<PAGE>
OPPENHEIMER VALUE STOCK FUND
ANNUAL REPORT DECEMBER 31, 1993
[LOGO]
"I WANT HER TO HAVE EVERYTHING MY PARENTS GAVE ME.
"THIS FUND GIVES US THE POTENTIAL FOR THE KIND OF LONG-TERM GROWTH WE NEED."
[GRAPHIC]
<PAGE>
FUND FACTS
- -------------------------------------------------------------------------------
Five Facts Every Shareholder Should Know About
Oppenheimer Value Stock Fund
---------------------------------------------------------
1 The Fund's objective is to seek long-term growth
In this report: of capital and income, primarily through
investments in the stocks of well-established
Answers to two companies. The Fund invests primarily in stocks
timely questions you that pay cash dividends.
should ask your
Fund's managers.
---------------------------------------------------------
/ /With the U.S. 2 The Fund's total return at net asset value for
stock market at Class A shares was 8.97% in the 12 months ended
record labels, December 31, 1993. Total return at net asset
how can you find value for Class B shares from inception of the
high-quality stocks Class on May 1, 1993 to December 31, 1993 was
at attractive prices? 4.63%.(1)
---------------------------------------------------------
/ / How has the 3 Your Fund's managers use a value investment
managers' value strategy, purchasing stocks that they believe are
strategy benefited priced significantly below their normal levels and
the portfolio? selling stocks that they believe have reached or
exceeded normal valuations.
---------------------------------------------------------
4 The Fund's top five stock holdings at December 31,
1993, were:(2)
GENERAL ELECTRIC CO. The sixth largest company in
the U.S., with a diversified portfolio of
operations.
MINNESOTA MINING AND MANUFACTURING CO. Also known
as 3M; an international manufacturer of industrial
and consumer products.
AMP, INC. The world's leading producer of
electrical/electronic connection devices.
PFIZER, INC. A leading drug company and
manufacturer of medical devices, consumer
products, specialty chemicals, and drugs.
PITNEY BOWES, INC. A world leader in mailing,
shipping, and weighing systems, as well as copiers
and facsimile machines.
---------------------------------------------------------
5 "With the U.S. stock market near record highs, we
are identifying value stock opportunities by
focusing on well-known companies that are
restructuring operations and refocusing on their
core businesses. Many of our investments in
consumer-driven companies have performed very
well, producing substantial capital gains."
PORTFOLIO MANAGER, DAVID SALERNO,
DECEMBER 31, 1993
CONCERT CAPITAL MANAGEMENT, INC., THE
FUND'S SUB-ADVISOR
1. Based on the change in net asset value per Class A share from 12/31/92 to
12/31/93. The Fund's average annual total returns after deducting the current
maximum sales charge of 5.75%, for the 1- and 5-year periods ended 12/31/93 were
2.70% and 11.10%, respectively. Total return for Class B shares from 5/1/93
(inception of the class) and held until 12/31/93 was -0.37%. This reflects the
change in value of a hypothetical investment made on 5/1/93 and held until
12/31/93, with all dividends and capital gains distributions reinvested and
after applying the contingent deferred sales charge of 5%. All total returns
include reinvestment of dividends and capital gains distributions.
2. The Fund's portfolio is subject to change.
Past performance is not indicative of future results. 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.
2 Oppenheimer Value Stock Fund
<PAGE>
REPORT TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Oppenheimer Value Stock Fund Class A produced a
total return at net asset value of 8.97% for the
12 months ended December 31, 1993. Total return at
net asset value for Class B shares from inception
of the Class on May 1, 1993 to December 31, 1993,
was 4.63%(3).
To seek capital appreciation, the Fund's
managers use a value strategy--purchasing stocks
whose prices have dropped below their perceived
normal valuations and holding them until the
managers believe they have fully realized their
true value. To maximize the portfolio's stability,
we invest primarily in high-quality companies that
(1) have achieved above-average profitability; (2)
have strong balance sheets; and (3) appear
positioned to generate above-average dividend
growth.
