001 par value capital stock. Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------- CLASS A Sold 818,855 $ 11,945,822 1,031,614 $ 14,122,521 Dividends and/or distributions reinvested 131,047 1,915,494 62,731 854,672 Redeemed (1,040,110) (15,159,866) (1,307,401) (17,818,843) --------------------------------------------------------- Net decrease (90,208) $ (1,298,550) (213,056) $ (2,841,650) ========================================================= - ------------------------------------------------------------------------------------- CLASS B Sold 215,428 $ 3,183,426 290,346 $ 4,026,294 Dividends and/or distributions reinvested 8,063 119,409 96 1,314 Redeemed (338,238) (4,998,594) (435,276) (6,026,643) --------------------------------------------------------- Net decrease (114,747) $ (1,695,759) (144,834) $ (1,999,035) ========================================================= - ------------------------------------------------------------------------------------- CLASS C Sold 210,886 $ 3,045,208 221,557 $ 2,977,259 Dividends and/or distributions reinvested 4,885 70,489 267 3,610 Redeemed (110,147) (1,585,939) (114,094) (1,533,815) --------------------------------------------------------- Net increase 105,624 $ 1,529,758 107,730 $ 1,447,054 ========================================================= - ------------------------------------------------------------------------------------- CLASS N Sold 33,998 $ 492,558 85,506 $ 1,165,275 Dividends and/or distributions reinvested 1,563 22,772 357 4,887 Redeemed (23,994) (347,553) (8,146) (108,870) --------------------------------------------------------- Net increase 11,567 $ 167,777 77,717 $ 1,061,292 =========================================================
46 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended October 31, 2005, were as follows: PURCHASES SALES - -------------------------------------------------------------------------------- Investment securities $ 76,718,731 $ 73,809,454 U.S. government and government agency obligations 8,537,881 8,925,638 To Be Announced (TBA) mortgage-related securities 288,196,124 291,611,924 - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million. - -------------------------------------------------------------------------------- ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended October 31, 2005, the Fund paid $231,434 to OFS for services to the Fund. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Directors and its independent directors must determine whether the 47 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at October 31, 2005 for Class B, Class C and Class N shares were $434,366, $160,268 and $14,030, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------- October 31, 2005 $71,166 $261 $27,678 $2,259 $1,242
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended October 31, 2005, OFS waived $42 for Class N shares. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of October 31, 2005, the Fund had no outstanding foreign currency contracts. 48 | OPPENHEIMER DISCIPLINED ALLOCATION FUND - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices (financial futures) or debt securities (interest rate futures) in order to gain exposure to or protection from changes in market value of stocks and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported in the Statement of Operations as the closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported in the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of October 31, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS OCTOBER 31, 2005 (DEPRECIATION) - -------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Long Bonds 12/20/05 36 $ 4,030,875 $(146,538) ---------- CONTRACTS TO SELL Euro-Bundesobligation, 10 yr. 12/8/05 7 1,010,223 (19) U.S. Treasury Nts., 2 yr. 12/30/05 71 14,569,422 131,360 U.S. Treasury Nts., 5 yr. 12/20/05 63 6,671,109 100,523 U.S. Treasury Nts., 10 yr. 12/20/05 59 6,398,734 121,810 ---------- 353,674 ---------- $ 207,136 ==========
49 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Contracts subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended October 31, 2005 was as follows: CALL OPTIONS --------------------------- NUMBER OF AMOUNT OF CONTRACTS PREMIUMS - --------------------------------------------------------- Options outstanding as of October 31, 2004 -- $ -- Options written 127 15,589 --------------------------- Options outstanding as of October 31, 2005 127 $15,589 =========================== - -------------------------------------------------------------------------------- 8. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to unrealized gain (loss), in the amount due to or owed by the Fund at termi- 50 | OPPENHEIMER DISCIPLINED ALLOCATION FUND nation or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of October 31, 2005, the Fund had entered into the following total return swap agreements:
PAID BY RECEIVED BY SWAP NOTIONAL THE FUND AT RATE AS OF THE FUND AT RATE AS OF TERMINATION UNREALIZED COUNTERPARTY AMOUNT OCT. 31, 2005 OCT. 31, 2005 OCT. 31, 2005 OCT. 31, 2005 DATE DEPRECIATION - ---------------------------------------------------------------------------------------------------------------------------- One-Month Change of Total LIBOR Minus Return of 0.25% Lehman (+ or -) Rate Brothers UBS AG $1,000,000 Received 4.3946% CMBS Index (0.7846)%* 12/1/05 $9,892
* Represents an additional amount paid by the Fund at October 31, 2005. Index abbreviations are as follows: CMBS Commercial Mortgage Backed Securities LIBOR London-Interbank Offered Rate - -------------------------------------------------------------------------------- 9. ILLIQUID OR RESTRICTED SECURITIES As of October 31, 2005, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Directors as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. Securities that are illiquid or restricted are marked with the applicable footnote on the Statement of Investments. Information concerning restricted securities is as follows: ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATE COST OCTOBER 31, 2005 DEPRECIATION - -------------------------------------------------------------------------------- Geotek Communications, Inc., Series B, Escrow Shares 1/4/01 $400 $ -- $400 - -------------------------------------------------------------------------------- 10. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other 51 | OPPENHEIMER DISCIPLINED ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 10. LITIGATION Continued costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 52 | OPPENHEIMER DISCIPLINED ALLOCATION FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER SERIES FUND, INC.: We have audited the accompanying statement of assets and liabilities of Oppenheimer Disciplined Allocation Fund (one of the portfolios constituting the Oppenheimer Series Fund, Inc.), including the statement of investments, as of October 31, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Allocation Fund as of October 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado December 20, 2005 53 | OPPENHEIMER DISCIPLINED ALLOCATION FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends, if any, paid by the Fund during the fiscal year ended October 31, 2005 which are not designated as capital gain distributions should be multiplied by 44.61% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended October 31, 2005 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $1,098,303 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2006, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 54 | OPPENHEIMER DISCIPLINED ALLOCATION FUND REPORT OF SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- On August 17, 2005, a shareholder meeting of the Oppenheimer Series Fund, Inc. (Oppenheimer Disciplined Allocation Fund) was held at which the eleven Trustees identified below were elected to both Funds (Proposal No. 1) as described in the Funds' proxy statement for that meeting. The following is a report of the votes cast: - -------------------------------------------------------------------------------- PROPOSAL NO. 1 NOMINEE FOR WITHHELD TOTAL - -------------------------------------------------------------------------------- TRUSTEES Matthew P. Fink 33,382,247.805 378,488.787 33,760,736.592 Robert G. Galli 33,351,276.097 409,460.495 33,760,736.592 Phillip A. Griffiths 33,373,198.248 387,538.344 33,760,736.592 Mary F. Miller 33,359,875.828 400,860.764 33,760,736.592 Joel W. Motley 33,380,600.979 380,135.613 33,760,736.592 John V. Murphy 33,368,822.956 391,913.636 33,760,736.592 Kenneth A. Randall 33,328,691.369 432,045.223 33,760,736.592 Russell S. Reynolds, Jr. 33,343,144.967 417,591.625 33,760,736.592 Joseph M. Wikler 33,376,187.675 384,548.917 33,760,736.592 Peter I. Wold 33,368,807.905 391,928.687 33,760,736.592 Clayton K. Yeutter 33,343,755.040 416,981.552 33,760,736.592 55 | OPPENHEIMER DISCIPLINED ALLOCATION FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 56 | OPPENHEIMER DISCIPLINED ALLOCATION FUND DIRECTORS AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF THE FUND, LENGTH OF SERVICE, PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN. AGE INDEPENDENT DIRECTORS THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January 2005); Attorney at Hogan & Chairman of the Board of Hartson (law firm) (since June 1993); Director of Danielson Holding Corp. (waste-to-energy company) Directors (since 2003), (since 2002); Director of Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Inc. Director (since 1996) (1993-December 2002); Director of ConAgra Foods (1993-2001); Director of Texas Instruments Age: 74 (1993-2001); Director of FMC Corporation (1993-2001). Oversees 38 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005); Director (since 2005) Director of ICI Education Foundation (education foundation) (since October 1991); President of the Age: 64 Investment Company Institute (trade association) (1991-2004); Director of ICI Mutual Insurance Company (insurance company) (1991-2004). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in the OppenheimerFunds Director (since 1996) complex. Age: 72 PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier) (since 2001); Trustee of Director (since 1999) Woodward Academy (since 1983); Senior Advisor of The Andrew W. Mellon Foundation (since 2001); Age: 67 Member of the National Academy of Sciences (since 1979); Member of the American Philosophical Society (since 1996); Council on Foreign Relations (since 2002); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999). Oversees 38 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice Director (since 2004) President and General Auditor of American Express Company (financial services company) (July Age: 63 1998-February 2003). Oversees 38 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002); Director (since 2002) Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January 2002); Age: 53 Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (since February 1972); Director (since 1996) Former Director of Prime Retail, Inc. (real estate investment trust), Dominion Energy Inc. (electric Age: 78 power and oil & gas producer), Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research). Oversees 38 portfolios in the OppenheimerFunds complex.
