<PAGE>
OPPENHEIMER DISCOVERY FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
OPPENHEIMER FUNDS.
"I'M PLANNING FOR MY FAMILY'S FUTURE NOW.
"BY INVESTING IN THIS AGGRESSIVE
STOCK FUND, WE PLAN TO TAKE PART
IN THE GROWTH OF COMPANIES
WITH HIGH LONG-TERM POTENTIAL."
<PAGE>
FUND FACTS
SIX FACTS EVERY SHAREHOLDER SHOULD KNOW
ABOUT OPPENHEIMER DISCOVERY FUND
- - -------------------------------------------------------------------------------
1 The Fund seeks capital appreciation by investing in a portfolio
of growth stocks. It currently focuses on stocks issued by smaller
companies with market capitalizations under $500 million.
- - -------------------------------------------------------------------------------
2 The Fund is designed for investors with longer-term investment horizons,
who can accept short-term volatility in the Fund's net asset value in
return for the potential for above-average, long-term gains.
- - -------------------------------------------------------------------------------
3 The Fund's total return at net asset value was -6.52% for the six
months ended March 31, 1994 and 10.98% for the 12 months ended
on that date.(1)
- - -------------------------------------------------------------------------------
4 The Fund holds a **** rating from Morningstar, Inc., an influential,
independent mutual fund monitoring service.(2)
- - -------------------------------------------------------------------------------
5 The Fund's average annual total returns for the 1- and 5-year periods
ended March 31, 1994 and since inception of the Fund on
September 11, 1986 were 4.60%, 16.16% and 17.40%, respectively(3)
- - -------------------------------------------------------------------------------
6 The five largest holdings in the portfolio at March 31 were:(4)
EMC CORP. Manufacturer of computer products.
GREEN TREE FINANCIAL CORP. Purchaser of housing contracts.
APPLE SOUTH, INC. Operator of full service restaurants.
COMPUWARE CORP. Developer of systems software products.
NAUTICA ENTERPRISES, Inc. Manufacturer of active and casual apparel.
- - -------------------------------------------------------------------------------
IN THIS REPORT:
ANSWERS TO TWO TIMELY
QUESTIONS YOU SHOULD
ASK YOUR FUND'S
MANAGERS.
/ / HOW HAS THE
STRENGTHENING
ECONOMY AFFECTED
SMALL-COMPANY
GROWTH STOCKS?
/ / ARE YOU CURRENTLY
FOCUSING ON ANY SPECIFIC
TYPES OF COMPANIES
OR STOCKS?
1. Based on the change in net asset value per share from 9/30/93 and 3/31/93 to
3/31/94, without deducting the current maximum sales charge of 5.75%. All total
return figures assume reinvestment of capital gains distributions.
2. Source: Morningstar, Inc., 3/31/94. Morningstar ranks funds by a quantitative
system that uses investment performance and risk assessment factors, and adjusts
returns for fees and sales loads, with 1 star as the lowest ranking and 5 stars
as the highest. Of 2,253 funds evaluated by Morningstar in that period, 576
funds received a 4-star or "above-average" ranking. 195 received a 5-star
ranking. Risk assessment reflects fund performance relative to 3-month
Treasury bill returns.
3. Average annual total returns are based on a hypothetical investment held
until 3/31/94, after deducting the current maximum sales charge of 5.75%.
4. The Fund's portfolio is subject to change.
All total return figures assume reinvestment of dividends and capital gains
distributions.
Past performance does not guarantee future results. The principal value and
return 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.
2 Oppenheimer Discovery Fund
<PAGE>
REPORT TO SHAREHOLDERS
The six-month period ended March 31, 1994 was a challenging one for growth
stocks, a fact reflected in Oppenheimer Discovery Fund's recent performance. For
the period, your Fund posted a total return at net asset value of -6.52%, while
for the 12 months ended on that date, that figure was 10.98%.(5)
Your Fund's portfolio is not, of course, immune to changes in the
economic cycle. With reports of stronger-than-expected fourth quarter economic
expansion, the stock market experienced price volatility early in 1994. A
number of stocks in the Fund's portfolio also experienced sharp corrections
amid concerns about the effects of rising interest rates on small-company
earnings.
The sell-off in small company shares is likely, however, to be
short-lived. As investors realize the positive impact of economic growth on
small company earnings, these stocks should again begin to outperform.
Given the current uncertainty about interest rates, your managers are
taking a somewhat cautious approach, using market rallies to take profits in
stocks whose prices have risen rapidly, building cash reserves, and using market
pull-backs to add to established positions and add new ones.
