[COVER]
Annual Report October 31, 1997
O P P E N H E I M E R
Quest Value
Fund, Inc.
[Graphic of Calculator]
[OppenheimerFunds Logo]
THE RIGHT WAY TO INVEST
<PAGE>
Report highlights
- --------------------------------------------------------------------------------
[bullet] Within the insurance industry we found many highly competitive
companies that dominated niche markets and were able to increase their earnings.
[bullet] We employ a "bottom up" strategy to stock selection, carefully
evaluating each company on its individual merits rather than attempting to
maintain a percentage of holdings in any one sector.
Contents
3 President's Letter
4 Fund Performance
6 An Interview with the Fund's Manager
11 Statement of Investments
14 Statement of Assets & Liabilities
16 Statement of Operations
17 Statements of Changes in Net Assets
18 Financial Highlights
21 Notes to Financial Statements
27 Report of Independent Accountants
28 Federal Income Tax Information
29 Shareholder Meeting
30 Officers & Directors
32 Information & Services
Avg Annual Total Returns
For the 1-year period ended
10/31/97 (without sales charges)(1)
Class A
25.41%
Class B
24.71%
Class C
24.79%
Class Y
(Since inception on 12/16/96)
24.55%
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2 Oppenheimer Quest Value Fund, Inc.
<PAGE>
[PICTURE OF BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer Quest Value Fund, Inc.
Dear shareholder,
- --------------------------------------------------------------------------------
As you are no doubt aware, during the end of October and early November many
stock markets around the world recorded their all-time largest point declines,
followed by subsequent gains and continued volatility, leaving investors
uncertain about what would occur next.
To put those events in focus, let's look at a "snapshot" of the two-week
time period. Sharp declines in the overseas stock markets, particularly in Asia,
triggered a series of sell-offs throughout Europe, Latin America and the United
States. In response, the U.S. stock market, as measured by the Dow Jones
Industrial Average, dropped 554 points on October 27, its largest point decline
in history. However, almost as quickly, the U.S. stock market bounced back over
the succeeding few days, regaining nearly all of its losses.
While no one could have predicted the timing or extent of these
fluctuations, many analysts, including our fund managers here at
OppenheimerFunds, had warned of a correction for several months. We believed
that U.S. valuations were too high, stocks were expensive relative to bonds,
recent corporate earnings were somewhat disappointing and that Federal Reserve
Chairman Alan Greenspan could possibly seek a short-term interest rate hike.
While only one short-term interest rate hike occurred in March of 1997, the
other factors have held true.
We'd like to take this opportunity to remind shareholders that stock
market volatility is a normal and expected part of the business cycle. As Alan
Greenspan suggested, in years to come this period will likely be remembered as a
positive change for a market that was growing too quickly.
For frequent market updates, please visit our website at
www.oppenheimerfunds.com or call 1-800-835-3104 to listen to our recorded
messages. In the meantime, thank you for your confidence in OppenheimerFunds,
The Right Way to Invest. We look forward to helping you reach your investment
goals in the future.
/s/ Bridget A. Macaskill
- ------------------------
Bridget A. Macaskill
November 21, 1997
3 Oppenheimer Quest Value Fund, Inc.
<PAGE>
Performance update
- --------------------------------------------------------------------------------
Oppenheimer Quest Value Fund, Inc. has performed very well during the period.
In fact, for the one-year period ended October 31, 1997, its Class A shares
provided an average annual total return of 25.41%, without sales charges.(2)
Growth of $10,000
Over five years
(without sales charges)(3)
Oppenheimer Quest
Value Fund, Inc.
Class A shares S&P 500 Index
10000 10000
10738 10503
11010 10982
11174 11015
11420 11300
11441 11562
11155 11123
11327 11170
11822 11716
11538 11714
12816 12855
14145 14082
15330 15201
15820 16117
17241 16982
17751 17744
18716 18292
19865 19817
20053 20348
22767 23901
24412 25692
Avg Annual Total Returns
For the Period Ended 9/30/97(1)
Class A
1 year 5 year 10 year
22.93% 18.13% 13.29%
Class B
Since
1 year 5 year Inception
24.76% N/A 19.24%
Class C
Since
1 year 5 year Inception
28.84% N/A 19.52%
Class Y
Since
1 year 5 year Inception
N/A N/A 26.30%
Cumulative Total Return
For the Period Ended 9/30/97(1)
Class A
5 year
130.08% $22,886(3)
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 4/30/80. The Fund's maximum
sales charge for Class A shares was lower prior to 11/24/95, so actual
performance may have been higher. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 2% (since inception on
9/1/93). Class C returns for the one-year result include the contingent deferred
sales charge of 1%. Class C shares have an inception date of 9/1/93. Class Y
shares were first publicly offered on 12/16/96 and are not available for sale to
individual shareholders. An explanation of the different performance
calculations is in the Fund's prospectus. Class B and C shares are subject to an
annual 0.75% asset-based sales charge and Class A shares are subject to an
annual 0.25% asset-based sales charge. OppenheimerFunds, Inc. became the Fund's
advisor on 11/22/95. The Fund's subadvisor is OpCap Advisors, which was the
Fund's advisor prior to 11/22/95. The portfolio manager is employed by the
Fund's subadvisor.
