N-30D 1 0001.txt OPPENHEIMER DISCIPLINED VALUE FUND [GRAPHIC] Semiannual Report April 30, 2000 Oppenheimer Disciplined Value Fund [LOGO OF OPPENHEIMERFUNDS] The Right Way to Invest -------------------------------------------------------------------------------- REPORT HIGHLIGHTS -------------------------------------------------------------------------------- CONTENTS 1 President's Letter 3 An Interview with Your Fund's Managers 9 Financial Statements 30 Officers and Directors Despite a difficult environment for value investing, the Fund benefited from investments in technology, energy and utility companies. The Fund's performance was hurt by concerns regarding rising interest rates, which favored the stocks of well-known, high-growth companies rather than the Fund's value-oriented investments. Our enhanced stock selection process led us to trim investments in poor-performing sectors, including consumer cyclicals and financial sector stocks. Cumulative Total Returns* For the 6-Month Period Ended 4/30/00 Class A Without With Sales Chg. Sales Chg. ------------------------------------- 1.28% -4.55% Class B Without With Sales Chg. Sales Chg. ------------------------------------- 0.93% -3.38% Class C Without With Sales Chg. Sales Chg. ------------------------------------- 0.95% 0.09% Class Y Without With Sales Chg. Sales Chg. ------------------------------------- 1.41% 1.41% *See Notes on page 7 for further details. -------------------------------------------------------------------------------- PRESIDENT'S LETTER -------------------------------------------------------------------------------- Dear Shareholder, [PHOTO] Bridget A. Macaskill President Oppenheimer Disciplined Value Fund For many years,we have encouraged investors to consider whether they could tolerate more risk in their long-term investments by participating in the stock market, which has historically provided higher long-term returns than any other asset class. Today, however, we have a very different concern: some investors may have assumed too much risk by concentrating their investments in just a handful of stocks or sectors or by "chasing performance." Several months ago, Alan Greenspan, the Chairman of the Federal Reserve Board, stated his view that the spectacular returns some sectors of the market were then experiencing may have been partly responsible for pushing our economy to growth rates that could lead to higher inflation. Today it is clear that the dramatic rise in the prices of a narrow segment of the market created enormous wealth for some investors. The result of this newfound wealth has been a substantial increase in spending that the Federal Reserve Board believes could threaten the healthy growth of our economy. That's why the Fed has been raising interest rates steadily and decisively over the past year. By making borrowing more expensive, the Fed has been attempting to slow economic growth. It is a precarious balancing act: too much tightening creates the risk of recession, while too little opens the door to inflation. The implications of the Fed's resolve are clear: investors must continue to be prepared for near-term market volatility. In the bond market, higher interest rates usually lead to lower bond prices. In the stock market, slower economic growth often reduces corporate earnings and puts downward pressure on stock prices. Highly valued stocks can be particularly vulnerable to a correction. The Securities and Exchange Commission Chairman, Arthur Levitt, has been cautioning investors against the expectation that the types of returns seen in the recent bull market will last forever. 1 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- PRESIDENT'S LETTER -------------------------------------------------------------------------------- Because of the prospect of continued market volatility, we encourage you to consider diversifying your investments. Indeed, diversification may help you mitigate the effects of sharp declines in any one area. It may also help you better position your portfolio to seek greater returns over the long run. While some "new economy" stocks have risen over the last year, many so- called "old economy" stocks are selling at low prices. In the bond market, higher interest rates over the short term may reduce inflation concerns, which should be beneficial over the long term. By buying out-of-favor investments, you may be able to profit when and if they return to favor. What specific investments should you consider today so that you are prepared for tomorrow? The answer depends on your individual investing goals, risk tolerance and financial circumstances. We urge you to talk with your financial advisor about ways to diversify your portfolio. This may include considering global diversification as part of your strategy. While investing abroad has special risks, such as the effects of foreign currency fluctuations, it also offers opportunities to participate in global economic growth and to hedge against the volatility in U.S. markets. We thank you for your continued confidence in OppenheimerFunds, The Right Way to Invest. Sincerely, /s/ Bridget A. Macaskill Bridget A. Macaskill May 19, 2000 2 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- AN INTERVIEW WITH YOUR FUND'S MANAGERS -------------------------------------------------------------------------------- [PHOTO] Portfolio Management Team (l to r) Kenneth White Peter Antos Michael Strathearn How did the Fund perform during the six-month period that ended April 30, 2000? A. During most of the reporting period, the market continued to favor large growth stocks over the undervalued companies in which the Fund invests. While we are disappointed with the Fund's return over the period, we expect undervalued stocks with prospects for growth to reward investors. Why has this been such a difficult period for value investing? Historically, value stocks have proven to be bargains over the long term. However, they tend to underperform the market when corporate earnings growth appears likely to slow and concerns regarding the economic future are on the rise. At such times, investors tend to seek large, growth-oriented companies. Throughout the recent six-month period, actual U.S. economic growth remained robust. However the unusually rapid pace of U.S.economic growth raised concerns that inflation might appear. In an effort to prevent the economy from overheating, the Federal Reserve Board (the Fed) raised interest rates, and declared that they intended to continue raising them until the pace of consumer spending and economic growth slowed. The Fed's actions and statements heightened uncertainties regarding the sustainability of U.S. economic growth, and value- oriented stocks suffered as a result. Many of our holdings in traditional value- oriented sectors were hard hit despite good earnings and strong business conditions. 3 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- AN INTERVIEW WITH YOUR FUND'S MANAGERS -------------------------------------------------------------------------------- "We added substantially to our value-oriented technology holdings to take advantage of strength among the computer and telecommunications industries." How did you manage the Fund in light of these conditions? We sought to position the Fund to perform as strongly as possible during a difficult time for value investing. During the period, we added substantially to our value-oriented technology holdings to take advantage of strength among the computer and telecommunications industries. The percentage of the Fund's assets allocated to technology rose from approximately 10% at the beginning of the period to approximately 20% near the end of the period.1 Most of the Fund's best performing stocks were concentrated in this sector, including Teradyne, Inc., a semiconductor test equipment manufacturer; and Apple Computer, Inc., maker of the popular iMac computers.2 Among other key sectors, we scored successes with several of our energy and utility holdings. Energy stocks benefited from a rebound in energy prices. We participated in the sector's rise with investments in drilling rig owners and natural gas producers. Our holdings of electric and telecommunications companies also generally performed well, especially stocks of companies participating in the rapid build-out of cellular and fiber optic communications networks. Did you make any other significant portfolio management moves for the Fund? We implemented a sophisticated new ranking system a few months before the period began. This system is designed to help us better evaluate the broad universe of value-oriented stocks by analyzing a broad range of quality, price and earnings- related factors. Assisted by the results of this ranking system, we trimmed the Fund's holdings in consumer cyclicals and financial sector stocks. Both of these sectors tend to underperform in times of rising interest rates, such as prevailed during the period. 