As noted in previous reports, well-managed, innovative companies in
several market sectors--technology; consumer cyclicals, such as specialty
retailing; and financial services stocks--continue to be the engines that
drive the Fund's performance.
Recently, however, your managers have been adding manufacturing and
industrial companies, whose earnings and stock prices stand to benefit from
the current economic environment.
For example, we bought ABT Building Products, a company whose
high-quality pressed-board alternative to lumber siding is quickly gaining
market share in the construction industry; added to our position in Johnstown
America Industries, a fast-growing rail car manufacturer; and established a
new position in Recoton, maker of phone, cable, and computer accessories.
Looking ahead, your management team is confident that small-company
growth stocks offer strong prospects for long-term capital appreciation.
We appreciate your confidence in Oppenheimer Discovery Fund, and we
look forward to continuing to help you meet your investment goals.
/s/ / Donald W. Spiro
Donald W. Spiro
President
Oppenheimer Discovery Fund
April 25, 1994
(5) See footnote 1, page 2.
3 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF INVESTMENTS March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS--16.3%
- - -----------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 3.55%,
dated 3/31/94, to be repurchased at $91,636,131 on 4/4/94
collateralized by U.S. Treasury Nts., 4.125%--9.50%, 5/15/94--
10/31/96, with a value of $58,558,015 and U.S. Treasury Bills,
0%, 5/19/94, with a value of $34,931,704 (Cost $91,600,000) $91,600,000 $91,600,000
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND IntelCom Group, Inc., 8% Cv. Sub. Debs., 9/24/98(2) 2,000,000 1,932,615
NOTES--4.8% IntelCom Group, Inc., 7% Cv. Sub. Nts., 10/30/98(2) 2,000,000 1,637,909
Medaphis Corp., 6.50% Cv. Sub. Debs., 1/1/00(2) 2,000,000 2,720,000
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs.,
8/15/00(2) 4,040,000 4,080,000
RHI Entertainment, Inc., 6.50% Cv. Sub. Debs., 6/1/03 3,250,000 4,480,938
Solectron Corp., 0% Liq. Yld. Opt. Sub. Nts., 5/5/12 4,101,600 7,740,000
Tops Appliance City, Inc., 6.50% Cv. Sub. Debs., 11/30/03(2) 4,000,000 2,820,000
United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 1,500,000 1,522,500
-----------
Total Corporate Bonds and Notes (Cost $23,222,841) 26,933,962
-----------
-----------
Units
- - -----------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS, AND Berjaya Singer Berhad Wts., Exp. 9/98 600,000 314,846
CERTIFICATES--0.2% China Aerospace International Holdings Ltd. Wts., Exp. 12/95 2,400,000 198,770
NationsMart Corp. Wts., Exp. 10/98 300,000 337,500
PerSeptive Technology Corp. Wts., Exp. 12/97 1,000 683,939
Windmere Corp. Wts., Exp. 1/98 238 --
Xoma Corp. Wts., Exp. 6/95 6,914 3,457
-----------
Total Rights, Warrants, and Certificates (Cost $870,203) 1,538,512
-----------
-----------
Shares
- - -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--81.1%
- - -----------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--2.5%
- - -----------------------------------------------------------------------------------------------------------------------------
CHEMICALS: SPECIALTY--0.9% BAREFOOT, INC.(1) 140,000 4,970,000
- - -----------------------------------------------------------------------------------------------------------------------------
METALS: MISCELLANEOUS--0.8% Addington Resources, Inc.(1) 100,000 1,425,000
Custom Chrome, Inc.(1) 130,000 3,055,000
-----------
4,480,000
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
STEEL--0.8% AK Steel Holding Corp.(1) 160,000 3,760,000
Rouge Steel Co., Cl. A(1) 39,000 838,500
-----------
4,598,500
-----------
-----------
</TABLE>
4 Oppenheimer Discovery Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS--23.8%
- - -----------------------------------------------------------------------------------------------------------------------------
AUTO PARTS: Bailey Corp.(1) 120,000 $1,245,000
AFTER MARKET--1.5% Breed Technologies, Inc. 50,000 1,643,750
