-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JLGzQm7klq7m0xBzDbCgLEzK5SKwEwV2ZUva2YmbC3WirJybCbHXL3mPm7Qj/gdz 7Fzs3aRR7cyagtmPWJ0yQw== 0000935069-04-000785.txt : 20040528 0000935069-04-000785.hdr.sgml : 20040528 20040528132505 ACCESSION NUMBER: 0000935069-04-000785 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040528 EFFECTIVENESS DATE: 20040528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER BALANCED FUND CENTRAL INDEX KEY: 0000729968 IRS NUMBER: 133395850 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03864 FILM NUMBER: 04837689 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER MULTIPLE STRATEGIES FUND DATE OF NAME CHANGE: 19970306 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER ASSET ALLOCATION FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER RETIREMENT FUND DATE OF NAME CHANGE: 19870503 N-CSRS 1 rs0240_10908.txt RS0240_10908.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-3864 Oppenheimer Balanced Fund (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. Two World Financial Center, New York, New York 10281-1008 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: September 30 Date of reporting period: October 1, 2003 - March 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. STATEMENT OF INVESTMENTS March 31, 2004 / Unaudited - --------------------------------------------------------------------------------
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--53.6% - ----------------------------------------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--10.1% - ----------------------------------------------------------------------------------------------------------------------- AUTO COMPONENTS--0.2% TRW Automotive Holdings Corp. 1 62,300 $ 1,356,271 - ----------------------------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.7% Brinker International, Inc. 1 159,600 6,053,628 - ----------------------------------------------------------------------------------------------------------------------- McDonald's Corp. 262,300 7,493,911 -------------- 13,547,539 - ----------------------------------------------------------------------------------------------------------------------- HOUSEHOLD DURABLES--1.2% Toll Brothers, Inc. 1 151,400 6,878,102 - ----------------------------------------------------------------------------------------------------------------------- WCI Communities, Inc. 1 94,900 2,375,347 -------------- 9,253,449 - ----------------------------------------------------------------------------------------------------------------------- MEDIA--5.4% AMC Entertainment, Inc. 1 195,600 3,002,460 - ----------------------------------------------------------------------------------------------------------------------- EchoStar Communications Corp., Cl. A 1 99,400 3,255,350 - ----------------------------------------------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1 1,063,400 11,644,230 - ----------------------------------------------------------------------------------------------------------------------- Regal Entertainment Group 64,100 1,408,918 - ----------------------------------------------------------------------------------------------------------------------- UnitedGlobalCom, Inc., Cl. A 1 1,958,767 16,629,932 - ----------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B 183,900 7,210,719 -------------- 43,151,609 - ----------------------------------------------------------------------------------------------------------------------- MULTILINE RETAIL--1.0% Sears Roebuck & Co. 193,700 8,321,352 - ----------------------------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--0.6% Boise Cascade Corp. 64,517 2,235,514 - ----------------------------------------------------------------------------------------------------------------------- Gap, Inc. (The) 115,700 2,536,144 -------------- 4,771,658 - ----------------------------------------------------------------------------------------------------------------------- CONSUMER STAPLES--4.0% - ----------------------------------------------------------------------------------------------------------------------- BEVERAGES--1.0% Adolph Coors Co., Cl. B 30,400 2,111,280 - ----------------------------------------------------------------------------------------------------------------------- Constellation Brands, Inc., Cl. A 1 182,200 5,848,620 -------------- 7,959,900 - ----------------------------------------------------------------------------------------------------------------------- FOOD PRODUCTS--1.3% Tyson Foods, Inc., Cl. A 417,200 7,530,460 - ----------------------------------------------------------------------------------------------------------------------- Unilever NV, NY Shares 41,300 2,867,872 -------------- 10,398,332
9 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- PERSONAL PRODUCTS--0.4% Estee Lauder Cos., Inc. (The), Cl. A 80,300 $ 3,560,502 - ----------------------------------------------------------------------------------------------------------------------- TOBACCO--1.3% Altria Group, Inc. 184,500 10,046,025 - ----------------------------------------------------------------------------------------------------------------------- ENERGY--3.7% - ----------------------------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.4% Halliburton Co. 56,800 1,726,152 - ----------------------------------------------------------------------------------------------------------------------- Todco, Cl. A 1 92,600 1,351,960 -------------- 3,078,112 - ----------------------------------------------------------------------------------------------------------------------- OIL & GAS--3.3% BP plc, ADR 69,100 3,537,920 - ----------------------------------------------------------------------------------------------------------------------- Devon Energy Corp. 24,300 1,413,045 - ----------------------------------------------------------------------------------------------------------------------- Houston Exploration Co. 1 25,800 1,154,034 - ----------------------------------------------------------------------------------------------------------------------- LUKOIL, Sponsored ADR 12,600 1,573,691 - ----------------------------------------------------------------------------------------------------------------------- Petroleo Brasileiro SA, Preference 109,000 3,183,997 - ----------------------------------------------------------------------------------------------------------------------- Pioneer Natural Resources Co. 1 62,000 2,002,600 - ----------------------------------------------------------------------------------------------------------------------- Talisman Energy, Inc. 79,800 4,689,939 - ----------------------------------------------------------------------------------------------------------------------- TotalFinaElf SA, Sponsored ADR 1 36,500 3,358,000 - ----------------------------------------------------------------------------------------------------------------------- Westport Resources Corp. 1 73,700 2,431,363 - ----------------------------------------------------------------------------------------------------------------------- YUKOS, ADR 50,079 3,007,745 -------------- 26,352,334 - ----------------------------------------------------------------------------------------------------------------------- FINANCIALS--9.4% - ----------------------------------------------------------------------------------------------------------------------- CAPITAL MARKETS--0.8% Bank of New York Co., Inc. (The) 118,300 3,726,450 - ----------------------------------------------------------------------------------------------------------------------- UBS AG 1 33,600 2,495,765 -------------- 6,222,215 - ----------------------------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--2.7% FleetBoston Financial Corp. 199,400 8,953,060 - ----------------------------------------------------------------------------------------------------------------------- SouthTrust Corp. 113,600 3,766,976 - ----------------------------------------------------------------------------------------------------------------------- SunTrust Banks, Inc. 6,800 474,028 - ----------------------------------------------------------------------------------------------------------------------- U.S. Bancorp 146,806 4,059,186 - ----------------------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 75,300 4,267,251 -------------- 21,520,501 - ----------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--2.4% CIT Group, Inc. 98,000 3,728,900 - ----------------------------------------------------------------------------------------------------------------------- Citigroup, Inc. 135,300 6,995,010 - ----------------------------------------------------------------------------------------------------------------------- J.P. Morgan Chase & Co. 140,600 5,898,170
10 | OPPENHEIMER BALANCED FUND