1. Portfolio allocations are subject to change. 2. See Statement of Investments for a complete list of investments as of April 30,2000. 4 OPPENHEIMER DISCIPLINED VALUE FUND Average Annual Total Returns For the Periods Ended 3/31/00 3 Class A 1-Year 5-Year 10-Year --------------------------- -8.23% 12.37% 12.84% Class B Since 1-Year 5-Year Inception --------------------------- -7.46% N/A 10.43% Class C Since 1-Year 5-Year Inception --------------------------- -4.15% N/A 8.93% Class Y Since 1-Year 5-Year Inception --------------------------- -2.41% N/A 9.00% Because of ongoing market volatility, the Fund's performance since 3/31/00 has been subject to substantial short-term fluctuations and current performance may be less than the results shown. While these changes enhanced the Fund's performance, the negative environment for value investing still took a significant toll. Stocks in the consumer staples sector, including beverage companies and other commodity suppliers, lost value despite strong company fundamentals and good earnings performance. Solid companies in the capital goods sector faced a similarly unfavorable investment environment. Reasonably priced stocks of retailers in the consumer cyclical sector also turned in disappointing performance as investors focused on a narrow group of high growth companies in the sector. What is your outlook for the future in light of today's market conditions? A gap of unprecedented dimensions has opened between the prices of value- oriented stocks and growth-oriented stocks. However, the potential vulnerability of overpriced growth stocks was exposed during April 2000, when prices of some of the market's highest fliers fell significantly. We have found that buying stocks with low price-earnings ratios--a hallmark value approach--creates a portfolio that, over the long term, has the potential to outperform the overall stock market. We remain committed to value investing, and continually seek value companies we consider likely to surpass the market's expectations. We believe such companies are likely to add value to the Fund's portfolio over time. We further believe our disciplined strategy positions investors to benefit from such opportunities. That's why Oppenheimer Disciplined Value Fund remains part of The Right Way to Invest. 3. See Notes on page 7 for further details. 5 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- AN INTERVIEW WITH YOUR FUND'S MANAGERS -------------------------------------------------------------------------------- Sector Allocation 4 [GRAPH] . Financial 20.2% . Capital Goods 18.0 . Technology 17.3 . Energy 10.9 . Consumer Cyclicals 9.2 . Utilities 7.8 . Consumer Staples 7.4 . Communication Services 3.4 . Basic Materials 2.8 . Transportation 1.5 . Healthcare 1.5 Top Ten Common Stock Holdings 4 ------------------------------------------------------------------------------ Exxon Mobil Corp. 3.2% ------------------------------------------------------------------------------ Citigroup, Inc. 2.1 ------------------------------------------------------------------------------ BellSouth Corp. 2.0 ------------------------------------------------------------------------------ SPX Corp. 1.9 ------------------------------------------------------------------------------ Minnesota Mining & Manufacturing Co. 1.8 ------------------------------------------------------------------------------ Apple Computer 1.8 ------------------------------------------------------------------------------ Cigna Corp. 1.7 ------------------------------------------------------------------------------ Kimberly-Clark Corp. 1.7 ------------------------------------------------------------------------------ Teradyne, Inc. 1.6 ------------------------------------------------------------------------------ International Business Machines Corp. 1.6 Top Five Common Stock Industries 4 ------------------------------------------------------------------------------ Insurance 10.9% ------------------------------------------------------------------------------ Manufacturing 10.1 ------------------------------------------------------------------------------ Electronics 7.9 ------------------------------------------------------------------------------ Electric Utilities 6.7 ------------------------------------------------------------------------------ Computer Hardware 5.8 4. Portfolio is subject to change. Percentages are as of April 30, 2000, and are based on total market value of common stock. 6 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- NOTES -------------------------------------------------------------------------------- In reviewing performance and rankings, please remember that past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For quarterly updates on the Fund's performance, please contact your financial advisor, call us at 1.800.525.7048 or visit our website at www.oppenheimerfunds.com. Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Cumulative total returns are not annualized. The Fund's total returns shown do not show the effects 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. 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% (inception). 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 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. 7 OPPENHEIMER DISCIPLINED VALUE FUND Financials 8 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS April 30, 2000/Unaudited -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Common Stocks-92.2% -------------------------------------------------------------------------------- Basic Materials-2.7% -------------------------------------------------------------------------------- Chemicals-1.7% Dow Chemical Co. 37,600 $ 4,248,800 -------------------------------------------------------------------------------- Rohm & Haas Co. 61,500 2,190,937 ----------- 6,439,737 -------------------------------------------------------------------------------- Paper-1.0% Georgia Pacific Group/Timber Group 36,000 834,750 -------------------------------------------------------------------------------- Louisiana-Pacific Corp. 48,700 651,362 -------------------------------------------------------------------------------- Weyerhaeuser Co. 42,900 2,292,469 ----------- 3,778,581 -------------------------------------------------------------------------------- Capital Goods-16.5% -------------------------------------------------------------------------------- Aerospace/Defense-3.1% Boeing Co.1 101,600 4,032,250 -------------------------------------------------------------------------------- General Dynamics Corp. 61,100 3,574,350 -------------------------------------------------------------------------------- L-3 Communications Holdings,Inc.2 35,600 1,895,700 -------------------------------------------------------------------------------- Northrop Grumman Corp. 37,600 2,664,900 ----------- 12,167,200 -------------------------------------------------------------------------------- Electrical Equipment-3.7% AVX Corp. 18,900 1,841,569 -------------------------------------------------------------------------------- CommScope,Inc.2 38,700 1,838,250 -------------------------------------------------------------------------------- Integrated Device Technology,Inc.2 57,200 2,749,175 -------------------------------------------------------------------------------- Rockwell International Corp. 32,600 1,283,625 -------------------------------------------------------------------------------- SPX Corp.2 61,500 6,757,312 ----------- 14,469,931 -------------------------------------------------------------------------------- Industrial Services-0.4% Valassis Communications,Inc.2 42,500 1,447,656 -------------------------------------------------------------------------------- Manufacturing-9.3% Avery-Dennison Corp. 23,800 1,561,875 -------------------------------------------------------------------------------- Ball Corp. 32,400 1,020,600 -------------------------------------------------------------------------------- Briggs & Stratton Corp. 33,300 1,277,887 -------------------------------------------------------------------------------- Cooper Industries, Inc. 58,300 2,000,419 -------------------------------------------------------------------------------- Crane Co. 61,100 1,642,062 -------------------------------------------------------------------------------- Deere & Co. 28,200 1,138,575 -------------------------------------------------------------------------------- Dover Corp. 99,900 5,076,169 -------------------------------------------------------------------------------- Eaton Corp. 23,100 1,940,400 -------------------------------------------------------------------------------- Honeywell International, Inc. 76,800 4,300,800 -------------------------------------------------------------------------------- Kulicke & Soffa Industries, Inc.2 19,400 1,519,262 -------------------------------------------------------------------------------- Miller (Herman), Inc. 52,000 1,423,500 -------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 74,600 6,452,900 9 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited/Continued -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Manufacturing Continued Parker-Hannifin Corp. 46,200 $ 2,148,300 -------------------------------------------------------------------------------- Textron,Inc. 32,500 2,012,969 -------------------------------------------------------------------------------- United Technologies Corp. 43,500 2,705,156 ----------- 36,220,874 -------------------------------------------------------------------------------- Communication Services-3.1% -------------------------------------------------------------------------------- Telecommunications-Long Distance-1.3% AT&T Corp. 106,600 4,976,887 -------------------------------------------------------------------------------- Telephone Utilities-1.8% BellSouth Corp. 145,200 7,069,425 -------------------------------------------------------------------------------- Consumer Cyclicals-8.5% -------------------------------------------------------------------------------- Autos & Housing-2.0% Ethan Allen Interiors,Inc. 22,700 605,806 -------------------------------------------------------------------------------- Fortune Brands,Inc. 36,600 915,000 -------------------------------------------------------------------------------- Genuine Parts Co. 123,400 3,239,250 -------------------------------------------------------------------------------- Stanley Works (The) 52,600 1,551,700 -------------------------------------------------------------------------------- Vulcan Materials Co. 36,300 1,590,394 ----------- 7,902,150 -------------------------------------------------------------------------------- Consumer Services-0.3% Harte-Hanks,Inc. 44,200 1,093,950 -------------------------------------------------------------------------------- Leisure & Entertainment-0.4% MGM Grand,Inc. 51,500 1,519,250 -------------------------------------------------------------------------------- Media-2.5% Central Newspapers,Inc.,Cl.A 24,200 742,637 -------------------------------------------------------------------------------- Deluxe Corp. 41,700 1,050,319 -------------------------------------------------------------------------------- Gannett Co.,Inc. 83,000 5,301,625 -------------------------------------------------------------------------------- Knight-Ridder,Inc. 50,100 2,458,031 ----------- 9,552,612 -------------------------------------------------------------------------------- Retail: General-1.3% Family Dollar Stores,Inc. 15,900 303,094 -------------------------------------------------------------------------------- Federated Department Stores,Inc.2 35,300 1,200,200 -------------------------------------------------------------------------------- May Department Stores Co. 51,800 1,424,500 -------------------------------------------------------------------------------- Sears Roebuck & Co. 58,000 2,124,250 ----------- 5,052,044 -------------------------------------------------------------------------------- Retail: Specialty-1.1% BJ's Wholesale Club,Inc.2 22,500 797,344 -------------------------------------------------------------------------------- Ross Stores,Inc. 17,000 352,750 -------------------------------------------------------------------------------- Sherwin-Williams Co. 57,500 1,430,312 -------------------------------------------------------------------------------- Tandy Corp. 28,800 1,641,600 ----------- 4,222,006 10 OPPENHEIMER DISCIPLINED VALUE FUND Market Value Shares See Note 1 -------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings-0.9% Jones Apparel Group,Inc.2 16,300 $ 483,906 -------------------------------------------------------------------------------- Liz Claiborne,Inc. 22,300 1,032,769 -------------------------------------------------------------------------------- Shaw Industries,Inc. 120,600 1,906,987 ----------- 3,423,662 -------------------------------------------------------------------------------- Consumer Staples-6.8% -------------------------------------------------------------------------------- Beverages-1.4% Adolph Coors Co.,Cl.B 32,100 1,637,100 -------------------------------------------------------------------------------- Anheuser-Busch Cos.,Inc. 55,600 3,923,275 ----------- 5,560,375 -------------------------------------------------------------------------------- Entertainment-1.6% Brinker International,Inc.2 50,800 1,619,250 -------------------------------------------------------------------------------- Darden Restaurants,Inc. 48,800 899,750 -------------------------------------------------------------------------------- McDonald's Corp. 27,700 1,056,062 -------------------------------------------------------------------------------- Outback Steakhouse,Inc.2 43,400 1,421,350 -------------------------------------------------------------------------------- Wendy's International,Inc. 48,200 1,078,475 ----------- 6,074,887 -------------------------------------------------------------------------------- Food-1.9% Bestfoods 37,200 1,869,300 -------------------------------------------------------------------------------- ConAgra,Inc. 47,400 894,675 -------------------------------------------------------------------------------- Hormel Foods Corp. 47,800 728,950 -------------------------------------------------------------------------------- IBP,Inc. 112,300 1,852,950 -------------------------------------------------------------------------------- International Home Foods,Inc.2 61,400 894,137 -------------------------------------------------------------------------------- Keebler Foods Co. 35,600 1,119,175 ----------- 7,359,187 -------------------------------------------------------------------------------- Food & Drug Retailers-0.4% SUPERVALU,Inc. 72,900 1,508,119 -------------------------------------------------------------------------------- Household Goods-1.5% Kimberly-Clark Corp. 103,000 5,980,437 -------------------------------------------------------------------------------- Energy-10.0% -------------------------------------------------------------------------------- Energy Services-1.9% Anadarko Petroleum Corp. 43,400 1,885,187 -------------------------------------------------------------------------------- ENSCO International,Inc. 75,800 2,515,612 -------------------------------------------------------------------------------- Global Marine,Inc.2 126,100 3,026,400 ----------- 7,427,199 -------------------------------------------------------------------------------- Oil: Domestic-4.9% Apache Corp. 20,800 1,007,500 -------------------------------------------------------------------------------- Burlington Resources,Inc. 32,500 1,277,656 -------------------------------------------------------------------------------- Conoco,Inc.,Cl.A 83,400 1,985,962 -------------------------------------------------------------------------------- Exxon Mobil Corp. 146,618 11,390,386 11 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited/Continued -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Oil: Domestic Continued Murphy Oil Corp. 23,600 $ 1,392,400 -------------------------------------------------------------------------------- Texaco,Inc. 42,800 2,118,600 ----------- 19,172,504 -------------------------------------------------------------------------------- Oil: International-3.2% BP Amoco plc,ADR 107,100 5,462,100 -------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 73,600 4,222,800 -------------------------------------------------------------------------------- Total Fina Elf SA,Sponsored ADR 37,700 2,851,062 ----------- 12,535,962 -------------------------------------------------------------------------------- Financial-18.6% -------------------------------------------------------------------------------- Banks-3.4% Bank of America Corp. 34,900 1,710,100 -------------------------------------------------------------------------------- Bank of NewYork Co.,Inc.