N-30D 1 q64204n-30d.txt A/R OPPENHEIMER DISCIPLINED ALLOCATION FUND 1 ANNUAL REPORT OCTOBER 31, 2000 OPPENHEIMER DISCIPLINED ALLOCATION FUND [PHOTO] [OPPENHEIMERFUNDS LOGO] THE RIGHT WAY TO INVEST 2 CONTENTS 1 President's Letter 3 An Interview with Your Fund's Manager 7 Fund Performance 12 FINANCIAL STATEMENTS 38 INDEPENDENT AUDITORS' REPORT 39 Federal Income Tax Information 40 Officers and Directors REPORT HIGHLIGHTS -------------------------------------------------------------------------------- THE FUND HAS RECENTLY BENEFITED FROM A SHIFT IN INVESTOR SENTIMENT from growth stocks to more reasonably valued stocks with strong business fundamentals. THE RISING PRICE OF OIL HAS CREATED INVESTMENT OPPORTUNITIES IN ENERGY COMPANIES, which represented an area of emphasis for the Fund. THE INCREASED INCIDENCE OF CORPORATE ACQUISITIONS, leveraged buyouts and share buybacks INDICATE THAT MANY STOCKS ARE BARGAINS AT CURRENT PRICES. AVERAGE ANNUAL TOTAL RETURNS* For the 1-Year Period Ended 10/31/00 Class A Without With Sales Chg. Sales Chg. ------------------------------ 8.27% 2.05% Class B Without With Sales Chg. Sales Chg. ------------------------------ 7.48% 2.73% Class C Without With Sales Chg. Sales Chg. ------------------------------ 7.44% 6.49% *SEE NOTES ON PAGE 10 FOR FURTHER DETAILS. 3 [PHOTO] BRIDGET A. MACASKILL President Oppenheimer Disciplined Allocation Fund PRESIDENT'S LETTER -------------------------------------------------------------------------------- DEAR SHAREHOLDER, Over the past several decades, our investment teams have learned the importance of avoiding complacency when it comes to navigating the financial markets--especially when times are good. Right now, times appear particularly good. The U.S. economy is in its tenth year of expansion. In the bond market, U.S. Treasury issues have been performing favorably over the past year. In addition, despite volatility in the second quarter, the stock market has been providing attractive returns from a wide spectrum of industry sectors, capitalization ranges and investment styles. We have arrived at this juncture after months of monitoring the rapid pace of global economic growth and its implications for inflation, as well as the Federal Reserve Board's evolving monetary policy. At this point, economic indicators suggest a dampening of short-term inflationary pressures. While recent increases in oil prices are certainly taking their toll, we don't believe this signals a return to 1970's-style inflation. Accordingly, if the Fed continues in its diligence, the economy could maintain its healthy rate of growth. In the bond market, the achievement of a federal budget surplus has prompted the Treasury to buy back many of its long-term securities. The resulting supply shortage boosted these securities' returns, causing an inversion of the yield curve--an unusual situation in which shorter term Treasuries yield more than their longer term counterparts. Other bond sectors are offering many opportunities in the form of attractive valuations. Perhaps most important is that we have begun to see encouraging signs in the stock market. Formerly high-flying Internet stocks have generally come down to earth, and investors have begun to refocus on companies with strong business fundamentals and justifiable valuations. Investors have also returned to long-neglected, value-oriented companies. 1 OPPENHEIMER DISCIPLINED ALLOCATION FUND 4 PRESIDENT'S LETTER Continued -------------------------------------------------------------------------------- What else do these various trends tell us? They tell us that the ability to discriminate between long-term potential and short-lived fads has become more critical than ever. Trying to generate good long-term performance requires tracking the best companies through intensive research, combined with hard-earned experience. At OppenheimerFunds, our seasoned portfolio management teams fight complacency by remaining constantly aware of the risks that face the economy and financial markets. Virtually anything could affect the overall markets--a surge in inflation, a decline in productivity, deteriorating corporate earnings, or even the new Administration's proposals regarding tax reform, healthcare and Social Security. However, by remaining vigilant in our quest for fundamentally sound businesses, we believe we can find good investments that can weather market volatility. In this environment, we encourage you to consult your financial advisor and to stay on track with your long-term financial plan. For our part, we will continue to monitor the opportunities and risks ever present in the financial markets. Thank you for your confidence in OppenheimerFunds, The Right Way to Invest. Sincerely, /s/ BRIDGET A. MACASKILL Bridget A. Macaskill November 21, 2000 THESE GENERAL MARKET VIEWS REPRESENT OPINIONS OF OPPENHEIMERFUNDS, INC. AND ARE NOT INTENDED TO PREDICT OR DEPICT PERFORMANCE OF THE SECURITIES MARKETS OR ANY PARTICULAR FUND. SPECIFIC DISCUSSION, AS IT APPLIES TO YOUR FUND, IS CONTAINED IN THE PAGES THAT FOLLOW. STOCKS AND BONDS HAVE DIFFERENT TYPES OF INVESTMENT RISKS; STOCKS ARE SUBJECT TO MARKET VOLATILITY AND BONDS ARE SUBJECT TO CREDIT AND INTEREST RATE RISKS. 2 OPPENHEIMER DISCIPLINED ALLOCATION FUND 5 AN INTERVIEW WITH YOUR FUND'S MANAGER -------------------------------------------------------------------------------- Q HOW DID OPPENHEIMER DISCIPLINED ALLOCATION FUND PERFORM OVER THE ONE-YEAR PERIOD THAT ENDED OCTOBER 31, 2000? A. We are generally pleased with the Fund's performance in a relatively difficult market environment, especially toward the end of the fiscal year. Our performance is especially satisfying because of the Fund's significant weight in value stocks, which had been out of favor for much of the reporting period. We attribute our relative success to our asset allocation strategy, in which our substantial holdings of bonds and cash helped cushion some of the stock market's volatility, as well as to our security selection strategy, which emphasized improving earnings in addition to reasonable valuations. HAS THE FUND'S ASSET ALLOCATION STRATEGY CHANGED OVER THE PAST YEAR? Any changes to the Fund's allocations have resulted from investment activity, such as market appreciation, and not from strategic shifts. Most important, our allocation to stocks has remained relatively constant at approximately 60% of the portfolio. Our allocation to bonds has risen modestly from about 30% to roughly 35% of assets, while our cash investments have declined from about 10% to around 5% of the Fund. WHAT ECONOMIC EVENTS OR TRENDS INFLUENCED THE FUND'S PERFORMANCE? Over the past year, we have seen a major shift in investors' economic expectations. When the reporting period began on November 1, 1999, the economy was growing at a rate that many analysts feared might trigger long-dormant inflationary pressures. To relieve these pressures, the Federal Reserve Board was in the midst of raising key short-term interest rates. Growth stocks were strongly in favor among investors during this time. This was especially true of technology stocks, many of which reached such lofty valuations that they were considered by many investors ineligible for inclusion in a value-oriented portfolio. In contrast, most value stocks languished for lack of investor interest. 3 OPPENHEIMER DISCIPLINED ALLOCATION FUND 6 "THE RECENT ECONOMIC SLOWDOWN HAS CAUSED INVESTOR SENTIMENT TO SHIFT FROM 'GROWTH AT ANY PRICE' TO A RENEWED FOCUS ON VALUATIONS." AN INTERVIEW WITH YOUR FUND'S MANAGER -------------------------------------------------------------------------------- During the first and second quarters of 2000, however, growth stocks began to falter as investors became concerned that rising inflation might derail their earnings growth rates. As these concerns intensified, technology stocks plunged in value. In response, many investors sold their technology holdings and redeployed their assets to other, more reasonably priced market sectors, rekindling widespread interest in value stocks. In addition, investors became more selective in their investment decisions, insisting that their stock holdings have sound business fundamentals. This shift in investor sentiment directly benefited the types of stocks in which the Fund invests. Subsequently, signs began to emerge that the Federal Reserve Board's interest rate hikes were having the desired effect of slowing economic growth. At the same time, oil prices rose to record levels. This caused further uncertainty in the stock market, as investors were unsure of the implications for growth stocks. Despite a summertime rally, many growth stocks declined sharply in the fall. On the other hand, many value stocks, especially energy and financial companies, rose as investors became more optimistic about their prospects in the current environment. HOW DID THE FUND'S BOND HOLDINGS FARE? Despite a rising interest rate environment during most of the reporting period, our bond portfolio contributed positively to performance. That's primarily because we emphasized U.S. Treasury securities, which benefited from their own unique supply-and-demand influences. A federal budget surplus enabled the Treasury Department to buy back some of its more seasoned, higher yielding bonds and to reduce issuance of new securities. At the same time, demand remained strong from U.S. and foreign investors seeking a safe haven amid heightened stock market volatility. As a result, prices for these bonds remained high. 4 OPPENHEIMER DISCIPLINED ALLOCATION FUND 7 AVERAGE ANNUAL TOTAL RETURNS For the Periods Ended 9/30/00(2)
Class A 1-Year 5-Year 10-Year ----------------------------- 2.33% 7.76% 11.28%
Class B Since 1-Year 5-Year Inception ----------------------------- 3.09% N/A 8.01%
Class C Since 1-Year 5-Year Inception ----------------------------- 6.87% N/A 7.88%