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES Continued Merrill Lynch & Co., Inc. 36,500 $ 2,173,940 -------------- 18,796,020 - ----------------------------------------------------------------------------------------------------------------------- INSURANCE--2.5% Chubb Corp. 68,200 4,742,628 - ----------------------------------------------------------------------------------------------------------------------- Platinum Underwriters Holdings Ltd. 76,000 2,435,800 - ----------------------------------------------------------------------------------------------------------------------- Prudential Financial, Inc. 131,000 5,866,180 - ----------------------------------------------------------------------------------------------------------------------- UnumProvident Corp. 166,300 2,432,969 - ----------------------------------------------------------------------------------------------------------------------- XL Capital Ltd., Cl. A 60,000 4,562,400 -------------- 20,039,977 - ----------------------------------------------------------------------------------------------------------------------- REAL ESTATE--1.0% Developers Diversified Realty Corp. 59,000 2,383,600 - ----------------------------------------------------------------------------------------------------------------------- Host Marriott Corp. 1 458,900 5,864,742 -------------- 8,248,342 - ----------------------------------------------------------------------------------------------------------------------- HEALTH CARE--8.4% - ----------------------------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--1.4% MedImmune, Inc. 1 271,300 6,261,604 - ----------------------------------------------------------------------------------------------------------------------- Wyeth 126,900 4,765,095 -------------- 11,026,699 - ----------------------------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--1.0% Beckman Coulter, Inc. 83,000 4,526,820 - ----------------------------------------------------------------------------------------------------------------------- Guidant Corp. 54,100 3,428,317 -------------- 7,955,137 - ----------------------------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.6% Aetna, Inc. 54,000 4,844,880 - ----------------------------------------------------------------------------------------------------------------------- PacifiCare Health Systems, Inc. 1 105,800 4,184,390 - ----------------------------------------------------------------------------------------------------------------------- Province Healthcare Co. 1 281,900 4,482,210 - ----------------------------------------------------------------------------------------------------------------------- Tenet Healthcare Corp. 1 659,400 7,358,904 -------------- 20,870,384 - ----------------------------------------------------------------------------------------------------------------------- PHARMACEUTICALS--3.4% GlaxoSmithKline plc, ADR 85,500 3,415,725 - ----------------------------------------------------------------------------------------------------------------------- Novartis AG 124,360 5,281,263 - ----------------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 193,940 6,797,597 - ----------------------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 239,400 3,883,068 - ----------------------------------------------------------------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 70,600 4,476,746
11 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- PHARMACEUTICALS Continued Watson Pharmaceuticals, Inc. 1 74,200 $ 3,175,018 -------------- 27,029,417 - ----------------------------------------------------------------------------------------------------------------------- INDUSTRIALS--5.9% - ----------------------------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--2.4% Boeing Co. 52,600 2,160,282 - ----------------------------------------------------------------------------------------------------------------------- Empresa Brasileira de Aeronautica SA, ADR 138,400 4,442,640 - ----------------------------------------------------------------------------------------------------------------------- Orbital Sciences Corp. 1 593,117 7,431,756 - ----------------------------------------------------------------------------------------------------------------------- Raytheon Co. 165,700 5,193,038 -------------- 19,227,716 - ----------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.8% Brink's Co. (The) 100,000 2,758,000 - ----------------------------------------------------------------------------------------------------------------------- Cendant Corp. 661,600 16,136,424 - ----------------------------------------------------------------------------------------------------------------------- ChoicePoint, Inc. 1 92,400 3,513,972 -------------- 22,408,396 - ----------------------------------------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.3% Tyco International Ltd. 69,200 1,982,580 - ----------------------------------------------------------------------------------------------------------------------- ROAD & RAIL--0.4% Burlington Northern Santa Fe Corp. 56,300 1,773,450 - ----------------------------------------------------------------------------------------------------------------------- Canadian National Railway Co. 45,600 1,793,448 -------------- 3,566,898 - ----------------------------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--8.0% - ----------------------------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--3.0% Hewlett-Packard Co. 455,879 10,412,276 - ----------------------------------------------------------------------------------------------------------------------- International Business Machines Corp. 143,300 13,160,672 -------------- 23,572,948 - ----------------------------------------------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.0% Flextronics International Ltd. 1 472,700 8,139,894 - ----------------------------------------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.4% Net2Phone, Inc. 1 633,600 3,294,720 - ----------------------------------------------------------------------------------------------------------------------- IT SERVICES--0.5% CSG Systems International, Inc. 1 158,100 2,716,158 - ----------------------------------------------------------------------------------------------------------------------- Infosys Technologies Ltd., Sponsored ADR 14,500 1,184,650 -------------- 3,900,808
12 | OPPENHEIMER BALANCED FUND
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.9% Analog Devices, Inc. 54,500 $ 2,616,545 - ----------------------------------------------------------------------------------------------------------------------- Intel Corp. 180,700 4,915,040 -------------- 7,531,585 SOFTWARE--2.2% Compuware Corp. 1 165,000 1,229,250 - ----------------------------------------------------------------------------------------------------------------------- Microsoft Corp. 397,900 9,935,563 - ----------------------------------------------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 1 168,800 6,208,464 -------------- 17,373,277 - ----------------------------------------------------------------------------------------------------------------------- MATERIALS--1.6% - ----------------------------------------------------------------------------------------------------------------------- CHEMICALS--0.9% Dow Chemical Co. 102,500 4,128,700 - ----------------------------------------------------------------------------------------------------------------------- Praxair, Inc. 80,600 2,991,872 -------------- 7,120,572 - ----------------------------------------------------------------------------------------------------------------------- METALS & MINING--0.4% Companhia Vale do Rio Doce, Sponsored ADR 74,600 3,495,010 - ----------------------------------------------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.3% Bowater, Inc. 45,900 2,002,617 - ----------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.9% - ----------------------------------------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.7% IDT Corp., Cl. B 1 306,500 6,175,975 - ----------------------------------------------------------------------------------------------------------------------- WorldCom, Inc./WorldCom Group 1 450,000 9,000 -------------- 6,184,975 - ----------------------------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.2% AT&T Corp. 75,400 1,475,578 - ----------------------------------------------------------------------------------------------------------------------- UTILITIES--1.6% - ----------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.9% AES Corp. (The) 1 534,000 4,555,020 - ----------------------------------------------------------------------------------------------------------------------- PG&E Corp. 1 79,200 2,294,424 -------------- 6,849,444 - ----------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.7% Kinder Morgan, Inc. 59,400 3,743,388 - ----------------------------------------------------------------------------------------------------------------------- Sempra Energy 72,200 2,295,960 -------------- 6,039,348 -------------- Total Common Stocks (Cost $295,516,358) 427,672,141
13 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
MARKET VALUE UNITS SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - ----------------------------------------------------------------------------------------------------------------------- Sun Healthcare Group, Inc. Wts., Exp. 2/28/05 1,2 (Cost $0) 496 $ 18 PRINCIPAL AMOUNT - ----------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES--8.8% - ----------------------------------------------------------------------------------------------------------------------- Bank One Auto Securitization Trust, Automobile Receivable Certificates, Series 2003-1, Cl. A2, 1.29%, 8/21/06 $ 1,730,000 1,731,704 - ----------------------------------------------------------------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A, Cl. A2, 1.45%, 11/25/05 1,523,075 1,525,211 - ----------------------------------------------------------------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts., Series 2003-2, Cl. A2A, 1.20%, 5/16/05 1,511,935 1,512,965 - ----------------------------------------------------------------------------------------------------------------------- Caterpillar Financial Asset Trust, Equipment Loan Pass-Through Certificates, Series 2003-A, Cl. A2, 1.25%, 10/25/05 1,073,490 1,074,269 - ----------------------------------------------------------------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2003-A, Cl. AF1, 1.836%, 10/25/17 208,660 208,785 Series 2003-B, Cl. AF1, 1.64%, 2/25/18 429,986 430,088 Series 2003-C, Cl. AF1, 2.14%, 7/25/18 1,577,032 1,580,944 Series 2004-A, Cl. AF1, 2.03%, 6/25/19 1,074,684 1,077,103 - ----------------------------------------------------------------------------------------------------------------------- Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations: Series 2003-3, Cl. 1A1, 1.17%, 8/25/17 3 749,112 749,437 Series 2003-4, Cl. 1A1, 1.21%, 9/25/17 3 1,731,191 1,732,174 - ----------------------------------------------------------------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2003-A, Cl. A2, 1.26%, 1/16/06 625,368 625,911 Series 2003-B, Cl. A2, 1.287%, 3/15/06 960,000 960,858 - ----------------------------------------------------------------------------------------------------------------------- Citibank Credit Card Issuance Trust, Credit Card Receivable Nts., Series 2002-A3, Cl. A3, 4.40%, 5/15/07 1,430,000 1,478,395 - ----------------------------------------------------------------------------------------------------------------------- CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg. Obligations: Series 2003-1, Cl. AF1, 1.94%, 1/25/33 384,407 384,560 Series 2003-2, Cl. AF1, 1.19%, 5/25/33 3 685,243 685,537 Series 2003-3, Cl. AF1, 1.21%, 8/25/33 2,3 1,156,051 1,156,506 - ----------------------------------------------------------------------------------------------------------------------- DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2002-B, Cl. A2, 2.20%, 4/6/05 15,784 15,796 Series 2003-A, Cl. A2, 1.52%, 12/8/05 2,890,000 2,895,662 Series 2003-B, Cl. A2, 1.61%, 7/8/06 3,300,000 3,310,156 - ----------------------------------------------------------------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates, Series 2003-A, Cl. A2A, 1.62%, 8/15/05 552,724 553,750 - ----------------------------------------------------------------------------------------------------------------------- Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.: Series 2002-2, Cl. A1, 1.91%, 4/16/07 615,469 617,032 Series 2003-3, Cl. A1, 1.50%, 1/15/08 2,192,308 2,197,490