O'Reilly Automotive, Inc.(1) 120,000 3,360,000
Stant Corp.(1) 150,000 2,400,000
-----------
8,648,750
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--0.3% EZ Communications, Inc., Cl. A(1) 144,000 1,782,000
- - -----------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--3.3% Autotote Corp., Cl. A(1) 120,000 2,340,000
Evergreen Media Corp., Cl. A(1) 53,000 675,750
Harveys Casinos Resorts(1) 90,000 1,327,500
Iwerks Entertainment, Inc.(1) 180,000 3,825,000
Monarch Casino & Resort, Inc.(1) 150,000 1,425,000
Players International, Inc.(1) 210,000 4,357,500
RIO HOTELS & CASINO, INC.(1) 120,000 1,725,000
WMS Industries, Inc.(1) 100,000 2,687,500
-----------
18,363,250
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
HOMEBUILDING--0.7% Lennar Corp. 124,000 3,844,000
- - -----------------------------------------------------------------------------------------------------------------------------
HOTELS/MOTELS--0.8% Hospitality Franchise Systems, Inc.(1) 80,000 4,400,000
- - -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD FURNISHINGS Berjaya Leisure 600,000 187,569
AND APPLIANCES--0.9% Berjaya Singer Berhad 1,500,000 2,312,936
Rhodes, Inc.(1) 140,000 2,467,500
-----------
4,968,005
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
LEISURE TIME--1.1% Grand Casinos, Inc.(1) 90,000 2,475,000
Mikohn Gaming Corp.(1) 50,000 762,500
Outboard Marine Corp. 150,000 2,887,500
-----------
6,125,000
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
PUBLISHING--1.0% Marvel Entertainment Group, Inc.(1) 140,000 2,922,500
Scientific Games Holdings Corp.(1) 115,000 2,530,000
-----------
5,452,500
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
RESTAURANTS--4.4% Applebee's International, Inc. 300,000 6,675,000
Apple South, Inc. 350,000 7,700,000
DF & R Restaurants, Inc.(1) 110,000 2,956,250
Marcus Corp. (The) 110,000 2,873,750
Outback Steakhouse, Inc.(1) 180,000 4,770,000
-----------
24,975,000
-----------
-----------
</TABLE>
5 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
RETAIL STORES: GENERAL Damark International, Inc.(1) 150,000 $3,300,000
MERCHANDISE CHAINS--0.6%
- - -----------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--4.8% Bed Bath & Beyond, Inc.(1) 130,000 3,770,000
CML Group, Inc. 207,000 3,441,375
General Nutrition Cos., Inc.(1) 270,000 6,682,500
Insurance Auto Auctions, Inc.(1) 65,000 1,803,750
Musicland Stores Corp.(1) 120,000 2,340,000
NationsMart Corp.(1) 300,000 1,125,000
Petco Animal Supplies, Inc.(1) 140,000 1,820,000
Rex Stores Corp.(1) 160,000 2,840,000
Sunglass Hut International, Inc.(1) 60,000 2,010,000
Ultimate Electronics, Inc.(1) 130,000 1,365,000
-----------
27,197,625
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
TEXTILES: APPAREL Authentic Fitness Corp.(1) 200,000 2,650,000
MANUFACTURERS--4.4% Mohawk Industries, Inc.(1) 145,000 3,951,250
Nautica Enterprises, Inc.(1) 310,000 7,440,000
Phillips-Van Heusen Corp. 110,000 3,836,250
Tommy Hilfiger Corp.(1) 199,000 7,139,125
-----------
25,016,625
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--12.9%
- - -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: Value Health, Inc.(1) 100,000 3,837,500
DIVERSIFIED--0.7%
- - -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: Athena Neurosciences, Inc.(1) 100,000 737,500
MISCELLANEOUS--8.1% Celtrix Pharmaceuticals, Inc.(1) 100,000 737,500
Cephalon, Inc.(1) 62,000 844,750
COR Therapeutics, Inc.(1) 72,500 860,938
Cygnus Therapeutic Systems(1) 150,000 1,425,000
Dentsply International, Inc.(1) 140,000 5,040,000
Ethical Holdings Ltd., Sponsored ADR(1) 320,000 3,040,000
Genetic Therapy, Inc.(1) 148,200 1,852,500
Gilead Sciences, Inc.(1) 52,000 559,000
Intergroup Healthcare Corp.(1) 60,000 2,700,000
Isis Pharmaceuticals, Inc.(1) 100,000 712,500
Martek Biosciences Corp.(1) 200,000 1,850,000
Matrix Pharmaceutical, Inc.(1) 100,000 1,112,500
Nature's Bounty, Inc.(1) 330,000 6,930,000
Noven Pharmaceuticals, Inc.(1) 140,000 2,432,500
Perrigo Co.(1) 100,000 2,250,000
PerSeptive Biosystems, Inc.(1) 130,379 3,780,991
PerSeptive Technology II Corp., Units(1) 205,000 5,842,500
SciClone Pharmaceuticals, Inc.(1) 137,000 2,106,375