Conditions were less beneficial for our corporate bond holdings. Default rates rose as the economy slowed, reducing market liquidity and putting pressure on prices. However, because we focused on very high quality corporate bonds, we avoided the full brunt of these adverse influences. WHAT AREAS OF THE STOCK MARKET CONTRIBUTED MOST TO PERFORMANCE? We received very strong returns from our energy holdings, including Exxon Mobil Corp., which constituted the Fund's largest single holding during the reporting period.1 Energy companies benefited from the rising price of oil during the second half of the year. In addition to large, integrated oil producers such as Exxon Mobil, we emphasized oil and gas exploration and production companies, which also did well. Financial stocks also provided strong returns for the Fund during the second half of the reporting period. Fortunately, we had greater exposure to financial stocks than did our benchmark, the S&P 500 Index. We focused primarily on leading diversified financial-services providers such as Citigroup, Inc., which prospered as it realized efficiencies after the merger of Travelers Group, Inc. with Citicorp, Inc.(1) Finally, by maintaining less exposure than our benchmark to certain industry groups, we were able to avoid some of the weakness in those market sectors. For example, we eluded much of the decline in technology stocks by having minimal exposure to avoided securities in that market sector. We also largely avoided telecommunication companies, many of which have suffered from lower profit margins because of competitive pressures in their long-distance businesses. WHAT IS YOUR OUTLOOK? Despite recent weakness in the stock market, we are optimistic that many stocks that have been out of favor for a long time will continue to rebound. In fact, we are seeing signs that 1. See page 12 for a complete listing of the Fund's investments as of 10/31/00. 2. See notes on page 10 for further details. 5 OPPENHEIMER DISCIPLINED ALLOCATION FUND 8 PORTFOLIO ALLOCATION(3) [PIE CHART] - Stocks 62.4% - Bonds 32.5 - Cash Equivalents 5.1
investors have begun to recognize that, at current prices, many stocks may represent bargains. In some cases, company management has taken advantage of low stock prices to buy back shares or take their companies private. In other cases, larger companies have acquired smaller ones because they found it less expensive to buy competitors at low valuations than to build new capacity. Regardless of short-term changes in investor sentiment, however, we remain convinced that our disciplined approach to identifying value, allocating assets and managing risks will produce competitive returns over the long run. Indeed, in our view, these investment principles are an important part of what makes OppenheimerFunds The Right Way to Invest.
TOP TEN COMMON STOCK HOLDINGS(4) ............................................................. Exxon Mobil Corp. 1.7% ............................................................. Minnesota Mining & Manufacturing Co. 1.3 ............................................................. SPX Corp. 1.3 ............................................................. Citigroup, Inc. 1.3 ............................................................. Boeing Co. 1.3 ............................................................. Duke Energy Corp. 1.2 ............................................................. UnitedHealth Group, Inc. 1.2 ............................................................. Cigna Corp. 1.2 ............................................................. Kimberly-Clark Corp. 1.1 ............................................................. XL Capital Ltd., Cl. A 1.1 TOP FIVE COMMON STOCK INDUSTRIES(4) ............................................................. Insurance 8.7% ............................................................. Manufacturing 5.5 ............................................................. Diversified Financial 5.2 ............................................................. Electric Utilities 3.9 ............................................................. Banks 3.4
3. Portfolio is subject to change. Percentages are as of October 31, 2000, and are based on total market value of investments. 4. Portfolio is subject to change. Percentages are as of October 31, 2000, and are based on net assets. 6 OPPENHEIMER DISCIPLINED ALLOCATION FUND 9 FUND PERFORMANCE -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? Below is a discussion by OppenheimerFunds, Inc. of the Fund's performance during its fiscal year ended October 31, 2000, followed by a graphical comparison of the Fund's performance to two appropriate broad-based market indices. MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the fiscal year that ended October 31, 2000, Oppenheimer Disciplined Allocation Fund's performance was strongly influenced by changes in economic and market conditions. The Fund's positive returns in its equity portfolio were driven primarily by the energy and financial services industry groups, which have benefited from, among other factors, higher oil prices and an apparent end to rising interest rates, respectively. The Fund also benefited from its holdings of U.S. Treasury bonds, which responded well to a reduced supply of securities amid robust investor demand. The Fund's portfolio holdings, allocations and investment style are subject to change. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 2000. In the case of Class A shares, performance is measured over a 10-year period. In the case of Class B, performance is measured from inception of the class on October 2, 1995. In the case of Class C, performance is measured from inception of the class on May 1, 1996. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B and Class C shares, and reinvestments of all dividends and capital gains distributions. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. The Fund's performance is also compared to Merrill Lynch Corporate and Government Master Index, a broad-based index of U.S. Treasury and government agency securities, corporate and Yankee bonds regarded as a general measurement of the performance of the domestic debt securities market. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of Fund business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the securities in the indices. 7 OPPENHEIMER DISCIPLINED ALLOCATION FUND 10 FUND PERFORMANCE Continued [The following table was originally a line graph in the printed materials.] CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund Merrill Lynch Corporate and (Class A) S&P 500 Index Government Master Index 12/31/90 $ 9,425 $10,000 $10,000 03/31/91 10,364 11,450 10,245 06/30/91 10,510 11,423 10,408 09/30/91 11,254 12,032 11,003 12/31/91 12,083 13,040 11,589 03/31/92 12,282 12,711 11,422 06/30/92 12,323 12,952 11,883 09/30/92 12,632 13,361 12,471 12/31/92 13,279 14,032 12,479 03/31/93 14,077 14,644 13,059 06/30/93 14,534 14,715 13,440 09/30/93 15,250 15,094 13,901 12/31/93 15,390 15,443 13,859 03/31/94 14,998 14,859 13,452 06/30/94 14,741 14,921 13,291 09/30/94 15,155 15,649 13,349 12/31/94 15,065 15,646 13,407 03/31/95 15,984 17,168 14,061 06/30/95 17,030 18,804 14,970 09/30/95 17,813 20,298 15,246 12/31/95 18,673 21,519 15,952 03/31/96 18,987 22,674 15,600 06/30/96 19,116 23,690 15,665 09/30/96 19,485 24,422 15,936 10/31/96 19,844 25,096 16,302 01/31/97 20,930 28,108 16,447 04/30/97 20,988 28,787 16,538 07/31/97 23,792 34,444 17,397 10/31/97 23,580 33,151 17,765 01/31/98 24,033 35,669 18,294 04/30/98 25,662 40,609 18,399 07/31/98 24,976 41,093 18,814 10/31/98 24,977 40,448 19,596 01/31/99 26,980 47,266 19,893 04/30/99 27,071 49,473 19,577 07/31/99 26,614 49,395 19,251 10/31/99 25,631 50,828 19,451 01/31/00 25,148 52,153 19,339 04/30/00 26,566 54,480 19,771 07/31/00 26,748 53,823 20,344 10/31/00 $27,751 $53,918 $20,854
Average Annual Total Return of Class A Shares of the Fund at 10/31/00 (2) 1-Year 2.05% 5-Year 8.00% 10-Year 11.34% [The following table was originally a line graph in the printed materials.] CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund Merrill Lynch Corporate and (Class B) S&P 500 Index Government Master Index 10/02/95 $ 10,000 $ 10,000 $ 10,000 12/31/95 10,493 10,602 10,463 03/31/96 10,647 11,170 10,232 06/30/96 10,697 11,671 10,275 09/30/96 10,880 12,032 10,453 10/31/96 11,072 12,364 10,693 01/31/97 11,651 13,848 10,788 04/30/97 11,664 14,183 10,848 07/31/97 13,198 16,969 11,411 10/31/97 13,060 16,332 11,652 01/31/98 13,283 17,573 11,999 04/30/98 14,159 20,007 12,068 07/31/98 13,749 20,245 12,341 10/31/98 13,726 19,928 12,854 01/31/99 14,805 23,286 13,048 04/30/99 14,821 24,374 12,841 07/31/99 14,546 24,335 12,627 10/31/99 13,978 25,041 12,758 01/31/00 13,687 25,694 12,685 04/30/00 14,437 26,841 12,968 07/31/00 14,507 26,517 13,344 10/31/00 $ 14,930 $ 26,563 $ 13,678
Average Annual Total Return of Class B Shares of the Fund at 10/31/00 (2) 1-Year 2.73% 5-Year 8.18% Life 8.21% 1. The Fund changed its fiscal year-end from 12/31 to 10/31. 2. See page 10 for further details. 8 OPPENHEIMER DISCIPLINED ALLOCATION FUND 11 [The following table was originally a line graph in the printed materials.] CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Disciplined Allocation Fund Merrill Lynch Corporate and (Class C) S&P 500 Index Government Master Index 05/01/96 $10,000 $10,000 $10,000 06/30/96 10,062 10,297 10,113 09/30/96 10,225 10,615 10,288 10/31/96 10,408 10,908 10,524 01/31/97 10,955 12,217 10,618 04/30/97 10,965 12,512 10,677 07/31/97 12,406 14,971 11,231 10/31/97 12,274 14,409 11,469 01/31/98 12,489 15,503 11,810 04/30/98 13,304 17,650 11,878 07/31/98 12,921 17,861 12,146 10/31/98 12,901 17,581 12,651 01/31/99 13,912 20,544 12,842 04/30/99 13,927 21,503 12,639 07/31/99 13,664 21,469 12,428 10/31/99 13,138 22,092 12,557 01/31/00 12,858 22,668 12,485 04/30/00 13,561 23,679 12,764 07/31/00 13,628 23,394 13,134 10/31/00 $14,115 $23,435 $13,463
Average Annual Total Return of Class C Shares of the Fund at 10/31/00 (2) 1-Year 6.49% Life 7.96% THE PERFORMANCE INFORMATION FOR BOTH INDICES IN THE GRAPHS BEGINS ON 12/31/90 FOR CLASS A, 9/30/95 FOR CLASS B AND 4/30/96 FOR CLASS C. 1. The Fund changed its fiscal year-end from 12/31 to 10/31. 2. See page 10 for further details. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. GRAPHS ARE NOT DRAWN TO THE SAME SCALE. 9 OPPENHEIMER DISCIPLINED ALLOCATION FUND 12 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. BECAUSE OF ONGOING MARKET VOLATILITY, THE FUND'S PERFORMANCE HAS BEEN SUBJECT TO SUBSTANTIAL SHORT-TERM FLUCTUATIONS AND CURRENT PERFORMANCE MAY BE LESS THAN THE RESULTS SHOWN. 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 and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not 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), 2% (5-year) and 1% (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. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 10 OPPENHEIMER DISCIPLINED ALLOCATION FUND 13 FINANCIALS ------------------------------------------------------------------------------- 11 OPPENHEIMER DISCIPLINED ALLOCATION FUND 14 STATEMENT OF INVESTMENTS October 31, 2000