14 | OPPENHEIMER BALANCED FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES Continued - ----------------------------------------------------------------------------------------------------------------------- Honda Auto Receivables Owner Trust, Automobile Receivable Obligations: Series 2003-1, Cl. A2, 1.46%, 9/19/05 $ 970,845 $ 972,137 Series 2003-2, Cl. A2, 1.34%, 12/21/05 1,826,860 1,828,950 Series 2003-3, Cl. A2, 1.52%, 4/21/06 3,210,000 3,216,873 Series 2003-4, Cl. A2, 1.58%, 7/17/06 2,830,000 2,837,755 - ----------------------------------------------------------------------------------------------------------------------- Household Automotive Trust, Automobile Loan Certificates, Series 2003-2, Cl. A2, 1.56%, 12/18/06 1,450,000 1,453,901 - ----------------------------------------------------------------------------------------------------------------------- M&I Auto Loan Trust, Automobile Loan Certificates: Series 2002-1, Cl. A3, 2.49%, 10/22/07 1,819,958 1,834,476 Series 2003-1, Cl. A2, 1.60%, 7/20/06 2,410,000 2,416,563 - ----------------------------------------------------------------------------------------------------------------------- National City Auto Receivables Trust, Automobile Receivable Obligations, Series 2004-A, Cl. A2, 1.50%, 2/15/07 1,400,000 1,399,125 - ----------------------------------------------------------------------------------------------------------------------- Nissan Auto Lease Trust, Automobile Lease Obligations, Series 2003-A, Cl. A2, 1.69%, 12/15/05 1,900,000 1,904,182 - ----------------------------------------------------------------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.: Series 2003-A, Cl. A2, 1.45%, 5/16/05 1,146,270 1,147,415 Series 2003-B, Cl. A2, 1.20%, 11/15/05 2,970,000 2,972,077 Series 2004-A, Cl. A2, 1.40%, 7/17/06 1,580,000 1,581,895 - ----------------------------------------------------------------------------------------------------------------------- Residential Funding Mortgage Securities II, Inc., Home Equity Loan Pass-Through Certificates, Series 2003-HS1, Cl. AI2, 1.19%, 1/25/33 3 235,882 236,030 - ----------------------------------------------------------------------------------------------------------------------- Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations: Series 2002-B, Cl. A3, 3.76%, 6/15/06 603,540 610,227 Series 2003-A, Cl. A2, 1.28%, 8/15/05 1,671,557 1,672,951 Series 2003-B, Cl. A2, 1.43%, 2/15/06 2,170,000 2,172,262 - ----------------------------------------------------------------------------------------------------------------------- USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2002-1, Cl. A3, 2.41%, 10/16/06 923,101 929,048 Series 2003-1, Cl. A2, 1.22%, 4/17/06 1,519,014 1,520,280 Series 2004-1, Cl. A2, 1.43%, 9/15/06 3,840,000 3,841,291 - ----------------------------------------------------------------------------------------------------------------------- Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivable Certificates: Series 2003-1, Cl. A2, 1.11%, 12/20/05 3,529,480 3,530,598 Series 2003-2, Cl. A2, 1.55%, 6/20/06 1,630,000 1,634,048 - ----------------------------------------------------------------------------------------------------------------------- Whole Auto Loan Trust, Automobile Loan Receivable Certificates: Series 2002-1, Cl. A2, 1.88%, 6/15/05 1,179,249 1,181,452 Series 2003-1, Cl. A2A, 1.40%, 4/15/06 3,090,000 3,094,504 -------------- Total Asset-Backed Securities (Cost $70,394,728) 70,492,373 - ----------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--26.0% - ----------------------------------------------------------------------------------------------------------------------- CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 830,000 831,475 - ----------------------------------------------------------------------------------------------------------------------- Fannie Mae Whole Loan, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 2003-W6, Cl. 2A1, 2.232%, 9/25/42 2,673,138 2,674,145
15 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS Continued - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp.: 5%, 4/15/34 4 $ 7,580,000 $ 7,617,900 5.50%, 1/1/34 957,652 982,462 5.50%, 4/15/34 4 4,288,000 4,395,200 7%, 5/1/29-11/1/33 4,849,634 5,152,755 7%, 4/15/34 4 11,492,000 12,188,703 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations, Gtd Multiclass Mtg. Participation Certificates, Series 1669, Cl. G, 6.50%, 2/15/23 943,325 961,082 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Mtg. Pass-Through Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 103,688 103,875 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Series 2055, Cl. ZM, 6.50%, 5/15/28 1,459,572 1,530,558 Series 2080, Cl. Z, 6.50%, 8/15/28 976,792 1,014,645 Series 2387, Cl. PD, 6%, 4/15/30 1,621,000 1,671,471 Series 2491, Cl. PE, 6%, 12/15/27 1,290,000 1,307,334 Series 2498, Cl. PC, 5.50%, 10/15/14 400,000 409,410 Series 2500, Cl. FD, 1.59%, 3/15/32 3 602,082 607,069 Series 2526, Cl. FE, 1.49%, 6/15/29 3 681,875 684,786 Series 2551, Cl. FD, 1.49%, 1/15/33 3 584,165 586,448 Series 2551, Cl. TA, 4.50%, 2/15/18 2,516,225 2,537,354 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, (7.082)%, 6/1/26 5 933,757 140,356 Series 177, Cl. B, (9.301)%, 7/1/26 5 1,599,665 238,396 Series 183, Cl. IO, (7.80)%, 4/1/27 5 1,537,305 216,090 Series 184, Cl. IO, (5.714)%, 12/1/26 5 1,512,016 217,075 Series 2130, Cl. SC, 32.35%, 3/15/29 5 1,258,560 120,384 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Structured Pass-Through Securities, Collateralized Mtg. Obligations: Series H006, Cl. A1, 1.724%, 4/15/08 221,310 220,984 Series T-42, Cl. A2, 5.50%, 2/25/42 183,591 185,140 - ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 5%, 4/15/34 4 14,265,000 14,331,874 5.50%, 7/1/33-12/1/34 8,531,850 8,749,118 5.50%, 2/1/34-4/11/34 4 16,543,432 16,953,224 6%, 5/1/16 4,144,516 4,369,108 6.50%, 12/1/27-2/1/28 1,162,322 1,224,157 6.50%, 10/1/30-4/1/34 4 30,842,141 32,404,641 7%, 7/1/32-11/1/33 4,184,080 4,463,717 7%, 4/25/34 4 54,915,000 58,295,677 8.50%, 7/1/32 192,255 207,880
16 | OPPENHEIMER BALANCED FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS Continued - ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1998-63, Cl. PG, 6%, 3/25/27 $ 839,497 $ 853,262 Trust 2001-50, Cl. NE, 6%, 8/25/30 1,402,344 1,446,080 Trust 2001-70, Cl. LR, 6%, 9/25/30 1,217,334 1,246,834 Trust 2001-70, Cl. PD, 6%, 3/25/29 1,240,000 1,262,504 Trust 2001-72, Cl. NH, 6%, 4/25/30 1,070,000 1,100,814 Trust 2001-74, Cl. PD, 6%, 5/25/30 430,000 440,082 Trust 2002-50, Cl. PD, 6%, 9/25/27 950,000 970,222 Trust 2002-73, Cl. PA, 5%, 1/25/17 964,539 970,270 Trust 2002-77, Cl. WF, 1.49%, 12/18/32 3 975,855 979,083 Trust 2002-94, Cl. MA, 4.50%, 8/25/09 1,724,472 1,746,702 Trust 2003-81, Cl. PA, 5%, 2/25/12 564,726 576,579 - ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates Interest-Only Stripped Mtg.-Backed Security: Trust 2002-47, Cl. NS, 9.188%, 4/25/32 5 2,211,005 215,214 Trust 2002-51, Cl. S, 9.188%, 8/25/32 5 2,030,051 194,548 - ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 2002-52, Cl. SD, 13.61%, 9/25/32 5 2,696,732 237,626 Trust 2002-9, Cl. MS, 9.507%, 3/25/32 5 1,502,486 138,715 Trust 222, Cl. 2, (7.852)%, 6/1/23 5 1,960,668 312,442 Trust 240, Cl. 2, (8.424)%, 9/1/23 5 4,428,416 726,398 Trust 252, Cl. 2, (10.24)%, 11/1/23 5 2,208,816 401,125 Trust 254, Cl. 2, (7.012)%, 1/1/24 5 1,112,501 185,352 Trust 273, Cl. 2, (6.783)%, 7/1/26 5 673,465 104,502 - ----------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 4.375%, 3/20/26 70,187 71,337 7%, 4/15/26 539,153 576,477 7.50%, 5/15/27 2,289,725 2,467,082 - ----------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 2002-15, Cl. SM, 23.249%, 2/16/32 5 2,027,731 209,238 - ----------------------------------------------------------------------------------------------------------------------- Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 1,362,000 1,608,368 - ----------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg Pass-Through Certificates: Series 1996-B, Cl. 1, 6.996%, 4/25/26 2,3 44,279 39,851 Series 1996-C1, Cl. F, 8.455%, 1/20/06 2,3 250,000 247,500 - ----------------------------------------------------------------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., Collateralized Mtg Obligations Pass-Through Certificates, Series 2003-AR7, Cl. A1, 1.507%, 8/25/33 3 791,495 792,215 -------------- Total Mortgage-Backed Obligations (Cost $207,163,360) 207,714,915