Vertex Pharmaceuticals, Inc.(1) 50,000 668,750
-----------
45,483,304
-----------
-----------
</TABLE>
6 Oppenheimer Discovery Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
HOSPITAL MANAGEMENT--3.2% American Medical Response, Inc.(1) 70,000 $1,618,750
Clinicorp, Inc.(1) 50,000 50,000
Clinicorp, Inc.(1)(2) 450,000 366,750
Genesis Health Ventures, Inc.(1) 125,000 3,250,000
Horizon Healthcare Corp.(1) 242,300 5,209,450
Lincare Holdings, Inc.(1) 100,000 2,175,000
Mariner Health Group, Inc.(1) 120,000 2,430,000
Medaphis Corp.(1) 80,000 2,660,000
-----------
17,759,950
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS--0.9% MARQUETTE ELECTRONICS, INC., Cl. A(1) 130,000 2,080,000
Zoll Medical Corp.(1) 100,000 2,975,000
-----------
5,055,000
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
ENERGY--4.6%
- - -----------------------------------------------------------------------------------------------------------------------------
OIL AND GAS DRILLING--4.5% Alexander Energy Corp.(1) 312,500 1,562,500
Basin Exploration, Inc.(1) 300,000 2,700,000
Clayton Williams Energy, Inc.(1) 150,000 1,537,500
Cross Timbers Oil Co. 160,000 2,240,000
International Colin Energy Corp.(1) 90,000 1,158,750
Louis Dreyfus Natural Gas Corp.(1) 140,000 2,887,500
Nabors Industries, Inc.(1) 500,000 3,312,500
Newfield Exploration Co.(1) 80,000 1,700,000
Noble Drilling Corp.(1) 150,000 1,012,500
St. Mary Land & Exploration Co. 250,000 3,218,750
Stone Energy Corp.(1) 200,000 2,025,000
Trident NGL Holding, Inc. 210,000 1,863,750
-----------
25,218,750
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
OIL WELL SERVICES Weatherford International, Inc.(1) 100,000 837,500
AND EQUIPMENT--0.1%
- - -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL--9.6%
- - -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: BHC Financial, Inc. 171,250 2,782,813
MISCELLANEOUS--6.1% CMAC Investment Corp. 80,000 2,320,000
Credit Depot Corp.(1) 90,500 588,250
First USA, Inc. 190,000 6,697,500
Foothill Group, Inc. (The), Cl. A 350,000 4,637,500
Green Tree Financial Corp. 189,600 8,460,900
Insignia Financial Group, Inc., Cl. A(1) 50,000 987,500
</TABLE>
7 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL SERVICES: North American Mortgage Co. 35,000 $778,750
MISCELLANEOUS Olympic Financial Ltd.(1) 400,000 1,950,000
(continued) Servicios Financieros Quadrun SA, Sponsored ADR(1) 120,000 2,730,000
TFC Enterprises, Inc.(1) 200,000 2,500,000
-----------
34,433,213
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: LIFE--0.4% Physicians Health Services, Inc., Cl. A(1) 100,000 2,475,000
- - -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: MULTI-LINE--1.3% CCP Insurance, Inc. 200,000 4,350,000
Delphi Financial Group, Cl. A(1) 160,000 3,200,000
-----------
7,550,000
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
INSURANCE: PROPERTY Mid Ocean Ltd.(1) 116,500 3,130,938
AND CASUALTY--1.4% PartnerRe Holdings Ltd. 95,000 1,864,375
Vesta Insurance Group, Inc. 125,000 2,640,625
-----------
7,635,938
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
SAVINGS AND Metropolitan Bancorp(1) 150,000 2,025,000
LOANS/HOLDING COS.--0.4%
- - -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--5.2%
- - -----------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS ABT Building Products Corp.(1) 125,000 3,343,750
GROUP--0.6%
- - -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--0.3% Career Horizons, Inc.(1) 25,000 431,250
Search Capital Group, Inc.(1) 100,000 1,325,000
-----------
1,756,250
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.8% AER Energy Resources, Inc.(1) 268,000 2,345,000
Kent Electronics Corp.(1) 90,000 2,407,500
-----------
4,752,500
-----------
-----------
- - -----------------------------------------------------------------------------------------------------------------------------
MACHINERY: DIVERSIFIED--1.3% Duracraft Corp.(1) 100,000 3,000,000
Novellus Systems, Inc.(1) 120,000 4,170,000
------------
7,170,000
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
MANUFACTURING: DIVERSIFIED
- - -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--0.9%