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ COMMON STOCKS--61.7% -------------------------------------------------------------------------------- BASIC MATERIALS--1.7% -------------------------------------------------------------------------------- CHEMICALS--0.8% Dow Chemical Co. 29,400 $ 900,375 -------------------------------------------------------------------------------- Rohm & Haas Co. 14,800 444,925 ---------- 1,345,300 -------------------------------------------------------------------------------- PAPER--0.9% Georgia Pacific Corp. 16,800 451,500 -------------------------------------------------------------------------------- Georgia Pacific Corp./Timber Group 12,100 342,581 -------------------------------------------------------------------------------- Weyerhaeuser Co. 14,200 666,512 ---------- 1,460,593 -------------------------------------------------------------------------------- CAPITAL GOODS--11.4% -------------------------------------------------------------------------------- AEROSPACE/DEFENSE--2.5% Boeing Co. 30,900 2,095,406 -------------------------------------------------------------------------------- General Dynamics Corp. 16,100 1,152,156 -------------------------------------------------------------------------------- Northrop Grumman Corp. 9,900 831,600 ---------- 4,079,162 -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--2.9% AVX Corp. 12,000 343,500 -------------------------------------------------------------------------------- CommScope, Inc.(1) 11,900 301,219 -------------------------------------------------------------------------------- Integrated Device Technology, Inc.(1) 22,500 1,267,031 -------------------------------------------------------------------------------- Rockwell International Corp. 7,500 294,844 -------------------------------------------------------------------------------- SPX Corp.(1) 17,400 2,151,075 -------------------------------------------------------------------------------- Vishay Intertechnology, Inc.(1) 17,250 517,500 ---------- 4,875,169 -------------------------------------------------------------------------------- INDUSTRIAL SERVICES--0.5% Miller (Herman), Inc. 17,400 454,575 -------------------------------------------------------------------------------- Valassis Communications, Inc.(1) 13,200 366,300 ---------- 820,875 -------------------------------------------------------------------------------- MANUFACTURING--5.5% Avery-Dennison Corp. 7,300 368,650 -------------------------------------------------------------------------------- Ball Corp. 10,800 379,350 -------------------------------------------------------------------------------- Briggs & Stratton Corp. 4,800 171,300 -------------------------------------------------------------------------------- Cooper Industries, Inc. 19,000 726,750 -------------------------------------------------------------------------------- Crane Co. 24,100 631,119 -------------------------------------------------------------------------------- Deere & Co. 8,900 327,631 -------------------------------------------------------------------------------- Dover Corp. 28,700 1,217,956
12 OPPENHEIMER DISCIPLINED ALLOCATION FUND 15
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ MANUFACTURING Continued Eaton Corp. 4,500 $ 306,281 -------------------------------------------------------------------------------- Honeywell International, Inc. 24,200 1,302,262 -------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 22,300 2,154,737 -------------------------------------------------------------------------------- Parker-Hannifin Corp. 13,100 542,012 -------------------------------------------------------------------------------- Textron, Inc. 6,700 337,931 -------------------------------------------------------------------------------- United Technologies Corp. 9,800 684,162 ---------- 9,150,141 -------------------------------------------------------------------------------- COMMUNICATION SERVICES--1.0% -------------------------------------------------------------------------------- TELEPHONE UTILITIES--1.0% BellSouth Corp. 33,400 1,613,637 -------------------------------------------------------------------------------- CONSUMER CYCLICALS--4.6% -------------------------------------------------------------------------------- AUTOS & HOUSING--1.2% Fortune Brands, Inc. 10,400 306,150 -------------------------------------------------------------------------------- Genuine Parts Co. 39,500 841,844 -------------------------------------------------------------------------------- Stanley Works (The) 16,300 433,987 -------------------------------------------------------------------------------- Vulcan Materials Co. 9,200 386,400 ---------- 1,968,381 -------------------------------------------------------------------------------- MEDIA--1.6% Deluxe Corp. 11,900 268,494 -------------------------------------------------------------------------------- Gannett Co., Inc. 25,500 1,479,000 -------------------------------------------------------------------------------- Harte-Hanks, Inc. 11,700 258,862 -------------------------------------------------------------------------------- Knight-Ridder, Inc. 13,200 663,300 ---------- 2,669,656 -------------------------------------------------------------------------------- RETAIL: GENERAL--0.7% Family Dollar Stores, Inc. 5,000 97,187 -------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 12,500 407,031 -------------------------------------------------------------------------------- May Department Stores Co. 4,700 123,375 -------------------------------------------------------------------------------- Sears Roebuck & Co. 17,700 526,221 ---------- 1,153,814 -------------------------------------------------------------------------------- RETAIL: SPECIALTY--0.7% BJ's Wholesale Club, Inc.(1) 6,900 227,269 -------------------------------------------------------------------------------- RadioShack Corp. 8,500 506,812 -------------------------------------------------------------------------------- Ross Stores, Inc. 6,200 81,762 -------------------------------------------------------------------------------- Sherwin-Williams Co. 17,800 386,037 ---------- 1,201,880
13 OPPENHEIMER DISCIPLINED ALLOCATION FUND 16 STATEMENT OF INVESTMENTS Continued
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ TEXTILE/APPAREL & HOME FURNISHINGS--0.4% Jones Apparel Group, Inc.(1) 5,100 $ 141,844 -------------------------------------------------------------------------------- Liz Claiborne, Inc. 7,000 297,500 -------------------------------------------------------------------------------- Shaw Industries, Inc. 11,300 209,756 ---------- 649,100 -------------------------------------------------------------------------------- CONSUMER STAPLES--4.6% -------------------------------------------------------------------------------- BEVERAGES--1.2% Adolph Coors Co., Cl. B 4,600 292,963 -------------------------------------------------------------------------------- Anheuser-Busch Cos., Inc. 36,000 1,647,000 ---------- 1,939,963 -------------------------------------------------------------------------------- ENTERTAINMENT--1.2% Brinker International, Inc.(1) 33,400 1,310,950 -------------------------------------------------------------------------------- Darden Restaurants, Inc. 13,900 312,750 -------------------------------------------------------------------------------- McDonald's Corp. 8,500 263,500 -------------------------------------------------------------------------------- Wendy's International, Inc. 7,600 165,300 ---------- 2,052,500 -------------------------------------------------------------------------------- FOOD--0.9% ConAgra Foods, Inc. 33,274 711,232 -------------------------------------------------------------------------------- Hormel Foods Corp. 9,800 164,763 -------------------------------------------------------------------------------- Keebler Foods Co. 14,200 575,100 ---------- 1,451,095 -------------------------------------------------------------------------------- FOOD & DRUG RETAILERS--0.2% SUPERVALU, Inc. 20,100 309,038 -------------------------------------------------------------------------------- HOUSEHOLD GOODS--1.1% Kimberly-Clark Corp. 28,300 1,867,800 -------------------------------------------------------------------------------- ENERGY--6.4% -------------------------------------------------------------------------------- ENERGY SERVICES--1.5% Anadarko Petroleum Corp. 12,000 768,600 -------------------------------------------------------------------------------- ENSCO International, Inc. 21,700 721,525 -------------------------------------------------------------------------------- Global Marine, Inc.(1) 36,700 972,550 ---------- 2,462,675 -------------------------------------------------------------------------------- OIL: DOMESTIC--3.1% Apache Corp. 5,400 298,688 -------------------------------------------------------------------------------- Burlington Resources, Inc. 9,100 327,600 -------------------------------------------------------------------------------- Conoco, Inc., Cl. A 22,100 570,456 -------------------------------------------------------------------------------- Exxon Mobil Corp. 31,878 2,843,119 -------------------------------------------------------------------------------- Murphy Oil Corp. 7,500 434,531 -------------------------------------------------------------------------------- Texaco, Inc. 11,300 667,406 ---------- 5,141,800
14 OPPENHEIMER DISCIPLINED ALLOCATION FUND 17