4 Oppenheimer Quest Value Fund, Inc.
<PAGE>
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer Quest Value Fund, Inc. is for investors looking for capital
appreciation.
What We Look For
[bullet] Quality established businesses.
[bullet] Management motivated to work for shareholders.
[bullet] Companies believed to be undervalued.
[bullet] High return on capital vs. high growth.
Top 10 Stock Holdings(4)
..............................................................
ACE Ltd. 8.0% Freddie Mac 3.3%
..............................................................
EXEL Ltd. 7.7 Tenet Healthcare Corp. 3.3
..............................................................
Lockheed Martin Corp. 4.6 Wells Fargo & Co. 3.2
..............................................................
Caterpillar, Inc. 4.3 McDonald's Corp. 3.0
..............................................................
General Re Corp. 3.6 LucasVarity plc, ADR 2.8
..............................................................
Sector Weightings(4)
[PIE CHART]
Financial 41.2%
Industrial 21.8
Consumer Cyclical 13.4
Technology 9.6
Consumer Non-Cyclical 7.5
Basic Materials 6.5
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
3. Results of a hypothetical $10,000 investment in Class A shares on September
30, 1992. The S&P 500 Index is a broad-based unmanaged stock index including
daily reinvestment of dividends, and cannot be purchased directly by investors.
Past performance does not guarantee future results.
4. Portfolio is subject to change. Percentages are as of October 31, 1997 and
are based on total market value of stock holdings.
5 Oppenheimer Quest Value Fund, Inc.
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How has the Fund performed during the 12-month period ended October 31, 1997?
Oppenheimer Quest Value Fund, Inc. Class A shares provided an average annual
total return, without sales charges, of 25.41% for the one-year period ended
October 31, 1997.(1)
Why did stock prices rise and fall so sharply during the period? The stock
market has advanced close to 30% in the one- year period which ended October 31,
1997, and over 90% in the past three years. The two periods of modest decline in
the past year seem to have been inspired by fears of excessive growth which
could lead to inflation, and, later in the year, by fears that the deflation
which occurred in Asia could spread to the United States. Such corrections are a
necessary aspect of allowing economic fundamentals and financial markets to come
more closely into balance. These adjustments now occur more rapidly than they
did a few years ago, but from a longer- term perspective, the market does not
seem significantly more volatile.
It is important to understand, however, that Oppenheimer Quest Value
Fund, Inc. is primarily interested in the fundamental financial attributes of
individual companies, not of the market as a whole, and not even of industry
sectors within the market. The portfolio is constructed one stock at a time,
with an intense focus on identifying companies that can sustain a superior
return on invested capital, yet are selling in the market at modest valuations.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
[CALLOUT]
"We manage
the portfolio
one stock
at a time."
6 Oppenheimer Quest Value Fund, Inc.
<PAGE>
[PHOTO OF EILEEN ROMINGER, Portfolio Manager]
Portfolio Manager
Eileen Rominger
Did your "bottom-up" approach lead you to companies in certain market sectors?
Yes, we happened to find a number of fundamentally attractive companies in the
insurance industry. This was not because the insurance industry itself was
attractive, but rather because these individual companies are highly competitive
in niche markets that are difficult for others to enter successfully. For
example, as of October 31, the two largest holdings in our portfolio were ACE
Ltd. and EXEL Ltd. Both participate in specialty businesses such as excess
liability insurance, property catastrophe reinsurance, satellite insurance and
political risk insurance. Both companies are number one in their markets,
generate excess cash flow and are well capitalized. In addition, they both made
acquisitions in the past year that will help them increase their earnings.
The Fund also benefited from our holdings in an insurance company that
writes nonstandard automobile insurance, including insurance for drivers that
other companies will not cover. This company has demonstrated that they know how
to manage these risks--they have one of the lowest expense ratios in the
industry, and they can charge a premium price. They recently entered the market
for standard automobile insurance, and we expect them to do quite well.
7 Oppenheimer Quest Value Fund, Inc.
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
What other opportunities have you found over the past year?
Each of the Fund's holdings has its own set of competitive advantages that may
enable it to achieve superior profitability over time. For example, Lockheed
Martin Corp. has built great economies of scale as the defense industry has
consolidated and is now poised to reap the rewards in the form of cost synergies
and cash flow growth. Caterpillar, Inc. is another company in the portfolio
which is generating very strong cash flow as a result of a multi-year program of
cost cutting, new product introduction, and expansion into international
markets.
Among financial companies, General Re Corp.'s competitive advantages are
its loyal customer base, its direct mode of product distribution, and its strong
balance sheet. General Re's cash flow has steadily risen and has been
consistently employed in ways that have enhanced shareholder value.
An important characteristic of all of these companies is that not only
are they powerful business franchises, but their stock prices present compelling
values in the market.
Have you had any disappointing investments in the past year?