57 | OPPENHEIMER DISCIPLINED ALLOCATION FUND DIRECTORS AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting and executive Director (since 1996) recruiting) (since 1993); Life Trustee of International House (non-profit educational organization); Age: 73 Former Trustee of The Historical Society of the Town of Greenwich. Oversees 38 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996); Director (since 2005) Director of Lakes Environmental Association (since 1996); Member of the Investment Committee of the Age: 64 Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 39 portfolios in the OppenheimerFunds complex. PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since Director (since 2005) 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and Age: 57 production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds complex. BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1996); Director of Special Director (since 2005) Value Opportunities Fund, LLC (registered investment company) (since September 2004); Director of Age: 62 Zurich Financial Investment Advisory Board (affiliate of the Manager's parent company) (since October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990- September 2001) (economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002) (executive search firm). Oversees 48 portfolios in the OppenheimerFunds complex. - ----------------------------------------------------------------------------------------------------------------------------------- INTERESTED DIRECTOR THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, AND OFFICER NY 10281-1008. MR. MURPHY SERVES AS A DIRECTOR FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED DIRECTOR DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since September President and Principal 2000) of the Manager; President and Director or Trustee of other Oppenheimer funds; President and Executive Officer and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and of Director (since 2001) Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July Age: 56 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July
58 | OPPENHEIMER DISCIPLINED ALLOCATION FUND JOHN V. MURPHY, 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset Continued Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77 portfolios as a Director or Trustee and 10 additional portfo- lios as officer in the OppenheimerFunds complex. - ----------------------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. FERREIRA, LEAVY, MANIUODAKIS AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. EMMANUEL FERREIRA, Vice President of the Manager since January 2003. Formerly, Portfolio Manager at Lashire Investments Vice President (since 2003) (July 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999). An Age: 37 officer of 4 portfolios in the OppenheimerFunds complex. CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000. Formerly a portfolio manager of Morgan Vice President (since 2000) Stanley Dean Witter Investment Management (1997 - September 2000). An officer of 7 portfolios in the Age: 33 OppenheimerFunds complex. ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView Asset Management Corporation Vice President (since 2002) (since April 2002 and of OFI Institutional Asset Management, Inc. (since June 2002). Formerly Age: 38 Executive Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment Management (August 1993-April 2002). An officer of 14 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice President Vice President and Chief of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Compliance Officer Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit of the (since 2004) Manager (1997-February 2004). An officer of 87 portfolios in the OppenheimerFunds complex. Age: 55 BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following: Treasurer and Principal HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Financial and Accounting Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Officer (since 1999) Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds Age: 46 International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999),Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds
59 | OPPENHEIMER DISCIPLINED ALLOCATION FUND DIRECTORS AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- BRIAN W. WIXTED, Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Continued Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager; Secretary (since 2001) General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial Age: 57 Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S DIRECTORS AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 60 | OPPENHEIMER DISCIPLINED ALLOCATION FUND OPPENHEIMER VALUE FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- Software 11.9% - -------------------------------------------------------------------------------- Aerospace & Defense 9.6 - -------------------------------------------------------------------------------- Oil & Gas 9.4 - -------------------------------------------------------------------------------- Diversified Financial Services 9.1 - -------------------------------------------------------------------------------- Commercial Banks 8.8 - -------------------------------------------------------------------------------- Media 6.7 - -------------------------------------------------------------------------------- Electric Utilities 5.4 - -------------------------------------------------------------------------------- Insurance 5.2 - -------------------------------------------------------------------------------- Tobacco 5.0 - -------------------------------------------------------------------------------- Capital Markets 4.8 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Wells Fargo & Co. 5.0% - -------------------------------------------------------------------------------- Altria Group, Inc. 5.0 - -------------------------------------------------------------------------------- Honeywell International, Inc. 4.9 - -------------------------------------------------------------------------------- UBS AG 4.8 - -------------------------------------------------------------------------------- BP plc, ADR 4.5 - -------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 4.1 - -------------------------------------------------------------------------------- Microsoft Corp. 4.1 - -------------------------------------------------------------------------------- JPMorgan Chase & Co. 4.0 - -------------------------------------------------------------------------------- United Technologies Corp. 4.0 - -------------------------------------------------------------------------------- Exxon Mobil Corp. 3.8 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 7 | OPPENHEIMER VALUE FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Financials 32.0% Diversified Financial Services 9.5 Commercial Banks 9.1 Insurance 5.4 Capital Markets 5.0 Thrifts & Mortgage Finance 3.0 Information Technology 15.0 Industrials 13.5 Energy 11.7 Consumer Discretionary 6.9 Utilities 6.5 Consumer Staples 5.1 Health Care 3.6 Materials 3.5 Telecommunication Services 2.2 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2005, and are based on the total market value of common stocks. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE Oppenheimer Value Fund withstood a volatile market environment to deliver an attractive 12-month total return. Strong absolute and relative total returns for the Fund's financial, consumer staples, and consumer discretionary stocks helped overcome relative weakness in the portfolio's technology and industrial holdings. The Fund's performance can be attributed to our bottom-up stock selection discipline. Our investment strategy centers around finding stocks whose prices are, in our view, inexpensive relative to the underlying companies' long-term earnings power and potential to generate cash flow. As a byproduct of this sharp focus on the value characteristics of individual stocks, the Fund's sector weightings may vary from those of the index. Such over- and underweightings are a reflection of our conviction about the prospects for individual holdings and their industry niches rather than enthusiasm for broad sectors. During this period, we found relatively few financial services or consumer discretionary companies that met our investment parameters. In our estimation, many financial services companies were overly exposed to rising interest rates and a flat yield curve (i.e., a relatively small gap or difference between short- and long-term fixed-income yields). Many consumer companies appeared richly valued and vulnerable to a falloff in spending as consumers struggled to deal with higher energy prices and interest rates. As a result of these concerns, the portfolio was underweighted (vs. the index) in these sectors. Despite the variance, these were areas of relative strength for the Fund. Among the largest contributors to performance were Liberty Global, Inc., Lehman Brothers Holdings, Inc., Franklin Resources, Inc. and Prudential Financial, Inc. The Fund was also underweight in the energy sector, which detracted from results due to the strong performance from the energy stocks. The Fund acquired shares of Liberty Global, Inc., as a result of a merger between UnitedGlobal Com, Inc., a previous holding, and another cable TV operator. Liberty Global, Inc. is a U.S.