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ OIL: INTERNATIONAL--1.8% BP Amoco plc, ADR 22,400 $1,141,000 -------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 20,500 1,217,188 -------------------------------------------------------------------------------- Total Fina Elf SA, Sponsored ADR 10,100 723,413 ---------- 3,081,601 -------------------------------------------------------------------------------- FINANCIAL--17.3% -------------------------------------------------------------------------------- BANKS--3.4% Bank of America Corp. 6,100 293,181 -------------------------------------------------------------------------------- Bank of New York Co., Inc. (The) 12,800 736,800 -------------------------------------------------------------------------------- Chase Manhattan Corp. 18,600 846,300 -------------------------------------------------------------------------------- Mellon Financial Corp. 21,100 1,018,075 -------------------------------------------------------------------------------- PNC Financial Services Group 12,200 815,875 -------------------------------------------------------------------------------- Roslyn Bancorp, Inc. 8,900 193,019 -------------------------------------------------------------------------------- SunTrust Banks, Inc. 4,400 214,775 -------------------------------------------------------------------------------- UnionBanCal Corp. 7,500 157,500 -------------------------------------------------------------------------------- Wachovia Corp. 5,800 313,200 -------------------------------------------------------------------------------- Wells Fargo Co. 21,400 991,088 ---------- 5,579,813 -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL--5.2% AMBAC Financial Group, Inc. 6,200 494,838 -------------------------------------------------------------------------------- American Express Co. 5,400 324,000 -------------------------------------------------------------------------------- Bear Stearns Cos., Inc. 3,800 230,375 -------------------------------------------------------------------------------- Citigroup, Inc. 40,666 2,140,048 -------------------------------------------------------------------------------- Fannie Mae 10,300 793,100 -------------------------------------------------------------------------------- Franklin Resources, Inc. 7,300 312,732 -------------------------------------------------------------------------------- Freddie Mac 10,000 600,000 -------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The) 5,600 558,950 -------------------------------------------------------------------------------- John Hancock Financial Services, Inc.(1) 20,600 651,475 -------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 11,400 798,000 -------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 9,200 738,875 -------------------------------------------------------------------------------- PMI Group, Inc. (The) 13,000 960,375 ---------- 8,602,768 -------------------------------------------------------------------------------- INSURANCE--8.7% ACE Ltd. 28,900 1,134,325 -------------------------------------------------------------------------------- Allmerica Financial Corp. 4,900 309,006 -------------------------------------------------------------------------------- Allstate Corp. 10,400 418,600 -------------------------------------------------------------------------------- American General Corp. 7,800 627,900 -------------------------------------------------------------------------------- American International Group, Inc. 15,712 1,539,776 -------------------------------------------------------------------------------- AXA Financial, Inc. 14,000 756,875 -------------------------------------------------------------------------------- Chubb Corp. 9,200 776,825
15 OPPENHEIMER DISCIPLINED ALLOCATION FUND 18 STATEMENT OF INVESTMENTS Continued
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ INSURANCE Continued Cigna Corp. 15,800 $ 1,926,810 -------------------------------------------------------------------------------- Jefferson-Pilot Corp. 16,200 1,113,750 -------------------------------------------------------------------------------- Lincoln National Corp. 24,400 1,180,350 -------------------------------------------------------------------------------- Manulife Financial Corp. 28,400 731,300 -------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 3,800 496,850 -------------------------------------------------------------------------------- MetLife, Inc.(1) 22,100 610,513 -------------------------------------------------------------------------------- Radian Group, Inc. 13,000 921,375 -------------------------------------------------------------------------------- XL Capital Ltd., Cl. A 24,200 1,860,375 ----------- 14,404,630 -------------------------------------------------------------------------------- HEALTHCARE--1.9% -------------------------------------------------------------------------------- HEALTHCARE/DRUGS--1.9% HCA-Healthcare Corp. (The) 30,800 1,230,075 -------------------------------------------------------------------------------- UnitedHealth Group, Inc. 18,200 1,990,625 ----------- 3,220,700 -------------------------------------------------------------------------------- TECHNOLOGY--7.3% -------------------------------------------------------------------------------- COMPUTER HARDWARE--2.0% Apple Computer, Inc.(1) 31,000 606,438 -------------------------------------------------------------------------------- Hewlett-Packard Co. 13,400 622,263 -------------------------------------------------------------------------------- International Business Machines Corp. 18,800 1,851,800 -------------------------------------------------------------------------------- Lexmark International, Inc., Cl. A(1) 5,800 237,800 ----------- 3,318,301 -------------------------------------------------------------------------------- COMPUTER SERVICES--0.8% First Data Corp. 27,100 1,358,388 -------------------------------------------------------------------------------- COMPUTER SOFTWARE--0.3% Symantec Corp.(1) 11,700 457,031 -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.8% ADC Telecommunications, Inc.(1) 36,000 769,500 -------------------------------------------------------------------------------- L-3 Communications Holdings, Inc.(1) 9,000 593,438 ----------- 1,362,938 -------------------------------------------------------------------------------- ELECTRONICS--3.4% Advanced Micro Devices, Inc.(1) 15,400 348,425 -------------------------------------------------------------------------------- Cypress Semiconductor Corp.(1) 12,400 464,225 -------------------------------------------------------------------------------- Dallas Semiconductor Corp. 27,400 1,085,725 -------------------------------------------------------------------------------- Intel Corp. 23,000 1,035,000 -------------------------------------------------------------------------------- Kulicke & Soffa Industries, Inc.(1) 24,400 358,375 -------------------------------------------------------------------------------- National Semiconductor Corp.(1) 27,900 725,400
16 OPPENHEIMER DISCIPLINED ALLOCATION FUND 19
MARKET VALUE SHARES SEE NOTE 1 ================================================================================ ELECTRONICS Continued Novellus Systems, Inc.(1) 15,400 $ 630,438 -------------------------------------------------------------------------------- Teradyne, Inc.(1) 12,500 390,625 -------------------------------------------------------------------------------- Zebra Technologies Corp., Cl. A(1) 12,200 534,513 ----------- 5,572,726 -------------------------------------------------------------------------------- TRANSPORTATION--0.9% -------------------------------------------------------------------------------- AIR TRANSPORTATION--0.4% Delta Air Lines, Inc. 12,900 609,525 -------------------------------------------------------------------------------- RAILROADS & TRUCKERS--0.5% Union Pacific Corp. 19,600 918,750 -------------------------------------------------------------------------------- UTILITIES--4.6% -------------------------------------------------------------------------------- ELECTRIC UTILITIES--3.9% Conectiv, Inc. 17,600 315,700 -------------------------------------------------------------------------------- CP&L Energy, Inc. 10,300 415,219 -------------------------------------------------------------------------------- Duke Energy Corp. 23,300 2,013,994 -------------------------------------------------------------------------------- FPL Group, Inc. 10,200 673,200 -------------------------------------------------------------------------------- Montana Power Co. 12,700 358,775 -------------------------------------------------------------------------------- Potomac Electric Power Co. 6,600 150,975 -------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 15,100 626,650 -------------------------------------------------------------------------------- Reliant Energy, Inc. 36,600 1,512,038 -------------------------------------------------------------------------------- TXU Corp. 10,900 403,981 ----------- 6,470,532 -------------------------------------------------------------------------------- GAS UTILITIES--0.7% El Paso Energy Corp. 16,600 1,040,613 -------------------------------------------------------------------------------- NICOR, Inc. 5,700 201,281 ----------- 1,241,894 ----------- Total Common Stocks (Cost $95,188,916) 102,412,176 ================================================================================ PREFERRED STOCKS--0.4% Ingersoll-Rand International Finance Corp. I, 6.22% Preferred Redeemable Increased Dividend Equity Securities (Cost $750,000) 30,000 754,689 UNITS -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.1% Concentric Network Corp. Wts., Exp. 12/15/07(2) 100 43,037 -------------------------------------------------------------------------------- Dairy Mart Convenience Stores, Inc. Wts., Exp. 12/12/01(2) 666 233 -------------------------------------------------------------------------------- McCaw International Wts., Exp. 4/15/07(2) 100 2,356 -------------------------------------------------------------------------------- Microcell Telecommunications, Inc. Wts., Exp. 6/1/06(3) 500 28,907 -------------------------------------------------------------------------------- Price Communications Corp. Wts., Exp. 8/1/07(2) 516 36,120 -------------------------------------------------------------------------------- Signature Brands USA, Inc. Wts., Exp. 8/15/02(2) 100 14 ----------- Total Rights, Warrants and Certificates (Cost $7,063) 110,667
17 OPPENHEIMER DISCIPLINED ALLOCATION FUND 20 STATEMENT OF INVESTMENTS Continued