Yes, we have. The management of the newly combined LucasVarity plc encountered
some delays in achieving their cost-cutting goals for the firm, which were
compounded by weak trading conditions in some of their European markets. The
shares underperformed the mar-ket as a result. We continue to believe that the
strong market positions enjoyed by the company, the growing cash flow, and the
management's strong record of working for the shareholders will generate better
results in the coming year.
[CALLOUT]
"We look for
investments with
strong prospects
for the long
term . . ."
8 Oppenheimer Quest Value Fund, Inc.
<PAGE>
What do you look for when making new investments?
First, we seek to invest in companies that we believe have solid fundamentals to
support their businesses in good economic times and bad. Second, we pay careful
attention to the price we pay for those companies. We look for situations in
which great companies are selling for less than their fair values.
Perhaps most important, we look for investments with strong prospects
for the long term. That's because we approach these businesses as owners, not
as traders. In our view, being an owner of high-quality businesses represents
The Right Way to Invest.
[CALLOUT]
". . .because we
approach these
businesses
as owners,
not as traders."
9 Oppenheimer Quest Value Fund, Inc.
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer Quest Value Fund, Inc.
<PAGE>
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Statement of Investments October 31, 1997
- -------------------------------------------------------------------------------
Market Value
Shares See Note 1
=========================================================================
Common Stocks--81.9%
- -------------------------------------------------------------------------
Basic Materials--5.3%
- -------------------------------------------------------------------------
Chemicals--4.5%
Du Pont (E.I.) De Nemours & Co. 370,000 $21,043,750
- -------------------------------------------------------------------------
Hercules, Inc. 241,000 11,055,875
- -------------------------------------------------------------------------
Monsanto Co. 365,000 15,603,750
- -------------------------------------------------------------------------
Solutia, Inc. 43,000 951,375
-----------
48,654,750
- -------------------------------------------------------------------------
Metals-- 0.5%
Freeport-McMoRan Copper & Gold, Inc., Cl. B 229,290 5,474,299
- -------------------------------------------------------------------------
Paper-- 0.3%
Champion International Corp. 60,000 3,311,250
- -------------------------------------------------------------------------
Consumer Cyclicals--10.9%
- -------------------------------------------------------------------------
Autos & Housing -- 0.7%
Security Capital Group, Inc.(1) 5,258 7,887,405
- -------------------------------------------------------------------------
Leisure & Entertainment--6.5%
AMR Corp.(1) 187,000 21,773,812
- -------------------------------------------------------------------------
Carnival Corp., Cl. A 450,000 21,825,000
- -------------------------------------------------------------------------
McDonald's Corp. 600,000 26,887,500
-----------
70,486,312
- -------------------------------------------------------------------------
Media--1.5%
Omnicom Group, Inc. 225,500 15,925,937
- -------------------------------------------------------------------------
Retail: General--2.2%
May Department Stores Cos. 448,000 24,136,000
- -------------------------------------------------------------------------
Consumer Non-Cyclicals--6.2%
- -------------------------------------------------------------------------
Healthcare/Drugs-- 0.7%
Warner-Lambert Co. 55,000 7,875,312
- -------------------------------------------------------------------------
Healthcare/Supplies & Services--4.4%
Becton, Dickinson & Co. 398,000 18,332,875
- -------------------------------------------------------------------------
Tenet Healthcare Corp.(1) 955,500 29,202,469
-----------
47,535,344
- -------------------------------------------------------------------------
Household Goods--1.1%
Avon Products, Inc. 175,600 11,501,800
11 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Statement of Investments (Continued)
- -------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ------------------------------------------------------------------
Financial--33.8%
- ------------------------------------------------------------------
Banks-- 6.7%
BankBoston Corp. 273,000 $ 22,130,062
- ------------------------------------------------------------------
Citicorp 170,000 21,260,625
- ------------------------------------------------------------------
Wells Fargo & Co. 98,666 28,748,806
------------
72,139,493
- ------------------------------------------------------------------
Diversified Financial--4.7%
Countrywide Credit Industries, Inc. 620,000 21,273,750
- ------------------------------------------------------------------
Freddie Mac 772,000 29,239,500
------------
50,513,250
- ------------------------------------------------------------------
Insurance --22.4%(2)
ACE Ltd. 766,200 71,208,712
- ------------------------------------------------------------------
AFLAC, Inc. 329,050 16,740,419
- ------------------------------------------------------------------
American International Group, Inc. 88,500 9,032,531
- ------------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 400,000 15,050,000
- ------------------------------------------------------------------
EXEL Ltd. 1,131,400 68,378,987
- ------------------------------------------------------------------
General Re Corp. 164,000 32,338,750
- ------------------------------------------------------------------
Mid Ocean Ltd. 259,900 16,861,013
- ------------------------------------------------------------------
Progressive Corp. 127,000 13,239,750
------------
242,850,162
- ------------------------------------------------------------------
Industrial--17.8%
- ------------------------------------------------------------------
Electrical Equipment-- 0.9%
General Electric Co. 150,400 9,710,200
- ------------------------------------------------------------------
Industrial Materials--1.2%
Armstrong World Industries, Inc. 190,000 12,646,875
- ------------------------------------------------------------------
Industrial Services-- 0.8%
Donnelley (R.R.) & Sons Co. 280,000 9,135,000
- ------------------------------------------------------------------
Manufacturing--13.1%
AlliedSignal, Inc. 300,000 10,800,000
- ------------------------------------------------------------------
Caterpillar, Inc. 740,000 37,925,000
