[photo of mountains]
Annual Report October 31, 2000
Oppenheimer
Quest Value Fund, Inc.(SM)
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Although our overall performance proved disappointing, we were encouraged by the
migration toward more reasonably priced companies, offering solid fundamentals
and realistic expectations.
We emphasized dominant, well-managed companies that use free cash flow to create
shareholder value.
The Fund focused on "traditional" value investments and companies that are less
sensitive to changes in the economy.
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Managers
7 Fund Performance
12 Financial
Statements
28 Independent
Auditors' Report
29 Federal
Income Tax
Information
30 Officers and
Directors
Average Annual
Total Returns*
For the 1-Year Period
Ended 10/31/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
1.44% -4.39%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
0.79% -3.63%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
0.83% -0.05%
Class Y
------------------------
1.54%
*See Notes on page 10 for further details.
<PAGE>
PRESIDENT'S LETTER
[photo]
Bridget A. Macaskill
President
Oppenheimer
Quest Value Fund, Inc.
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial markets--
especially when times are good. Right now, times appear particularly good. The
U.S. economy is in its tenth year of expansion. In the bond market, U.S.
Treasury issues have been performing favorably over the past year. In addition,
despite volatility in the second quarter, the stock market has been providing
attractive returns from a wide spectrum of industry sectors, capitalization
ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace of
global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has prompted
the Treasury to buy back many of its long-term securities. The resulting supply
shortage boosted these securities' returns, causing an inversion of the yield
curve--an unusual situation in which shorter term Treasuries yield more than
their longer term counterparts. Other bond sectors are offering many
opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in the
stock market. Formerly high-flying Internet stocks have generally come down to
earth, and investors have begun to refocus on companies with strong business
fundamentals and justifiable valuations. Investors have also returned to
long-neglected, value-oriented companies.
1 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
PRESIDENT'S LETTER
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial
advisor and to stay on track with your long-term financial plan. For our part,
we will continue to monitor the opportunities and risks ever present in the
financial markets. Thank you for your confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 21, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of the securities markets or any
particular fund. Specific discussion, as it applies to your Fund, is contained
in the pages that follow. Stocks and bonds have different types of investment
risks; stocks are subject to market volatility and bonds are subject to credit
and interest rate risks.
2 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Q How did Oppenheimer Quest Value Fund, Inc(SM) perform during the 12 months
that ended October 31, 2000?
A. Although our overall performance proved disappointing for the fiscal year,
and we underperformed our benchmark, the S&P 500 Index, we were encouraged by
recent developments suggesting a resurgence in value investing. In our view, the
extended underperformance of value stocks at the beginning of the period did not
reflect any lack of fundamental strength among these issues, but instead
demonstrated a market in awe of rapidly growing, yet overheated technology and
telecommunications issues. From mid-year to period end, however, a marked
increase in volatility prompted investors to take a more discerning view. As a
result, there appeared to be a migration toward more reasonably priced
alternatives offering solid fundamentals and realistic expectations.
Why did we see a change in investor sentiment?
As we mentioned, investors began to focus on individual opportunities,
regardless of their industry classification. This was in stark contrast to what
transpired earlier in the period, when the market, without rhyme or reason,
rewarded a narrow group of fast-growing, richly valued "new economy" stocks. The
moment of truth, though, came in mid-March when inflation concerns reemerged,
signaling that the Federal Reserve Board would likely continue its standing
policy of raising interest rates to slow economic growth. At this juncture,
investors came to realize that the exorbitant prices they were paying for these
high-growth stocks--many without visible earnings or even the prospect of
earnings--might be unjustified. A torrent of widespread selling followed, as
investors sought to lock in gains. Although a rebound soon followed, the rally
was short lived, as many technology stocks sold off in July and again in
September.
3 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Meanwhile, the Federal Reserve Board's year-long efforts to engineer a "soft
landing" began to achieve their desired effect of bringing inflation under
control. While that prospect implied an end to further interest rate
hikes--typically a supportive environment for stocks--skyrocketing oil prices,
Mideast tensions and a number of corporate profit warnings converged to further
rattle the markets towards the end of the reporting period. As investor
sentiment turned increasingly cautious, it also became more selective. By period
end, previously beaten-down sectors, such as financial services and healthcare,
had in fact transformed into performance leaders.
How was the Fund managed in this volatile environment?
We remained committed to our discipline, which looks at companies one at a time
to find what we believe are superior, undervalued businesses. By a superior
business, we mean one that is extremely well managed, earns high returns on
capital, has a dominant competitive position to protect those returns and uses
the resulting free cash flow to create shareholder value through acquisitions or
share repurchases. "Undervalued," however, should not be confused with "cheap."
Specifically, we use the term "undervalued" to refer to companies that are
selling for less than their fair market value--or the price a prudent buyer
would pay for the entire business.
In light of recent volatility, the Fund emphasized "traditional" value
companies, such as financial services stocks, in addition to companies perceived
as less cyclical or sensitive to changes in the economy, such as consumer
staples. While we had limited exposure to technology during the period, we
closely monitored the sector for high quality, yet out-of-favor opportunities
that appeared poised for a turnaround.