The U.S. economy remains in a period of
moderate growth, and interest rates have continued
to decline steadily for most of the year. In this
environment, and with the U.S. stock market
reaching record highs, our challenge has been to
find companies meeting these criteria at
attractive valuations.
In the current environment, we have
identified opportunities for growth by seeking out
high-quality companies that are restructuring
their operations to focus on core businesses. For
example, we recently invested in American Express,
which has sold off its Shearson Lehman brokerage
business to focus on its travel service and charge
card operations. We also invested in K Mart, which
has divested parts of its specialty retailing
group and used the proceeds to upgrade its
discount stores. A third example is Xerox, which
is in the process of selling its financial
services operations and has gained an advantage
over its Japanese competitors in the document
processing equipment business as a result of the
dramatic strengthening of the yen against the
dollar.
Another interesting recent investment is
Pioneer Hi-Bred International, the nation's
leading supplier of seed corn to farmers. We have
built a position in this company in anticipation
of much higher plantings after the flood in the
Mid West during 1993.
In the past six months, the Fund
realized substantial gains from our value stock
strategy. For example, Eastman Kodak, which we
purchased in early 1993, has worked through its
highly publicized management difficulties,
allowing us to sell a portion of our investment at
a significant gain.
We are pleased that Oppenheimer Value
Stock Fund continues to produce attractive total
returns, and we look forward to serving your
investment needs in the year ahead.
/s/ James C. Swain /s/Jon S. Fossel
Chairman, Oppenheimer President, Oppenheimer
Integrity Funds Integrity Funds
for Oppenheimer for Oppenheimer Value
Value Stock Fund Stock Fund
January 21, 1994
3. See footnote 1, page 2.
3 Oppenheimer Value Stock Fund
<PAGE>
STATEMENT OF INVESTMENTS December 31, 1993
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM NOTES-9.1%
- -----------------------------------------------------------------------------------------------------------------------------
Caterpillar Financial Services Corp., 3.40%, 1/6/94 $2,000,000 $1,999,056
------------------------------------------------------------------------------------------
ConAgra, Inc., 3.40%, 1/11/94 910,000 909,140
------------------------------------------------------------------------------------------
Corning, Inc., 3.50%, 1/5/94 1,900,000 1,899,261
------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 3.05%, 1/5/94 645,000 645,000
------------------------------------------------------------------------------------------
Indiana Michigan Power Co., 3.50%, 1/4/94 1,330,000 1,329,612
------------------------------------------------------------------------------------------
Public Service Co. of Colorado, 3.70%, 1/7/94 1,870,000 1,868,847
----------
Total Short-Term Notes (Cost $8,650,916) 8,650,916
SHARES
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS-89.5%
- -----------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS-7.1%
- -----------------------------------------------------------------------------------------------------------------------------
ALUMINUM-0.9% Reynolds Metals Co. 18,000 816,750
- -----------------------------------------------------------------------------------------------------------------------------
CHEMICALS-1.3% Du Pont (E.I.) De Nemours & Co. 25,000 1,206,250
- -----------------------------------------------------------------------------------------------------------------------------
CHEMICALS: SPECIALTY-1.9% Lubrizol Corp. (The) 25,500 870,187
------------------------------------------------------------------------------------------
Nalco Chemical Co. 26,500 993,750
----------
1,863,937
- -----------------------------------------------------------------------------------------------------------------------------
METAL: MISCELLANEOUS-1.2% Phelps Dodge Corp. 23,500 1,145,625
- -----------------------------------------------------------------------------------------------------------------------------
PAPER AND FOREST PRODUCTS-1.8% Westvaco Corp. 23,000 819,375
------------------------------------------------------------------------------------------
Willamette Industries, Inc. 19,000 940,500
----------
1,759,875
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS-15.9%
- -----------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES-1.8% Ford Motor Co. 27,000 1,741,500
- -----------------------------------------------------------------------------------------------------------------------------