- ------------------------------------------------------------------
Dover Corp. 340,000 22,950,000
- ------------------------------------------------------------------
Grand Metropolitan plc, Sponsored ADR 350,000 13,081,250
- ------------------------------------------------------------------
LucasVarity plc, ADR 720,900 24,600,713
- ------------------------------------------------------------------
Tenneco, Inc. 216,000 9,706,500
- ------------------------------------------------------------------
Textron, Inc. 400,000 23,125,000
------------
142,188,463
- ------------------------------------------------------------------
Transportation--1.8%
Canadian Pacific Ltd. (New) 650,000 19,378,125
12 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------
Technology--7.9%
- ----------------------------------------------------------------------------
Aerospace/Defense --3.8%
Lockheed Martin Corp. 430,000 $ 40,876,875
- ----------------------------------------------------------------------------
Computer Hardware --0.7%
Adaptec, Inc.(1) 150,000 7,265,625
- ----------------------------------------------------------------------------
Electronics--1.8%
Arrow Electronics, Inc.(1) 179,000 5,079,125
- ----------------------------------------------------------------------------
Avnet, Inc. 231,000 14,538,563
--------------
19,617,688
- ----------------------------------------------------------------------------
Telecommunications-Technology--1.6%
Sprint Corp. 285,200 14,830,400
- ----------------------------------------------------------------------------
Tele-Communications TCI Ventures Group, Cl. A(1) 111,177 2,564,020
--------------
17,394,420
--------------
Total Common Stocks (Cost $617,464,138) 886,504,585
<TABLE>
<CAPTION>
Face
Amount
=========================================================================================
Short-Term Notes--19.2%(3)
- -----------------------------------------------------------------------------------------
Beneficial Corp.:
<S> <C> <C>
5.50%, 12/4/97 $ 3,377,000 3,359,974
5.51%, 12/10/97 25,000,000 24,850,771
- -----------------------------------------------------------------------------------------
Deere (John) Capital Corp.:
5.47%, 11/6/97 1,904,000 1,902,554
5.49%, 11/19/97 50,000,000 49,862,750
- -----------------------------------------------------------------------------------------
Ford Motor Credit Corp.:
5.48%, 12/8/97 39,530,000 39,307,358
5.50%, 11/5/97 13,183,000 13,174,947
- -----------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.51%, 12/1/97 38,590,000 38,412,703
- -----------------------------------------------------------------------------------------
Household Finance Corp., 5.49%, 11/13/97 3,264,000 3,258,027
- -----------------------------------------------------------------------------------------
International Business Machines Corp., 5.48%, 11/10/97 4,112,000 4,106,367
- -----------------------------------------------------------------------------------------
Merrill Lynch & Co., 5.53%, 11/3/97 30,327,000 30,317,688
----------
Total Short-Term Notes (Cost $208,553,139) 208,553,139
- -----------------------------------------------------------------------------------------
Total Investments, at Value (Cost $826,017,277) 101.1% 1,095,057,724
- -----------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.1) (12,294,386)
------------ -------------
Net Assets 100.0% $1,082,763,338
============ ==============
</TABLE>
1. Non-income producing security.
2. The Fund may have elements of risk due to concentrated investments in
specific industries. Such concentrations may subject the Fund to additional
risks resulting from future political or economic conditions.
3. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
13 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
=========================================================================================
<S> <C>
Assets
Investments, at value (cost $826,017,277)--see accompanying statement $1,095,057,724
- -----------------------------------------------------------------------------------------
Cash 295,542
- -----------------------------------------------------------------------------------------
Receivables:
Shares of capital stock sold 7,810,765
Interest and dividends 519,477
- -----------------------------------------------------------------------------------------
Other 18,189
--------------
Total assets 1,103,701,697
=========================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 16,826,880
Shares of capital stock redeemed 3,644,431
Distribution and service plan fees 231,537
Transfer and shareholder servicing agent fees 74,868
Other 160,643
--------------
Total liabilities 20,938,359
=========================================================================================
Net Assets $1,082,763,338
==============
=========================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 53,140,214
- -----------------------------------------------------------------------------------------
Additional paid-in capital 707,981,325
- -----------------------------------------------------------------------------------------
Undistributed net investment income 4,754,927
- -----------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 47,846,425
- -----------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 269,040,447
--------------
Net assets $1,082,763,338
==============
</TABLE>
14 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $699,230,322 and 34,130,613 shares of capital stock outstanding) $20.49
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $21.74
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $298,348,393 and 14,788,764 shares of capital stock outstanding) $20.17
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $82,098,206 and 4,070,613 shares of capital stock outstanding) $20.17
- -------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $3,086,417 and 150,224 shares of capital stock outstanding) $20.55
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Statement of Operations For the Year Ended October 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
====================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $69,652) $ 10,022,532
- ------------------------------------------------------------------------------------
Interest 9,123,410
------------
Total income 19,145,942
====================================================================================
Expenses
Management fees--Note 4 7,708,982
- ------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,797,969
Class B 2,001,839
Class C 558,092
- ------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 742,902
- ------------------------------------------------------------------------------------