(The) 41,800 1,716,413 -------------------------------------------------------------------------------- Chase Manhattan Corp. 20,400 1,470,075 -------------------------------------------------------------------------------- Mellon Financial Corp. 44,800 1,439,200 -------------------------------------------------------------------------------- PNC Financial Services Group 38,500 1,679,563 -------------------------------------------------------------------------------- Roslyn Bancorp,Inc. 28,800 489,600 -------------------------------------------------------------------------------- UnionBanCal Corp. 22,700 628,506 -------------------------------------------------------------------------------- Wachovia Corp. 15,600 977,925 -------------------------------------------------------------------------------- Wells Fargo Co. 73,500 3,018,094 ----------- 13,129,476 -------------------------------------------------------------------------------- Diversified Financial-5.2% AMBAC Financial Group,Inc. 21,300 1,022,400 -------------------------------------------------------------------------------- American Express Co. 6,000 900,375 -------------------------------------------------------------------------------- Citigroup,Inc. 125,000 7,429,688 -------------------------------------------------------------------------------- Fannie Mae 33,700 2,032,531 -------------------------------------------------------------------------------- Freddie Mac 21,600 992,250 -------------------------------------------------------------------------------- Goldman Sachs Group,Inc.(The) 17,700 1,650,525 -------------------------------------------------------------------------------- John Hancock Financial Services,Inc.2 67,700 1,235,525 -------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 29,300 2,248,775 -------------------------------------------------------------------------------- Nationwide Financial Services,Inc.,Cl.A 22,200 618,825 -------------------------------------------------------------------------------- PMI Group,Inc.(The) 43,800 2,121,563 ----------- 20,252,457 -------------------------------------------------------------------------------- Insurance-10.0% ACE Ltd. 101,800 2,436,838 -------------------------------------------------------------------------------- Allmerica Financial Corp. 15,400 833,525 -------------------------------------------------------------------------------- Allstate Corp. 95,300 2,251,463 -------------------------------------------------------------------------------- American General Corp. 16,500 924,000 -------------------------------------------------------------------------------- American International Group,Inc. 33,400 3,663,563 -------------------------------------------------------------------------------- AXA Financial,Inc. 46,800 1,526,850 12 OPPENHEIMER DISCIPLINED VALUE FUND Market Value Shares See Note 1 -------------------------------------------------------------------------------- Insurance Continued Chubb Corp. 46,300 $ 2,945,838 -------------------------------------------------------------------------------- Cigna Corp. 76,800 6,124,800 -------------------------------------------------------------------------------- Jefferson-Pilot Corp. 53,700 3,574,406 -------------------------------------------------------------------------------- Lincoln National Corp. 81,100 2,823,294 -------------------------------------------------------------------------------- Manulife Financial Corp. 71,100 1,115,381 -------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 22,400 2,207,800 -------------------------------------------------------------------------------- MetLife, Inc.2 72,300 1,197,469 -------------------------------------------------------------------------------- Radian Group, Inc. 43,900 2,236,156 -------------------------------------------------------------------------------- St.Paul Cos., Inc. 28,400 1,011,750 -------------------------------------------------------------------------------- XL Capital Ltd., Cl.A 85,100 4,052,888 ----------- 38,926,021 -------------------------------------------------------------------------------- Healthcare-1.4% -------------------------------------------------------------------------------- Healthcare/Drugs-1.0% UnitedHealth Group, Inc. 58,100 3,874,544 -------------------------------------------------------------------------------- Healthcare/Supplies & Services-0.4% Columbia/HCA Healthcare Corp. 50,300 1,430,406 -------------------------------------------------------------------------------- Technology-16.1% -------------------------------------------------------------------------------- Computer Hardware-5.4% Apple Computer, Inc.2 51,900 6,438,844 -------------------------------------------------------------------------------- Hewlett-Packard Co. 30,900 4,171,500 -------------------------------------------------------------------------------- International Business Machines Corp. 52,200 5,826,825 -------------------------------------------------------------------------------- Lexmark International Group, Inc., Cl.A2 36,900 4,354,200 ----------- 20,791,369 -------------------------------------------------------------------------------- Computer Services-1.3% First Data Corp. 101,000 4,917,438 -------------------------------------------------------------------------------- Computer Software-1.3% Computer Associates International, Inc. 44,100 2,461,331 -------------------------------------------------------------------------------- Symantec Corp.2 38,800 2,422,575 ----------- 4,883,906 -------------------------------------------------------------------------------- Communications Equipment-0.7% ADC Telecommunications, Inc.2 41,700 2,533,275 -------------------------------------------------------------------------------- Electronics-7.3% Advanced Micro Devices, Inc.2 25,200 2,211,300 -------------------------------------------------------------------------------- Atmel Corp.2 9,700 474,694 -------------------------------------------------------------------------------- Cypress Semiconductor Corp.2 36,200 1,880,138 -------------------------------------------------------------------------------- Dallas Semiconductor Corp. 83,200 3,572,400 -------------------------------------------------------------------------------- Intel Corp. 24,500 3,106,906 -------------------------------------------------------------------------------- National Semiconductor Corp.2 91,000 5,528,250 -------------------------------------------------------------------------------- Novellus Systems, Inc.2 50,300 3,354,381 -------------------------------------------------------------------------------- Teradyne, Inc.2 53,500 5,885,000 -------------------------------------------------------------------------------- Zebra Technologies Corp., Cl.A2 39,100 2,228,700 ----------- 28,241,769 13 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited/Continued -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Photography-0.1% Polaroid Corp. 29,200 $ 589,475 -------------------------------------------------------------------------------- Transportation-1.4% -------------------------------------------------------------------------------- Air Transportation-0.7% Delta Air Lines, Inc. 50,100 2,642,775 -------------------------------------------------------------------------------- Railroads & Truckers-0.7% Union Pacific Corp. 68,100 2,868,713 -------------------------------------------------------------------------------- Utilities-7.1% -------------------------------------------------------------------------------- Electric Utilities-6.1% Carolina Power & Light Co. 36,200 1,323,563 -------------------------------------------------------------------------------- Conectiv,Inc. 66,800 1,185,700 -------------------------------------------------------------------------------- Duke Energy Corp. 86,000 4,945,000 -------------------------------------------------------------------------------- FPL Group, Inc. 57,800 2,611,838 -------------------------------------------------------------------------------- Montana Power Co. 88,800 3,912,750 -------------------------------------------------------------------------------- Potomac Electric Power Co. 28,600 670,313 -------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 73,600 2,640,400 -------------------------------------------------------------------------------- Reliant Energy, Inc. 171,800 4,574,175 -------------------------------------------------------------------------------- Texas Utilities Co. 59,800 2,014,513 ----------- 23,878,252 -------------------------------------------------------------------------------- Gas Utilities-1.0% El Paso Energy Corp. 70,400 2,992,000 -------------------------------------------------------------------------------- NICOR, Inc. 29,100 985,763 ----------- 3,977,763 ----------- Total Common Stocks (Cost $345,888,710) 357,892,274 Units -------------------------------------------------------------------------------- Rights, Warrants and Certificates-0.0% Concentric Network Corp. Wts., Exp. 12/15/073 100 47,012 -------------------------------------------------------------------------------- Dairy Mart Convenience Stores, Inc. Wts., Exp. 12/12/013 333 117 -------------------------------------------------------------------------------- Intermedia Communications, Inc. Wts., Exp.6/1/00 50 7,609 -------------------------------------------------------------------------------- Microcell Telecommunications, Inc. Wts., Exp.6/1/064 500 42,500 -------------------------------------------------------------------------------- Price Communications Corp. Wts., Exp. 8/1/073 344 55,040 -------------------------------------------------------------------------------- Signature Brands USA, Inc. Wts., Exp. 8/15/023 50 1,006 ----------- Total Rights, Warrants and Certificates (Cost $7,533) 153,284 14 OPPENHEIMER DISCIPLINED VALUE FUND