AUTO PARTS: AFTER MARKET-1.9% Genuine Parts Co. 48,500 1,824,813
- -----------------------------------------------------------------------------------------------------------------------------
HARDWARE AND TOOLS-1.3% Stanley Works (The) 28,500 1,268,250
- -----------------------------------------------------------------------------------------------------------------------------
LEISURE TIME-1.4% Eastman Kodak Co. 24,800 1,388,800
- -----------------------------------------------------------------------------------------------------------------------------
PUBLISHING-3.6% Dun & Bradstreet Corp. (The) 30,000 1,848,750
------------------------------------------------------------------------------------------
McGraw-Hill, Inc. 23,000 1,555,375
----------
3,404,125
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: DEPARTMENT May Department Stores Co. 40,500 1,594,687
STORES-1.7%
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: GENERAL K Mart Corp. 42,100 894,625
------------------------------------------------------------------------------------------
MERCHANDISE CHAINS-2.4% Penney (J.C.) Co., Inc. 26,500 1,387,938
----------
2,282,563
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY-0.7% Rite Aid Corp. 40,000 635,000
- -----------------------------------------------------------------------------------------------------------------------------
TEXTILES: APPAREL V.F. Corp. 22,500 1,037,812
MANUFACTURERS-1.1%
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS-10.8%
- -----------------------------------------------------------------------------------------------------------------------------
BEVERAGES: ALCOHOLIC-1.4% Brown-Forman Corp., Cl. B 15,500 1,352,375
- -----------------------------------------------------------------------------------------------------------------------------
DRUGS-2.3% Pfizer, Inc. 32,500 2,242,500
</TABLE>
4 Oppenheimer Value Stock Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
FOOD PROCESSING-2.9% CPC International, Inc. 28,000 $1,333,500
------------------------------------------------------------------------------------------
Gerber Products Co. 19,000 539,125
------------------------------------------------------------------------------------------
Pioneer Hi-Bred International, Inc. 21,000 819,000
----------
2,691,625
- -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: DIVERSIFIED-2.0% Bristol-Myers Squibb Co. 33,000 1,918,125
- -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS-1.0% Clorox Co. (The) 18,300 992,775
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS-1.2% Becton, Dickinson & Co. 30,600 1,097,775
- -----------------------------------------------------------------------------------------------------------------------------
ENERGY-7.9%
- -----------------------------------------------------------------------------------------------------------------------------
OIL: INTEGRATED DOMESTIC-1.7% Atlantic Richfield Co. 10,500 1,105,125
------------------------------------------------------------------------------------------
USX-Marathon Group 32,000 528,000
----------
1,633,125
- -----------------------------------------------------------------------------------------------------------------------------
OIL: INTEGRATED Amoco Corp. 26,500 1,401,187
INTERNATIONAL-6.2% ------------------------------------------------------------------------------------------
Chevron Corp. 22,000 1,916,750
------------------------------------------------------------------------------------------
Mobil Corp. 19,500 1,540,500
------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 10,200 1,064,625
----------
5,923,062
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL-10.7%
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: American Express Co. 40,500 1,250,438
MISCELLANEOUS-1.3%
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: LIFE-1.0% Jefferson-Pilot Corp. 19,850 930,469
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: MULTI-LINE-1.1% Unitrin, Inc. 23,500 1,022,250
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: PROPERTY AND Chubb Corp. (The) 9,500 739,812
CASUALTY-2.5% ------------------------------------------------------------------------------------------
SAFECO Corp. 30,000 1,650,000
----------
2,389,812
- -----------------------------------------------------------------------------------------------------------------------------
MAJOR BANKS: REGIONAL-4.8% Comerica, Inc. 51,000 1,357,875
------------------------------------------------------------------------------------------
CoreStates Financial Corp. 56,000 1,463,000