-domiciled company that operates cable TV systems in Europe and Japan. Our research showed that it had considerable growth potential, since the company faced fewer structural competitive issues than U.S. cable operators. The stock has benefited from that favorable competitive environment and from growing subscriber bases for its broadband and cable telephony services. The Fund's financial services holdings benefited primarily from company-specific developments. The stock of brokerage firm Lehman Brothers was inexpensive (compared to other broker/dealers) when we purchased it, even though its profitability was among 9 | OPPENHEIMER VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- the best in the industry and its franchises and returns were improving. Since then, the market has awakened to Lehman's strong points. Asset manager Franklin Resources benefited from robust mutual fund inflows that helped to boost earnings and, as a result, its stock price. At Prudential, successful restructuring efforts have contributed to improved returns and stock performance. During this period, we found relatively few energy companies that met our investment parameters. In the energy sector, we were concerned about sustainability of higher oil prices. As a result of these concerns, the portfilio was underweighted (vs. the index) in this sector. The Fund's primary area of weakness was technology, a sector in which the portfolio was overweighted. The single largest detractors from results were Take-Two Interactive Software, Inc., and IBM Corp. Take Two, which manufactures mature-rated and sports-related game software and video game accessories, was negatively impacted by a recall of its leading videogame and, to a lesser extent, by generally weaker consumer demand. We view the setback as temporary and believe that the company may benefit from new releases and its excellent competitive position in the mature-rated market. In the first half of the period, IBM experienced difficulty with execution. Although the situation has improved, the stock still has not recovered fully. Stock selection in industrials also detracted from performance due primarily to weakness in Cendant Corp. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 2005. In the case of Class A and Class B shares, performance is measured over a ten-fiscal-year period. In the case of Class C, performance is measured from inception of the class on May 1, 1996. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. In the case of Class Y, performance is measured from inception of the class on December 16, 1996. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 10 | OPPENHEIMER VALUE FUND CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Value Fund (Class A) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund (Class A) S&P 500 Index 12/31/1994 9,425 10,131 03/31/1995 10,255 10,973 06/30/1995 11,124 12,019 09/30/1995 12,070 12,973 12/31/1995 12,856 13,753 03/31/1996 13,468 14,491 06/30/1996 13,637 15,141 09/30/1996 14,016 15,609 10/31/1996 1 14,322 16,039 01/31/1997 15,845 17,965 04/30/1997 15,853 18,399 07/31/1997 18,707 22,014 10/31/1997 18,276 21,188 01/31/1998 18,540 22,798 04/30/1998 20,884 25,955 07/31/1998 19,607 26,264 10/31/1998 18,686 25,852 01/31/1999 20,771 30,209 04/30/1999 20,939 31,620 07/31/1999 20,584 31,570 10/31/1999 19,358 32,486 01/31/2000 18,213 33,333 04/30/2000 19,606 34,820 07/31/2000 19,175 34,400 10/31/2000 18,854 34,461 01/31/2001 20,491 33,033 04/30/2001 20,067 30,306 07/31/2001 20,324 29,473 10/31/2001 17,798 25,884 01/31/2002 19,522 27,703 04/30/2002 19,545 26,482 07/31/2002 16,481 22,513 10/31/2002 16,526 21,976 01/31/2003 16,887 21,330 04/30/2003 17,414 22,959 07/31/2003 19,476 24,908 10/31/2003 20,686 26,544 01/31/2004 23,353 28,698 04/30/2004 22,522 28,209 07/31/2004 22,634 28,186 10/31/2004 23,758 29,043 01/31/2005 25,932 30,484 04/30/2005 25,636 29,995 07/31/2005 27,423 32,145 10/31/2005 27,082 31,574
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 7.44% 5-Year 6.25% 10-Year 7.93% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from 12/31 to 10/31. 11 | OPPENHEIMER VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Value Fund (Class B) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund (Class B) S&P 500 Index 10/02/1995 10,000 10,000 12/31/1995 10,804 10,602 03/31/1996 11,294 11,170 06/30/1996 11,399 11,671 09/30/1996 11,683 12,032 10/31/1996 1 11,930 12,364 01/31/1997 13,169 13,848 04/30/1997 13,143 14,183 07/31/1997 15,487 16,969 10/31/1997 15,105 16,332 01/31/1998 15,287 17,573 04/30/1998 17,188 20,007 07/31/1998 16,114 20,245 10/31/1998 15,327 19,928 01/31/1999 17,002 23,286 04/30/1999 17,109 24,374 07/31/1999 16,780 24,335 10/31/1999 15,754 25,041 01/31/2000 14,798 25,694 04/30/2000 15,901 26,841 07/31/2000 15,515 26,517 10/31/2000 15,237 26,563 01/31/2001 16,526 25,463 04/30/2001 16,158 23,360 07/31/2001 16,328 22,719 10/31/2001 14,280 19,952 01/31/2002 15,663 21,354 04/30/2002 15,680 20,413 07/31/2002 13,223 17,354 10/31/2002 13,258 16,940 01/31/2003 13,549 16,442 04/30/2003 13,971 17,697 07/31/2003 15,625 19,200 10/31/2003 16,596 20,461 01/31/2004 18,736 22,121 04/30/2004 18,069 21,744 07/31/2004 18,159 21,727 10/31/2004 19,060 22,387 01/31/2005 20,805 23,498 04/30/2005 20,567 23,121 07/31/2005 22,001 24,778 10/31/2005 21,727 24,338
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 8.02% 5-Year 6.31% 10-Year 8.15% 1. The Fund changed its fiscal year end from 12/31 to 10/31. 12 | OPPENHEIMER VALUE FUND CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Value Fund (Class C) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund (Class C) S&P 500 Index 05/01/1996 10,000 10,000 06/30/1996 10,061 10,297 09/30/1996 10,314 10,615 10/31/1996 1 10,535 10,908 01/31/1997 11,629 12,217 04/30/1997 11,606 12,512 07/31/1997 13,676 14,971 10/31/1997 13,341 14,409 01/31/1998 13,508 15,503 04/30/1998 15,186 17,650 07/31/1998 14,233 17,861 10/31/1998 13,537 17,581 01/31/1999 15,012 20,544 04/30/1999 15,115 21,503 07/31/1999 14,821 21,469 10/31/1999 13,918 22,092 01/31/2000 13,070 22,668 04/30/2000 14,049 23,679 07/31/2000 13,712 23,394 10/31/2000 13,463 23,435 01/31/2001 14,600 22,464 04/30/2001 14,270 20,609 07/31/2001 14,423 20,043 10/31/2001 12,605 17,602 01/31/2002 13,804 18,839 04/30/2002 13,795 18,009 07/31/2002 11,607 15,310 10/31/2002 11,616 14,945 01/31/2003 11,841 14,505 04/30/2003 12,195 15,613 07/31/2003 13,602 16,939 10/31/2003 14,423 18,051 01/31/2004 16,241 19,516 04/30/2004 15,638 19,183 07/31/2004 15,678 19,168 10/31/2004 16,418 19,750 01/31/2005 17,893 20,730 04/30/2005 17,658 20,398 07/31/2005 18,851 21,860 10/31/2005 18,575 21,472
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 12.14% 5-Year 6.65% Since Inception (5/1/96) 6.74% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from 12/31 to 10/31. 13 | OPPENHEIMER VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Value Fund (Class N) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund (Class N) S&P 500 Index 03/01/2001 10,000 10,000 04/30/2001 9,928 10,094 07/31/2001 10,050 9,817 10/31/2001 8,794 8,621 01/31/2002 9,635 9,227 04/30/2002 9,640 8,821 07/31/2002 8,126 7,499 10/31/2002 8,143 7,320 01/31/2003 8,307 7,104 04/30/2003 8,563 7,647 07/31/2003 9,564 8,296 10/31/2003 10,154 8,841 01/31/2004 11,453 9,559 04/30/2004 11,034 9,396 07/31/2004 11,079 9,388 10/31/2004 11,615 9,674 01/31/2005 12,667 10,154 04/30/2005 12,514 9,991 07/31/2005 13,379 10,707 10/31/2005 13,203 10,517
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 10/31/05 1-Year 12.68% 5-Year N/A Since Inception (3/1/01) 6.14% 14 | OPPENHEIMER VALUE FUND CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Value Fund (Class Y) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Value Fund (Class Y) S&P 500 Index 12/16/1996 10,000 10,000 01/31/1997 10,699 10,624 04/30/1997 10,693 10,881 07/31/1997 12,637 13,019 10/31/1997 12,362 12,531 01/31/1998 12,552 13,482 04/30/1998 14,145 15,349 07/31/1998 13,292 15,532 10/31/1998 12,687 15,289 01/31/1999 14,111 17,866 04/30/1999 14,238 18,700 07/31/1999 13,984 18,670 10/31/1999 13,170 19,212 01/31/2000 12,392 19,713 04/30/2000 13,355 20,593 07/31/2000 13,062 20,344 10/31/2000 12,851 20,380 01/31/2001 13,980 19,536 04/30/2001 13,709 17,923 07/31/2001 13,905 17,431 10/31/2001 12,196 15,308 01/31/2002 13,387 16,383 04/30/2002 13,409 15,661 07/31/2002 11,321 13,314 10/31/2002 11,321 12,997 01/31/2003 11,557 12,614 04/30/2003 11,981 13,578 07/31/2003 13,391 14,730 10/31/2003 14,240 15,698 01/31/2004 16,090 16,972 04/30/2004 15,541 16,683 07/31/2004 15,633 16,669 10/31/2004 16,418 17,176 01/31/2005 17,942 18,028 04/30/2005 17,756 17,739 07/31/2005 19,003 19,010 10/31/2005 18,779 18,673