Principal Market Value Amount See Note 1 ---------------------------------------------------------------------------------------------------- Convertible Corporate Bonds and Notes-0.0% Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01 2,5 (Cost $46,270) $ 50,000 $ -- ---------------------------------------------------------------------------------------------------- Short-Term Notes-4.1% Federal Home Loan Bank, 5.88%, 5/1/00 (Cost $15,800,000) 15,800,000 15,800,000 ---------------------------------------------------------------------------------------------------- Repurchase Agreements-4.5% Repurchase agreement with Zion First National Bank, 5.70%, dated 4/28/00, to be repurchased at $17,308,218 on 5/1/00, collateralized by U.S.Treasury Bonds, 6.50%-12.75%, 11/15/10-11/15/26, with a value of $10,430,864 and U.S. Treasury Nts., 4.50%-7%, 8/31/00-7/15/06, with a value of $7,257,875 (Cost $17,300,000) 17,300,000 17,300,000 ---------------------------------------------------------------------------------------------------- Total Investments,at Value (Cost $379,042,513) 100.8% 391,145,558 ---------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (0.8) (2,922,852) -------------------------- Net Assets 100.0% $388,222,706 ==========================
Footnotes to Statement of Investments 1. Securities with an aggregate market value of $40,579 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts.See Note 5 of Notes to Financial Statements. 2. Non-income-producing security. 3. Identifies issues considered to be illiquid or restricted-See Note 6 of Notes to Financial Statements. 4. Represents a security 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 $42,500 or 0.01% of the Fund's net assets as of April 30, 2000. 5. Issuer is in default. See accompanying Notes to Financial Statements. 15 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES Unaudited --------------------------------------------------------------------------------
April 30, 2000 ------------------------------------------------------------------------------------- Assets Investments, at value (cost $379,042,513)-see accompanying statement $ 391,145,558 ------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 715,017 Interest and dividends 252,574 Shares of capital stock sold 159,638 Other 26,229 ------------ Total assets 392,299,016 ------------------------------------------------------------------------------------- Liabilities Bank overdraft 157,078 ------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 2,100,742 Shares of capital stock redeemed 1,147,731 Transfer and shareholder servicing agent fees 248,936 Directors' compensation 99,486 Daily variation on futures contracts 85,775 Distribution and service plan fees 61,231 Other 175,331 ------------- Total liabilities 4,076,310 ------------------------------------------------------------------------------------- Net Assets $ 388,222,706 ============= ------------------------------------------------------------------------------------- Composition of Net Assets Par value of shares of capital stock $ 21,893 ------------------------------------------------------------------------------------- Additional paid-in capital 385,630,502 ------------------------------------------------------------------------------------- Undistributed net investment income 1,360,890 ------------------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (11,776,048) ------------------------------------------------------------------------------------- Net unrealized appreciation on investments 12,985,469 ------------- Net Assets $ 388,222,706 ============= ------------------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $214,572,906 and 12,092,964 shares of capital stock outstanding) $17.74 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $18.82 ------------------------------------------------------------------------------------- Class B Shares: Net asset value,redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $78,593,038 and 4,432,341 shares of capital stock outstanding) $17.73 ------------------------------------------------------------------------------------- Class C Shares: Net asset value,redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $13,511,527 and 772,063 shares of capital stock outstanding) $17.50 ------------------------------------------------------------------------------------- Class Y Shares: Net asset value,redemption price and offering price per share (based on net assets of $81,545,235 and 4,595,693 shares of capital stock outstanding) $17.74
See accompanying Notes to Financial Statements. 16 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Unaudited -------------------------------------------------------------------------------- For the Six Months Ended April 30,2000 ------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $3,373) $ 3,558,608 ------------------------------------------------------------------------------- Interest 864,097 ----------- Total income 4,422,705 ------------------------------------------------------------------------------- Expenses Management fees 1,277,813 ------------------------------------------------------------------------------- Distribution and service plan fees: Class A 317,840 Class B 430,606 Class C 61,434 ------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 419,493 Class B 140,702 Class C 20,107 Class Y 121,057 ------------------------------------------------------------------------------- Directors' compensation 22,715 ------------------------------------------------------------------------------- Accounting service fees 7,500 ------------------------------------------------------------------------------- Custodian fees and expenses 7,369 ------------------------------------------------------------------------------- Other 122,066 ----------- Total expenses 2,948,702 Less expenses paid indirectly (3,681) ----------- Net expenses 2,945,021 ------------------------------------------------------------------------------- Net Investment Income 1,477,684 ------------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) Net realized loss on: Investments (8,648,176) Closing of futures contracts (821,699) ----------- Net realized loss (9,469,875) ------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 6,984,824 ----------- Net realized and unrealized loss (2,485,051) ------------------------------------------------------------------------------- Net Decrease in Net Assets Resulting from Operations $(1,007,367) =========== See accompanying Notes to Financial Statements. 17 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