Johnstown America Industries, Inc.(1) 190,000 4,892,500
------------
- - -----------------------------------------------------------------------------------------------------------------------------
POLLUTION CONTROL--0.2% Kaiser Steel Resources, Inc. 80,000 1,240,000
------------
Transportation:
- - -----------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS--1.0%
Fritz Cos., Inc.(1) 130,000 3,900,000
Rural/Metro Corp.(1) 100,000 1,675,000
------------
5,575,000
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
TRUCKERS--0.1% Celadon Group, Inc. 50,000 725,000
</TABLE>
8 Oppenheimer Discovery Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<C> <S> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--21.9%
- - -----------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--0.3% China Aerospace International Holdings Ltd.(1) 6,677,600 $1,857,889
- - -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE Acxiom Corp.(1) 150,000 3,112,500
AND SERVICES--10.7% Cheyenne Software, Inc.(1) 105,000 2,703,750
Compuware Corp.(1) 180,000 7,582,500
Cornerstone Imaging, Inc.(1) 142,000 2,911,000
CUC International, Inc.(1) 130,000 4,095,000
Davidson & Associates, Inc.(1) 121,000 2,480,500
Electronic Arts, Inc.(1) 90,000 2,362,500
Fourth Shift Corp.(1) 190,000 1,377,500
Interlinq Software Corp.(1) 195,000 1,608,750
Medicus Systems Corp.(1) 95,000 1,757,500
OCTUS, Inc., Units(1)(3) 270,000 2,362,500
Oracle Systems Corp.(1) 200,000 6,425,000
Pyxis Corp.(1) 200,000 5,250,000
SPS Transaction Services, Inc.(1) 48,000 2,460,000
SPSS, Inc.(1)(3) 300,000 2,925,000
Sierra On-Line, Inc.(1) 170,000 4,037,500
Sybase, Inc.(1) 140,000 6,300,000
------------
59,751,500
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SYSTEMS--4.9% BancTec, Inc.(1) 180,000 4,005,000
Cisco Systems, Inc.(1) 80,000 2,740,000
EMC Corp.(1) 580,000 11,527,500
HBO & Co. 260,000 6,500,000
Planar Systems, Inc.(1) 212,500 2,178,125
Zilog, Inc.(1) 25,000 831,250
27,781,875
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS:
INSTRUMENTATION--2.7% Aseco Corp.(1) 91,000 693,875
Flextronics International Ltd.(1) 33,000 412,500
Gentex Corp.(1) 120,000 2,730,000
Lam Research Corp.(1) 130,000 4,030,000
Recoton Corp.(1) 91,000 2,616,250
SCI Systems, Inc.(1) 200,000 3,200,000
Sanmina Corp.(1) 90,000 1,687,500
------------
15,370,125
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS:
SEMICONDUCTORS--1.5% Advanced Technology Materials, Inc.(1) 172,200 990,150
Altera Corp.(1) 130,000 4,160,000
Dallas Semiconductor Corp.(1) 110,000 1,856,250
MRS Technology, Inc.(1) 162,900 1,629,000
------------
8,635,400
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
9 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<C> <S> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.8% Aspect Telecommunications Corp.(1) 72,000 $2,412,000
Glenayre Technologies, Inc.(1) 60,000 2,220,000
Intertel Communications, Inc.(1) 150,000 2,386,875
Intertel Communications, Inc.(1)(2) 22,500 312,806
LCI International, Inc.(1) 76,600 2,929,950
------------
10,261,631
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
UTILITIES--0.6%
- - -----------------------------------------------------------------------------------------------------------------------------
NATURAL GAS--0.1% Eastex Energy, Inc.(1) 225,000 787,500
- - -----------------------------------------------------------------------------------------------------------------------------
TELEPHONE (New)--0.5% Peoples Telephone Co., Inc.(1) 285,000 2,671,873
------------
- - -----------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $358,721,804) 457,005,203
Total Investments, at Value (Cost $474,414,848) 102.4% 577,077,677
Liabilities in Excess of Other Assets (2.4) (13,500,756)
------------ ------------
NET ASSETS 100.0% $563,576,921
------------ ------------
------------ ------------
- - -----------------------------------------------------------------------------------------------------------------------------
<FN>
1. Non-income producing security.
2. Restricted security--See Note 5 of Notes to
Financial Statements.