------------------------------------------------------------------------------------------
Norwest Corp. 38,000 926,250
------------------------------------------------------------------------------------------
Wachovia Corp. 25,540 855,590
----------
4,602,715
- -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL-16.5%
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES-1.4% Donnelley (R.R.) & Sons Co. 28,500 887,062
------------------------------------------------------------------------------------------
Omnicom Group, Inc. 10,000 462,500
----------
1,349,562
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT-8.4% AMP, Inc. 40,000 2,525,000
------------------------------------------------------------------------------------------
General Electric Co. 29,000 3,041,375
------------------------------------------------------------------------------------------
Grainger (W.W.), Inc. 22,000 1,265,000
------------------------------------------------------------------------------------------
Hubbell, Inc., Cl.B 22,021 1,191,887
----------
8,023,262
</TABLE>
5 Oppenheimer Value Stock Fund
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
MANUFACTURING: DIVERSIFIED Crane Co. 17,800 $ 440,550
INDUSTRIALS-5.2% ------------------------------------------------------------------------------------------
Dover Corp. 19,500 1,184,625
------------------------------------------------------------------------------------------
General Signal Corp. 37,500 1,289,063
------------------------------------------------------------------------------------------
Harsco Corp. 24,000 975,000
------------------------------------------------------------------------------------------
Parker-Hannifin Corp. 29,000 1,094,750
----------
4,983,988
- -----------------------------------------------------------------------------------------------------------------------------
RAILROADS-1.5% Norfolk Southern Corp. 20,000 1,410,000
- -----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY-13.3%
AEROSPACE/DEFENSE-4.1% Boeing Co. (The) 14,700 635,775
------------------------------------------------------------------------------------------
Lockheed Corp. 25,000 1,706,250
------------------------------------------------------------------------------------------
Rockwell International Corp. 22,000 816,750
------------------------------------------------------------------------------------------
TRW, Inc. 10,500 727,125
----------
3,885,900
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SYSTEMS-0.9% International Business Machines Corp. 14,300 807,950
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: INSTRUMENTATION-2.1% Hewlett-Packard Co. 25,500 2,014,500
- -----------------------------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT AND Minnesota Mining and Manufacturing Co. 25,000 2,718,750
SUPPLIES-6.2% ------------------------------------------------------------------------------------------
Pitney Bowes, Inc. 50,000 2,068,750
------------------------------------------------------------------------------------------
Xerox Corp. 13,500 1,206,562
----------
5,994,062
- -----------------------------------------------------------------------------------------------------------------------------
UTILITIES-7.3%
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRIC COS.-3.7% Allegheny Power System, Inc. 11,000 291,500
------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp. 46,000 931,500
------------------------------------------------------------------------------------------
NIPSCO Industries, Inc. 26,000 854,750
------------------------------------------------------------------------------------------
SCANA Corp. 16,500 820,875
------------------------------------------------------------------------------------------
Union Electric Co. 16,000 628,000
----------
3,526,625
NATURAL GAS-1.0% Consolidated Natural Gas Co. 20,500 963,500
- -----------------------------------------------------------------------------------------------------------------------------
TELEPHONE (NEW)-2.6% Ameritech Corp. 15,600 1,197,300
------------------------------------------------------------------------------------------
Bell Atlantic Corp. 7,600 448,400
------------------------------------------------------------------------------------------
Southern New England Telecommunications Corp. 24,500 885,063
----------
2,530,763
Total Common Stocks (Cost $69,387,905) 85,507,145
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $78,038,820) 98.6% 94,158,061
- -----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.4 1,470,159
------- ----------
NET ASSETS 100.0% $95,628,220
------- ----------
------- ----------
</TABLE>
See accompanying Notes to Financial Statements.