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/05 1-Year 14.38% 5-Year 7.88% Since Inception (12/16/96) 7.36% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE SINCE INCEPTION RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR FURTHER INFORMATION. 15 | OPPENHEIMER VALUE FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at WWW.OPPENHEIMERFUNDS.COM. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 9/16/85. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 10/2/95. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "10-year" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 5/1/96. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. 16 | OPPENHEIMER VALUE FUND CLASS Y shares of the Fund were first publicly offered on 12/16/96. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 17 | OPPENHEIMER VALUE FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended October 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 18 | OPPENHEIMER VALUE FUND the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (5/1/05) (10/31/05) OCTOBER 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,056.40 $ 5.09 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,020.27 5.00 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,051.80 9.61 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.88 9.44 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,051.90 9.14 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,016.33 8.98 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,055.10 6.65 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,018.75 6.53 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,057.60 3.64 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,021.68 3.57 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended October 31, 2005 are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 0.98% - --------------------------- Class B 1.85 - --------------------------- Class C 1.76 - --------------------------- Class N 1.28 - --------------------------- Class Y 0.70 - -------------------------------------------------------------------------------- 19 | OPPENHEIMER VALUE FUND STATEMENT OF INVESTMENTS October 31, 2005 - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--96.6% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--6.7% - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA--6.7% Liberty Global, Inc., Series A 1,306,546 $ 32,363,144 - ----------------------------------------------------------------------------------------------------------------------------------- Liberty Global, Inc., Series C 1 1,377,846 32,682,507 - ----------------------------------------------------------------------------------------------------------------------------------- News Corp., Inc., Cl. A 1,791,800 25,533,150 --------------- 90,578,801 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER STAPLES--5.0% - ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO--5.0% Altria Group, Inc. 892,100 66,952,105 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY--11.4% - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.0% Halliburton Co. 441,752 26,107,543 - ----------------------------------------------------------------------------------------------------------------------------------- OIL & GAS--9.4% BP plc, ADR 913,230 60,638,472 - ----------------------------------------------------------------------------------------------------------------------------------- Exxon Mobil Corp. 904,000 50,750,560 - ----------------------------------------------------------------------------------------------------------------------------------- TotalFinaElf SA, Sponsored ADR 125,600 15,828,112 --------------- 127,217,144 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIALS--30.8% - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL MARKETS--4.8% UBS AG 758,900 65,014,963 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--8.8% Bank of America Corp. 513,478 22,459,528 - ----------------------------------------------------------------------------------------------------------------------------------- Wachovia Corp. 560,400 28,311,408 - ----------------------------------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 1,131,810 68,134,962 --------------- 118,905,898 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--9.1% Capital One Financial Corp. 444,300 33,922,305 - ----------------------------------------------------------------------------------------------------------------------------------- Citigroup, Inc. 293,966 13,457,763 - ----------------------------------------------------------------------------------------------------------------------------------- JPMorgan Chase & Co. 1,472,300 53,915,626
VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES Continued Lehman Brothers Holdings, Inc. 180,900 $ 21,648,303 --------------- 122,943,997 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE--5.2% Everest Re Group Ltd. 140,300 13,952,835 - ----------------------------------------------------------------------------------------------------------------------------------- Genworth Financial, Inc., Cl. A 1,311,770 41,569,991 - ----------------------------------------------------------------------------------------------------------------------------------- Platinum Underwriters Holdings Ltd. 539,870 15,380,896 --------------- 70,903,722 - ----------------------------------------------------------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--2.9% Countrywide Financial Corp. 760,940 24,175,064 - ----------------------------------------------------------------------------------------------------------------------------------- Freddie Mac 237,970 14,599,460 --------------- 38,774,524 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTH CARE--3.5% - ----------------------------------------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--1.3% Wyeth 389,990 17,377,954 - ----------------------------------------------------------------------------------------------------------------------------------- PHARMACEUTICALS--2.2% Sanofi-Aventis SA, ADR 745,800 29,921,496 - ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIALS--13.0% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--9.6% Honeywell International, Inc. 1,946,300 66,563,460 - ----------------------------------------------------------------------------------------------------------------------------------- Raytheon Co. 249,550 9,220,873 - ----------------------------------------------------------------------------------------------------------------------------------- United Technologies Corp. 1,046,000 53,638,880 --------------- 129,423,213 - ----------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--3.4% Cendant Corp. 2,680,440 46,693,265 - ----------------------------------------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--14.4% - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--2.5% Hutchinson Technology, Inc. 1 261,300 6,480,240
20 | OPPENHEIMER VALUE FUND
VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS Continued International Business Machines Corp. 339,850 $ 27,826,918 --------------- 34,307,158 - ----------------------------------------------------------------------------------------------------------------------------------- SOFTWARE--11.9% Microsoft Corp. 2,133,360 54,827,352 - ----------------------------------------------------------------------------------------------------------------------------------- Novell, Inc. 1 1,989,540 15,160,295 - ----------------------------------------------------------------------------------------------------------------------------------- Synopsys, Inc. 1 1,839,500 34,858,525 - ----------------------------------------------------------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 1 2,703,925 55,836,051 --------------- 160,682,223 - ----------------------------------------------------------------------------------------------------------------------------------- MATERIALS--3.4% - ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS--2.3% Praxair, Inc. 637,880 31,517,651 - ----------------------------------------------------------------------------------------------------------------------------------- METALS & MINING--1.1% Phelps Dodge Corp. 122,700 14,781,669 - ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--2.1% - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--2.1% IDT Corp., Cl. B 1 1,263,103 15,081,450 - ----------------------------------------------------------------------------------------------------------------------------------- Sprint Nextel Corp. 579,800 13,515,138 --------------- 28,596,588 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES--6.3% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--5.4% AES Corp. (The) 1 2,122,180 33,721,440 - ----------------------------------------------------------------------------------------------------------------------------------- CMS Energy Corp. 1 823,300 12,275,403 - ----------------------------------------------------------------------------------------------------------------------------------- PG&E Corp. 264,030 9,605,412 - ----------------------------------------------------------------------------------------------------------------------------------- Reliant Energy, Inc. 1 1,306,230 16,589,121 --------------- 72,191,376 - ----------------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.9% Sempra Energy 285,930 12,666,699 --------------- Total Common Stocks (Cost $1,220,214,364) 1,305,557,989