3. Affiliated company. Represents ownership of at
least 5% of the voting securities of the issuer
and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the
six months ended March 31, 1994. The aggregate
fair value of all securities of affiliated
companies as of March 31, 1994 amounted to
$2,362,500. Transactions during the period in
which the issuer was an affiliate are as follows:
</TABLE>
<TABLE>
<CAPTION>
BALANCE BALANCE
SEPTEMBER 30, 1993 GROSS REDUCTIONS MARCH 31, 1994
----------------------- ---------------------- -----------------------
SHARES COST SHARES COST SHARES COST
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LifeQuest Medical, Inc. 200,000 $2,011,250 200,000 $2,011,250 -- $ --
- - -----------------------------------------------------------------------------------------------------------
OCTUS, Inc., Units 270,000 1,665,312 -- -- 270,000 1,665,312
- - -----------------------------------------------------------------------------------------------------------
SPSS, Inc.(4) 300,000 2,400,000 -- -- 300,000 2,400,000
---------- ---------- ----------
$6,076,562 $2,011,250 $4,065,312
---------- ---------- ----------
---------- ---------- ----------
<FN>
4. Not an affiliate as of March 31, 1994.
See accompanying Notes to Financial Statements.
</TABLE>
10 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
<C> <S> <C>
- - -----------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at value (cost $474,414,848)--see accompanying statement $577,077,677
-----------------------------------------------------------------------------------------------
Cash 629,425
-----------------------------------------------------------------------------------------------
Receivables:
Investments sold 7,242,479
Shares of beneficial interest sold 2,808,201
Dividends and interest 356,267
-----------------------------------------------------------------------------------------------
Other 37,217
------------
Total assets 588,151,266
------------
- - -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 14,258,356
Shares of beneficial interest redeemed 9,877,883
Service plan fees--Note 4 380,486
Other 57,620
------------
Total liabilities 24,574,345
------------
- - -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $563,576,921
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $437,924,974
NET ASSETS -----------------------------------------------------------------------------------------------
Accumulated net investment loss (5,099,603)
-----------------------------------------------------------------------------------------------
Accumulated net realized gain from investment,
written option and foreign
currency transactions 28,088,721
-----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and
translation of assets and liabilities
denominated in foreign currencies--Note 3 102,662,829
-----------------------------------------------------------------------------------------------
Net assets--applicable to 15,502,051 shares
of beneficial interest outstanding $563,576,921
------------
------------
-----------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share $36.35
------------
Maximum Offering Price Per Share
(net asset value plus sales charge of 5.75%
of offering price) $38.57
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Discovery Fund
<PAGE>
STATEMENT OF OPERATIONS For The Six Months Ended March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
<C> <S> <C>
- - -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Dividends $1,544,364
Interest 757,428
Total income 2,301,792
- - -----------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 4 2,187,509
-----------------------------------------------------------------------------------------------
Service plan fees--Note 4 743,632
-----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 376,193
-----------------------------------------------------------------------------------------------
Shareholder reports 137,677
-----------------------------------------------------------------------------------------------
Legal and auditing fees 34,158
-----------------------------------------------------------------------------------------------
Trustees' fees and expenses 29,490
-----------------------------------------------------------------------------------------------
Registration and filing fees 16,373
-----------------------------------------------------------------------------------------------
Custodian fees and expenses 5,950
-----------------------------------------------------------------------------------------------
Other 67,127
----------
Total expenses 3,598,109
- - -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,296,317)
- - -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND Net realized gain (loss) from:
UNREALIZED GAIN (LOSS) Investments 30,016,897
ON INVESTMENTS Foreign currency transactions (866,021)
AND FOREIGN CURRENCY -----------------------------------------------------------------------------------------------
TRANSACTIONS Net realized gain 29,150,876
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (66,805,177)
Translation of assets and liabilities denominated in foreign currencies (1,297,487)
------------
Net change (68,102,664)
------------
Net realized and unrealized loss on investments and foreign
currency transactions (38,951,788)
- - -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(40,248,105)
------------
------------
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Discovery Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1994 SEPTEMBER 30,
(UNAUDITED) 1993
<C> <S> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS Net investment loss $(1,296,317) $(2,412,387)
-----------------------------------------------------------------------------------------------
Net realized gain on investments,
options written and foreign
currency transactions 29,150,876 19,651,352
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation
or depreciation on investments,
options written and translation of
assets and liabilities denominated
in foreign currencies (68,102,664) 140,464,453
------------ ------------
Net increase (decrease) in net assets resulting
from operations (40,248,105) 157,703,418
- - -----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS Distributions from net realized gain on investments,
TO SHAREHOLDERS options written and foreign currency transactions
($1.00 per share) (15,366,207) --
- - -----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from beneficial interest
TRANSACTIONS transactions--Note 2 32,134,238 135,344,010
- - -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase (decrease) (23,480,074) 293,047,428
-----------------------------------------------------------------------------------------------
Beginning of period 587,056,995 294,009,567
------------ ------------
End of period (including accumulated net investment losses
of $5,099,603 and $3,803,286, respectively) $563,576,921 $587,056,995
------------ ------------
------------ ------------
See accompanying Notes to Financial Statements.