6 Oppenheimer Value Stock Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES December 31, 1993
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ASSETS Investments, at value (cost $78,038,820)-see accompanying statement $94,158,061
------------------------------------------------------------------------------------------
Cash 1,516,373
------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 540,617
Dividends and interest 176,365
Investments sold 13,685
------------------------------------------------------------------------------------------
Other 9,052
-----------
Total assets 96,414,153
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 403,474
Shares of beneficial interest redeemed 240,929
Distribution assistance-Note 4 57,283
Dividends and distributions 34,797
Deferred trustee fees-Note 5 8,765
Other 40,685
-----------
Total liabilities 785,933
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $95,628,220
-----------
-----------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $79,551,976
NET ASSETS ------------------------------------------------------------------------------------------
Undistributed net investment income 225
------------------------------------------------------------------------------------------
Distributions in excess of net realized gain from investment transactions (43,222)
------------------------------------------------------------------------------------------
Net unrealized appreciation on investments-Note 3 16,119,241
-----------
Net assets $95,628,220
-----------
-----------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $90,469,747 and 6,279,938 shares of beneficial interest outstanding) $14.41
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $15.29
------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based
on net assetsof $5,158,473 and 359,470 shares of beneficial interest outstanding) $14.35
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer Value Stock Fund
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended December 31, 1993
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INVESTMENT INCOME Dividends $2,301,756
------------------------------------------------------------------------------------------
Interest 324,670
----------
Total income 2,626,426
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees-Note 4 614,932
------------------------------------------------------------------------------------------
Distribution assistance:
Class A-Note 4 198,834
Class B-Note 4 16,056
------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees-Note 4 72,447
------------------------------------------------------------------------------------------
Shareholder reports 57,937
------------------------------------------------------------------------------------------
Legal and auditing fees 20,583
------------------------------------------------------------------------------------------
Custodian fees and expenses 20,266
------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 8,929
Class B 1,337
------------------------------------------------------------------------------------------
Trustees' fees and expenses 7,731
------------------------------------------------------------------------------------------
Other 9,117
----------
Total expenses 1,028,169
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,598,257
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain on investments 4,772,844
------------------------------------------------------------------------------------------
GAIN (LOSS) ON INVESTMENTS Net change in unrealized appreciation on investments (52,118)
----------
Net realized and unrealized gain on investments 4,720,726
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,318,983
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Value Stock Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
OPERATIONS Net investment income $ 1,598,257 $ 1,250,163
------------------------------------------------------------------------------------------
Net realized gain on investments 4,772,844 1,430,983
------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation on investments (52,118) 2,336,062
----------- -----------
Net increase in net assets resulting from
operations 6,318,983 5,017,208
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.288 and $.322 per share, respectively) (1,573,023) (1,252,511)
SHAREHOLDERS Class B ($.166 per share) (33,142) --
------------------------------------------------------------------------------------------
Distributions from net realized gain on investments:
Class A ($.76 and $.346 per share, respectively) (4,515,011) (1,431,916)
Class B ($.76 per share) (258,413) --
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS Class A beneficial interest transactions-Note 2 30,973,434 7,662,567
------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Class B beneficial interest transactions-Note 2 5,339,170 --
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 36,251,998 9,995,348
------------------------------------------------------------------------------------------
Beginning of year 59,376,222 49,380,874
----------- -----------
End of year (including undistributed net
investment income of $225 and $8,133, respectively) $95,628,220 $59,376,222
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Value Stock Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------------------------------------------- ------------
YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31,