PRINCIPAL VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--2.6% - ----------------------------------------------------------------------------------------------------------------------------------- Undivided interest of 5.44% in joint repurchase agreement (Principal Amount/Value $647,082,000, with a maturity value of $647,153,179) with UBS Warburg LLC, 3.96%, dated 10/31/05, to be repurchased at $35,182,870 on 11/1/05, collateralized by Federal National Mortgage Assn., 5%, 10/1/35, with a value of $661,717,556 (Cost $35,179,000) $ 35,179,000 $ 35,179,000 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,255,393,364) 99.2% 1,340,736,989 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.8 10,570,546 ------------------------------- NET ASSETS 100.0% $1,351,307,535 ===============================
FOOTNOTE TO STATEMENT OF INVESTMENTS 1. Non-income producing security. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value (cost $1,255,393,364)--see accompanying statement of investments $ 1,340,736,989 - -------------------------------------------------------------------------------- Cash 160,291 - -------------------------------------------------------------------------------- Receivables and other assets: Shares of capital stock sold 7,709,140 Investments sold 7,251,897 Interest and dividends 377,243 Other 15,122 ---------------- Total assets 1,356,250,682 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 2,297,238 Shares of capital stock redeemed 1,937,843 Distribution and service plan fees 243,883 Transfer and shareholder servicing agent fees 218,613 Shareholder communications 81,358 Directors' compensation 80,662 Other 83,550 ---------------- Total liabilities 4,943,147 - -------------------------------------------------------------------------------- NET ASSETS $ 1,351,307,535 ================ - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------- Par value of shares of capital stock $ 57,172 - -------------------------------------------------------------------------------- Additional paid-in capital 1,199,311,063 - -------------------------------------------------------------------------------- Accumulated net investment income 5,255,662 - -------------------------------------------------------------------------------- Accumulated net realized gain on investments 61,340,013 - -------------------------------------------------------------------------------- Net unrealized appreciation on investments 85,343,625 ---------------- NET ASSETS $ 1,351,307,535 ================ 22 | OPPENHEIMER VALUE FUND - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $835,793,016 and 35,130,280 shares of capital stock outstanding) $ 23.79 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 25.24 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $127,257,483 and 5,492,215 shares of capital stock outstanding) $ 23.17 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $170,710,048 and 7,456,442 shares of capital stock outstanding) $ 22.89 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $76,057,811 and 3,253,372 shares of capital stock outstanding) $ 23.38 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $141,489,177 and 5,839,383 shares of capital stock outstanding) $ 24.23 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER VALUE FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $133,653) $ 16,428,818 - -------------------------------------------------------------------------------- Interest 1,185,723 - -------------------------------------------------------------------------------- Other income 21,997 ---------------- Total investment income 17,636,538 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 4,932,587 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 1,476,547 Class B 1,092,359 Class C 1,242,652 Class N 264,945 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 1,172,478 Class B 323,583 Class C 272,567 Class N 142,517 Class Y 147,376 - -------------------------------------------------------------------------------- Shareholder communications: Class A 153,634 Class B 58,652 Class C 34,565 Class N 6,288 - -------------------------------------------------------------------------------- Directors' compensation 39,113 - -------------------------------------------------------------------------------- Accounting service fees 15,000 - -------------------------------------------------------------------------------- Custodian fees and expenses 7,487 - -------------------------------------------------------------------------------- Other 101,165 ---------------- Total expenses 11,483,515 Less reduction to custodian expenses (1,232) ---------------- Net expenses 11,482,283 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 6,154,255 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN - -------------------------------------------------------------------------------- Net realized gain on investments 70,292,725 - -------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 20,234,425 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 96,681,405 ================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004 - ---------------------------------------------------------------------------------------------------------- OPERATIONS - ---------------------------------------------------------------------------------------------------------- Net investment income $ 6,154,255 $ 1,875,843 - ---------------------------------------------------------------------------------------------------------- Net realized gain 70,292,725 37,112,277 - ---------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 20,234,425 18,764,765 --------------------------------- Net increase in net assets resulting from operations 96,681,405 57,752,885 - ---------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ---------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (2,034,104) (574,991) Class B -- -- Class C -- -- Class N (98,987) (59,111) Class Y (289,396) (16,057) - ---------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (3,563,988) -- Class B (799,560) -- Class C (788,223) -- Class N (319,960) -- Class Y (289,411) -- - ---------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS - ---------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from capital stock transactions: Class A 401,024,642 126,690,468 Class B 30,568,616 15,328,730 Class C 80,170,490 40,268,281 Class N 38,290,520 23,054,671 Class Y 103,772,486 28,001,783 - ---------------------------------------------------------------------------------------------------------- NET ASSETS - ---------------------------------------------------------------------------------------------------------- Total increase 742,324,530 290,446,659 - ---------------------------------------------------------------------------------------------------------- Beginning of period 608,983,005 318,536,346 --------------------------------- End of period (including accumulated net investment income of $5,255,662 and $1,545,458, respectively) $ 1,351,307,535 $ 608,983,005 =================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 21.15 $ 18.46 $ 14.78 $ 15.93 $ 17.06 - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .19 1 .13 1 .04 .07 .03 Net realized and unrealized gain (loss) 2.75 2.61 3.67 (1.21) (.98) -------------------------------------------------------------------------- Total from investment operations 2.94 2.74 3.71 (1.14) (.95) - ---------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.11) (.05) (.03) (.01) (.18) Distributions from net realized gain (.19) -- -- -- -- -------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.30) (.05) (.03) (.01) (.18) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 23.79 $ 21.15 $ 18.46 $ 14.78 $ 15.93 ========================================================================== - ---------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 13.99% 14.85% 25.18% (7.15)% (5.60)% - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 835,793 $ 378,785 $ 215,019 $ 141,563 $ 166,285 - ---------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 600,426 $ 303,560 $ 166,143 $ 166,319 $ 181,631 - ---------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.83% 0.66% 0.37% 0.38% 0.19% Total expenses 0.99% 4 1.07% 4,5 1.22% 4,5 1.22% 4,5 1.26% 4 - ---------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 72% 85% 117% 150% 336%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER VALUE FUND