17 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--8.1% - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank Unsec. Bonds, Series EY06, 5.25%, 8/15/06 $ 2,476,000 $ 2,662,408 - ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. Unsec. Nts.: 2.875%, 12/15/06 1,685,000 1,719,099 4.50%, 1/15/13 1,270,000 1,307,300 4.875%, 11/15/13 945,000 992,121 5.50%, 7/15/06 17,200,000 18,578,477 6.625%, 9/15/09 475,000 554,278 6.875%, 9/15/10 1,000,000 1,189,453 - ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4.25%, 7/15/07 7,750,000 8,201,197 6%, 5/15/11 4,240,000 4,835,775 7.25%, 1/15/10-5/15/30 7,130,000 8,714,124 - ----------------------------------------------------------------------------------------------------------------------- Tennessee Valley Authority Bonds: 5.375%, 11/13/08 685,000 754,752 7.125%, 5/1/30 603,000 765,912 Series C, 4.75%, 8/1/13 395,000 411,935 Series C, 6%, 3/15/13 380,000 432,407 - ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 5.375%, 2/15/31 2,978,000 3,246,952 6.50%, 11/15/26 510,000 627,579 STRIPS, 3.37%, 2/15/11 6 2,019,000 1,589,595 STRIPS, 3.86%, 2/15/13 6 2,098,000 1,476,388 - ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 1.875%, 1/31/06 1,161,000 1,169,074 3%, 2/15/09 794,000 802,871 4%, 2/15/14 2,607,000 2,642,033 5%, 2/15/11 275,000 303,660 5.25%, 5/15/04 135,000 135,728 5.75%, 8/15/10 1,131,000 1,298,883 -------------- Total U.S. Government Obligations (Cost $63,272,609) 64,412,001 - ----------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--0.1% - ----------------------------------------------------------------------------------------------------------------------- United Mexican States Nts., 7.50%, 1/14/12 (Cost $735,869) 665,000 774,725 - ----------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES--8.9% - ----------------------------------------------------------------------------------------------------------------------- ABN Amro Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93 500,000 581,251 - ----------------------------------------------------------------------------------------------------------------------- Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 555,000 610,874 - ----------------------------------------------------------------------------------------------------------------------- Allied Waste North America, Inc., 8.875% Sr. Nts., Series B, 4/1/08 740,000 834,350 - ----------------------------------------------------------------------------------------------------------------------- American Honda Finance Corp., 3.85% Nts., 11/6/08 425,000 436,658 - ----------------------------------------------------------------------------------------------------------------------- AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 1,200,000 1,365,382 - ----------------------------------------------------------------------------------------------------------------------- AXA, 8.60% Unsec. Sub. Nts., 12/15/30 1,030,000 1,359,217 - ----------------------------------------------------------------------------------------------------------------------- Bank of America Corp., 7.80% Jr. Unsec. Sub. Nts., 2/15/10 500,000 607,815 - ----------------------------------------------------------------------------------------------------------------------- Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 140,000 162,420 - ----------------------------------------------------------------------------------------------------------------------- Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 770,000 864,325
18 | OPPENHEIMER BALANCED FUND
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ----------------------------------------------------------------------------------------------------------------------- Boeing Capital Corp.: 6.50% Nts., 2/15/12 8 $ 1,000,000 $ 1,128,914 7.375% Sr. Nts., 9/27/10 730,000 867,431 - ----------------------------------------------------------------------------------------------------------------------- British Telecommunications plc, 7.875% Nts., 12/15/05 1,070,000 1,173,605 - ----------------------------------------------------------------------------------------------------------------------- Caesars Entertainment, Inc., 7% Sr. Unsec. Sub. Nts., 7/15/04 685,000 695,275 - ----------------------------------------------------------------------------------------------------------------------- CenterPoint Energy, Inc.: 5.875% Nts., 6/1/08 980,000 1,019,154 8.125% Unsec. Nts., Series B, 7/15/05 335,000 358,369 - ----------------------------------------------------------------------------------------------------------------------- CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 1,000,000 1,209,676 - ----------------------------------------------------------------------------------------------------------------------- Citigroup, Inc., 6.875% Unsec. Nts., 2/15/98 550,000 640,987 - ----------------------------------------------------------------------------------------------------------------------- Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 399,000 442,469 - ----------------------------------------------------------------------------------------------------------------------- Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93 440,000 539,818 - ----------------------------------------------------------------------------------------------------------------------- Conectiv, Inc., 5.30% Unsec. Unsub. Nts., Series B, 6/1/05 230,000 238,548 - ----------------------------------------------------------------------------------------------------------------------- CSX Corp., 6.25% Unsec. Nts., 10/15/08 780,000 872,378 - ----------------------------------------------------------------------------------------------------------------------- D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 710,000 812,950 - ----------------------------------------------------------------------------------------------------------------------- DaimlerChrysler North America Holding Corp., 4.75% Unsec. Nts., 1/15/08 1,525,000 1,591,449 - ----------------------------------------------------------------------------------------------------------------------- Delphi Corp., 6.55% Nts., 6/15/06 705,000 761,239 - ----------------------------------------------------------------------------------------------------------------------- Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 1,050,000 1,291,015 - ----------------------------------------------------------------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 1,2,9 1,400,000 350,000 - ----------------------------------------------------------------------------------------------------------------------- Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 725,000 883,808 - ----------------------------------------------------------------------------------------------------------------------- DTE Energy Co.: 6% Sr. Unsec. Unsub. Nts., 6/1/04 365,000 367,529 6.375% Sr. Nts., 4/15/33 855,000 863,818 - ----------------------------------------------------------------------------------------------------------------------- EOP Operating LP: 6.763% Sr. Unsec. Nts., 6/15/07 295,000 330,433 8.375% Nts., 3/15/06 560,000 625,046 - ----------------------------------------------------------------------------------------------------------------------- FedEx Corp., 2.65% Nts., 4/1/07 7 1,290,000 1,289,427 - ----------------------------------------------------------------------------------------------------------------------- FirstEnergy Corp., 5.50% Sr. Unsub. Nts., Series A, 11/15/06 845,000 899,135 - ----------------------------------------------------------------------------------------------------------------------- Ford Motor Co.: 7.70% Unsec. Debs., 5/15/97 500,000 482,101 8.90% Unsec. Unsub. Debs., 1/15/32 285,000 327,736 - ----------------------------------------------------------------------------------------------------------------------- France Telecom SA: 9% Sr. Unsec. Nts., 3/1/11 690,000 844,069 9.50% Sr. Unsec. Nts., 3/1/31 3 360,000 488,353 - ----------------------------------------------------------------------------------------------------------------------- Franklin Resources, Inc., 3.70% Nts., 4/15/08 585,000 594,409 - ----------------------------------------------------------------------------------------------------------------------- Gap, Inc. (The), 6.90% Nts., 9/15/07 695,000 774,925 - ----------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 6.875% Unsec. Unsub. Nts., 8/28/12 1,980,000 2,142,099 - ----------------------------------------------------------------------------------------------------------------------- General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 550,000 625,743 - ----------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The), 7.80% Sr. Unsec. Unsub. Nts., Series B, 1/28/10 500,000 605,635 - ----------------------------------------------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 480,000 483,132
19 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ----------------------------------------------------------------------------------------------------------------------- Health Net, Inc., 8.375% Sr. Unsec. Unsub. Nts., 4/15/11 $ 665,000 $ 819,853 - ----------------------------------------------------------------------------------------------------------------------- Hertz Corp. (The), 7.625% Sr. Nts., 6/1/12 2,165,000 2,386,839 - ----------------------------------------------------------------------------------------------------------------------- Huntsman Corp./ICI Chemical Co. plc, 13.08% Sr. Unsec. Disc. Nts., 12/31/09 6 800,000 372,000 - ----------------------------------------------------------------------------------------------------------------------- Hutchison Whampoa International Ltd., 7.45% Sr. Bonds, 11/24/33 7 685,000 719,584 - ----------------------------------------------------------------------------------------------------------------------- IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,2,9 600,000 -- - ----------------------------------------------------------------------------------------------------------------------- John Hancock Global Funding II, 7.90% Nts., 7/2/10 7 1,300,000 1,583,379 - ----------------------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 10.875% Sr. Nts., Series B, 10/15/06 1,2,9 250,000 230,000 - ----------------------------------------------------------------------------------------------------------------------- Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 810,000 910,536 - ----------------------------------------------------------------------------------------------------------------------- Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 1,255,000 