1993 1992 1991(3) 1990 1989 1988 1987 1986(2) 1993(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of
period
- ------------------------------------------------------------------------------------------------------------------------------------
$14.19 $13.57 $11.39 $12.08 $10.47 $ 9.51 $9.98 $10.16 $14.60
Income (loss) from investment
operations:
Net investment income .29 .32 .33 .37 .40 .33 .34 .01 .17
Net realized and unrealized
gain (loss) on investments .98 .97 2.49 (.57) 1.87 1.15 (.22) (.19) .51
------- ------ ------ ------ ------ ------ ------ ------ ---------
Total income (loss) from
investment operations 1.27 1.29 2.82 (.20) 2.27 1.48 .12 (.18) .68
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net
investment income (.29) (.32) (.33) (.39) (.41) (.33) (.41) -- (.17)
Distributions from net realized
gain on investments (.76) (.35) (.31) (.10) (.25) (.19) (.18) -- (.76)
------- ------ ------ ------ ------ ------ ------ ------ ---------
Total dividends and distributions
to shareholders (1.05) (.67) (.64) (.49) (.66) (.52) (.59) -- (.93)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.41 $14.19 $13.57 $11.39 $12.08 $10.47 $9.51 $ 9.98 $14.35
------- ------ ------ ------ ------ ------ ------ ------ ---------
------- ------ ------ ------ ------ ------ ------ ------ ---------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 8.97% 9.61% 25.23% (1.53)% 21.93% 15.61% 1.10% (1.77)% 4.63%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $90,470 $59,376 $49,381 $40,153 $37,713 $27,434 $19,377 $20,162 $5,158
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $80,229 $53,485 $45,581 $39,104 $33,742 $24,658 $22,322 (2) $2,527
- ------------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 6,280 4,184 3,639 3,526 3,122 2,620 2,039 2,021 359
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.97% 2.34% 2.59% 3.22% 3.51% 3.45% 3.15% (2) .97%(5)
Expenses, before voluntary
reimbursement 1.24% 1.19% 1.31% 1.36% 1.40% 1.21% .70% (2) 2.14%(5)
Expenses, net of voluntary
reimbursement N/A N/A 1.26% 1.30% 1.30% 1.19% N/A (2) N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 24.3% 12.3% 14.5% 13.5% 14.9% 13.1% 10.8% (2) 24.3%
<FN>
1. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
2. For the period from December 22, 1986 to December 31, 1986. Ratios during
this development period would not be indicative of representative results.
3. On March 28, 1991, Oppenheimer Management Corporation became the investment
advisor to the Fund.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the year
ended December 31, 1993 were $25,469,747 and $17,554,755, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Value Stock Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Value Stock Fund (the Fund) is a separate
ACCOUNTING POLICIES fund of Oppenheimer Integrity Funds, a diversified,
open-end management investment company registered
under the Investment Company Act of 1940, as amended.
The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers
both Class A and Class B shares. Class A shares are
sold with a front-end sales charge. Class B shares may
be subject to a contingent deferred sales charge. Both
classes of shares have identical rights to earnings,
assets and voting privileges, except that each class
has its own distribution plan, expenses directly
attributable to a particular class and exclusive
voting rights with respect to matters affecting a
single class. 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 4:00 p.m. (New York time) 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 asked
price or the last sale price on the prior trading day.
Short-term 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. Securities for
which market quotes are not readily available are
valued under procedures established by the Board of
Trustees to determine fair value in good faith.
-----------------------------------------------------
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 INCOME 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 tax provision is required.
-----------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
distributions to shareholders are recorded on the
ex-dividend date.
-----------------------------------------------------
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. 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.
- -------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL INTEREST value shares of beneficial interest of each class.
Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993(1) YEAR ENDED DECEMBER 31, 1992
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,167,501 $19,481,793 741,739 $10,397,819
Issued in connection with
the acquisition of Oppenheimer
Blue Chip Fund-Note 6 1,356,899 20,149,959 -- --
Dividends and distributions reinvested 379,876 5,528,826 58,050 817,191
Redeemed (1,808,202) (14,187,144) (254,477) (3,552,443)
--------- ----------- ------- -----------
Net increase 2,096,074 $30,973,434 545,312 $ 7,662,567
--------- ----------- ------- -----------
--------- ----------- ------- -----------
----------------------------------------------------------------------------------------------------------
Class B:
Sold 357,108 $ 5,313,077 -- $ --
Dividends and distributions reinvested 18,763 270,609 -- --
Redeemed (16,401) (244,516) -- --
Net increase 359,470 $ 5,339,170 -- $ --
<FN>
1. For the year ended December 31, 1993 for Class A
shares and for the period from May 1, 1993 (inception
of offering) to December 31, 1993 for Class B shares.