Shareholder reports 222,784
- ------------------------------------------------------------------------------------
Registration and filing fees:
Class A 115,978
Class B 56,901
Class C 15,512
Class Y 600
- ------------------------------------------------------------------------------------
Custodian fees and expenses 34,544
- ------------------------------------------------------------------------------------
Legal and auditing fees 34,224
- ------------------------------------------------------------------------------------
Directors' fees and expenses 13,184
- ------------------------------------------------------------------------------------
Other 71,008
------------
Total expenses 14,374,519
====================================================================================
Net Investment Income 4,771,423
====================================================================================
Realized and Unrealized Gain
Net realized gain on investments 47,887,290
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 127,277,273
------------
Net realized and unrealized gain 175,164,563
====================================================================================
Net Increase in Net Assets Resulting from Operations $179,935,986
============
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996
<S> <C> <C>
==========================================================================================
Operations
Net investment income $ 4,771,423 $ 2,018,194
- ------------------------------------------------------------------------------------------
Net realized gain 47,887,290 31,502,109
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 127,277,273 69,588,617
-------------- ------------
Net increase in net assets resulting from operations 179,935,986 103,108,920
==========================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (1,801,385) (1,990,608)
Class B (107,344) (187,734)
Class C (27,574) (36,026)
- ------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (22,962,861) (18,878,099)
Class B (6,696,217) (2,778,986)
Class C (1,768,806) (689,670)
==========================================================================================
Capital Stock Transactions
Net increase in net assets resulting from capital stock
transactions--Note 2:
Class A 186,699,902 67,398,927
Class B 151,470,057 59,694,507
Class C 42,571,844 15,679,507
Class Y 2,817,095 --
==========================================================================================
Net Assets
Total increase 530,130,697 221,320,738
- ------------------------------------------------------------------------------------------
Beginning of period 552,632,641 331,311,903
-------------- ------------
End of period (including undistributed net investment
income of $4,754,927 and $1,919,807, respectively) $1,082,763,338 $552,632,641
============== ============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended October 31,
1997 1996(3) 1995 1994 1993
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $17.30 $14.51 $12.59 $12.51 $11.71
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .11 .08 .12(4) .09(4) .05(4)
Net realized and unrealized gain (loss) 4.07 3.79 2.71 .50 1.34
------ ------ ------ ------ ------
Total income (loss) from investment
operations 4.18 3.87 2.83 .59 1.39
- -------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.07) (.10) (.08) (.04) (.05)
Distributions from net realized gain (.92) (.98) (.83) (.47) (.54)
------ ------ ------ ------ ------
Total dividends and distributions to
shareholders (.99) (1.08) (.91) (.51) (.59)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.49 $17.30 $14.51 $12.59 $12.51
====== ====== ====== ====== ======
=======================================================================================================
Total Return, at Net Asset Value(5) 25.41% 28.39% 24.74% 5.01% 12.27%
=======================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $699,230 $412,246 $282,615 $238,085 $245,320
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $560,582 $338,429 $257,240 $237,923 $205,074
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.74% 0.58% 0.90% 0.72% 0.40%
Expenses 1.60% 1.71% 1.68% 1.71% 1.75%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 19.7% 36.0% 36.0% 49.0% 27.0%
Average brokerage commission rate(8) $0.0573 $0.0559 -- -- --
</TABLE>
1. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
2. For the period from September 1, 1993 (inception of offering) to October 31,
1993.
3. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
4. Based on average shares outstanding for the period.
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
18 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
- ----------------------------------------------------------------------- ----------------------
Year Ended October 31, Year Ended October 31,
1997 1996(3) 1995 1994 1993(2) 1997 1996(3)
=================================================================================================
<S> <C> <C> <C> <C> <C> <C>
$17.08 $14.37 $12.53 $12.51 $12.66 $17.07 $14.35
- -------- -------- --------- --------- ------- ------- -------
.05 .05 .05(4) .02(4) (.01)(4) .05 .04
3.97 3.71 2.69 .50 (.14) 3.98 3.71
- -------- -------- --------- --------- ------- ------- -------
4.02 3.76 2.74 .52 (.15) 4.03 3.75
- -------------------------------------------------------------------------------------------------
(.01) (.07) (.07) (.03) -- (.01) (.05)
(.92) (.98) (.83) (.47) -- (.92) (.98)
- -------- -------- --------- --------- ------- ------- -------
(.93) (1.05) (.90) (.50) -- (.93) (1.03)
- -------- -------- --------- --------- ------- ------- -------
$20.17 $17.08 $14.37 $12.53 $12.51 $20.17 $17.07
======== ======== ========= ========= ======= ======== ========
=================================================================================================
24.71% 27.76% 24.08% 4.43% (1.19)% 24.79% 27.73%
=================================================================================================
$298,348 $111,130 $38,557 $14,373 $2,015 $82,098 $29,256
- -------- -------- --------- --------- ------- ------- -------
$200,752 $68,175 $25,393 $8,341 $1,136 $55,969 $18,099
- -------- -------- --------- --------- ------- -------- --------
0.25% 0.06% 0.36% 0.14% (1.19)%(6) 0.25% 0.06%
2.10% 2.26% 2.21% 2.24% 2.27%(6) 2.10% 2.20%
- -------- -------- --------- --------- ------- ------- --------
19.7% 36.0% 36.0% 49.0% 27.0% 19.7% 36.0%
$0.0573 $0.0559 -- -- -- $0.0573 $0.0559
</TABLE>
6. Annualized.
7. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended October 31, 1997 were $387,455,107 and $129,795,392, respectively.
8. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold. See accompanying Notes to Financial Statements.
19 Oppenheimer Quest Value Fund, Inc.
<PAGE>
Financial Highlights (Continued)
<TABLE>
<CAPTION>
Class C Class Y
--------------------------------------------- ------------
Period Ended
Year Ended October 31, October 31,
1995 1994 1993(2) 1997(1)
========================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $12.52 $12.50 $12.66 $16.50
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .04(4) .01(4) (.01)(4) .10
Net realized and unrealized gain (loss) 2.70 .51 (.15) 3.95
------- ------- ------- ------
Total income (loss) from investment
operations 2.74 .52 (.16) 4.05
- --------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.08) (.03) -- --
Distributions from net realized gain (.83) (.47) -- --
------- ------- ------- ------
Total dividends and distributions
to shareholders (.91) (.50) -- --
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.35 $12.52 $12.50 $20.55
======= ====== ====== ======
========================================================================================================
Total Return, at Net Asset Value(5) 24.10% 4.45% (1.26)% 24.55%
========================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $10,140 $3,581 $221 $3,086
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $6,711 $1,725 $169 $1,372
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.31% 0.09% (0.90)%(6) 1.20%(6)
Expenses 2.26% 2.28% 2.27%(6) 1.19%(6)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 36.0% 49.0% 27.0% 19.7%
Average brokerage commission rate(8) -- -- -- $0.0573
</TABLE>
20 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements
- -------------------------------------------------------------------------------
===============================================================================
1. Significant Accounting Policies
Oppenheimer Quest Value Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek capital
appreciation. It is the intention of the Fund to continue to invest in equity
securities of companies believed by the Manager to be undervalued. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers
Class A, Class B, Class C and Class Y shares. Class A shares are sold with a
front-end sales charge. Class B and Class C shares may be subject to a
contingent deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by
an approved portfolio pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the firm rendering the quotes
is reliable and that the quotes reflect current market value, or are valued
under consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost
(or last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
21 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the 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
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Interest income is accrued on a daily basis. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
22 Oppenheimer Quest Value Fund, Inc.
<PAGE>
2. Capital Stock
The Fund has authorized 100 million shares of $1.00 par value capital stock in
the aggregate to be apportioned among each class of shares. Transactions in
shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended October 31, 1997(1) Year Ended October 31, 1996
------------------------------ ---------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 15,030,841 $ 278,180,029 6,823,030 $109,212,436
Dividends and distributions
reinvested 1,380,466 23,316,006 1,381,459 19,409,592
Redeemed (6,112,033) (114,796,133) (3,849,611) (61,223,101)
---------- ------------- ---------- ------------
Net increase 10,299,274 $ 186,699,902 4,354,878 $ 67,398,927
========== ============= ========== ============
- -------------------------------------------------------------------------------------------
Class B:
Sold 9,222,271 $ 169,517,668 4,315,316 $ 67,660,385
Dividends and distributions
reinvested 382,280 6,387,808 196,585 2,738,062
Redeemed (1,323,617) (24,435,419) (686,922) (10,703,940)
---------- ------------- ---------- ------------
Net increase 8,280,934 $ 151,470,057 3,824,979 $ 59,694,507
========== ============= ========== ============
- -------------------------------------------------------------------------------------------
Class C:
Sold 2,955,467 $ 54,066,076 1,267,566 $ 20,075,574
Dividends and distributions
reinvested 105,641 1,764,202 51,443 716,599
Redeemed (704,333) (13,258,434) (311,646) (5,112,666)
---------- ------------- ---------- ------------
Net increase 2,356,775 $ 42,571,844 1,007,363 $ 15,679,507
========== ============= ========== ============
- -------------------------------------------------------------------------------------------
Class Y:
Sold 176,674 $ 3,355,435 -- $ --
Redeemed (26,450) (538,340) -- --
---------- ------------- ---------- ------------
Net increase 150,224 $ 2,817,095 -- $ --
========== ============= ========== ============
</TABLE>
1. For the year ended October 31, 1997 for Class A, B and C and for the period
from December 16, 1996 (inception of offering) to October 31, 1997 for Class Y
shares.
===============================================================================
3. Unrealized Gains and Losses on Investments
At October 31, 1997, net unrealized appreciation on investments of $269,040,447
was composed of gross appreciation of $272,174,847, and gross depreciation of
$3,134,400.