1,450,011 - ----------------------------------------------------------------------------------------------------------------------- Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10 1,2,9 300,000 45,000 12.50% Sr. Nts., 4/15/10 1,2,9 600,000 108,000 - ----------------------------------------------------------------------------------------------------------------------- Liberty Media Corp., 3.50% Nts., 9/25/06 825,000 840,696 - ----------------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 4.125% Nts., Series C, 1/15/09 960,000 991,170 - ----------------------------------------------------------------------------------------------------------------------- Morgan Stanley, 6.60% Nts., 4/1/12 760,000 875,175 - ----------------------------------------------------------------------------------------------------------------------- Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 515,000 525,097 - ----------------------------------------------------------------------------------------------------------------------- NiSource Finance Corp.: 3.20% Nts., 11/1/06 250,000 256,129 7.875% Sr. Unsec. Nts., 11/15/10 1,070,000 1,295,797 - ----------------------------------------------------------------------------------------------------------------------- Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 870,000 1,029,779 - ----------------------------------------------------------------------------------------------------------------------- Orbcomm Global LP, Escrow Shares, 8/15/04 2,10 155,000 -- - ----------------------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 510,000 637,500 - ----------------------------------------------------------------------------------------------------------------------- PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 7 620,000 618,924 - ----------------------------------------------------------------------------------------------------------------------- Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 7 1,215,000 1,602,047 - ----------------------------------------------------------------------------------------------------------------------- Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 7 1,285,000 1,628,481 - ----------------------------------------------------------------------------------------------------------------------- PSEG Energy Holdings, 7.75% Unsec. Nts., 4/16/07 810,000 860,625 - ----------------------------------------------------------------------------------------------------------------------- Pulte Homes, Inc., 8.375% Sr. Nts., 8/15/04 310,000 315,179 - ----------------------------------------------------------------------------------------------------------------------- R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08 750,000 959,606 - ----------------------------------------------------------------------------------------------------------------------- Raytheon Co., 6.50% Unsec. Nts., 7/15/05 1,155,000 1,223,583 - ----------------------------------------------------------------------------------------------------------------------- Safeway, Inc.: 2.50% Nts., 11/1/05 250,000 251,393 3.80% Sr. Unsec. Nts., 8/15/05 1,515,000 1,550,395 - ----------------------------------------------------------------------------------------------------------------------- Sprint Capital Corp., 8.75% Nts., 3/15/32 725,000 919,645 - ----------------------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc., 10% Sr. Sec. Nts., 12/19/07 2 136,379 132,288 - ----------------------------------------------------------------------------------------------------------------------- TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 1,965,000 2,612,188 - ----------------------------------------------------------------------------------------------------------------------- TECO Energy, Inc., 10.50% Sr. Unsec. Nts., 12/1/07 680,000 795,600 - ----------------------------------------------------------------------------------------------------------------------- Telefonos de Mexico SA, 8.25% Sr. Unsec. Nts., 1/26/06 665,000 733,229 - ----------------------------------------------------------------------------------------------------------------------- Time Warner Cos., Inc., 9.125% Debs., 1/15/13 695,000 896,651 - ----------------------------------------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 308,000 417,454
20 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - --------------------------------------------------------------------------------
PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued - ----------------------------------------------------------------------------------------------------------------------- Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 $ 770,000 $ 873,950 - ----------------------------------------------------------------------------------------------------------------------- Tyco International Group SA: 5.875% Unsec. Unsub. Nts., 11/1/04 167,000 170,818 6.375% Nts., 10/15/11 1,000,000 1,095,426 6.75% Sr. Unsub. Nts., 2/15/11 1,380,000 1,538,875 - ----------------------------------------------------------------------------------------------------------------------- Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 945,000 1,030,763 - ----------------------------------------------------------------------------------------------------------------------- Waste Management, Inc.: 7% Sr. Nts., 7/15/28 290,000 323,395 7.375% Sr. Unsub. Nts., 8/1/10 650,000 766,832 - ----------------------------------------------------------------------------------------------------------------------- Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 1,180,000 1,224,274 -------------- Total Non-Convertible Corporate Bonds and Notes (Cost $68,143,311) 71,061,133 - ----------------------------------------------------------------------------------------------------------------------- STRUCTURED NOTES--1.6% - ----------------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts., Series 2003-1, 2.89%, 1/7/05 2,3 4,250,000 4,208,775 - ----------------------------------------------------------------------------------------------------------------------- JPMorgan Chase Bank, TRAC-X NA High Yield T2 Credit Linked Bonds, 6.05%, 3/25/09 7 3,865,000 3,961,625 - ----------------------------------------------------------------------------------------------------------------------- UBS AG, High Grade Credit Linked Nts., 2.753%, 12/10/04 2,3 4,250,000 4,313,750 -------------- Total Structured Notes (Cost $12,365,000) 12,484,150 - ----------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--10.8% 11 - ----------------------------------------------------------------------------------------------------------------------- Undivided interest of 5.591% in joint repurchase agreement (Principal Amount/Market Value $1,535,928,000, with a maturity value of $1,535,971,945) with PaineWebber, Inc., 1.03%, dated 3/31/04, to be repurchased at $85,876,457 on 4/1/04, collateralized by Federal National Mortgage Assn., 4.50%, 10/1/33--3/1/34, with a value of $1,568,601,295 (Cost $85,874,000) 85,874,000 85,874,000 - ----------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $803,465,235) 117.9% 940,485,456 - ----------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (17.9) (143,078,803) ---------------------------------- NET ASSETS 100.0% $ 797,406,653 ==================================
21 | OPPENHEIMER BALANCED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Identifies issues considered to be illiquid. See Note 9 of Notes to Financial Statements. 3. Represents the current interest rate for a variable or increasing rate security. 4. When-issued security to be delivered and settled after March 31, 2004. See Note 1 of Notes to Financial Statements. 5. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $3,657,461 or 0.46% of the Fund's net assets as of March 31, 2004. 6. Zero coupon bond reflects effective yield on the date of purchase. 7. 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 Trustees. These securities amount to $11,403,467 or 1.43% of the Fund's net assets as of March 31, 2004. 8. Securities with an aggregate market value of $1,128,914 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 9. Issue is in default. See Note 1 of Notes to Financial Statements. 10. Received as the result of issuer reorganization. Currently has minimal market value. 11. The Fund may have elements of risk due to concentrated investments. Such concentrations may subject the Fund to additional risks. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 22 | OPPENHEIMER BALANCED FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - --------------------------------------------------------------------------------
MARCH 31, 2004 - ----------------------------------------------------------------------------------------------------------- ASSETS - ----------------------------------------------------------------------------------------------------------- Investments, at value (including cost and market value of $85,874,000 in repurchase agreements) (including securities loaned of approximately $44,406,000) (cost $803,465,235) - --see accompanying statement of investments $940,485,456 - ----------------------------------------------------------------------------------------------------------- Cash 73,579 - ----------------------------------------------------------------------------------------------------------- Collateral for securities loaned 45,248,900 - ----------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 3,327,807 Shares of beneficial interest sold 1,011,100 Investments sold on a when-issued basis 525,347 Futures margins 227,172 Swap contracts 99,118 Other 19,510 ------------ Total assets 991,017,989 - ----------------------------------------------------------------------------------------------------------- LIABILITIES - ----------------------------------------------------------------------------------------------------------- Return of collateral for securities loaned 45,248,900 - ----------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased on a when-issued basis 147,087,671 Shares of beneficial interest redeemed 502,141 Distribution and service plan fees 402,023 Trustees' compensation 141,660 Shareholder communications 108,337 Transfer and shareholder servicing agent fees 101,567 Other 19,037 ------------ Total liabilities 193,611,336 - ----------------------------------------------------------------------------------------------------------- NET ASSETS $797,406,653 ============ - ----------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ----------------------------------------------------------------------------------------------------------- Paid-in capital $648,195,924 - ----------------------------------------------------------------------------------------------------------- Accumulated net investment income 2,130,917 - ----------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 9,935,658 - ----------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 137,144,154 ------------ NET ASSETS $797,406,653 ============