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 ============================================================================================== ASSET-BACKED SECURITIES--0.4% Dayton Hudson Credit Card Master Trust, Asset-Backed Certificates, Series 1997-1, Cl. A, 6.25%, 8/25/05 $ 125,000 $ 123,983 ---------------------------------------------------------------------------------------------- IROQUOIS Trust, Asset-Backed Amortizing Nts., Series 1997-2, Cl. A, 6.752%, 6/25/072 572,282 566,739 ---------- Total Asset-Backed Securities (Cost $697,140) 690,722 ============================================================================================== MORTGAGE-BACKED OBLIGATIONS--5.0% Countrywide Funding Corp., Mtg. Pass-Through Certificates, Series 1994-10, Cl. A3, 6%, 5/25/09 250,000 246,015 ---------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation Certificates, 6%, 3/1/09 535,370 522,907 ---------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 1542, Cl. QC, 5.92%, 10/15/20(2,4) 283,712 22,430 Series 1583, Cl. IC, 1.29%, 1/15/20(4) 1,071,460 70,641 Series 1661, Cl. PK, (84.15)%, 11/15/06(4) 48,106 331 ---------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 12/1/03 319,059 310,336 6.50%, 3/1/26-4/1/26 568,920 548,252 7.50%, 1/1/08-6/1/08 361,878 365,457 ---------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Trust 1992-15, Cl. KZ, 7%, 2/25/22 915,537 878,623 ---------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1993-190, Cl. Z, 5.85%, 7/25/08 72,384 71,864 ---------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 1993-223, Cl. PM, 7.03%, 10/25/23(2,4) 860,181 102,413 ---------------------------------------------------------------------------------------------- GE Capital Mortgage Services, Inc., Collateralized Mtg. Obligations, Series 1999-2, Cl. A3, 6.50%, 4/25/29 500,000 459,375 ---------------------------------------------------------------------------------------------- GE Capital Mortgage Services, Inc., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1994-7, Cl. A18, 6%, 2/25/09 1,143,592 1,054,964 ---------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 7%, 4/15/09-1/15/24 845,344 841,162 7.50%, 3/15/09 367,355 374,071 8%, 5/15/17 269,168 275,675 ---------------------------------------------------------------------------------------------- IMC Home Equity Trust, Asset-Backed Home Equity Securities, Series 1998-3, Cl. A5, 6.36%, 8/20/22(5) 700,000 689,281 ---------------------------------------------------------------------------------------------- Norwest Asset Securities Corp., Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates: Series 1999-16, Cl. A3, 6%, 6/25/29 500,000 485,780 Series 1999-18, Cl. A2, 6%, 7/25/29 1,000,000 951,560 ---------- Total Mortgage-Backed Obligations (Cost $8,343,972) 8,271,137
18 OPPENHEIMER DISCIPLINED ALLOCATION FUND 21
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 =============================================================================================== U.S. GOVERNMENT OBLIGATIONS--6.0% U.S. Treasury Bonds: 6%, 2/15/26 $ 6,050,000 $ 6,065,349 7.50%, 11/15/16(6) 2,000,000 2,304,178 8.75%, 5/15/17(6) 1,250,000 1,606,391 ------------ Total U.S. Government Obligations (Cost $9,851,200) 9,975,918 ============================================================================================== NON-CONVERTIBLE CORPORATE BONDS AND NOTES--20.9% ---------------------------------------------------------------------------------------------- BASIC MATERIALS--0.6% ---------------------------------------------------------------------------------------------- CHEMICALS--0.6% PPG Industries, Inc., 9% Debs., 5/1/21 315,000 349,620 ---------------------------------------------------------------------------------------------- Rohm & Haas Co., 7.85% Unsec. Debs., 7/15/29 650,000 635,612 ------------ 985,232 ---------------------------------------------------------------------------------------------- CAPITAL GOODS--3.4% ---------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE--0.3% Raytheon Co., 6.45% Nts., 8/15/02 500,000 493,622 ---------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES--2.2% Fred Meyer, Inc., 7.375% Sr. Nts., 3/1/05 1,250,000 1,237,014 ---------------------------------------------------------------------------------------------- Norse CBO Ltd., 6.515% Collateralized Bond Obligations, Series 1A, Cl. A3, 8/13/10(2) 1,000,000 911,875 ---------------------------------------------------------------------------------------------- Owens-Illinois, Inc., 7.15% Sr. Nts., 5/15/05 1,000,000 715,000 ---------------------------------------------------------------------------------------------- USI American Holdings, Inc., 7.25% Sr. Nts., Series B, 12/1/06 830,000 801,293 ------------ 3,665,182 ---------------------------------------------------------------------------------------------- MANUFACTURING--0.9% Federal-Mogul Corp., 7.50% Nts., 7/1/04 500,000 142,500 ---------------------------------------------------------------------------------------------- Kimberly-Clark Corp., 7.875% Debs., 2/1/23 355,000 351,862 ---------------------------------------------------------------------------------------------- Norsk Hydro AS, 8.75% Bonds, 10/23/01 500,000 506,630 ---------------------------------------------------------------------------------------------- U.S. Industries, Inc./USI American Holdings, Inc./USI Global Corp., 7.125% Sr. Unsec. Nts., 10/15/03 500,000 495,413 ------------ 1,496,405 ---------------------------------------------------------------------------------------------- COMMUNICATION SERVICES--0.6% ---------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-LONG DISTANCE--0.3% Qwest Capital Funding, Inc., 6.125% Nts., 7/15/02 500,000 492,580 ---------------------------------------------------------------------------------------------- TELEPHONE UTILITIES--0.3% Telefonica de Argentina SA, 9.125% Nts., Series 1, 5/7/08 500,000 438,750
19 OPPENHEIMER DISCIPLINED ALLOCATION FUND 22 STATEMENT OF INVESTMENTS Continued
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 ============================================================================================== CONSUMER CYCLICALS--1.2% ---------------------------------------------------------------------------------------------- AUTOS & HOUSING--0.8% Ford Motor Co., 6.375% Sr. Unsec. Unsub. Nts., 2/1/29 $ 1,000,000 $ 805,608 ---------------------------------------------------------------------------------------------- Lear Corp., 7.96% Sr. Unsec. Nts., Series B, 5/15/05 500,000 465,960 ---------------------------------------------------------------------------------------------- 1,271,568 ----------- ---------------------------------------------------------------------------------------------- MEDIA--0.4% AT&T Corp./Liberty Media Group, 8.25% Unsec. Debs., 2/1/30 400,000 361,662 ---------------------------------------------------------------------------------------------- Reed Elsevier, Inc., 6.625% Nts., 10/15/23(3) 400,000 347,636 ----------- 709,298 ---------------------------------------------------------------------------------------------- CONSUMER STAPLES--3.9% ---------------------------------------------------------------------------------------------- BROADCASTING--0.7% British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 400,000 371,118 ---------------------------------------------------------------------------------------------- CSC Holdings, Inc., 7.625% Sr. Unsec. Debs., 7/15/18 1,000,000 884,067 ----------- 1,255,185 ---------------------------------------------------------------------------------------------- ENTERTAINMENT--0.9% Tricon Global Restaurants, Inc., 7.45% Sr. Unsec. Nts., 5/15/05 1,000,000 950,221 ---------------------------------------------------------------------------------------------- Viacom, Inc., 6.75% Sr. Unsec. Nts., 1/15/03 530,000 526,595 ---------------------------------------------------------------------------------------------- 1,476,816 ----------- ---------------------------------------------------------------------------------------------- FOOD--0.3% CPC International, Inc., 6.15% Unsec. Nts., Series C, 1/15/06 500,000 485,615 ---------------------------------------------------------------------------------------------- FOOD & DRUG RETAILERS--0.9% Albertson's, Inc., 7.45% Unsec. Debs., 8/1/29 1,000,000 898,802 ---------------------------------------------------------------------------------------------- Price/Costco Wholesale Corp., 7.125% Sr. Nts., 6/15/05 550,000 545,833 ----------- 1,444,635 ---------------------------------------------------------------------------------------------- HOUSEHOLD GOODS--1.1% Dial Corp. (The), 5.89% Medium-Term Nts., Series A, 10/22/01 750,000 737,950 ---------------------------------------------------------------------------------------------- Fort James Corp.: 6.234% Nts., 3/15/01 250,000 248,455 6.875% Sr. Nts., 9/15/07 1,000,000 944,097 ----------- 1,930,502 ---------------------------------------------------------------------------------------------- ENERGY--3.1% ---------------------------------------------------------------------------------------------- ENERGY SERVICES--3.1% Coastal Corp., 8.125% Sr. Nts., 9/15/02 565,000 579,942 ---------------------------------------------------------------------------------------------- Columbia Gas System, Inc., 6.80% Nts., Series C, 11/28/05 500,000 480,571 ---------------------------------------------------------------------------------------------- Gulf Canada Resources Ltd., 8.25% Sr. Nts., 3/15/17(2) 575,000 582,187 ---------------------------------------------------------------------------------------------- Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 990,000 942,417 ---------------------------------------------------------------------------------------------- Petroleum Geo-Services ASA, 7.50% Nts., 3/31/07 825,000 817,466 ---------------------------------------------------------------------------------------------- Petroliam Nasional Berhad, 6.875% Nts., 7/1/03(3) 500,000 488,771
20 OPPENHEIMER DISCIPLINED ALLOCATION FUND 23