Six Months Ended April 30, Year Ended 2000 October 31, (Unaudited) 1999 ---------------------------------------------------------------------------------------------------- Operations Net investment income $ 1,477,684 $ 3,794,053 ---------------------------------------------------------------------------------------------------- Net realized gain (loss) (9,469,875) 81,509,276 ---------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 6,984,824 (52,160,614) ---------------------------- Net increase (decrease) in net assets resulting from operations (1,007,367) 33,142,715 ---------------------------------------------------------------------------------------------------- Dividends and/or Distributions to Shareholders Dividends from net investment income: Class A (2,996,628) (3,566,570) Class B -- (140,802) Class C -- (19,197) Class Y (789,687) (1,509,823) ---------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (55,606,158) (18,351,792) Class B (14,307,623) (5,096,352) Class C (2,028,737) (726,632) Class Y (11,069,300) (5,276,985) ---------------------------------------------------------------------------------------------------- Capital Stock Transactions Net increase (decrease) in net assets resulting from capital stock transactions: Class A (116,843,500) (61,766,766) Class B (9,639,261) (19,938,207) Class C 947,268 (3,572,259) Class Y 15,191,943 (61,262,769) ---------------------------------------------------------------------------------------------------- Net Assets Total decrease (198,149,050) (148,085,439) ---------------------------------------------------------------------------------------------------- Beginning of period 586,371,756 734,457,195 ---------------------------- End of period (including undistributed net investment income of $1,360,890 and $3,669,521, respectively) $388,222,706 $586,371,756 ============================
See accompanying Notes to Financial Statements. 18 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
Six Months Year Year Ended Ended Ended April 30, 2000 Oct.31, Dec.31, Class A (Unaudited) 1999 1998 1997 1996 1 1995 -------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $20.69 $20.91 $23.31 $19.65 $17.84 $14.20 -------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .10 .17 .16 .23 .15 .25 Net realized and unrealized gain .09 .64 .32 4.91 1.88 4.88 --------------------------------------------------------------- Total income from investment operations .19 .81 .48 5.14 2.03 5.13 -------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.16) (.17) (.12) (.07) (.10) (.25) Distributions from net realized gain (2.98) (.86) (2.76) (1.41) (.12) (1.24) --------------------------------------------------------------- Total dividends and/or distributions to shareholders (3.14) (1.03) (2.88) (1.48) (.22) (1.49) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $17.74 $20.69 $20.91 $23.31 $19.65 $17.84 =============================================================== -------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 3 1.28% 3.60% 2.24% 27.60% 11.41% 36.40% -------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $214,573 $392,483 $456,264 $371,810 $180,784 $118,118 -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $268,310 $448,884 $442,138 $234,314 $135,940 $ 98,063 -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.83% 0.68% 0.84% 1.05% 1.01% 1.53% Expenses 1.20% 1.02% 0.98% 5 1.07% 5 1.13% 5 1.22% 5 -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 6 32% 135% 106% 103% 74% 70%
1. For the ten months ended October 31, 1996. The Fund changed its fiscal year end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc. became the investment advisor to the Fund. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized for periods of less than one full year. 5. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended April 30, 2000 were $132,703,171 and $335,371,112, respectively. See accompanying Notes to Financial Statements. 19 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
Six Months Year Year Ended Ended Ended April 30,2000 Oct.31, Dec.31, Class B (Unaudited) 1999 1998 1997 1996 1 1995 1 -------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value,beginning of period $20.58 $20.83 $23.32 $19.77 $18.08 $17.83 -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.01) (.03) .02 .09 .05 .02 Net realized and unrealized gain .14 .66 .30 4.91 1.83 1.40 --------------------------------------------------------------- Total income from investment operations .13 .63 .32 5.00 1.88 1.42 -------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.02) (.05) (.04) (.07) (.02) Distributions from net realized gain (2.98) (.86) (2.76) (1.41) (.12) (1.15) -------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (2.98) (.88) (2.81) (1.45) (.19) (1.17) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $17.73 $20.58 $20.83 $23.32 $19.77 $18.08 =============================================================== -------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 4 0.93% 2.79% 1.47% 26.61% 10.43% 8.04% -------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $78,593 $102,736 $123,260 $83,291 $5,854 $717 -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $86,372 $123,616 $110,240 $30,019 $2,903 $306 -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment income (loss) 0.00% (0.08)% 0.08% 0.22% 0.22% 0.21% Expenses 1.98% 1.77% 1.73% 6 1.84% 6 1.88% 6 1.97% 6 -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 7 32% 135% 106% 103% 74% 70%
1. For the ten months ended October 31,1996. The Fund changed its fiscal year end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc. became the investment advisor to the Fund. 2. For the period from October 2, 1995 (inception of offering) to December 31, 1995. 3. Per share amounts calculated based on the average shares outstanding during the period. 4. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 5. Annualized for periods of less than one full year. 6. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 7. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended April 30, 2000 were $132,703,171 and $335,371,112, respectively. See accompanying Notes to Financial Statements. 20 OPPENHEIMER DISCIPLINED VALUE FUND
Six Months Year Ended Ended April 30, 2000 Oct. 31, Class C (Unaudited) 1999 1998 1997 1996 1 -------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $20.35 $20.60 $23.07 $19.57 $18.79 -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) -- (.02) .01 .10 2 .06 Net realized and unrealized gain .13 .65 .31 4.85 2 .94 ------------------------------------------------------- Total income from investment operations .13 .63 .32 4.95 1.00 -------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.02) (.03) (.04) (.10) Distributions from net realized gain (2.98) (.86) (2.76) (1.41) (.12) ------------------------------------------------------- Total dividends and/or distributions to shareholders (2.98) (.88) (2.79) (1.45) (.22) -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $17.50 $20.35 $20.60 $23.07 $19.57 ======================================================= ============================================================================================================== Total Return, at Net Asset Value3 0.95% 2.82% 1.47% 26.64% 5.35% ============================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $13,512 $14,582 $18,204 $10,243 $715 -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $12,336 $17,746 $15,355 $ 4,477 $342 -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.02)% (0.07)% 0.06% 0.17% 0.04% Expenses 1.98% 1.77% 1.73% 5 1.86% 5 1.87% 5 -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 6 32% 135% 106% 103% 74%
1. For the period from May 1, 1996 (inception of offering) to October 31, 1996. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized for periods of less than one full year. 5. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended April 30, 2000 were $132,703,171 and $335,371,112, respectively. See accompanying Notes to Financial Statements. 21 OPPENHEIMER DISCIPLINED VALUE FUND 21 -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
Six Months Year Ended Ended April 30, 2000 Oct. 31, Class Y (Unaudited) 1999 1998 1997 1 --------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $20.72 $20.97 $23.34 $20.31 --------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .09 .22 .22 .31 2 Net realized and unrealized gain .12 .64 .34 4.20 2 -------------------------------------------- Total income from investment operations .21 .86 .56 4.51 --------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.21) (.25) (.17) (.07) Distributions from net realized gain (2.98) (.86) (2.76) (1.41) -------------------------------------------- Total dividends and/or distributions to shareholders (3.19) (1.11) (2.93) (1.48) --------------------------------------------------------------------------------------------------- Net asset value, end of period $17.74 $20.72 $20.97 $23.34 ============================================ =================================================================================================== Total Return, at Net Asset Value3 1.41% 3.81% 2.63% 23.62% =================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $81,545 $76,571 $136,729 $90,994 --------------------------------------------------------------------------------------------------- Average net assets (in thousands) $75,633 $95,765 $118,010 $51,775 --------------------------------------------------------------------------------------------------- Ratios to average net assets:4 Net investment income 0.98% 0.90% 1.19% 1.21% Expenses 0.98% 0.76% 0.62% 5 0.78% 5 --------------------------------------------------------------------------------------------------- Portfolio turnover rate6 32% 135% 106% 103%