23 | OPPENHEIMER BALANCED FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ---------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $649,009,057 and 46,776,617 shares of beneficial interest outstanding) $13.87 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $14.72 - ---------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $80,564,470 and 5,898,837 shares of beneficial interest outstanding) $13.66 - ---------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $62,428,945 and 4,552,402 shares of beneficial interest outstanding) $13.71 - ---------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $5,404,181 and 392,084 shares of beneficial interest outstanding) $13.78
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER BALANCED FUND STATEMENT OF OPERATIONS Unaudited - --------------------------------------------------------------------------------
For the Six Months Ended March 31, 2004 - ---------------------------------------------------------------------------------------- INVESTMENT INCOME - ---------------------------------------------------------------------------------------- Interest $ 4,751,140 - ---------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $96,927) 2,973,828 - ---------------------------------------------------------------------------------------- Portfolio lending fees 18,586 ------------ Total investment income 7,743,554 - ---------------------------------------------------------------------------------------- EXPENSES - ---------------------------------------------------------------------------------------- Management fees 2,672,526 - ---------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 600,726 Class B 363,545 Class C 274,539 Class N 12,101 - ---------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 405,929 Class B 94,458 Class C 50,316 Class N 8,399 - ---------------------------------------------------------------------------------------- Shareholder communications: Class A 38,912 Class B 9,368 Class C 4,120 Class N 424 - ---------------------------------------------------------------------------------------- Trustees' compensation 17,968 - ---------------------------------------------------------------------------------------- Custodian fees and expenses 8,938 - ---------------------------------------------------------------------------------------- Other 58,116 ------------ Total expenses 4,620,385 Less reduction to custodian expenses (1,340) Less voluntary waiver of transfer and shareholder servicing agent fees: Class A (26,168) Class B (1,925) Class C (818) Class N (26) ------------ Net expenses 4,590,108 - ---------------------------------------------------------------------------------------- NET INVESTMENT INCOME 3,153,446
25 | OPPENHEIMER BALANCED FUND STATEMENT OF OPERATIONS Unaudited / Continued - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN - ----------------------------------------------------------------------------------------- Net realized gain on: Investments (including premiums on options exercised) $ 36,549,300 Closing of futures contracts 3,428,552 Closing and expiration of option contracts written 428,486 Foreign currency transactions 213,602 ------------- Net realized gain 40,619,940 - ----------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 31,452,289 Translation of assets and liabilities denominated in foreign currencies 103,661 Futures contracts (1,251,588) ------------- Net change in unrealized appreciation 30,304,362 - ----------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 74,077,748 =============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER BALANCED FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED MARCH 31, 2004 SEPTEMBER 30, (UNAUDITED) 2003 - ------------------------------------------------------------------------------------------------------ OPERATIONS - ------------------------------------------------------------------------------------------------------ Net investment income $ 3,153,446 $ 10,168,008 - ------------------------------------------------------------------------------------------------------ Net realized gain (loss) 40,619,940 (25,256,881) - ------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) 30,304,362 137,802,225 ------------------------------------ Net increase in net assets resulting from operations 74,077,748 122,713,352 - ------------------------------------------------------------------------------------------------------ DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ------------------------------------------------------------------------------------------------------ Dividends from net investment income: Class A (890,848) (9,895,590) Class B -- (549,555) Class C -- (411,935) Class N (2,442) (26,078) - ------------------------------------------------------------------------------------------------------ Tax return of capital distribution: Class A -- (1,438,201) Class B -- (158,899) Class C -- (105,519) Class N -- (4,407) - ------------------------------------------------------------------------------------------------------ BENEFICIAL INTEREST TRANSACTIONS - ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 12,287,361 (441,692) Class B 8,848,971 (9,391) Class C 10,171,700 7,175,471 Class N 1,610,369 2,289,286 - ------------------------------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------------------------------ Total increase 106,102,859 119,136,842 - ------------------------------------------------------------------------------------------------------ Beginning of period 691,303,794 572,166,952 ------------------------------------ End of period (including accumulated net investment income (loss) of $2,130,917 and $(129,239), respectively) $ 797,406,653 $ 691,303,794 ====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER BALANCED FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED MARCH 31, 2004 SEPT. 30, CLASS A (UNAUDITED) 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 12.55 $ 10.51 $ 12.14 $ 14.23 $ 14.06 $ 13.69 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .07 .21 .35 .43 .53 .54 Net realized and unrealized gain (loss) 1.27 2.08 (1.29) (1.40) 1.21 1.59 ----------------------------------------------------------------------------------- Total from investment operations 1.34 2.29 (.94) (.97) 1.74 2.13 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.02) (.22) (.31) (.38) (.48) (.54) Tax return of capital distribution -- (.03) -- -- -- -- Distributions from net realized gain -- -- (.38) (.74) (1.09) (1.22) ----------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.02) (.25) (.69) (1.12) (1.57) (1.76) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 13.87 $ 12.55 $ 10.51 $ 12.14 $ 14.23 $ 14.06 =================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 1 10.67% 21.98% (8.58)% (7.27)% 13.31% 16.29% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $649,009 $575,799 $483,311 $562,281 $639,648 $635,603 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $622,297 $523,477 $570,796 $626,251 $644,356 $660,113 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 0.99% 1.78% 2.84% 3.16% 3.71% 3.70% Total expenses 1.06% 3,4 1.11% 3 1.15% 3 1.01% 3 1.13% 3 1.09% 3 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 32% 205% 31% 40% 33% 15%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER BALANCED FUND
SIX MONTHS YEAR ENDED ENDED MARCH 31, 2004 SEPT. 30, CLASS B (UNAUDITED) 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 12.40 $ 10.38 $ 12.01 $ 14.08 $ 13.93 $ 13.57 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .01 .09 .25 .31 .41 .41 Net realized and unrealized gain (loss) 1.25 2.07 (1.29) (1.36) 1.19 1.58 ----------------------------------------------------------------------------------- Total from investment operations 1.26 2.16 (1.04) (1.05) 1.60 1.99 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.11) (.21) (.28) (.36) (.41) Tax return of capital distribution -- (.03) -- -- -- -- Distributions from net realized gain -- -- (.38) (.74) (1.09) (1.22) ----------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.14) (.59) (1.02) (1.45) (1.63) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 13.66 $ 12.40 $ 10.38 $ 12.01 $ 14.08 $ 13.93 =================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 1 10.16% 20.91% (9.38)% (7.96)% 12.30% 15.35% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 80,564 $ 64,944 $ 54,757 $ 63,487 $ 66,777 $ 68,875 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 72,730 $ 57,836 $ 64,702 $ 67,959 $ 66,956 $ 73,673 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 0.04% 0.81% 2.02% 2.37% 2.92% 2.85% Total expenses 2.02% 3,4 2.08% 3 1.97% 3 1.81% 3 1.94% 3 1.93% 3 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 32% 205% 31% 40% 33% 15%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER BALANCED FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED MARCH 31, 2004 SEPT. 30, CLASS C (UNAUDITED) 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 12.44 $ 10.42 $ 12.06 $ 14.13 $ 13.97 $ 13.61 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .02 .11 .24 .31 .41 .42 Net realized and unrealized gain (loss) 1.25 2.06 (1.29) (1.37) 1.20 1.57 ----------------------------------------------------------------------------------- Total from investment operations 1.27 2.17 (1.05) (1.06) 1.61 1.99 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.12) (.21) (.27) (.36) (.41) Tax return of capital distribution -- (.03) -- -- -- -- Distributions from net realized gain -- -- (.38) (.74) (1.09) (1.22) ----------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.15) (.59) (1.01) (1.45) (1.63) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 13.71 $ 12.44 $ 10.42 $ 12.06 $ 14.13 $ 13.97 =================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 1 10.21% 20.98% (9.41)% (8.00)% 12.35% 15.28% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 62,429 $ 47,212 $ 33,300 $ 36,171 $ 38,522 $ 38,978 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 54,950 $ 38,407 $ 37,412 $ 39,030 $ 38,597 $ 43,701 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 0.12% 0.90% 2.03% 2.37% 2.92% 2.85% Total expenses 1.92% 3,4 1.98% 3 1.96% 3 1.81% 3 1.94% 3 1.93% 3 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 32% 205% 31% 40% 33% 15%