CLASS B YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.68 $ 18.18 $ 14.64 $ 15.89 $ 16.99 - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.01) 1 (.05)(1) (.06) (.10) (.11) Net realized and unrealized gain (loss) 2.69 2.55 3.60 (1.15) (.97) -------------------------------------------------------------------------- Total from investment operations 2.68 2.50 3.54 (1.25) (1.08) - ---------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.02) Distributions from net realized gain (.19) -- -- -- -- -------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.19) -- -- -- (.02) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 23.17 $ 20.68 $ 18.18 $ 14.64 $ 15.89 ========================================================================== - ---------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 13.02% 13.75% 24.18% (7.87)% (6.34)% - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 127,258 $ 85,683 $ 60,858 $ 47,323 $ 57,584 - ---------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 109,545 $ 77,341 $ 51,476 $ 56,200 $ 65,115 - ---------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (0.03)% (0.24)% (0.44)% (0.40)% (0.57)% Total expenses 1.87% 1.98% 2.14% 2.01% 2.01% Expenses after payments and waivers and reduction to custodian expenses 1.87% 1.98% 2.05% 2.01% 2.01% - ---------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 72% 85% 117% 150% 336%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.41 $ 17.93 $ 14.44 $ 15.67 $ 16.77 - ---------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .01 1 (.03) 1 .03 (.01) (.08) Net realized and unrealized gain (loss) 2.66 2.51 3.46 (1.22) (.99) -------------------------------------------------------------------------- Total from investment operations 2.67 2.48 3.49 (1.23) (1.07) - ---------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.03) Distributions from net realized gain (.19) -- -- -- -- -------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.19) -- -- -- (.03) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 22.89 $ 20.41 $ 17.93 $ 14.44 $ 15.67 ========================================================================== - ---------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 13.14% 13.83% 24.17% (7.85)% (6.38)% - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 170,710 $ 79,501 $ 32,625 $ 13,466 $ 10,494 - ---------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 124,605 $ 61,387 $ 21,366 $ 12,977 $ 11,088 - ---------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) 0.04% (0.17)% (0.49)% (0.41)% (0.56)% Total expenses 1.77% 4 1.89% 4,5 2.07% 4,5 2.00% 4,5 2.01% 4 - ---------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 72% 85% 117% 150% 336%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER VALUE FUND
CLASS N YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 1 - -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.80 $ 18.25 $ 14.68 $ 15.90 $ 18.08 - -------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .11 2 .06 2 .03 .05 (.02) Net realized and unrealized gain (loss) 2.72 2.56 3.59 (1.22) (2.16) ------------------------------------------------------------------------ Total from investment operations 2.83 2.62 3.62 (1.17) (2.18) - -------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.06) (.07) (.05) (.05) -- Distributions from net realized gain (.19) -- -- -- -- ------------------------------------------------------------------------ Total dividends and/or distributions to shareholders (.25) (.07) (.05) (.05) -- - -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 23.38 $ 20.80 $ 18.25 $ 14.68 $ 15.90 ======================================================================== - -------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 13.68% 14.39% 24.70% (7.41)% (12.06)% - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 76,058 $ 33,100 $ 7,417 $ 1,201 $ 12 - -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 53,166 $ 23,344 $ 3,275 $ 508 $ 5 - -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) 0.50% 0.28% (0.03)% 0.00% (0.45)% Total expenses 1.30% 1.45% 1.61% 1.49% 1.61% Expenses after payments and waivers and reduction to custodian expenses 1.30% 1.45% 1.55% 1.49% 1.61% - -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 72% 85% 117% 150% 336%
1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS Y YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 21.54 $ 18.79 $ 14.96 $ 16.20 $ 17.07 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 1 .26 .24 (1.86) .06 .10 Net realized and unrealized gain (loss) 2.81 2.62 5.71 1 (1.21) 1 (.97) 1 ------------------------------------------------------------------------- Total from investment operations 3.07 2.86 3.85 (1.15) (.87) - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.19) (.11) (.02) (.09) -- Distributions from net realized gain (.19) -- -- -- -- ------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.38) (.11) (.02) (.09) -- - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 24.23 $ 21.54 $ 18.79 $ 14.96 $ 16.20 ========================================================================= - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 14.38% 15.30% 25.78% (7.18)% (5.10)% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 141,489 $ 31,914 $ 2,617 $ 1,074 $ 638 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 83,000 $ 8,398 $ 1,558 $ 955 $ 155 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 1.10% 1.17% 0.76% 0.33% 0.62% Total expenses 0.70% 0.61% 1.19% 3.77% 1.20% Expenses after payments and waivers and reduction to custodian expenses 0.70% 0.61% 0.80% 1.23% 0.83% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 72% 85% 117% 150% 336%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. Realization of current income is a secondary consideration. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Directors. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by 31 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Directors. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. 32 | OPPENHEIMER VALUE FUND Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES ---------------------------------------------------------------------- $ 27,129,610 $ 40,125,513 $ -- $ 84,761,319 1. During the fiscal year ended October 31, 2005, the Fund utilized $1,620,254 of capital loss carryforward to offset capital gains realized in that fiscal year. a,b a. Includes $1,175,862 of capital loss carryforwards acquired in the November 6, 2003 merger of Oppenheimer Select Managers Salomon Brothers All Cap Fund. b. Includes $444,392 of capital loss carryforwards acquired in the September 18, 2003 merger of Oppenheimer Trinity Value Fund. 2. During the fiscal year ended October 31, 2004, the Fund utilized $29,785,616 of capital loss carryforward to offset capital gains realized in that fiscal year. a,b a. Includes $444,392 of capital loss carryforwards acquired in the September 18, 2003 merger of Oppenheimer Trinity Value Fund. b. Includes $1,348,116 of capital loss carryforwards acquired in the November 6, 2003 merger of Oppenheimer Select Managers Salomon Brothers All Cap Fund. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for October 31, 2005. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO REDUCTION TO ACCUMULATED NET INCREASE TO ACCUMULATED NET REALIZED GAIN ON PAID-IN CAPITAL INVESTMENT INCOME INVESTMENTS 3 ---------------------------------------------------------------------- $ 8,249,637 $ 21,564 $ 8,228,073 3. $6,629,383, including $4,295,824 of long-term capital gain, was distributed in connection with Fund share redemptions. 33 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued The tax character of distributions paid during the years ended October 31, 2005 and October 31, 2004 was as follows: YEAR ENDED YEAR ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 ----------------------------------------------------------- Distributions paid from: Ordinary income $ 2,422,487 $ 650,159 Long-term capital gain 5,761,142 -- -------------------------------------- Total $ 8,183,629 $ 650,159 ====================================== The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of October 31, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 1,255,975,670 =============== Gross unrealized appreciation $ 119,196,411 Gross unrealized depreciation (34,435,092) --------------- Net unrealized appreciation $ 84,761,319 =============== - -------------------------------------------------------------------------------- DIRECTORS' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the year ended October 31, 2005, the Fund's projected benefit obligations were increased by $17,499 and payments of $2,208 were made to retired directors, resulting in an accumulated liability of $63,088 as of October 31, 2005. The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Director under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Director. The Fund purchases shares of the funds selected for deferral by the Director in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of directors' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. 34 | OPPENHEIMER VALUE FUND - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF CAPITAL STOCK The Fund has authorized 600 million shares of $0.001 par value capital stock of each class. Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------- CLASS A Sold 21,899,954 $ 510,001,541 8,369,840 $ 170,220,679 Dividends and/or distributions reinvested 224,061 5,016,717 26,697 512,868 Acquisition-Note 5 -- -- 393,950 7,335,351 Redeemed (4,906,749) (113,993,616) (2,522,842) (51,378,430) ---------------------------------------------------------- Net increase 17,217,266 $ 401,024,642 6,267,645 $ 126,690,468 ========================================================== - ------------------------------------------------------------------------------------- CLASS B Sold 2,699,016 $ 61,263,523 2,032,579 $ 40,623,831 Dividends and/or distributions reinvested 33,852 744,025 -- -- Acquisition-Note 5 -- -- 286,209 5,246,208 Redeemed (1,384,112) (31,438,932) (1,523,503) (30,541,309) ---------------------------------------------------------- Net increase 1,348,756 $ 30,568,616 795,285 $ 15,328,730 ==========================================================