</TABLE>
11 Oppenheimer Value Stock Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- -------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At December 31, 1993, net unrealized appreciation of
LOSSES ON INVESTMENTS investments of $16,119,241 was composed of gross
appreciation of $18,112,985, and gross depreciation of
$1,993,744.
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER with the investment advisory agreement with the Fund
TRANSACTIONS WITH which provides for an annual fee of .75% on the first
AFFILIATES $100 million of net assets with a reduction of .03%
on each $200 million thereafter, to .66% on net assets
in excess of $500 million. The Manager has agreed to
reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended December 31, 1993,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $296,555, of which $232,226
was retained by Oppenheimer Funds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. During
the year ended December 31, 1993, OFDI received
contingent deferred sales charges of $58 upon
redemption of Class B shares.
Oppenheimer Shareholder Services (OSS), a
division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of
providing such services are allocated ratably to these
companies.
Under separate approved plans of
distribution, each class may expend up to .25% of its
net assets annually to reimburse OFDI for costs
incurred in distributing shares of the Fund, including
amounts paid to brokers, dealers, banks and other
institutions. In addition, Class B shares are subject
to an asset-based sales charge of .75% of net assets
annually, to reimburse OFDI for sales commissions paid
from its own resources at the time of sale and
associated financing costs. In the event of termination
or discontinuance of the Class B plan of distribution,
the Fund would be contractually obligated to pay OFDI
for any expenses not previously reimbursed or recovered
through contingent deferred sales charges. During the
year ended December 31, 1993, OFDI paid $149,525 to an
affiliated broker/dealer as reimbursement for Class A
distribution-related expenses and retained $16,056 as
reimbursement for Class B distribution-related expenses
and sales commissions.
- -------------------------------------------------------------------------------
5. DEFERRED TRUSTEE A former trustee elected to defer receipt of fees
COMPENSATION earned. These deferred fees earn interest at a rate
determined by the current Board of Trustees at the
beginning of each calendar year, compounded each
quarter-end. As of December 31, 1993, the Fund was
incurring interest at a rate of 6.01% per annum.
Deferred fees are payable in annual installments, with
accrued interest, each April 1 through 1995.
- -------------------------------------------------------------------------------
6. ACQUISITION OF On March 26, 1993, the Fund acquired all of the net
OPPENHEIMER assets of Oppenheimer Blue Chip Fund (Blue Chip),
BLUE CHIP FUND pursuant to an Agreement and Plan of Reorganization
approved by the Blue Chip shareholders on January 28,
1993. The Fund issued 1,356,899 shares of beneficial
interest, valued at $20,149,959, in exchange for the
net assets, resulting in combined net assets of
$83,976,756 on March 26, 1993. The net assets acquired
included net unrealized appreciation of $2,523,063. The
exchange was tax-free.
12 Oppenheimer Value Stock Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
- -------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Oppenheimer
Value Stock Fund:
We have audited the accompanying statement of
assets and liabilities, including the statement of
investments, of Oppenheimer Value Stock Fund as of
December 31, 1993, the related statement of operations
for the year then ended, the statements of changes in
net assets for the years ended December 31, 1993 and
1992, and the financial highlights for the period
January 1, 1991 to December 31, 1993. These financial
statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits. The financial highlights (except for total
return) for the period December 22, 1986 to December
31, 1990 were audited by other auditors whose report
dated February 4, 1991, expressed an unqualified
opinion on those financial highlights.