[callout]
"We remained committed to our discipline, which looks at companies one at a time
to find what we believe are superior, undervalued businesses."
4 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
Which stocks contributed most to the Fund's performance?
The challenging environment notwithstanding, a number of our holdings turned in
respectable returns for the period. Financial services powerhouse Citigroup,
Inc. continued to grow its global business, while its vast distribution network
and customer base provided numerous cross-sell opportunities for its extensive
product lineup. Household International, Inc., a diversified financial services
company, reported strong earnings per share growth, and the company continues to
reinvest in state-of-the-art technology, product innovation and in their
employees. Boeing Co. advanced significantly after continued margin improvement
and a positive outlook for the commercial aviation market. As for detractors,
global fast food leader McDonald's Corp. experienced setbacks, as its
dollar-denominated earnings were eroded by weakness in the euro and other
foreign currencies. Verizon Communications fell victim to earnings concerns
arising from unrealistic expectations for continuing growth in wireless
services. However, based on careful analysis, we remain confident in both
companies' long-term prospects and have maintained our holdings.
What is your outlook for the future?
While waiting out volatility can certainly be unsettling, it is the hallmark of
the patient investor. For this reason, we will continue to seek out compelling
value on a company-by-company basis, especially when we believe fundamentally
sound, attractively valued businesses have been sold indiscriminately. As we
appear to be transitioning toward a broader market, investors once again seem
willing to explore opportunities on their own merits. This plays to our
strengths as value investors and is just one of many reasons why Oppenheimer
Quest Value Fund, Inc. is an important part of The Right Way to Invest.
Average Annual
Total Returns
For the Periods Ended 9/30/00(1)
Class A
1-Year 5-Year 10-Year
------------------------
-2.06% 11.09% 15.27%
Class B Since
1-Year 5-Year Inception
------------------------
-1.29% 11.55% 12.56%
Class C Since
1-Year 5-Year Inception
------------------------
2.37% 11.82% 12.45%
Class Y Since
1-Year 5-Year Inception
------------------------
3.56% N/A 9.88%
1. See page 10 for further details.
5 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
Sector Allocation(2)
[pie chart]
Financial 35.4%
Diversified
Financial 16.5
Banks 10.7
Insurance 8.2
Capital Goods 17.7
Consumer
Staples 13.7
Healthcare 7.5
Transportation 6.9
Communication
Services 4.9
Technology 4.0
Energy 3.6
Consumer
Cyclicals 3.3
Basic Materials 3.0
Top Ten Common Stock Holdings(3)
-----------------------------------------------------------
Freddie Mac 6.0%
-----------------------------------------------------------
Kroger Co. 5.0
-----------------------------------------------------------
CVS Corp. 4.5
-----------------------------------------------------------
FleetBoston Financial Corp. 3.8
-----------------------------------------------------------
Household International, Inc. 3.8
-----------------------------------------------------------
Wells Fargo Co. 3.7
-----------------------------------------------------------
Citigroup, Inc. 3.5
-----------------------------------------------------------
Verizon Communications 3.5
-----------------------------------------------------------
McDonald's Corp. 3.4
-----------------------------------------------------------
Boeing Co. 3.4
Top Five Common Stock Industries(3)
-----------------------------------------------------------
Diversified Financial 15.6%
-----------------------------------------------------------
Banks 10.0
-----------------------------------------------------------
Food and Drug Retailers 9.5
-----------------------------------------------------------
Insurance 7.7
-----------------------------------------------------------
Manufacturing 6.7
2. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on total market value of common stock.
3. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on net assets.
6 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
FUND PERFORMANCE
How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc. of
the Fund's performance during its fiscal year ended October 31, 2000, followed
by a graphical comparison of the Fund's performance to an appropriate
broad-based market index.
Management's discussion of performance. During the fiscal year that ended
October 31, 2000, Oppenheimer Quest Value Fund, Inc. operated in a highly
volatile environment that adversely affected its returns, in addition to
underperforming its benchmark, S&P 500. For most of the period, investors
overlooked value stocks in favor of rising growth stocks. However, in light of
recurring inflation concerns, rising oil prices, a strong U.S. dollar and
corporate profit warnings the broader stock market began to show signs of
strain. At that point, investors turned to the solid fundamentals, reasonable
valuations and realistic expectations of traditional value stocks. During the
period, the Fund's managers continued their longstanding value discipline and
maintained many of their stock positions. However, because value stocks
generally lagged the broader market for most of the period, this short rally in
value stocks did little to help performance. The managers positioned the Fund's
income investments conservatively, favoring cash over bonds. This provided a
cushion against volatility, but also held back overall performance. The Fund's
portfolio holdings, allocations and strategies are subject to change.
Comparing the Fund's performance to the market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until October 31, 2000. In the case of Class A shares, performance is
measured for a 10-year period. In the case of Class B and Class C shares,
performance is measured from inception of those classes on September 1, 1993. In
the case of Class Y shares, performance is measured from inception of the class
on December 16, 1996. The Fund's performance reflects the deduction of the
maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
Index performance reflects the reinvestment of dividends but does not consider
the effect of capital gains or transaction costs, and none of the data in the
graphs shows the effect of taxes. The Fund's performance reflects the effects of
Fund business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index.