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 ============================================================================================================================ ENERGY SERVICES Continued TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 $ 500,000 $ 596,620 ---------------------------------------------------------------------------------------------------------------------------- Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs., 2/1/06 750,000 714,049 ---------------------------------------------------------------------------------------------------------------------------- 5,202,023 ---------- ---------------------------------------------------------------------------------------------------------------------------- FINANCIAL--5.8% ---------------------------------------------------------------------------------------------------------------------------- BANKS--0.8% FleetBoston Financial Corp./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 360,000 366,133 ---------------------------------------------------------------------------------------------------------------------------- People's Bank of Bridgeport (Connecticut), 7.20% Sub. Nts., 12/1/06 1,000,000 980,680 ---------- 1,346,813 ---------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL--2.5% American General Institutional Capital, 8.125% Bonds, Series B, 3/15/46(3) 575,000 538,551 ---------------------------------------------------------------------------------------------------------------------------- Capital One Financial Corp., 7.25% Nts., 12/1/03 1,000,000 987,540 ---------------------------------------------------------------------------------------------------------------------------- Conseco Financing Trust III, 8.796% Bonds, 4/1/27 850,000 301,750 ---------------------------------------------------------------------------------------------------------------------------- Finova Capital Corp., 7.625% Sr. Nts., 9/21/09 750,000 427,522 ---------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 5.625% Nts., 2/15/01 162,000 161,402 ---------------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The), 7.50% Sr. Unsec. Unsub. Nts., 1/28/05 750,000 755,686 ---------------------------------------------------------------------------------------------------------------------------- GS Escrow Corp., 6.75% Sr. Unsec. Nts., 8/1/01 1,000,000 987,412 ---------- 4,159,863 ---------------------------------------------------------------------------------------------------------------------------- INSURANCE--1.9% Conseco, Inc., 6.40% Unsec. Mandatory Par Put Remarketed Securities, 6/15/01 500,000 447,500 ---------------------------------------------------------------------------------------------------------------------------- Equitable Life Assurance Society (U.S.A.), 6.95% Surplus Nts., 12/1/05(3) 500,000 493,348 ---------------------------------------------------------------------------------------------------------------------------- GenAmerica Capital I, 8.525% Nts., 6/30/27(2) 750,000 707,873 ---------------------------------------------------------------------------------------------------------------------------- Life Re Capital Trust I, 8.72% Nts., 6/15/27(3) 500,000 472,156 ---------------------------------------------------------------------------------------------------------------------------- Travelers Property Casualty Corp., 6.75% Sr. Unsec. Nts., 11/15/06 1,000,000 985,590 ---------- 3,106,467 ---------------------------------------------------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS--0.6% First Industrial LP, 7.15% Bonds, 5/15/27 560,000 554,044 ---------------------------------------------------------------------------------------------------------------------------- Simon DeBartolo Group LP, 6.625% Unsec. Nts., 6/15/03 500,000 487,127 ---------- 1,041,171 ---------------------------------------------------------------------------------------------------------------------------- HEALTHCARE--0.6% ---------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES--0.6% Columbia/HCA Healthcare Corp., 6.875% Nts., 7/15/01 120,000 118,997 ---------------------------------------------------------------------------------------------------------------------------- Tenet Healthcare Corp.: 8% Sr. Nts., 1/15/05 325,000 321,344 8.625% Sr. Unsec. Nts., 12/1/03 500,000 503,878 ---------- 944,219
21 OPPENHEIMER DISCIPLINED ALLOCATION FUND 24 STATEMENT OF INVESTMENTS Continued
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 ============================================================================================================================ TRANSPORTATION--0.9% ---------------------------------------------------------------------------------------------------------------------------- AIR TRANSPORTATION--0.4% Northwest Airlines Corp., 8.375% Unsec. Nts., 3/15/04 $ 750,000 $ 724,229 ---------------------------------------------------------------------------------------------------------------------------- RAILROADS & TRUCKERS--0.5% CSX Corp., 7.05% Debs., 5/1/02 145,000 144,482 ---------------------------------------------------------------------------------------------------------------------------- Norfolk Southern Corp., 7.35% Nts., 5/15/07 125,000 123,417 ---------------------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 7.60% Nts., 5/1/05 500,000 505,205 ----------- 773,104 ---------------------------------------------------------------------------------------------------------------------------- UTILITIES--0.8% ---------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.3% El Paso Electric Co., 8.25% First Mtg. Bonds, Series C, 2/1/03 500,000 506,272 ---------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.5% Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 825,000 796,480 ----------- Total Non-Convertible Corporate Bonds and Notes (Cost $37,783,272) 34,746,031 ============================================================================================================================ CONVERTIBLE CORPORATE BONDS AND NOTES--0.0% Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(1,7) (Cost $92,540) 100,000 -- ============================================================================================================================ SHORT-TERM NOTES--0.7% Federal Home Loan Bank, 6.45%, 11/1/00 (Cost $1,200,000) 1,200,000 1,200,000 ============================================================================================================================ REPURCHASE AGREEMENTS--4.4% Repurchase agreement with Zion First National Bank, 6.51%, dated 10/31/00, to be repurchased at $7,239,309 on 11/1/00, collateralized by U.S. Treasury Nts., 4.25%-7.50%, 2/28/01-2/15/10, with a value of $7,392,170 (Cost $7,238,000) 7,238,000 7,238,000 ---------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $161,152,103) 99.6% 165,399,340 ---------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.4 668,525 -------------------------- NET ASSETS 100.0% $166,067,865 ==========================
22 OPPENHEIMER DISCIPLINED ALLOCATION FUND 25 FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income-producing security. 2. Identifies issues considered to be illiquid or restricted--See Note 7 of Notes to Financial Statements. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $2,369,369 or 1.43% of the Fund's net assets as of October 31, 2000. 4. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepay rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 5. Represents the current interest rate for a variable or increasing rate security. 6. Securities with an aggregate market value of $3,383,684 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 7. Issuer is in default. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 OPPENHEIMER DISCIPLINED ALLOCATION FUND 26 STATEMENT OF ASSETS AND LIABILITIES October 31, 2000 ================================================================================================================ ASSETS Investments, at value (cost $161,152,103)--see accompanying statement $ 165,399,340 ---------------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 1,122,094 Shares of capital stock sold 117,137 Daily variation on futures contracts 43,500 Other 12,612 ------------- Total assets 166,694,683 ================================================================================================================ LIABILITIES Bank overdraft 1,062 ---------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of capital stock redeemed 340,585 Shareholder reports 142,016 Directors' compensation 63,665 Transfer and shareholder servicing agent fees 37,213 Distribution and service plan fees 35,040 Other 7,237 ------------- Total liabilities 626,818 ================================================================================================================ NET ASSETS $ 166,067,865 ============= ================================================================================================================ COMPOSITION OF NET ASSETS Par value of shares of capital stock $ 11,657 ---------------------------------------------------------------------------------------------------------------- Additional paid-in capital 162,226,683 ---------------------------------------------------------------------------------------------------------------- Undistributed net investment income 340,901 ---------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (646,331) ---------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 4,134,955 ------------- NET ASSETS $166,067,865 ============= ================================================================================================================ NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $144,244,321 and 10,138,039 shares of capital stock outstanding) $14.23 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $15.10 --------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $17,892,092 and 1,240,048 shares of capital stock outstanding) $14.43 --------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $3,931,452 and 279,291 shares of capital stock outstanding) $14.08 ---------------------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 OPPENHEIMER DISCIPLINED ALLOCATION FUND 27 STATEMENT OF OPERATIONS For the Year Ended October 31, 2000 ======================================================================================================== INVESTMENT INCOME Interest $ 6,077,194 -------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $9,270) 1,771,037 ------------ Total income 7,848,231 ======================================================================================================== EXPENSES Management fees 1,230,427 -------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 424,.624 Class B 196,691 Class C 42,627 -------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 