</TABLE>
13 Oppenheimer Discovery Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
(Unaudited) 1993 1992(1) 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning of period $39.90 $27.62 $26.03 $17.97 $24.51 $17.62
- - ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) (.07) (.13) (.17) .06 .16 .29
Net realized and unrealized gain
(loss) on investments, options
written and foreign currency
transactions (2.48) 12.41 3.05 8.87 (4.84) 6.74
------------ ------------ ------------ ------------ ------------ ------------
Total income (loss) from
investment operations (2.55) 12.28 2.88 8.93 (4.68) 7.03
- - ---------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment
income -- -- -- (.19) (.30) (.14)
Distributions from net realized
gain on investments, options
written and foreign currency
transactions (1.00) -- (1.29) (.68) (1.56) --
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and
distributions to shareholders (1.00) -- (1.29) (.87) (1.86) (.14)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $36.35 $39.90 $27.62 $26.03 $17.97 $24.51
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
- - ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) (6.52)% 44.46% 11.28% 51.88% (20.34)% 40.23%
- - ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $563,577 $587,057 $294,010 $117,110 $50,357 $53,793
- - ---------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $602,819 $451,016 $218,065 $75,083 $54,454 $40,641
- - ---------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 15,502 14,713 10,647 4,499 2,802 2,195
- - ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (.43)%(3) (.54)% (.62)% .22% .83% 1.52%
Expenses 1.20%(3) 1.27% 1.52% 1.42% 1.53% 1.46%
- - ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 40.4% 85.2% 67.9% 158.1% 234.6% 132.0%
<FN>
1. Per share amounts calculated based on the weighted average number of shares
outstanding during the year.
2. 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.
3. Annualized.
4. 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 six
months ended March 31, 1994, were $221,194,055 and $241,785,014, respectively.
See accompanying Notes to Financial Statements.
</TABLE>
14 Oppenheimer Discovery Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- - -------------------------------------------------------------------------------
1. SIGNIFICANT
ACCOUNTING POLICIES Oppenheimer Discovery Fund (the Fund) is
registered under the Investment Company Act of
1940, as amended, as a diversified, open-end
management investment company. The Fund's
investment advisor is Oppenheimer Management
Corporation (the Manager). Presently, the Fund has
a single class of shares outstanding. The Fund has
received approval to offer a new class of shares,
in addition to the class currently offered. Both
classes will represent interests in the same
portfolio of investments. However, there will be
differences in charges assessed upon the purchase
and redemption of shares, and there will be
differences in certain expenses associated with
each class. 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. Long-term debt
securities are valued by a portfolio pricing
service approved by the Board of Trustees.
Long-term debt securities which cannot be valued
by the approved portfolio pricing service are
valued by averaging the mean between the bid and
asked prices obtained from two active market
makers in such securities. 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. A call option is valued based upon the last
sales price on the principal exchange on which the
option is traded or, in the absence of any
transactions that day, the value is based upon the
last sale on the prior trading date if it is
within the spread between the closing bid and
asked prices. If the last sale price is outside
the spread, the closing bid or asked price closest
to the last reported sale price is used.
--------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting
records of the Fund are maintained in U.S.
dollars. Prices of securities denominated in
foreign currencies are translated into U.S.
dollars at the closing rates of exchange. Amounts
related to the purchase and sale of securities and
investment income are translated at the rates of
exchange prevailing on the respective dates of
such transactions.
The Fund generally enters into forward
currency exchange contracts as a hedge, upon the
purchase or sale of a security denominated in a
foreign currency. Risks may arise from the
potential inability of the counterparty to meet
the terms of the contract and from unanticipated
movements in the value of a foreign currency
relative to the U.S. dollar.
The effect of changes in foreign currency
exchange rates on investments is separately
identified from the fluctuations arising from
changes in market values of securities held and
reported with all other foreign currency gains
and losses in the Fund's results of operations.
--------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the
custodian to take possession, to have legally
segregated in the Federal Reserve Book Entry
System or to have segregated within the
custodian's vault, all securities held as
collateral for repurchase agreements. If the
seller of the agreement defaults and the value of
the collateral declines, or if the seller enters
an insolvency proceeding, realization of the value
of the collateral by the Fund may be delayed or
limited.