7 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
FUND PERFORMANCE
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Quest Value Fund, Inc. (Class A) S&P 500 Index
<S> <C> <C>
10/31/90 9425 10000
01/31/91 11004 11417
04/30/91 12066 12558
07/31/91 12548 13080
10/31/91 13001 13342
01/31/92 14164 14002
04/30/92 14532 14316
07/31/92 14847 14750
10/31/92 15400 14669
01/31/93 16321 15481
04/30/93 16473 15636
07/31/93 16833 16035
10/31/93 17289 16856
01/31/94 17665 17471
04/30/94 17492 16466
07/31/94 17593 16861
10/31/94 18156 17506
01/31/95 18199 17563
04/30/95 19885 19337
07/31/95 22304 21257
10/31/95 22647 22129
01/31/96 25095 24345
04/30/96 26406 25173
07/31/96 25969 24775
10/31/96 29078 27458
01/31/97 31022 30754
04/30/97 31075 31497
07/31/97 36575 37686
10/31/97 36468 36272
01/31/98 37754 39027
04/30/98 42982 44432
07/31/98 41226 44961
10/31/98 40069 44256
01/31/99 40678 51715
04/30/99 45015 54130
07/31/99 42671 54045
10/31/99 42534 55613
01/31/00 40144 57063
04/30/00 40856 59609
07/31/00 39143 58890
10/31/00 43146 58993
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 10/31/00(1)
1-Year -4.39% 5-Year 12.42% 10-Year 15.74%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Quest Value Fund, Inc. (Class B) S&P 500 Index
<S> <C> <C>
09/01/93 10000 10000
10/31/93 9882 10128
01/31/94 10081 10498
04/30/94 9965 9894
07/31/94 10015 10132
10/31/94 10319 10519
01/31/95 10328 10553
04/30/95 11272 11619
07/31/95 12627 12773
10/31/95 12805 13297
01/31/96 14176 14628
04/30/96 14894 15126
07/31/96 14626 14887
10/31/96 16359 16499
01/31/97 17428 18480
04/30/97 17439 18926
07/31/97 20503 22645
10/31/97 20402 21795
01/31/98 21109 23451
04/30/98 23989 26698
07/31/98 22983 27017
10/31/98 22316 26593
01/31/99 22619 31075
04/30/99 24993 32526
07/31/99 23668 32475
10/31/99 23578 33417
01/31/00 22253 34288
04/30/00 22648 35818
07/31/00 21699 35386
10/31/00 23918 35448
</TABLE>
Average Annual Total Return of Class B Shares of the Fund at 10/31/00(1)
1-Year -3.63% 5-Year 12.89% Life 12.94%
1. See page 10 for further details.
8 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Quest Value Fund, Inc. (Class C) S&P 500 Index
<S> <C> <C>
09/01/93 10000 10000
10/31/93 9874 10128
01/31/94 10082 10498
04/30/94 9967 9894
07/31/94 10016 10132
10/31/94 10313 10519
01/31/95 10327 10553
04/30/95 11273 11619
07/31/95 12628 12773
10/31/95 12798 13297
01/31/96 14164 14628
04/30/96 14882 15126
07/31/96 14624 14887
10/31/96 16347 16499
01/31/97 17416 18480
04/30/97 17426 18926
07/31/97 20490 22645
10/31/97 20399 21795
01/31/98 21094 23451
04/30/98 23984 26698
07/31/98 22968 27017
10/31/98 22301 26593
01/31/99 22610 31075
04/30/99 24984 32526
07/31/99 23659 32475
10/31/99 23538 33417
01/31/00 22183 34288
04/30/00 22536 35818
07/31/00 21566 35386
10/31/00 23734 35448
</TABLE>
Average Annual Total Return of Class C Shares of the Fund at 10/31/00(1)
1-Year -0.05% 5-Year 13.15% Life 12.82%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Quest Value Fund, Inc. (Class Y) S&P 500 Index
<S> <C> <C>
12/16/96 10000 10000
01/31/97 10564 10624
04/30/97 10594 10881
07/31/97 12485 13019
10/31/97 12455 12531
01/31/98 12909 13482
04/30/98 14708 15349
07/31/98 14121 15532
10/31/98 13744 15289
01/31/99 13960 17866
04/30/99 15441 18700
07/31/99 14657 18670
10/31/99 14630 19212
01/31/00 13817 19713
04/30/00 14046 20593
07/31/00 13435 20344
10/31/00 14855 20380
</TABLE>
Average Annual Total Return of Class Y Shares of the Fund at 10/31/00(1)
1-Year 1.54% Life 10.74%
The performance information for both indices in the graphs begins on 10/31/90
for Class A, 8/31/93 for Class B and Class C, and 12/31/96 for Class Y.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
9 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. The Fund's returns
at 10/31/00 include results for periods of exceptional market performance that
are not typical of historical results. You should not expect those growth rates
to continue. Because of ongoing market volatility, the Fund's performance has
been subject to substantial short-term fluctuations and current performance may
be less than the results shown. For quarterly updates on the Fund's performance,
please contact your financial advisor, call us at 1.800.525.7048 or visit our
website at www.oppenheimerfunds.com.