1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Reduction to custodian expenses less than 0.01%. 4. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER BALANCED FUND
SIX MONTHS YEAR ENDED ENDED MARCH 31, 2004 SEPT. 30, CLASS N (UNAUDITED) 2003 2002 2001 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.49 $ 10.48 $ 12.13 $ 13.67 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .05 .20 .39 .24 Net realized and unrealized gain (loss) 1.25 2.01 (1.38) (1.48) -------------------------------------------------------------------- Total from investment operations 1.30 2.21 (.99) (1.24) - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.01) (.17) (.28) (.30) Tax return of capital distribution -- (.03) -- -- Distributions from net realized gain -- -- (.38) -- -------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.01) (.20) (.66) (.30) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.78 $ 12.49 $ 10.48 $ 12.13 ==================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 10.38% 21.27% (8.94)% (9.30)% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 5,404 $ 3,349 $ 798 $ 95 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 4,848 $ 1,604 $ 454 $ 12 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 0.46% 1.24% 2.49% 5.81% Total expenses 1.60% 1.76% 1.48% 1.32% Expenses after expense reimbursement or fee waiver and reduction to custodian expenses N/A 4,5 1.62% N/A 4 N/A 4 - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 32% 205% 31% 40%
1. For the period from March 1, 2001 (inception of offering) to September 30, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Balanced Fund (the Fund), formerly Oppenheimer Multiple Strategies Fund, 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 high total investment return consistent with preservation of principal. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. 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. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective foreign exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- STRUCTURED NOTES. The Fund invests in index-linked structured notes whose principal and/or interest depend on the performance of an underlying index. The structured notes are leveraged, which increases the volatility of each note's market value relative to the change in the underlying index. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of March 31, 2004, 32 | OPPENHEIMER BALANCED FUND the market value of these securities comprised 1.6% of the Fund's net assets, and resulted in unrealized gains of $119,150. - -------------------------------------------------------------------------------- SECURITIES ON A WHEN ISSUED BASIS. Delivery and payment for securities that have been purchased by the Fund on a when issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when issued basis may increase the volatility of the Fund's net asset value to the extent the Fund executes such purchases while remaining substantially fully invested. As of March 31, 2004, the Fund had entered into net when issued commitments of $146,562,324. In connection with its ability to purchase securities on a when issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the incremental difference between the forward purchase and sale of each forward roll as fee income or realized gain (loss) on investments. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, market fluctuations and 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. As of March 31, 2004, securities with an aggregate market value of $733,000, representing 0.09% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. 33 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. Secured by U.S. government securities, these balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily due to the recognition of paydown gains and losses as capital gain or loss for tax purposes and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. As of March 31, 2004, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of zero. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended March 31, 2004 and the year ended September 30, 2003, the Fund used $24,497,839 and $0, respectively, of carryforward to offset capital gains realized. As of September 30, 2003, the Fund had available for federal income tax purposes post-October losses of $20,597,738 and unused capital loss carryforwards as follows: 34 | OPPENHEIMER BALANCED FUND EXPIRING -------------------------- 2009 $ 28,532 2011 3,871,569 ---------- Total $3,900,101* ========== *Includes $28,532 from capital loss carryforward acquired in the September 4, 2003 merger with Oppenheimer Select Managers QM Active Balanced Fund. - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the six months ended March 31, 2004, the Fund's projected benefit obligations were increased by $6,886 and payments of $10,442 were made to retired trustees, resulting in an accumulated liability of $121,974 as of March 31, 2004. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or are invested in other Oppenheimer funds selected by the Trustee. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared and paid quarterly. Capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable, represents earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 35 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED MARCH 31, 2004 YEAR ENDED SEPTEMBER 30, 2003 SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------------- CLASS A Sold 3,369,975 $ 45,414,441 4,105,517 $ 47,076,255 Dividends and/or distributions reinvested 57,107 798,338 867,685 10,173,237 Acquisition-Note 11 -- -- 460,912 5,789,058 Redeemed (2,517,425) (33,925,418) (5,572,268) (63,480,242) ------------------------------------------------------------------------ Net increase (decrease) 909,657 $ 12,287,361 (138,154) $ (441,692) ======================================================================== - -------------------------------------------------------------------------------------------------------- CLASS B Sold 1,506,159 $ 20,018,018 1,845,061 $ 21,105,571 Dividends and/or distributions reinvested -- -- 56,269 654,993 Acquisition-Note 11 -- -- 61,992 768,077 Redeemed (845,005) (11,169,047) (2,000,366) (22,538,032) ------------------------------------------------------------------------ Net increase (decrease) 661,154 $ 8,848,971 (37,044) $ (9,391) ======================================================================== - -------------------------------------------------------------------------------------------------------- CLASS C Sold 1,054,723 $ 14,094,971 1,252,468 $ 14,407,664 Dividends and/or distributions reinvested -- -- 40,146 469,075 Acquisition-Note 11 -- -- 93,553 1,163,802 Redeemed (296,046) (3,923,271) (787,972) (8,865,070) ------------------------------------------------------------------------ Net increase 758,677 $ 10,171,700 598,195 $ 7,175,471 ======================================================================== - -------------------------------------------------------------------------------------------------------- CLASS N Sold 248,076 $ 3,303,764 170,483 $ 1,997,262 Dividends and/or distributions reinvested 173 2,417 2,505 29,692 Acquisition-Note 11 -- -- 47,795 597,438 Redeemed (124,270) (1,695,812) (28,893) (335,106) ------------------------------------------------------------------------ Net increase 123,979 $ 1,610,369 191,890 $ 2,289,286 ========================================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended March 31, 2004, were $264,049,271 and $208,728,509, respectively. - -------------------------------------------------------------------------------- 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 at an annual rate of 0.75% of the first $200 million of average annual net assets of the Fund, 0.72% of the 36 | OPPENHEIMER BALANCED FUND next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $700 million, and 0.58% of average annual net assets in excess of $1.5 billion. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the six months ended March 31, 2004, the Fund paid $545,805 to OFS for services to the Fund. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes, up to an annual rate of 0.35% of average net assets per class. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses the fees it receives from the Fund to pay brokers, dealers and other financial institutions for personal services and account maintenance services they provide for their customers who hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of these shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of up to 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at March 31, 2004 for Class B, Class C and Class N shares were $2,779,141, $1,132,966 and $83,762, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, 37 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - -------------------------------------------------------------------------------------------------------- March 31, 2004 $200,126 $387 $68,392 $2,728 $610