23 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- -------------------------------------------------------------------------------
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 1.00% of the first
$400 million of average annual net assets, 0.90% of the next $400 million of
average annual net assets, and 0.85% of average annual net assets over $800
million. Effective October 22, 1997, the investment advisory agreement was
amended to include additional breakpoints for average annual net assets in
excess of $800 million. The new investment advisory agreement provides for a fee
of 1.00% of the first $400 million of average annual net assets, 0.90% of the
next $400 million of average annual net assets, 0.85% of the next $3.2 billion
of average annual net assets, 0.80% of the next $4 billion of average annual net
assets, and 0.75% of average annual net assets over $8 billion. The Manager acts
as the accounting agent for the Fund at an annual fee of $55,000, plus
out-of-pocket costs and expenses reasonably incurred.
The Manager pays OpCap Advisors (the Sub-Advisor) based on the fee
schedule set forth in the Prospectus. For the year ended October 31, 1997, the
Manager paid $2,660,509 to the Sub-Advisor. On February 13, 1997 PIMCO Advisors
L.P. signed a definitive agreement with Oppenheimer Group, Inc. and its
subsidiary Oppenheimer Financial Corp. for PIMCO Advisors L.P. and its
affiliate, Thomson Advisory Group, Inc., to acquire the one-third managing
general partner interest in Oppenheimer Capital (the parent of OpCap Advisors)
and the 1.0% general interest in Oppenheimer Capital L.P.
For the year ended October 31, 1997, commissions (sales charges
paid by investors) on sales of Class A shares totaled $3,638,204, of which
$910,431 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B
and Class C shares totaled $5,794,972 and $474,699, respectively, of which
$222,454 and $6,853, respectively, was paid to an affiliated broker/dealer.
During the year ended October 31, 1997, OFDI received contingent deferred sales
charges of $348,684 and $23,932, respectively, upon redemption of Class B and
Class C shares as reimbursement for sales commissions advanced by OFDI at the
time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and for other registered
investment companies. The Fund pays OFS an annual maintenance fee of $14.85 for
each Fund shareholder account and reimburses OFS for its out-of-pocket expenses.
During the year ended October 31, 1997, the Fund paid OFS $615,475.
24 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
The Fund has adopted a Distribution and Service Plan for Class A shares to
compensate OFDI for a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold Class A shares. Under the
Plan, the Fund pays an annual asset-based sales charge to OFDI of 0.25% per year
on Class A shares. The Fund also pays a service fee to OFDI of 0.25% per year.
Both fees are computed on the average annual net assets of Class A shares of the
Fund, determined as of the close of each regular business day. OFDI uses all of
the service fee and a portion of the asset-based sales charge to compensate
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of shareholder accounts of their customers that
hold Class A shares. OFDI retains the balance of the asset-based sales charge to
reimburse itself for its other expenditures under the Plan. During the year
ended October 31, 1997, OFDI paid $547,120 to an affiliated broker/dealer as
compensation for Class A personal service and maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B
and C shares to compensate OFDI for its costs in distributing Class B and Class
C shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B shares and Class C shares
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and C shares. Each fee is
computed on the average annual net assets of Class B and Class C shares,
determined as of the close of each regular business day. During the year ended
October 31, 1997, OFDI paid $44,146 and $35,579, respectively, to an affiliated
broker/dealer as compensation for Class B and Class C personal service and
maintenance expenses and retained $1,751,281 and $350,569, respectively, as
compensation for Class B and Class C sales commissions and service fee advances,
as well as financing costs. If either Plan is terminated by the Fund, the Board
of Directors may allow the Fund to continue payments of the asset-based sales
charge to OFDI for distributing shares before the Plan was terminated. At
October 31, 1997, OFDI had incurred unreimbursed expenses of $7,193,352 for
Class B and $740,978 for Class C.
25 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- -------------------------------------------------------------------------------
===============================================================================
5. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided the asset
coverage for borrowings exceeds 300%. The Fund has entered into an agreement
which enables it to participate with other Oppenheimer funds in an unsecured
line of credit with a bank, which permits borrowings up to $400 million,
collectively. Interest is charged to each fund, based on its borrowings, at a
rate equal to the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days
after such loan is executed. The Fund also pays a commitment fee equal to its
pro rata share of the average unutilized amount of the credit facility at a rate
of 0.0575% per annum.
The Fund had no borrowings outstanding during the year ended
October 31, 1997.
26 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Report of Independent Accountants
- -------------------------------------------------------------------------------
===============================================================================
To the Board of Directors and Shareholders of
Oppenheimer Quest Value Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Oppenheimer Quest Value Fund, Inc.
(the Fund), at October 31, 1997, the results of its operations for the year then
ended, the changes in its net assets and the financial highlights for each of
the two years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as financial statements) are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1997 by correspondence with the
custodian and the application of alternative auditing procedures where
securities purchased had not been received, provide a reasonable basis for the
opinion expressed above. The financial statements of the Fund for the year ended
October 31, 1995 were audited by other independent accountants whose report
dated December 20, 1995 expressed an unqualified opinion on those statements.