OppenheimerFunds, Inc. became the Fund's advisor on 11/22/95. The Fund's
sub-advisor is OpCap Advisors, which was the Fund's advisor prior to 11/22/95.
The portfolio management team is employed by the Fund's sub-advisor.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A shares were first publicly offered on 4/30/80. Unless otherwise noted,
Class A returns include the current maximum initial sales charge of 5.75%. 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 A shares are subject to a maximum
annual 0.25% asset-based sales charge. There is a voluntary waiver of a portion
of the Class A asset-based sales charge as described in the Prospectus.
Class B shares were first publicly offered on 9/1/93. Unless otherwise noted,
Class B returns include the applicable contingent deferred sales charges of 5%
(1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72
months after purchase, the "life of class" return for Class B uses Class A
performance for the period after conversion. Class B shares are subject to an
annual 0.75% asset-based sales charge.
Class C shares were first publicly offered on 9/1/93. Unless otherwise noted,
Class C returns include the contingent deferred sales charge of 1% for the
one-year period. Class C shares are subject to an annual 0.75% asset-based sales
charge.
Class Y shares were first publicly offered on 12/16/96. Class Y shares are
offered only to certain institutional investors under special agreement with the
Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
Financials
11 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
STATEMENT OF INVESTMENTS October 31, 2000
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
==================================================================================
<S> <C> <C>
Common Stocks--94.0%
----------------------------------------------------------------------------------
Basic Materials--2.9%
----------------------------------------------------------------------------------
Metals--2.9%
----------------------------------------------------------------------------------
Aluminum--2.9%
Alcoa, Inc. 1,000,000 $28,687,500
----------------------------------------------------------------------------------
Capital Goods--16.6%
----------------------------------------------------------------------------------
Aerospace/Defense--3.4%
Boeing Co. 500,000 33,906,250
----------------------------------------------------------------------------------
Electrical Equipment--4.9%
Emerson Electric Co. 450,000 33,046,875
----------------------------------------------------------------------------------
Rockwell International Corp. 400,000 15,725,000
-----------
48,771,875
----------------------------------------------------------------------------------
Industrial Services--1.6%
Waste Management, Inc. 800,000 16,000,000
----------------------------------------------------------------------------------
Manufacturing--6.7%
Caterpillar, Inc. 450,000 15,778,125
----------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 350,000 33,818,750
----------------------------------------------------------------------------------
Textron, Inc. 350,000 17,653,125
-----------
67,250,000
----------------------------------------------------------------------------------
Communication Services--4.6%
----------------------------------------------------------------------------------
Telecommunications-Long Distance--4.6%
Sprint Corp. (Fon Group) 450,000 11,475,000
----------------------------------------------------------------------------------
Verizon Communications 600,000 34,687,500
-----------
46,162,500
----------------------------------------------------------------------------------
Consumer Cyclicals--3.0%
----------------------------------------------------------------------------------
Leisure & Entertainment--1.2%
Carnival Corp. 500,000 12,406,250
----------------------------------------------------------------------------------
Media--1.8%
Tribune Co. 500,000 18,531,250
----------------------------------------------------------------------------------
Consumer Staples--12.9%
----------------------------------------------------------------------------------
Entertainment--3.4%
McDonald's Corp. 1,100,000 34,100,000
----------------------------------------------------------------------------------
Food & Drug Retailers--9.5%
CVS Corp. 850,000 44,996,875
----------------------------------------------------------------------------------
Kroger Co.(1) 2,200,000 49,637,500
-----------
94,634,375
12 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
Market Value
Shares See Note 1
----------------------------------------------------------------------------------
Energy--3.3%
----------------------------------------------------------------------------------
Oil: Domestic--3.3%
Chevron Corp. 200,000 $ 16,425,000
----------------------------------------------------------------------------------
Unocal Corp. 500,000 17,062,500
------------
33,487,500
----------------------------------------------------------------------------------
Financial--33.3%
----------------------------------------------------------------------------------
Banks--10.0%
Chase Manhattan Corp. 550,000 25,025,000
----------------------------------------------------------------------------------
FleetBoston Financial Corp. 1,000,000 38,000,000
----------------------------------------------------------------------------------
Wells Fargo Co. 800,000 37,050,000
------------
100,075,000
----------------------------------------------------------------------------------
Diversified Financial--15.6%
Citigroup, Inc. 666,666 35,083,299
----------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 600,000 22,462,500
----------------------------------------------------------------------------------
Freddie Mac 1,000,000 60,000,000
----------------------------------------------------------------------------------
Household International, Inc. 750,000 37,734,375
------------
155,280,174
----------------------------------------------------------------------------------
Insurance--7.7%
AFLAC, Inc. 300,000 21,918,750
----------------------------------------------------------------------------------
John Hancock Financial Services, Inc.(1) 1,000,000 31,625,000
----------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 300,000 23,062,500
------------
76,606,250
----------------------------------------------------------------------------------
Healthcare--7.1%
----------------------------------------------------------------------------------
Healthcare: Drugs--5.1%
American Home Products Corp. 500,000 31,750,000
----------------------------------------------------------------------------------
Pharmacia Corp. 350,000 19,250,000
------------
51,000,000
----------------------------------------------------------------------------------
Healthcare: Supplies & Services--2.0%
Paracelsus Healthcare Corp.(1) 3,107 65
----------------------------------------------------------------------------------
Tenet Healthcare Corp. 500,000 19,656,250
------------
19,656,315
13 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
STATEMENT OF INVESTMENTS Continued
Market Value
Shares See Note 1
------------------------------------------------------------------------------------
Technology--3.8%
------------------------------------------------------------------------------------