We conducted our audits in accordance with
generally accepted auditing standards. 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 also includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
Our procedures included confirmation of securities
owned at December 31, 1993 by correspondence with the
custodian and brokers; where replies 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 audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and
financial highlights present fairly, in all material
respects, the financial position of Oppenheimer Value
Stock Fund at December 31, 1993, the results of its
operations, the changes in its net assets, and the
financial highlights for the respective stated periods,
in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE
Denver, Colorado
January 21, 1994
13 Oppenheimer Value Stock Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
- -------------------------------------------------------------------------------
In early 1994, shareholders will receive information
regarding all dividends and distributions paid to them
by the Fund during calendar year 1993. Regulations of
the U.S. Treasury Department require the Fund to report
this information to the Internal Revenue Service.
A distribution of $.76 per share was paid on
December 30, 1993, of which $.671 was designated as a
"capital gain distribution" for federal income tax
purposes. Whether received in stock or 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 December 31, 1993 which are not designated
as capital gain distributions should be multiplied by
100% 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.
14 Oppenheimer Value Stock Fund
<PAGE>
OPPENHEIMER VALUE STOCK FUND
A Series of Oppenheimer Integrity Funds
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES James C. Swain, Chairman and
Chief Executive Officer
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and
President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice
President
David B. Salerno, Vice
President
George C. Bowen, Vice
President, Secretary and
Treasurer
Lynn M. Coluccy, Assistant
Treasurer
Robert G. Zack, Assistant
Secretary
-------------------------------------------------------
INVESTMENT ADVISOR Oppenheimer Management
Corporation
-------------------------------------------------------
SUB-ADVISOR Concert Capital Management,
Inc.
-------------------------------------------------------
DISTRIBUTOR Oppenheimer Funds Distributor,
Inc.
-------------------------------------------------------
TRANSFER AND Oppenheimer Shareholder
SHAREHOLDER Services
SERVICING AGENT
-------------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
-------------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche
-------------------------------------------------------
LEGAL COUNSEL Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of
Oppenheimer Value Stock Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
Value Stock Fund. For material information concerning
the Fund, see the Prospectus.
15 Oppenheimer Value Stock Fund
<PAGE>
"HOW MAY I HELP YOU?"
GENERAL INFORMATION
1-800-525-7048
Talk to a Customer Service
Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and
Saturday from 10:00 a.m.
to 2:00 p.m. ET.
TELEPHONE TRANSACTIONS
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Make account transactions with a
Customer Service Representative.
Monday through Friday from
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PHONELINK
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Get automated information or
make automated transactions.
24 hours a day, 7 days a week.
TELECOMMUNICATION
DEVICE FOR THE DEAF
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Service for the hearing impaired.
Monday through Friday from
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OPPENHEIMER FUNDS
INFORMATION HOTLINE
1800-835-3104
Hear timely and insightful
messages on the economy and
issues that affect your finances.
24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 30 different funds designed to help meet
virtually every investment need, Oppenheimer Shareholder Services offers a
variety of services to satisfy your individual needs. Whenever you require help,
we're only a toll-free phone call away.
[PHOTO]
Barbara Hennigar
President
Oppenheimer Shareholder Services
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives.
"We also make it easy for you to redeem shares, exchange shares, or
conduct AccountLink transactions, simply by calling our Telephone Transactions
number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated
voice response system, is available 24 hours a day,
7 days a week. PhoneLink gives you access to variety of fund, account, and
market information. You can even make purchases, exchanges and redemptions using
your touch-tone phone. Of course, PhoneLink will always give you the option to
speak with a Customer Service Representative during regular business hours.
[GRAPHIC]
"When you invest in OppenheimerFunds, you know you'll receive a high
level of customer service. The International Customer Service Association knows
it, too, as it recently awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
[LOGO]Oppenheimer Funds Distributors, Inc. Bulk Rate
P.O. Box 5270 U.S. Postage
Denver, CO 80217-5270 PAID
Permit No. 314
Farmingdale, NY