1. For the period from December 16, 1996 (inception of offering) to October 31, 1997. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized for periods of less than one full year. 5. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended April 30, 2000 were $132,703,171 and $335,371,112, respectively. See accompanying Notes to Financial Statements. 22 OPPENHEIMER DISCIPLINED VALUE FUND 22 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Disciplined Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than- anticipated earnings. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus an initial sales charge. Class B and Class C shares are sold without an initial sales charge but may be subject to a contingent deferred sales charge (CDSC). Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC. All classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own expenses directly attributable to that class and exclusive voting rights with respect to matters affecting that class. Classes A, B and C shares have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------------------------------- Securities Valuation. Securities for which quotations are readily available are valued at the last sale price, or if in the absence of a sale, at the last sale price on the prior trading day if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. Foreign currency contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank, dealer or pricing service. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at cost (or last determined market value) and adjusted for amortization or accretion to maturity of any premium or discount. -------------------------------------------------------------------------------- Security Credit Risk. The Fund invests in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. 23 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited/Continued -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Continued Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. 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. -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. -------------------------------------------------------------------------------- Directors' Compensation. The Fund has adopted an unfunded retirement plan for the Fund's independent Board of Directors. Benefits are based on years of service and fees paid to each director during the years of service. During the six months ended April 30, 2000, a provision of $10,049 was made for the Fund's projected benefit obligations and payments of $3,499 were made to retired directors, resulting in an accumulated liability of $98,548 as of April 30, 2000. The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of annual compensation they are entitled to receive from the Fund. Under the plan,the compensation deferred is periodically adjusted as though an equivalent amount had been invested for the Board of Directors in shares of one or more Oppenheimer funds selected by the director. The amount paid to the Board of Directors under the plan will be determined based upon the performance of the selected funds. Deferral of directors' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. 24 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carry-overs, to shareholders. Therefore, no federal income or excise tax provision is required. -------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to share-holders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. -------------------------------------------------------------------------------- Classification of Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund. -------------------------------------------------------------------------------- Expense Offset Arrangements. Expenses paid indirectly represent a reduction of custodian fees for earnings on cash balances maintained by the Fund. -------------------------------------------------------------------------------- Other. Investment transactions are accounted for as of trade date and dividend income is recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with 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. 25 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited/Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2. Shares of Capital Stock The Fund has authorized 500 million of $0.001 par value shares of capital stock of each class. Transactions in shares of capital stock were as follows:
Six Months Ended April 30,2000 Year Ended October 31,1999 Shares Amount Shares Amount --------------------------------------------------------------------------------------------- Class A Sold 1,258,777 $ 22,299,483 2,041,059 $ 44,361,122 Dividends and/or distributions reinvested 2,212,145 38,402,834 978,744 21,317,077 Redeemed (10,349,190) (177,545,817) (5,865,300) (127,444,965) --------------------------------------------------------------- Net decrease (6,878,268) $(116,843,500) (2,845,497) $ (61,766,766) =============================================================== --------------------------------------------------------------------------------------------- Class B Sold 625,802 $ 11,011,616 1,150,666 $ 24,923,987 Dividends and/or distributions reinvested 782,878 13,622,641 231,740 5,051,920 Redeemed (1,967,746) (34,273,518) (2,308,042) (49,914,114) --------------------------------------------------------------- Net decrease (559,066) $ (9,639,261) (925,636) $ (19,938,207) =============================================================== --------------------------------------------------------------------------------------------- Class C Sold 279,473 $ 4,883,758 205,937 $ 4,440,151 Dividends and/or distributions reinvested 110,343 1,894,598 33,679 725,793 Redeemed (334,380) (5,831,088) (406,670) (8,738,203) --------------------------------------------------------------- Net increase (decrease) 55,436 $ 947,268 (167,054) $ (3,572,259) =============================================================== --------------------------------------------------------------------------------------------- Class Y Sold 956,178 $ 16,311,426 1,062,529 $ 22,726,365 Dividends and/or distributions reinvested 683,909 11,858,987 311,751 6,786,808 Redeemed (740,485) (12,978,470) (4,199,901) (90,775,942) --------------------------------------------------------------- Net increase (decrease) 899,602 $ 15,191,943 (2,825,621) $ (61,262,769) =============================================================== ---------------------------------------------------------------------------------------------
3. Unrealized Gains and Losses on Securities As of April 30, 2000, net unrealized appreciation on securities of $12,103,045 was composed of gross appreciation of $41,887,551, and gross depreciation of $29,784,506. 26 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million and 0.45% of average annual net assets in excess of $400 million. The Fund's management fee for six months ended April 30, 2000, was 0.58% of the average annual net assets for each class of shares, annualized for periods of less than one full year. -------------------------------------------------------------------------------- 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, is the transfer and shareholder servicing agent for the Fund and for other Oppenheimer funds. 0FS's total costs of providing such services are allocated ratably to these funds. -------------------------------------------------------------------------------- Distribution and Service Plan Fees. Under its General Distributor's Agreement with the Manager, the Distributor acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund. The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.
Aggregate Class A Commissions Commissions Commissions Front-End Front-End on Class A on Class B on Class C Sales Charges Sales Charges Shares Shares Shares on Class A Retained by Advanced by Advanced by Advanced by Six Months Ended Shares Distributor Distributor1 Distributor1 Distributor1 ----------------------------------------------------------------------------------------- April 30,2000 $212,098 $106,967 $29,295 $225,734 $16,120
1. The Distributor advances commission payments to dealers for certain sales of Class A shares and for sales of Class B and Class C shares from its own resources at the time of sale.