Computer Hardware--2.0%
International Business Machines Corp. 200,000 $ 19,700,000
------------------------------------------------------------------------------------
Electronics--1.8%
Solectron Corp.(1) 400,000 17,600,000
------------------------------------------------------------------------------------
Transportation--6.5%
------------------------------------------------------------------------------------
Air Transportation--2.0%
AMR Corp.(1) 600,000 19,650,000
------------------------------------------------------------------------------------
Railroads & Truckers--4.5%
Burlington Northern Santa Fe Corp. 750,000 19,921,875
------------------------------------------------------------------------------------
Canadian Pacific Ltd. 850,000 24,809,375
--------------
44,731,250
--------------
Total Common Stocks (Cost $777,906,208) 938,236,489
Principal
Amount
====================================================================================
Short-Term Notes--7.8%
American Express Credit Corp., 6.49%, 11/1/00 $24,927,000 24,927,000
------------------------------------------------------------------------------------
Federal Home Loan Bank, 6.45%, 11/1/00 4,551,000 4,551,000
------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.38%, 11/20/00 30,000,000 29,898,983
------------------------------------------------------------------------------------
Ford Motor Credit Co., 6.45%, 11/2/00 8,560,000 8,558,466
------------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.50%, 11/29/00 10,000,000 9,949,445
--------------
Total Short-Term Notes (Cost $77,884,894) 77,884,894
------------------------------------------------------------------------------------
Total Investments, at Value (Cost $855,791,102) 101.8% 1,016,121,383
------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.8) (18,229,980)
----------------------------
Net Assets 100.0% $ 997,891,403
============================
</TABLE>
Footnotes to Statement of Investments
1. Non-income-producing security.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES October 31, 2000
<TABLE>
==================================================================================
<S> <C>
Assets
Investments, at value (cost $855,791,102)--
see accompanying statement $1,016,121,383
----------------------------------------------------------------------------------
Cash 214,873
----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 9,336,897
Interest and dividends 576,878
Shares of capital stock sold 369,441
Other 44,081
--------------
Total assets 1,026,663,553
==================================================================================
Liabilities
Payables and other liabilities:
Shares of capital stock redeemed 27,935,615
Distribution and service plan fees 204,140
Directors' compensation 128,049
Transfer and shareholder servicing agent fees 71,821
Other 432,525
--------------
Total liabilities 28,772,150
==================================================================================
Net Assets $ 997,891,403
==============
==================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 52,094,761
----------------------------------------------------------------------------------
Additional paid-in capital 764,256,058
----------------------------------------------------------------------------------
Accumulated net investment loss (107,064)
----------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 21,317,367
----------------------------------------------------------------------------------
Net unrealized appreciation on investments 160,330,281
--------------
Net Assets $ 997,891,403
==============
==================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $569,085,682 and 29,339,119 shares of capital stock outstanding) $19.40
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $20.58
----------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $336,225,369 and 17,862,692 shares of capital stock
outstanding) $18.82
----------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $79,101,945 and 4,200,841 shares of capital stock
outstanding) $18.83
----------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $13,478,407 and 692,109 shares of capital
stock outstanding) $19.47
</TABLE>
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended October 31, 2000
<TABLE>
==================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $144,969) $ 17,089,089
----------------------------------------------------------------------------------
Interest 1,971,690
------------
Total income 19,060,779
==================================================================================
Expenses
Management fees 10,877,808
----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 3,162,132
Class B 3,914,645
Class C 948,254
----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 733,177
Class B 808,984
Class C 160,626
Class Y 52,580
----------------------------------------------------------------------------------
Shareholder reports 787,484
----------------------------------------------------------------------------------
Custodian fees and expenses 60,903
----------------------------------------------------------------------------------
Directors' compensation 12,732
----------------------------------------------------------------------------------
Other 542,450
------------
Total expenses 22,061,775
Less expenses paid indirectly (14,339)
Less reimbursement of expenses (597,741)
------------
Net expenses 21,449,695
==================================================================================
Net Investment Loss (2,388,916)
==================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain on investments 29,632,446
----------------------------------------------------------------------------------
Net change in unrealized depreciation on investments (47,103,924)
------------
Net realized and unrealized loss (17,471,478)
==================================================================================
Net Decrease in Net Assets Resulting from Operations $(19,860,394)
============
</TABLE>
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
STATMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended October 31, 2000 1999
=====================================================================================================
<S> <C> <C>
Operations
Net investment loss $ (2,388,916) $ (2,766,497)
-----------------------------------------------------------------------------------------------------
Net realized gain (loss) 29,632,446 183,043,399
-----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (47,103,924) (87,953,317)
--------------------------------
Net increase (decrease) in net assets resulting from operations (19,860,394) 92,323,585
=====================================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A -- (6,746,450)
Class B -- (1,678,587)
Class C -- (433,959)
Class Y -- (116,654)
-----------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A -- (26,322)
Class B -- (6,549)
Class C -- (1,693)
Class Y -- (455)
-----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (103,683,645) (38,188,719)
Class B (61,125,823) (20,944,577)
Class C (15,442,065) (5,714,099)
Class Y (1,711,662) (406,888)
=====================================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets resulting from
capital stock transactions:
Class A (224,908,276) (82,471,668)
Class B (114,394,586) 3,096,866
Class C (35,635,653) (8,962,373)
Class Y 562,999 4,332,150
=====================================================================================================
Net Assets
Total decrease (576,199,105) (65,946,392)
-----------------------------------------------------------------------------------------------------
Beginning of period 1,574,090,508 1,640,036,900
--------------------------------
End of period (including accumulated net investment
loss of $107,064 and $137,820, respectively) $ 997,891,403 $1,574,090,508
================================
</TABLE>
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended October 31, 2000 1999 1998 1997 1996(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $21.77 $21.46 $20.49 $17.30 $14.51
-----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .04 .02 .15 .11 .08
Net realized and unrealized gain .17 1.28 1.80 4.07 3.79
----------------------------------------------------------------------
Total income from investment operations .21 1.30 1.95 4.18 3.87
-----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.15) (.11) (.07) (.10)
Dividends in excess of net investment income -- --(2) -- -- --
Distributions from net realized gain (2.58) (.84) (.87) (.92) (.98)
----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (2.58) (.99) (.98) (.99) (1.08)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.40 $21.77 $21.46 $20.49 $17.30
======================================================================
=============================================================================================================================
Total Return, at Net Asset Value(3) 1.44% 6.15% 9.87% 25.41% 28.39%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $569,086 $906,698 $976,655 $699,230 $412,246
-----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $685,319 $977,120 $853,061 $560,582 $338,429
-----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income 0.05% 0.07% 0.83% 0.74% 0.58%
Expenses 1.61% 1.60% 1.59%(5) 1.60%(5) 1.71%(5)
Expenses, net of voluntary assumption 1.56% N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 62% 21% 20% 36%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. Less than $0.005 per share.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
<TABLE>
<CAPTION>
Class B Year Ended October 31, 2000 1999 1998 1997 1996(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $21.32 $21.08 $20.17 $17.08 $14.37
-----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.17) (.11) .07 .05 .05
Net realized and unrealized gain .25 1.26 1.76 3.97 3.71
----------------------------------------------------------------------
Total income from investment operations .08 1.15 1.83 4.02 3.76
-----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.07) (.05) (.01) (.07)
Dividends in excess of net investment income -- --(2) -- -- --
Distributions from net realized gain (2.58) (.84) (.87) (.92) (.98)
----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (2.58) (.91) (.92) (.93) (1.05)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.82 $21.32 $21.08 $20.17 $17.08
======================================================================
=============================================================================================================================
Total Return, at Net Asset Value(3) 0.79% 5.51% 9.38% 24.71% 27.76%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $336,225 $520,146 $512,885 $298,348 $111,130
-----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $390,734 $541,440 $417,011 $200,752 $ 68,175
-----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.58)% (0.51)% 0.33% 0.25% 0.06%
Expenses 2.24% 2.17% 2.09%(5) 2.10%(5) 2.26%(5)
Expenses, net of voluntary assumption 2.19% N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 62% 21% 20% 36%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. Less than $0.005 per share.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class C Year Ended October 31, 2000 1999 1998 1997 1996(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $21.32 $21.07 $20.17 $17.07 $14.35
-----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.17) (.11) .07 .05 .04
Net realized and unrealized gain .26 1.26 1.75 3.98 3.71
----------------------------------------------------------------------
Total income from investment operations .09 1.15 1.82 4.03 3.75
-----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.06) (.05) (.01) (.05)
Dividends in excess of net investment income -- --(2) -- -- --
Distributions from net realized gain (2.58) (.84) (.87) (.92) (.98)
----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (2.58) (.90) (.92) (.93) (1.03)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.83 $21.32 $21.07 $20.17 $17.07
======================================================================
=============================================================================================================================
Total Return, at Net Asset Value(3) 0.83% 5.55% 9.32% 24.79% 27.73%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $79,102 $132,668 $140,461 $82,098 $29,256
-----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $94,621 $143,378 $116,160 $55,969 $18,099
-----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.55)% (0.48)% 0.33% 0.25% 0.06%
Expenses 2.21% 2.15% 2.10%(5) 2.10%(5) 2.20%(5)
Expenses, net of voluntary assumption 2.16% N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 62% 21% 20% 36%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. Less than $0.005 per share.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
<TABLE>
<CAPTION>
Class Y Year Ended October 31, 2000 1999 1998 1997(1)
=========================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $21.82 $21.54 $20.55 $16.50
---------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .04 .08 .21 .10
Net realized and unrealized gain .19 1.28 1.83 3.95
---------------------------------------------------
Total income from investment operations .23 1.36 2.04 4.05
---------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.24) (.18) --
Dividends in excess of net investment income -- --(2) -- --
Distributions from net realized gain (2.58) (.84) (.87) --
---------------------------------------------------
Total dividends and/or distributions
to shareholders (2.58) (1.08) (1.05) --
---------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.47 $21.82 $21.54 $20.55
===================================================
=========================================================================================================
Total Return, at Net Asset Value(3) 1.54% 6.45% 10.36% 24.55%
=========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $13,478 $14,579 $10,036 $3,086
---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $12,712 $12,065 $ 5,673 $1,372
---------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income .21% 0.32% 1.30% 1.20%
Expenses 1.45% 1.33% 1.14%(5) 1.19%(5)
Expenses, net of voluntary assumption 1.40% N/A N/A N/A
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 62% 21% 20%
</TABLE>
1. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
2. Less than $0.005 per share.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
21 | 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 an open-end management investment company.
The Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager has
entered into a sub-advisory agreement with OpCap Advisors.
The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B and Class C shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Directors, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Directors. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
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.
22 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
--------------------------------------------------------------------------------
Directors' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Directors. Benefits are based on years of
service and fees paid to each director during the years of service. During the
year ended October 31, 2000, a credit of $25,056 was made for the Fund's
projected benefit obligations and payments of $5,700 were made to retired
directors, resulting in an accumulated liability of $107,062 as of October 31,
2000.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enables directors to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Directors in shares of one
or more Oppenheimer funds selected by the director. The amount paid to the Board
of Directors under the plan will be determined based upon the performance of the
selected funds. Deferral of directors' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from its
ultimate characterization for federal income tax purposes. Also, due to timing
of dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 2000, amounts have been reclassified to reflect an
increase in paid-in capital of $4,293,640, a decrease in accumulated net
investment loss of $2,419,672, and a decrease in accumulated net realized gain
on investments of $6,713,312. This reclassification includes $6,713,312
distributed in connection with Fund share redemptions which increased paid-in
capital and reduced accumulated net realized gain. Net assets of the Fund were
unaffected by the reclassifications.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
23 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
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, 2000 Year Ended October 31, 1999
Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 7,369,319 $ 136,341,325 11,694,065 $ 252,611,389
Dividends and/or
distributions reinvested 5,320,582 99,335,067 2,024,604 43,002,612
Redeemed (25,006,301) (460,584,668) (17,571,687) (378,085,669)
------------------------------------------------------------------
Net decrease (12,316,400) $(224,908,276) (3,853,018) $ (82,471,668)
==================================================================
-----------------------------------------------------------------------------------------------
Class B
Sold 2,877,044 $ 52,021,342 6,613,830 $ 141,247,575
Dividends and/or
distributions reinvested 3,169,518 57,747,250 1,023,776 21,407,158
Redeemed (12,581,412) (224,163,178) (7,575,616) (159,557,867)
------------------------------------------------------------------
Net increase (decrease) (6,534,850) $(114,394,586) 61,990 $ 3,096,866
==================================================================
-----------------------------------------------------------------------------------------------
Class C
Sold 1,049,415 $ 18,987,209 2,048,494 $ 43,807,706
Dividends and/or
distributions reinvested 811,047 14,785,640 282,097 5,898,654
Redeemed (3,881,669) (69,408,502) (2,774,837) (58,668,733)
------------------------------------------------------------------
Net decrease (2,021,207) $ (35,635,653) (444,246) $ (8,962,373)
==================================================================
-----------------------------------------------------------------------------------------------
Class Y
Sold 605,486 $ 11,164,899 444,747 $ 9,620,394
Dividends and/or
distributions reinvested 91,386 1,711,661 24,681 523,996
Redeemed (673,010) (12,313,561) (267,144) (5,812,240)
------------------------------------------------------------------
Net increase 23,862 $ 562,999 202,284 $ 4,332,150
==================================================================
</TABLE>
24 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2000, were
$593,201,569 and $1,197,242,711, respectively.
As of October 31, 2000, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $857,240,509 was:
Gross unrealized appreciation $190,064,510
Gross unrealized depreciation (31,183,636)
------------
Net unrealized appreciation $158,880,874
============
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 1.00% of
the first $400 million of average annual net assets of the Fund, 0.90% of the
next $400 million, 0.85% of the next $3.2 billion, 0.80% of the next $4 billion
and 0.75% of average annual net assets in excess of $8 billion. Effective
January 1, 2000, the Manager and the Sub-Advisor had voluntarily agreed to waive
advisory fees at an annual rate equal to 0.05% of the Fund's average net assets
for the quarter ended March 31, 2000. After March 31, 2000, such waiver will be
at the annual rate of 0.05% or 0.10% based on criteria set forth in the
Prospectus dated February 23, 2000. The foregoing waiver is voluntary and may be
terminated by the Manager or the Sub-Advisor at any time. The Fund's management
fee for the year ended October 31, 2000, was an annualized rate of 0.92%, before
any waiver by the Manager if applicable.