275,766 -------------------------------------------------------------------------------------------------------- Shareholder reports 165,783 -------------------------------------------------------------------------------------------------------- Accounting service fees 15,000 -------------------------------------------------------------------------------------------------------- Custodian fees and expenses 5,666 -------------------------------------------------------------------------------------------------------- Other 13,607 ------------ Total expenses 2,370,191 Less expenses paid indirectly (4,811) ------------ Net expenses 2,365,380 ------------ ======================================================================================================== NET INVESTMENT INCOME 5,482,851 -------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments (4,183,491) Closing of futures contracts 5,059,641 Foreign currency transactions 238 ------------ Net realized gain 876,388 -------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 7,315,751 Translation of assets and liabilities denominated in foreign currencies 7 ------------ Net change 7,315,758 ------------ Net realized and unrealized gain 8,192,146 -------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,674,997 ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 OPPENHEIMER DISCIPLINED ALLOCATION FUND 28 STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED OCTOBER 31, 2000 1999 =========================================================================================================== OPERATIONS Net investment income $ 5,482,851 $ 8,579,053 ----------------------------------------------------------------------------------------------------------- Net realized gain (loss) 876,388 29,409,771 ----------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 7,315,758 (28,350,463) ---------------------------------- Net increase in net assets resulting from operations 13,674,997 9,638,361 =========================================================================================================== DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Class A (5,346,316) (8,122,829) Class B (433,607) (502,951) Class C (95,557) (124,914) ----------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (24,684,807) (7,782,789) Class B (2,228,825) (594,276) Class C (532,698) (139,060) =========================================================================================================== CAPITAL STOCK TRANSACTIONS Net increase (decrease) in net assets resulting from capital stock transactions: Class A (95,971,778) (33,744,712) Class B (4,269,245) 2,509,874 Class C (1,444,164) 1,126,929 =========================================================================================================== NET ASSETS Total decrease (121,332,000) (37,736,367) ----------------------------------------------------------------------------------------------------------- Beginning of period 287,399,865 325,136,232 ---------------------------------- End of period (including undistributed net investment income of $340,901 and $779,391, respectively) $ 166,067,865 $ 287,399,865 ==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 OPPENHEIMER DISCIPLINED ALLOCATION FUND 29 FINANCIAL HIGHLIGHTS
CLASS A YEAR ENDED OCTOBER 31, 2000 1999 1998 1997 1996(1) =========================================================================================================================== PER SHARE OPERATING DATA --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $15.03 $15.45 $16.81 $16.00 $15.46 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .44 .44 .45 .51(2) .46 Net realized and unrealized gain (loss) .68 (.01) .45 2.25(2) .49 -------------------------------------------------------------- Total income from investment operations 1.12 .43 .90 2.76 .95 --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.44) (.44) (.45) (.56) (.36) Distributions from net realized gain (1.48) (.41) (1.81) (1.39) (.05) -------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.92) (.85) (2.26) (1.95) (.41) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $14.23 $15.03 $15.45 $16.81 $16.00 ============================================================== =========================================================================================================================== TOTAL RETURN, AT NET ASSET VALUE(3) 8.27% 2.62% 5.93% 18.82% 6.27% =========================================================================================================================== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $144,244 $258,159 $298,558 $243,267 $233,289 --------------------------------------------------------------------------------------------------------------------------- AVERAGE NET ASSETS (IN THOUSANDS) $172,514 $293,677 $268,715 $238,821 $228,203 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(4) Net investment income 2.88% 2.72% 2.96% 3.17% 3.52% Expenses 1.11% 1.04% 1.04%(5) 1.11%(5) 1.11%(5) --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 34% 122% 97% 98% 85%
1. For the 10 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 OPPENHEIMER DISCIPLINED ALLOCATION FUND 30 FINANCIAL HIGHLIGHTS Continued
CLASS B YEAR ENDED OCTOBER 31, 2000 1999 1998 1997 1996(1) ========================================================================================================================= PER SHARE OPERATING DATA Net asset value, beginning of period $15.20 $15.62 $16.99 $16.16 $15.66 ------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .30 .31 .36 .40(2) .31 Net realized and unrealized gain .73 -- .43 2.27(2) .54 ------------------------------------------------------------- Total income from investment operations 1.03 .31 .79 2.67 .85 ------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.32) (.32) (.35) (.45) (.30) Distributions from net realized gain (1.48) (.41) (1.81) (1.39) (.05) ------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.80) (.73) (2.16) (1.84) (.35) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $14.43 $15.20 $15.62 $16.99 $16.16 ============================================================= ========================================================================================================================= TOTAL RETURN, AT NET ASSET VALUE(3) 7.48% 1.84% 5.10% 17.96% 5.51% ========================================================================================================================= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $17,892 $23,522 $21,754 $8,720 $3,919 ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $19,643 $24,648 $14,235 $6,183 $2,324 ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(4) Net investment income 2.12% 1.97% 2.19% 2.32% 2.86% Expenses 1.87% 1.80% 1.80%(5) 1.89%(5) 1.85%(5) ------------------------------------------------------------------------------------------------------------------------- PORTFOLIO TURNOVER RATE 34% 122% 97% 98% 85%
1. For the 10 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 OPPENHEIMER DISCIPLINED ALLOCATION FUND 31
CLASS C YEAR ENDED OCTOBER 31, 2000 1999 1998 1997 1996(1) ========================================================================================================================== PER SHARE OPERATING DATA Net asset value, beginning of period $14.88 $15.31 $16.70 $15.93 $15.71 -------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .28 .32 .37 .44(2) .30 Net realized and unrealized gain (loss) .72 (.01) .40 2.19(2) .32 -------------------------------------------------------------- Total income from investment operations 1.00 .31 .77 2.63 .62 -------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.32) (.33) (.35) (.47) (.35) Distributions from net realized gain (1.48) (.41) (1.81) (1.39) (.05) -------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.80) (.74) (2.16) (1.86) (.40) -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $14.08 $14.88 $15.31 $16.70 $15.93 ============================================================== ========================================================================================================================== Total Return, at Net Asset Value(3) 7.44% 1.84% 5.10% 17.93% 4.08% ========================================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $3,931 $5,719 $4,824 $1,473 $188 -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $4,255 $5,876 $2,861 $ 805 $ 57 -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(4) Net investment income 2.13% 1.97% 2.18% 2.18% 2.90% Expenses 1.86% 1.80% 1.80%(5) 1.92%(5) 1.87%(5) -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 34% 122% 97% 98% 85%
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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 OPPENHEIMER DISCIPLINED ALLOCATION FUND 32 NOTES TO FINANCIAL STATEMENTS ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Disciplined Allocation Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek to maximize total investment return (including capital appreciation and income) principally by allocating its assets among stocks, corporate bonds, U.S. government securities and money market instruments, according to changing market conditions. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class C shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B and Class C shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (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 have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------------------------------- SECURITIES VALUATION. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 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. 30 OPPENHEIMER DISCIPLINED ALLOCATION FUND 33 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 year ended October 31, 2000, a credit of $30,008 was made for the Fund's projected benefit obligations and payments of $4,206 were made to retired directors, resulting in an accumulated liability of $58,929 as of October 31, 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. -------------------------------------------------------------------------------- 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 carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. 31 OPPENHEIMER DISCIPLINED ALLOCATION FUND 34 NOTES TO FINANCIAL STATEMENTS Continued ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Continued As of October 31, 2000, the Fund had available for federal income tax purposes an unused capital loss carryover as follows: EXPIRING -------------------- 2008 $167,496 -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. -------------------------------------------------------------------------------- CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal 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 dividends and 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. The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended October 31, 2000, amounts have been reclassified to reflect a decrease in paid-in capital of $36,259, a decrease in undistributed net investment income of $45,861, and a decrease in accumulated net realized loss on investments of $82,120. Net assets of the Fund were unaffected by the reclassifications -------------------------------------------------------------------------------- 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. 32 OPPENHEIMER DISCIPLINED ALLOCATION FUND 35 ================================================================================ 2. SHARES OF CAPITAL STOCK The Fund has authorized 450 million of $0.001 par value shares of capital stock of each class. Transactions in shares of capital stock were as follows:
YEAR ENDED OCTOBER 31, 2000 YEAR ENDED OCTOBER 31, 1999 SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------------------------- CLASS A Sold 473,867 $ 6,576,278 1,351,571 $ 21,353,382 Dividends and/or distributions reinvested 1,778,259 24,217,286 965,998 15,250,027 Redeemed (9,290,842) (126,765,342) (4,463,822) (70,348,121) ------------------------------------------------------------------------------- Net decrease (7,038,716) $ (95,971,778) (2,146,253) $(33,744,712) =============================================================================== ----------------------------------------------------------------------------------------------------------------------- CLASS B Sold 236,370 $ 3,332,225 547,606 $ 8,732,198 Dividends and/or distributions reinvested 187,074 2,584,174 66,056 1,054,288 Redeemed (730,656) (10,185,644) (458,993) (7,276,612) ------------------------------------------------------------------------------- Net increase (decrease) (307,212) $ (4,269,245) 154,669 $ 2,509,874 =============================================================================== ----------------------------------------------------------------------------------------------------------------------- CLASS C Sold 88,178 $ 1,218,700 202,792 $ 3,181,342 Dividends and/or distributions reinvested 43,934 592,281 16,189 252,900 Redeemed (237,266) (3,255,145) (149,699) (2,307,313) ------------------------------------------------------------------------------- Net increase (decrease) (105,154) $ (1,444,164) 69,282 $ 1,126,929 ===============================================================================
================================================================================ 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended October 31, 2000, were $60,349,188 and $151,874,168, respectively. As of October 31, 2000, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $161,742,914 was: Gross unrealized appreciation $ 17,281,128 Gross unrealized depreciation (13,624,702) ------------ Net unrealized appreciation $ 3,656,426 ============
================================================================================ 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager are 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 the year ended October 31, 2000 was an annualized rate of 0.625%, before any waiver by the Manager if applicable. 33 OPPENHEIMER DISCIPLINED ALLOCATION FUND 36 NOTES TO FINANCIAL STATEMENTS Continued ================================================================================ 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued ACCOUNTING FEES. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund on an "at-cost" basis. OFS also acts as the transfer and shareholder servicing agent for the other Oppenheimer 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 YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1) ---------------------------------------------------------------------------------------------------------------------------------- October 31, 2000 $155,566 $112,021 $9,827 $98,076 $11,259
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 YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR -------------------------------------------------------------------------------------------------------------------------- October 31, 2000 $-- $66,950 $--
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 year ended October 31, 2000, payments under the Class A plan totaled $424,624 prior to Manager waiver if applicable, all of which were paid by the Distributor to recipients, and included $305,366 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. 34 OPPENHEIMER DISCIPLINED ALLOCATION FUND 37 ================================================================================ 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 year ended October 31, 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 $196,691 $157,291 $604,244 3.38% Class C Plan 42,627 14,933 70,064 1.78
================================================================================ 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and to seek to protect against adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities. 35 OPPENHEIMER DISCIPLINED ALLOCATION FUND 38 NOTES TO FINANCIAL STATEMENTS Continued ================================================================================ 5. FOREIGN CURRENCY CONTRACTS Continued The Fund may realize a gain or loss upon the closing or settlement of the forward transaction. Realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. Securities denominated in foreign currency to cover net exposure on outstanding foreign currency contracts are noted in the Statement of Investments where applicable. ================================================================================ 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a particular price on a stipulated future date at a negotiated price. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or to seek to protect against changes in market value of stock and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts to hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or 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 October 31, 2000, the Fund had outstanding futures contracts as follows:
NUMBER OF VALUATION AS OF UNREALIZED CONTRACT DESCRIPTION EXPIRATION DATE CONTRACTS OCTOBER 31, 2000 DEPRECIATION ----------------------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Standard & Poor's 500 Index 12/14/00 6 $2,160,300 $111,975
36 OPPENHEIMER DISCIPLINED ALLOCATION FUND 39 ================================================================================ 7. ILLIQUID SECURITIES As of October 31, 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 October 31, 2000, was $2,975,277, which represents 1.79% of the Fund's net assets. ================================================================================ 8. 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 year ended or at October 31, 2000. 37 OPPENHEIMER DISCIPLINED ALLOCATION FUND 40 INDEPENDENT AUDITORS' REPORT ================================================================================ THE BOARD OF DIRECTORS AND SHAREHOLDERS OF OPPENHEIMER DISCIPLINED ALLOCATION FUND: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Oppenheimer Disciplined Allocation Fund as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the four-year period then ended and the 10-month period ended October 31, 1996. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Allocation Fund as of October 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the four-year period then ended and the 10-month period ended October 31, 1996, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Denver, Colorado November 21, 2000 38 OPPENHEIMER DISCIPLINED ALLOCATION FUND 41 FEDERAL INCOME TAX INFORMATION Unaudited ================================================================================ In early 2001 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2000. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends and distributions of $1.5576, $1.5271 and $1.5268 per share were paid to Class A, Class B and Class C shareholders, respectively, on December 9, 1999, of which $1.0507 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended October 31, 2000, which are not designated as capital gain distributions should be multiplied by 31.02% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 39 OPPENHEIMER DISCIPLINED ALLOCATION FUND 42 OPPENHEIMER DISCIPLINED ALLOCATION 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 Bruce Bartlett, Vice President John Kowalik, Vice President Christopher Leavy, Vice President Arthur J. Zimmer, 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 SHAREHOLDER OppenheimerFunds Services SERVICING AGENT ========================================================================================= CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES ========================================================================================= INDEPENDENT AUDITORS KPMG LLP ========================================================================================= LEGAL COUNSEL Mayer, Brown & Platt For more complete information about Oppenheimer Disciplined Allocation Fund, please refer to the Prospectus. To obtain a copy, call your financial advisor, or call OppenheimerFunds Distributor, Inc. at 1.800.525.7048, or visit the OppenheimerFunds Internet website at WWW.OPPENHEIMERFUNDS.COM. SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. 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.
40 OPPENHEIMER DISCIPLINED ALLOCATION FUND 43 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 transactions(1) 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: CNMTX Class B: CDABX Class C: CDACX -------------------------------------------------------------------------------- 1. At times this website may be inaccessible or its transaction feature may be unavailable. [OPPENHEIMERFUNDS LOGO] RA0205.001.1000 December 30, 2000