Class A Class B Class C Contingent Deferred Contingent Deferred Contingent Deferred Sales Charges Sales Charges Sales Charges Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor ---------------------------------------------------------------------------------------------- April 30,2000 $3,376 $164,784 $2,575
The Fund has adopted a Service Plan for Class A shares and Distribution and Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment Company Act. Under those plans the Fund pays the Distributor for all or a portion of its costs incurred in connection with the distribution and/or servicing of the shares of the particular class. -------------------------------------------------------------------------------- Class A Service Plan Fees. Under the Class A service plan, the Distributor currently uses the fees it receives from the Fund to pay brokers, dealers and other financial institutions. The Class A service plan permits reimbursements to the Distributor at a rate of up to 0.25% of average annual net assets of Class A shares purchased. The Distributor makes payments to plan recipients quarterly at an annual rate not to exceed 0.25% of the average annual net assets consisting of Class A shares of the Fund. For the six months ended 27 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited/Continued -------------------------------------------------------------------------------- ================================================================================ 4. Fees and Other Transactions with Affiliates Continued April 30, 2000, payments under the Class A plan totaled $317,840, all of which was paid by the Distributor to recipients. That included $174,123 paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. -------------------------------------------------------------------------------- Class B and Class C Distribution and Service Plan Fees. Under each plan, service fees and distribution fees are computed on the average of the net asset value of shares in the respective class, determined as of the close of each regular business day during the period. The Class B and Class C plans provide for the Distributor to be compensated at a flat rate, whether the Distributor's distribution expenses are more or less than the amounts paid by the Fund under the plan during the period for which the fee is paid. The Distributor retains the asset-based sales charge on Class B shares. The Distributor retains the asset-based sales charge on Class C shares during the first year the shares are outstanding. The asset-based sales charges on Class B and Class C shares allow investors to buy shares without a front-end sales charge while allowing the Distributor to compensate dealers that sell those shares. The Distributor's actual expenses in selling Class B and Class C shares may be more than the payments it receives from the contingent deferred sales charges collected on redeemed shares and asset-based sales charges from the Fund under the plans. If any plan is terminated by the Fund, the Board of Directors may allow the Fund to continue payments of the asset-based sales charge to the Distributor for distributing shares before the plan was terminated. The plans allow for the carryforward of distribution expenses, to be recovered from asset- based sales charges in subsequent fiscal periods. Distribution fees paid to the Distributor for the six months ended April 30, 2000, were as follows:
Distributor's Distributor's Aggregate Unreimbursed Unreimbursed Expenses as % Total Payments Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class ---------------------------------------------------------------------------------------- Class B Plan $430,606 $343,547 $2,625,549 3.34% Class C Plan 61,434 13,414 242,491 1.79 ========================================================================================
5. Futures Contracts The Fund may buy and sell futures contracts in order to gain exposure to or to seek to protect against changes in interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Fund may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. 28 OPPENHEIMER DISCIPLINED VALUE FUND 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 may recognize a realized gain or loss when the contract is closed or expires. 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. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of April 30, 2000, the Fund had outstanding futures contracts as follows:
Expiration Number of Valuation as of Unrealized Contract Description Date Contracts April 30, 2000 Appreciation ------------------------------------------------------------------------------------- Contracts to Purchase Standard & Poor's 500 Index 6/15/00 47 $17,155,000 $882,424 =====================================================================================
6. Illiquid Securities As of April 30, 2000, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of April 30, 2000, was $103,175, which represents 0.03% of the Fund's net assets. -------------------------------------------------------------------------------- 7. Bank Borrowings The Fund may borrow from a bank for temporary or emergency purposes including, without limitation, funding of shareholder redemptions provided asset coverage for borrowings exceeds 300%. The Fund has entered into an agreement which enables it to participate with other Oppenheimer funds in an unsecured line of credit with a bank, which permits borrowings up to $400 million, collectively. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the average unutilized amount of the credit facility at a rate of 0.08% per annum. The Fund had no borrowings outstanding during the six months ended April 30, 2000. 29 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- A Series of Oppenheimer Series Fund, Inc. ================================================================================ Officers and Directors Leon Levy, Chairman of the Board of Directors Donald W. Spiro, Vice Chairman of the Board of Directors Bridget A. Macaskill,Director and President Robert G. Galli, Director Phillip A. Griffiths, Director Benjamin Lipstein, Director Elizabeth B. Moynihan, Director Kenneth A. Randall, Director Edward V. Regan, Director Russell S. Reynolds, Jr., Director Clayton K. Yeutter, Director Peter M. Antos, Vice President Michael C. Strathearn, Vice President Kenneth B. White, Vice President Andrew J. Donohue, Secretary Brian W. Wixted, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary ================================================================================ Investment Advisor OppenheimerFunds, Inc. ================================================================================ Distributor OppenheimerFunds Distributor, Inc. ================================================================================ Transfer and OppenheimerFunds Services Shareholder Servicing Agent ================================================================================ Custodian of The Bank of New York Portfolio Securities ================================================================================ Independent Auditors KPMG LLP ================================================================================ Legal Counsel Mayer, Brown & Platt The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent auditors. This is a copy of a report to shareholders of Oppenheimer Disciplined Value Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Disciplined Value Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. Two World Trade Center, New York, NY 10048-0203 (C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved. 30 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- OPPENHEIMERFUNDS FAMILY --------------------------------------------------------------------------------
================================================================================================ Global Equity Developing Markets Fund Global Fund International Small Company Fund Quest Global Value Fund+ Europe Fund Global Growth & Income Fund International Growth Fund ================================================================================================ Equity Stock Stock & Bond Enterprise Fund 1 Main Street Growth & Income Fund Discovery Fund Quest Opportunity Value Fund Main Street Small Cap Fund Total Return Fund Quest Small Cap Value Fund Quest Balanced Value Fund MidCap Fund Capital Income Fund 2 Capital Appreciation Fund Multiple Strategies Fund Growth Fund Disciplined Allocation Fund Disciplined Value Fund Convertible Securities Fund Quest Value Fund Trinity Growth Fund Specialty Trinity Core Fund Real Asset Fund Trinity Value Fund Gold & Special Minerals Fund ================================================================================================ Fixed Income Taxable Municipal International Bond Fund California Municipal Fund World Bond Fund Main Street California Municipal Fund High Yield Fund Florida Municipal Fund 3 Champion Income Fund New Jersey Municipal Fund 3 Strategic Income Fund New York Municipal Fund 3 Bond Fund Pennsylvania Municipal Fund 3 Senior Floating Rate Fund Municipal Bond Fund U.S. Government Trust Insured Municipal Fund Limited-Term Government Fund Intermediate Municipal Fund Rochester Division Rochester Fund Municipals Limited Term New York Municipal Fund ================================================================================================ Money Market 4 Money Market Fund Cash Reserves
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus for details. 2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund." 3. Available to investors only in certain states. 4. An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although these funds may seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. (C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved. 31 OPPENHEIMER DISCIPLINED VALUE FUND -------------------------------------------------------------------------------- INFORMATION AND SERVICES -------------------------------------------------------------------------------- As an Oppenheimer fund shareholder, you can benefit from special services designed to make investing simple. Whether it's automatic investment plans, timely market updates, or immediate account access, you can count on us whenever you need assistance. So call us today, or visit our website--we're here to help. -------------------------------------------------------------------------------- Internet 24-hr access to account information and transactions1 www.oppenheimerfunds.com -------------------------------------------------------------------------------- General Information Mon-Fri 8am-9pm ET, Sat 10am-4pm ET 1.800.525.7048 -------------------------------------------------------------------------------- Telephone Transactions Mon-Fri 8am-9pm ET, Sat 10am-4pm ET 1.800.852.8457 -------------------------------------------------------------------------------- PhoneLink 24-hr automated information and automated transactions 1.800.533.3310 -------------------------------------------------------------------------------- Telecommunications Device for the Deaf (TDD) Mon-Fri 9am-6:30pm ET 1.800.843.4461 -------------------------------------------------------------------------------- OppenheimerFunds Market Hotline 24 hours a day, timely and insightful messages on the economy and issues that may affect your investments 1.800.835.3104 -------------------------------------------------------------------------------- Transfer and Shareholder Servicing Agent OppenheimerFunds Services P.O. Box 5270, Denver, CO 80217-5270 -------------------------------------------------------------------------------- Ticker Symbols Class A: CGRWX Class B: CGRBX Class C: CGRCX Class Y: CGRYX -------------------------------------------------------------------------------- 1. At times this website may be inaccessible or its transaction feature maybe unavailable. [LOGO OF OPPENHEIMERFUNDS]