--------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager pays OpCap Advisors (the Sub-Advisor) based on the
fee schedule set forth in the Prospectus. For the year ended October 31, 2000,
the Manager paid $3,171,226 to the Sub-Advisor.
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. The Fund pays OFS an annual maintenance fee for each Fund
shareholder account and reimburses OFS for its out-of-pocket expenses.
--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
25 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
October 31, 2000 $1,031,889 $276,175 $242,907 $1,254,336 $133,352
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
October 31, 2000 $60,807 $1,885,419 $35,399
</TABLE>
The Fund has adopted Distribution and Service Plans for Class A, Class B
and Class C shares under Rule 12b-1 of the Investment Company Act. Under those
plans, the Fund pays the Distributor for all or a portion of its costs incurred
in connection with the distribution and/or servicing of the shares of the
particular class.
--------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. Under the plan, the Fund pays an
asset-based sales charge to the Distributor at an annual rate of 0.20% of
average annual net assets of Class A shares of the Fund (the Board of Directors
can set this rate up to 0.25%). Effective January 1, 2000, the asset-based
charge rate for Class A shares has been voluntarily reduced from 0.25% to 0.20%
of average annual net assets representing Class A shares. The Fund also pays a
service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. The Distributor currently uses the fees it receives from the
Fund to pay brokers, dealers and other financial institutions. The Distributor
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average annual net assets consisting of Class A shares of the Fund.
For the year ended October 31, 2000, payments under the Class A Plan totaled
$3,162,132, all of which was paid by the Distributor to recipients. That
included $112,846 paid to an affiliate of the Distributor's parent company. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.
--------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
26 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Directors may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carryforward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended October 31, 2000,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $3,914,645 $3,140,217 $8,827,375 2.63%
Class C Plan 948,254 217,635 1,613,994 2.04
</TABLE>
================================================================================
5. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the year ended or at October
31, 2000.
27 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Directors and Shareholders of
Oppenheimer Quest Value Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Quest Value Fund, Inc. as of
October 31, 2000, and the related statement of operations, the statement of
changes in net assets and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets for the year ended October 31, 1999, and the financial
highlights for each of the years in the four-year period ended October 31, 1999,
were audited by other auditors whose report dated November 19, 1999, expressed
an unqualified opinion on this information.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian
and brokers; and where confirmations were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Quest Value Fund, Inc. as of October 31, 2000, the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2000
28 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $2.5824 per share were paid to Class A, Class B, Class C
and Class Y shareholders, on December 8, 1999, of which $1.6429 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).
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.
29 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
OPPENHEIMER QUEST VALUE FUND, INC.
<TABLE>
====================================================================================================
<S> <C>
Officers and Directors Bridget A. Macaskill, Chairman of the Board of Directors and President
Paul Y. Clinton, Director
Thomas W. Courtney, Director
Robert G. Galli, Director
Lacy B. Herrmann, Director
George Loft, Director
O. Leonard Darling, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
====================================================================================================
Investment Advisor OppenheimerFunds, Inc.
====================================================================================================
Sub-Advisor OpCap Advisors
====================================================================================================
Distributor OppenheimerFunds Distributor, Inc.
====================================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
====================================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
====================================================================================================
Independent Auditors KPMG LLP
====================================================================================================
Legal Counsel Mayer, Brown & Platt
For more complete information about Oppenheimer Quest Value
Fund, Inc., please refer to the Prospectus. To obtain a copy, call
your financial advisor, or call OppenheimerFunds Distributor, Inc. at
1.800.525.7048, or visit the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.
Shares of Oppenheimer funds are not deposits or obligations of any
bank, are not guaranteed by any bank, are not insured by the FDIC or
any other agency, and involve investment risks, including the possible
loss of the principal amount invested.
Oppenheimer funds are distributed by OppenheimerFunds Distributor,
Inc., Two World Trade Center, New York, NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
</TABLE>
30 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
===========================================================================================================
<S> <C> <C>
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
===========================================================================================================
Equity
Stock Stock & Bond
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
===========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R) California Municipal Fund(2,3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund(2)
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
===========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund subject to shareholder approval.
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
31 | OPPENHEIMER QUEST VALUE FUND, INC.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
Internet
24-hr access to account information and transactions(1)
www.oppenheimerfunds.com
------------------------------------------------------------------------------
General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
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PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
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Telecommunications Device for the Deaf (TDD)
Mon-Fri 9am-6:30pm ET
1.800.843.4461
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OppenheimerFunds Market Hotline
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
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Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
------------------------------------------------------------------------------
Ticker Symbols Class A: QFVFX Class B: QFVBX Class C: QFVCX Class Y: QFVYX
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[logo] OppenheimerFunds(R)
Distributor, Inc.
RA0225.001.1000 December 30, 2000