35 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF CAPITAL STOCK Continued
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------- CLASS C Sold 4,592,560 $ 103,383,454 2,218,314 $ 43,763,468 Dividends and/or distributions reinvested 31,946 693,237 -- -- Acquisition-Note 5 -- -- 440,763 7,968,992 Redeemed (1,062,520) (23,906,201) (584,362) (11,464,179) ----------------------------------------------------------- Net increase 3,561,986 $ 80,170,490 2,074,715 $ 40,268,281 =========================================================== - ------------------------------------------------------------------------------------- CLASS N Sold 2,243,821 $ 51,659,803 1,012,546 $ 20,320,194 Dividends and/or distributions reinvested 18,560 409,435 3,115 59,100 Acquisition-Note 5 -- -- 452,633 8,332,974 Redeemed (600,186) (13,778,718) (283,432) (5,657,597) ----------------------------------------------------------- Net increase 1,662,195 $ 38,290,520 1,184,862 $ 23,054,671 =========================================================== - ------------------------------------------------------------------------------------- CLASS Y Sold 5,325,506 $ 127,221,723 1,405,605 $ 29,328,236 Dividends and/or distributions reinvested 25,451 578,749 822 16,039 Acquisition-Note 5 -- -- 51 969 Redeemed (992,963) (24,027,986) (64,351) (1,343,461) ----------------------------------------------------------- Net increase 4,357,994 $ 103,772,486 1,342,127 $ 28,001,783 ===========================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended October 31, 2005, were as follows: PURCHASES SALES -------------------------------------------------------------- Investment securities $1,285,593,955 $667,849,379 - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million. - -------------------------------------------------------------------------------- ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per 36 | OPPENHEIMER VALUE FUND account fee. For the year ended October 31, 2005, the Fund paid $1,960,525 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Directors and its independent directors must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at October 31, 2005 for Class B, Class C and Class N shares were $3,075,727, $1,719,593 and $713,193, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated. 37 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------ October 31, 2005 $ 1,065,744 $ 948 $ 190,006 $ 27,739 $ 51,032
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 5. ACQUISITION OF OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND On November 6, 2003, the Fund acquired all of the net assets of Oppenheimer Select Managers Salomon Brothers All Cap Fund, pursuant to an Agreement and Plan of Reorganization approved by the Oppenheimer Select Managers Salomon Brothers All Cap Fund shareholders on October 31, 2003. The Fund issued (at an exchange ratio of 0.516576 for Class A, 0.514763 for Class B, 0.521451 for Class C, 0.517683 for Class N and 0.511551 for Class Y of the Fund to one share of Oppenheimer Select Managers Salomon Brothers All Cap Fund) 393,950; 286,209; 440,763; 452,633 and 51 shares of beneficial interest for Class A, Class B, Class C, Class N and Class Y, respectively, valued at $7,335,351, $5,246,208, $7,968,992, $8,332,974 and $969 in exchange for the net assets, resulting in combined Class A net assets of $227,060,486, Class B net assets of $66,085,206, Class C net assets of $41,217,738, Class N net assets of $15,907,953 and Class Y net assets of $2,648,868 on November 6, 2003. The net assets acquired included net unrealized appreciation of $2,862,951 and an unused capital loss carryforward of $2,523,977, potential utilization subject to tax limitation. The exchange qualified as a tax-free reorganization for federal income tax purposes. - -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or 38 | OPPENHEIMER VALUE FUND participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 39 | OPPENHEIMER VALUE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER SERIES FUND, INC.: We have audited the accompanying statement of assets and liabilities of Oppenheimer Value Fund (one of the portfolios constituting the Oppenheimer Series Fund, Inc.), including the statement of investments, as of October 31, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Value Fund as of October 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado December 20, 2005 40 | OPPENHEIMER VALUE FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends and distributions of $0.3005, $0.1913, $0.1913, $0.2505 and $0.3826 per share were paid to Class A, Class B, Class C, Class N and Class Y shareholders, respectively, on December 3, 2004, of which $0.1913 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of the capital assets held for more than one year (long-term capital gains). Dividends, if any, paid by the Fund during the fiscal year ended October 31, 2005 which are not designated as capital gain distributions should be multiplied by 45.40% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended October 31, 2005 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $16,418,121 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2006, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 41 | OPPENHEIMER VALUE FUND REPORT OF SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- On August 17, 2005, a shareholder meeting of the Oppenheimer Series Fund, Inc. (Oppenheimer Value Fund) was held at which the eleven Trustees identified below were elected to both Funds (Proposal No. 1) and the sub-proposals in (Proposal No. 2) were approved by the Oppenheimer Value Fund as described in the Fund's proxy statement for that meeting. The following is a report of the votes cast: - -------------------------------------------------------------------------------- PROPOSAL NO. 1 NOMINEE FOR WITHHELD TOTAL - -------------------------------------------------------------------------------- TRUSTEES Matthew P. Fink 27,131,084.022 250,883.060 27,381,967.082 Robert G. Galli 27,104,151.422 277,815.660 27,381,967.082 Phillip A. Griffiths 27,122,224.683 259,742.399 27,381,967.082 Mary F. Miller 27,108,544.790 273,422.292 27,381,967.082 Joel W. Motley 27,129,378.717 252,588.365 27,381,967.082 John V. Murphy 27,117,932.351 264,034.731 27,381,967.082 Kenneth A. Randall 27,081,245.815 300,721.267 27,381,967.082 Russell S. Reynolds, Jr. 27,094,703.832 287,263.250 27,381,967.082 Joseph M. Wikler 27,128,328.216 253,638.866 27,381,967.082 Peter I. Wold 27,113,639.594 268,327.488 27,381,967.082 Clayton K. Yeutter 27,096,139.270 285,827.812 27,381,967.082 - -------------------------------------------------------------------------------- PROPOSAL NO. 2: Proposal to change the policy on FOR AGAINST ABSTAIN BROKER NON-VOTE TOTAL - -------------------------------------------------------------------------------- 2K: Real Estate and Commodities 19,302,099.667 538,654.907 505,337.508 7,035,875.000 27,381,967.082 2L: Senior Securities 19,314,271.577 499,822.506 531,997.999 7,035,875.000 27,381,967.082 42 | OPPENHEIMER VALUE FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 43 | OPPENHEIMER VALUE FUND DIRECTORS AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER THE FUND, LENGTH OF SERVICE, TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX AGE CURRENTLY OVERSEEN INDEPENDENT THE ADDRESS OF EACH DIRECTOR IN THE CHART BELOW IS 6803 S. TUCSON WAY, DIRECTORS CENTENNIAL, CO 80112-3924. EACH DIRECTOR SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January Chairman of the Board 2005); Attorney at Hogan & Hartson (law firm) (since June 1993); Director of Directors (since 2003), of Danielson Holding Corp. (waste-to-energy company) (since 2002); Director (since 1996) Director of Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Age: 74 Inc. (1993-December 2002); Director of ConAgra Foods (1993-2001); Director of Texas Instruments (1993-2001); Director of FMC Corporation (1993-2001). Oversees 38 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research Director (since 2005) foundation) (since 2005); Director of ICI Education Foundation (education Age: 64 foundation) (since October 1991); President of the Investment Company Institute (trade association) (1991-2004); Director of ICI Mutual Insurance Company (insurance company) (1991-2004). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios Director (since 1996) in the OppenheimerFunds complex. Age: 72 PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier) Director (since 1999) (since 2001); Trustee of Woodward Academy (since 1983); Senior Advisor of Age: 67 The Andrew W. Mellon Foundation (since 2001); Member of the National Academy of Sciences (since 1979); Member of the American Philosophical Society (since 1996); Council on Foreign Relations (since 2002); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999). Oversees 38 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October Director (since 2004) 1998); and Senior Vice President and General Auditor of American Express Age: 63 Company (financial services company) (July 1998-February 2003). Oversees 38 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial Director (since 2002) adviser) (since 2002); Managing Director of Carmona Motley, Inc. Age: 53 (privately-held financial adviser) (since January 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) Director (since 1996) (since February 1972); Former Director of Prime Retail, Inc. (real estate Age: 78 investment trust), Dominion Energy Inc. (electric power and oil & gas producer), Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research). Oversees 38 portfolios in the OppenheimerFunds complex.
44 | OPPENHEIMER VALUE FUND RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance Director (since 1996) consulting and executive recruiting) (since 1993); Life Trustee of Age: 73 International House (non-profit educational organization); Former Trustee of The Historical Society of the Town of Greenwich. Oversees 38 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) Director (since 2005) and Cathco (since 1996); Director of Lakes Environmental Association Age: 64 (since 1996); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 39 portfolios in the OppenheimerFunds complex. PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and Director (since 2005) production company) (since 1994); Vice President, Secretary and Treasurer Age: 57 of Wold Trona Company, Inc. (soda ash processing and production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds complex. BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September Director (since 2005) 1996); Director of Special Value Opportunities Fund, LLC (registered Age: 62 investment company) (since September 2004); Director of Zurich Financial Investment Advisory Board (affiliate of the Manager's parent company) (since October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990- September 2001) (economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002) (executive search firm). Oversees 48 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------ INTERESTED DIRECTOR AND OFFICER THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A DIRECTOR FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED DIRECTOR DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President, Principal Executive President (since September 2000) of the Manager; President and Director or Officer and Director Trustee of other Oppenheimer funds; President and Director of Oppenheimer (since 2001) Acquisition Corp. ("OAC") (the Manager's parent holding company) and of Age: 56 Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and
45 | OPPENHEIMER VALUE FUND DIRECTORS AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77 portfolios as a Director or Trustee and 10 additional portfolios as officer in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------ OTHER OFFICERS OF THE FUND THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. LEAVY AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CHRISTOPHER LEAVY, Senior Vice President of the Manager since September 2000. Formerly a Vice President (since 2000) portfolio manager of Morgan Stanley Dean Witter Investment Management Age: 34 (1997 - September 2000). An officer of 7 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since Vice President and Chief March 2004); Vice President of OppenheimerFunds Distributor, Inc., Compliance Officer Centennial Asset Management Corporation and Shareholder Services, Inc. (since 2004) (since June 1983). Former Vice President and Director of Internal Audit of Age: 55 the Manager (1997-February 2004). An officer of 87 portfolios in the OppenheimerFunds complex. BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation, Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc., Officer (since 1999) Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Age: 46 Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999),Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex.
46 | OPPENHEIMER VALUE FUND ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since Secretary (since 2001) March 2002) of the Manager; General Counsel and Director of the Age: 57 Distributor (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S DIRECTORS AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 47 | OPPENHEIMER VALUE FUND ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Directors of the registrant has determined that the registrant does not have an audit committee financial expert serving on its Audit Committee. In this regard, no member of the Audit Committee was identified as having all of the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as an "audit committee financial expert," whether through the type of specialized education or experience described in that Instruction. The Board has concluded that while the members of the Audit Committee collectively have the necessary attributes and experience required to serve effectively as an Audit Committee, no single member possesses all of the required technical attributes through the particular methods of education or experience set forth in the Instructions to be designated as an audit committee financial expert. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $28,000 in fiscal 2005 and $26,000 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $156,805 in fiscal 2005 and $39,500 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: Computations of capital gain tax liability, preparation of tax returns, preparation of Form 5500 and tax consultations on pass through of foreign withholding taxes and mortgage dollar roll transactions. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $161,805 in fiscal 2005 and $45,500 in fiscal 2004 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of October 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Series Fund, Inc. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: December 20, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: December 20, 2005 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: December 20, 2005 EX-99.CERT 2 ra205_18614ex302.txt RA205_18614EX302 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 Series Fund, Inc.; 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 officer 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 second fiscal quarter of the period covered by this report 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 officer 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: December 20, 2005 /s/ John V. Murphy - ------------------ John V. Murphy Principal 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 Series Fund, Inc.; 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 officer 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 second fiscal quarter of the period covered by this report 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 officer 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: December 20, 2005 /s/ Brian W. Wixted - ------------------- Brian W. Wixted Principal Financial Officer EX-99.906 3 ra205_18614ex906.txt RA205_18614EX906.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, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Series Fund, Inc. (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2005 (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. Principal Executive Officer Principal Financial Officer Oppenheimer Series Fund, Inc. Oppenheimer Series Fund, Inc. /s/ John V. Murphy /s/ Brian W. Wixted - ------------------ ------------------- John V. Murphy Brian W. Wixted Date: December 20, 2005 Date: December 20, 2005 EX-99.CODE ETH 4 ra205_18614ethics.txt RA205_18614ETHICS 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 - ---------- 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. 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. 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; - ---------- 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. (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 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 -----END PRIVACY-ENHANCED MESSAGE-----