- -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of March 31, 2004, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or protection from changes in market value of 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 as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities. 38 | OPPENHEIMER BALANCED FUND Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported on the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of March 31, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS MARCH 31, 2004 (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Long Bonds 6/21/04 233 $26,576,563 $ 396,298 U.S. Treasury Nts., 10 yr 6/21/04 327 37,737,844 78,266 ---------- 474,564 ---------- CONTRACTS TO SELL U.S. Treasury Nts., 2 yr 6/30/04 65 13,986,172 (37,119) U.S. Treasury Nts., 5 yr 6/21/04 263 29,866,938 (414,392) ---------- (451,511) ---------- $ 23,053 ==========
- -------------------------------------------------------------------------------- 7. OPTION ACTIVITY The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. 39 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY Continued When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Contracts subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the six months ended March 31, 2004 was as follows: CALL OPTIONS ----------------------------------- NUMBER OF AMOUNT OF CONTRACTS PREMIUMS - ---------------------------------------------------------------------- Options outstanding as of September 30, 2003 6,826 $ 1,028,982 Options closed or expired (2,929) (428,486) Options exercised (3,897) (600,496) -------------------------------- Options outstanding as of March 31, 2004 -- $ -- ================================ - -------------------------------------------------------------------------------- 8. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). 40 | OPPENHEIMER BALANCED FUND As of March 31, 2004, the Fund had entered into the following total return swap agreements:
PAID BY RECEIVED BY THE FUND AT THE FUND AT NOTIONAL MARCH 31, MARCH 31, TERMINATION UNREALIZED SWAP COUNTERPARTY AMOUNT 2004 2004 DATE APPRECIATION - -------------------------------------------------------------------------------------------------------- One-Month Value of LIBOR less total return of 50 basis Lehman Brothers Deutsche Bank AG $11,582,889 points CMBS Index 6/30/04 $99,118
- -------------------------------------------------------------------------------- 9. ILLIQUID SECURITIES As of March 31, 2004, 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 March 31, 2004 was $10,831,688, which represents 1.36% of the Fund's net assets. - -------------------------------------------------------------------------------- 10. SECURITIES LENDING The Fund lends portfolio securities from time to time in order to earn additional income. In return, the Fund receives collateral in the form of US Treasury obligations or cash, against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the funds and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. As of March 31, 2004, the Fund had on loan securities valued at approximately $44,406,000. Cash of $45,248,900 was received as collateral for the loans, and has been invested in approved instruments. - -------------------------------------------------------------------------------- 11. ACQUISITION OF OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND On September 4, 2003, the Fund acquired all of the net assets of Oppenheimer Select Managers QM Active Balanced Fund, pursuant to an Agreement and Plan of Reorganization approved by the Oppenheimer Select Managers QM Active Balanced Fund shareholders on August 29, 2003. The Fund issued (at an exchange ratio of 0.743061 for Class A, 0.748082 for Class B, 0.746018 for Class C and 0.746337 for Class N of the Fund to one share of Oppenheimer Balanced Fund) 460,912, 61,992, 93,553 and 47,795 shares of beneficial interest for Class A, Class B, Class C and Class N, respectively, valued at $5,789,058, $768,077, $1,163,802 and $597,438 in exchange for the net assets, resulting in combined Class A net assets of $576,426,341, Class B net assets of $63,310,584, 41 | OPPENHEIMER BALANCED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 11. ACQUISITION OF OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND Continued Class C net assets of $45,976,371 and Class N net assets of $2,902,200 on September 4, 2003. The net assets acquired included net unrealized appreciation of $535,545 and unused capital loss carryforward of $28,532 potential utilization subject to tax limitation. The exchange qualified as a tax-free reorganization for federal income tax purposes. - -------------------------------------------------------------------------------- 12. BORROWING AND LENDING ARRANGEMENTS The Fund entered into an "interfund borrowing and lending arrangement" with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission (the SEC) to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. The SEC's order requires the Fund's Board of Trustees to adopt operating policies and procedures to administer interfund borrowing and lending. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund's Board of Trustees, based upon a recommendation by the Manager. The Fund's borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day's notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all. The Fund had no interfund borrowings or loans outstanding during the six months ended or at March 31, 2004. 42 | OPPENHEIMER BALANCED FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund will be required to file new Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The first such filing is due no later than August 31, 2004, for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov. 43 | OPPENHEIMER BALANCED FUND ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the registrant has determined that Edward V. Regan, the Chairman of the Board's Audit Committee, possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mr. Regan as the Audit Committee's financial expert. Mr. Regan is an "independent" Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not applicable to semiannual reports. ITEM 5. NOT APPLICABLE ITEM 6. SCHEDULE OF INVESTMENTS Not applicable ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At a meeting of the Board of Trustees of the registrant held on February 18, 2004, the Board adopted (1) a policy that, should the Board determine that a vacancy exists or is likely to exist on the Board, the Governance Committee of the Board, which is comprised entirely of independent trustees, shall consider any candidates for Board membership recommended by the registrant's security holders and (2) a policy that security holders wishing to submit a nominee for election to the Board may do so by mailing their submission to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street - 11th Floor, New York, NY 10281-1008, to the attention of the Chair of the Governance Committee. Prior to February 18, 2004, the Board did not have a formalized policy with respect to consideration of security holder nominees or a procedure by which security holders may make their submissions. In addition to security holder nominees, the Governance Committee may also consider nominees recommended by independent Board members or recommended by any other Board members and is authorized under its Charter, upon Board approval, to retain an executive search firm to assist in screening potential candidates. Upon Board approval, the Governance Committee may also obtain legal, financial, or other external counsel that may be necessary or desirable in the screening process. ITEM 10. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of March 31, 2004, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 2 ex99_code-240.txt EX99_CODE-240.TXT EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. Purpose of the Code This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. - -------- 1 The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. Prohibitions The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii)fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. Reports of Conflicts of Interests If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. Waivers Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: : (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii)will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. Reporting Requirements (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. Annual Renewal At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. Sanctions Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. Administration and Construction (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator - --------- 2 An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. Required Records The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. Amendments and Modifications This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. Confidentiality. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS Each Oppenheimer or Centennial fund Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer Personnel of OFI who by virtue of their jobs perform critical financial and accounting functions for OFI on behalf of a Fund, including: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ex99_302cert-240.txt EX99_302CERT-240.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: -------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer Balanced Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 5/14/04 /s/John V. Murphy ---------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: --------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer Balanced Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 5/14/04 /s/Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 4 ex99_906cert-240.txt EX99_906CERT-240.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Chief Executive Officer, and Brian W. Wixted, Chief Financial Officer, of Oppenheimer Balanced Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended March 31, 2004 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Balanced Fund Oppenheimer Balanced Fund /s/John V. Murphy /s/Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 5/14/04 Date: 5/14/04 -----END PRIVACY-ENHANCED MESSAGE-----