Price Waterhouse LLP
Denver, Colorado
November 21, 1997
27 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- -------------------------------------------------------------------------------
===============================================================================
In early 1998 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $0.9945, $0.9370 and $0.9366 per share were paid to
Class A, Class B and Class C shareholders, respectively, on December 11, 1996,
of which $0.8338 was designated as a "capital gain distribution" for federal
income tax purposes. Whether received in stock or in cash, the capital gain
distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended October 31,
1997 which are not designated as capital gain distributions should be multiplied
by 70.26% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
28 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
Shareholder Meeting (Unaudited)
- -------------------------------------------------------------------------------
===============================================================================
On June 2, 1997, a special shareholder meeting was held at which the selection
of Price Waterhouse LLP as the independent accountants and auditors of the Fund
for the fiscal year beginning November 1, 1996 was ratified (Proposal No. 1),
the proposed changes to certain of the Fund's fundamental investment policies,
including changes to the investment objective were approved (Proposal No. 2),
the investment Advisory Agreement between the Fund and OppenheimerFunds, Inc.
was approved (Proposal No. 3), the subadvisory Agreement between
OppenheimerFunds, Inc. and OpCap Advisors was approved (Proposal No. 4), the
Fund's Class A 12b-1 Distribution and Service Plan was approved by Class A
shareholders (Proposal No. 5), the Fund's Class B 12b-1 Distribution and Service
Plan was approved by Class B shareholders (Proposal No. 6), and the Fund's Class
C 12b-1 Distribution and Service Plan was approved by Class C shareholders
(Proposal No. 7) as described in the Fund's proxy statement for that meeting.
The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/ Broker
Proposal For Against Abstain Non-Votes Total
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Proposal No. 1 20,889,092.525 287,701.575 954,970.833 16,579,920 22,131,764.933
Proposal No. 2 19,493,341.968 1,298,010.268 1,357,555.547 16,579,920 22,148,907.783
Proposal No. 3 20,084,238.656 786,542.583 1,278,232.184 16,579,920 22,149,013.423
Proposal No. 4 19,991,516.339 818,803.616 1,340,032.468 16,579,920 22,150,352.423
Proposal No. 5 13,948,867.689 700,107.512 1,050,094.100 11,523,914 15,699,069.301
Proposal No. 6 4,471,016.044 240,150.475 306,841.447 3,970,870 5,018,007.966
Proposal No. 7 1,288,639.000 84,549.036 59,570.281 1,085,198 1,432,758.317
</TABLE>
29 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Quest Value Fund, Inc.
- --------------------------------------------------------------------------------
================================================================================
Officers and Directors Bridget A. Macaskill, Chairman of the Board of
Directors and President
Paul Y. Clinton, Director
Thomas W. Courtney, Director
Lacy B. Herrmann, Director
George Loft, Director
Robert C. Doll, Jr., Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Sub-Advisor OpCap Advisors
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of Portfolio State Street Bank and Trust Company
Securities
================================================================================
Independent Accountants Price Waterhouse LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Quest Value Fund, Inc. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
Quest Value Fund, Inc. For material information
concerning the Fund, see the Prospectus. Shares of
Oppenheimer funds are not deposits or obligations of
any bank, are not guaranteed by any bank, and are not
insured by the FDIC or any other agency, and involve
investment risks, including possible loss of the
principal amount invested.
30 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- -------------------------------------------------------------------------------
OppenheimerFunds Family
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
==========================================================================================
Real Asset Funds
- ------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
==========================================================================================
Stock Funds
- ------------------------------------------------------------------------------------------
Developing Markets Fund Capital Appreciation Fund(1) Disciplined Value Fund
Enterprise Fund Quest Capital Value Fund Quest Value Fund
International Growth Fund Growth Fund Mid Cap Fund
Discovery Fund Global Fund International Small
Quest Small Cap Value Fund Quest Global Value Fund Company Fund
==========================================================================================
Stock & Bond Funds
- ------------------------------------------------------------------------------------------
Main Street Income & Quest Growth & Income Disciplined Allocation Fund
Growth Fund Value Fund Multiple Strategies Fund(2)
Quest Opportunity Value Fund Global Growth & Income Fund Bond Fund for Growth
Total Return Fund Equity Income Fund
==========================================================================================
Bond Funds
- ------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
High Yield Fund Strategic Income Fund Limited-Term Government Fund
Bond Fund
==========================================================================================
Municipal Funds
- ------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
==========================================================================================
Money Market Funds(4)
- ------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
==========================================================================================
LifeSpan
- ------------------------------------------------------------------------------------------
Growth Fund Balanced Fund Income Fund
</TABLE>
1. On 12/18/96, the Fund's name was changed from "Target Fund."
2. On 3/16/97, the Fund's name was changed from "Asset Allocation Fund."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
31 Oppenheimer Quest Value Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Information and services
- --------------------------------------------------------------------------------
Internet
24-hr access to account information
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
Account Transactions
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-852-8457
PhoneLink
24-hr automated information
and automated transactions
1-800-533-3310
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
1-800-835-3104
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your OppenheimerFunds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[OPPENHEIMERFUNDS LOGO]
Distributor, Inc.
RA0225.001.1097 December 30, 1997