--------------------------------------------------
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. At March 31, 1994, the Fund had
available for federal income tax purposes an
unused capital loss carryover of approximately
$1,943,000 expiring in 1995, the usage of which is
subject to certain limitations.
15 Oppenheimer Discovery Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- - -------------------------------------------------------------------------------
1. SIGNIFICANT TRUSTEES' FEES AND EXPENSES. The Fund has adopted
ACCOUNTING POLICIES a nonfunded retirement plan for the Fund's
(CONTINUED) independent trustees. Benefits are based on years
of service and fees paid to each trustee during
the years of service. The accumulated liability
for the Fund's projected benefit obligations was
$117,741 at March 31, 1994. No payments have been
made under the plan.
--------------------------------------------------
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. Discount on securities
purchased is amortized over the life of the
respective securities, in accordance with federal
income tax requirements. 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
BENEFICIAL INTEREST par value shares of beneficial interest.
Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1994 YEAR ENDED SEPTEMBER 30, 1993
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Sold 5,004,555 $197,894,229 10,406,503 $349,688,611
Distributions reinvested 384,631 14,731,338 -- --
Redeemed (4,600,244) (180,491,329) (6,339,986) (214,344,601)
------------ ------------ ------------ ------------
Net increase 788,942 $32,134,238 4,066,517 $135,344,010
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
---------------------------------------------------------------------------------------------------
</TABLE>
- - -------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At March 31, 1994, net unrealized appreciation of
LOSSES ON INVESTMENTS investments of $102,662,829 was composed of gross
appreciation of $128,959,075, and gross
depreciation of $26,296,246.
- - -------------------------------------------------------------------------------
4. MANAGEMENT FEES Management fees paid to the Manager were in
AND OTHER TRANSACTIONS accordance with the investment advisory agreement
WITH AFFILIATES with the Fund which provides for an annual fee of
.75% on the first $200 million of net assets with
a reduction of .03% on each $200 million
thereafter to $800 million, and .60% on net assets
in excess of $800 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 six months ended March 31, 1994,
commissions (sales charges paid by investors) on
sales of Fund shares totaled $3,157,090, of which
$1,034,377 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an
affiliated broker/dealer.
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 an approved service plan, the Fund may
expend up to .25% of its net assets annually to
reimburse OFDI for costs incurred in connection
with the personal service and maintenance of
accounts that hold shares of the Fund, including
amounts paid to brokers, dealers, banks and other
institutions. During the six months ended March
31, 1994, OFDI paid $44,793 to an affiliated
broker/dealer as reimbursement for personal
service and maintenance expenses.
16 Oppenheimer Discovery Fund
<PAGE>
- - -------------------------------------------------------------------------------
5. RESTRICTED The Fund owns securities purchased in private
SECURITIES placement transactions, without registration under
the Securities Act of 1933 (the Act). The
securities are valued under methods approved by
the Board of Trustees as reflecting fair value.
The Fund intends to invest no more than 10% of its
net assets (determined at the time of purchase) in
restricted and illiquid securities, excluding
securities eligible for resale pursuant to Rule
144A of the Act that are determined to be liquid
by the Board of Trustees or by the Manager under
Board-approved guidelines. Restricted and illiquid
securities amount to $4,250,080, or .75% of the
Fund's net assets, at March 31, 1994.
<TABLE>
<CAPTION>
Valuation
Cost Per Unit as of
Security Acquisition Date Per Unit March 31, 1994
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Clinicorp, Inc. 3/23/93 $ 5.50 $ .82
---------------------------------------------------------------------------------------------------
IntelCom Group, Inc., 8% Cv. Sub. Debs., 9/24/98 9/24/93 $100.00 $ 96.63
---------------------------------------------------------------------------------------------------
IntelCom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 10/27/93 $100.00 $ 81.90
---------------------------------------------------------------------------------------------------
Intertel Communications, Inc. 6/9/93 $ 5.50 $ 13.90
---------------------------------------------------------------------------------------------------
Medaphis Corp., 6.50% Cv. Sub. Debs., 1/1/00(1) 12/22/92 $100.00 $136.00
Physicians Clinical Laboratory, Inc., 7.50%
Cv. Sub. Debs., 8/15/00(1) 8/17/93 $100.00 $101.00
---------------------------------------------------------------------------------------------------
Tops Appliance City, Inc., 6.50% Cv. Sub. Debs., 11/30/03(1) 11/26/93 $100.00 $ 70.50
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
17 Oppenheimer Discovery Fund
<PAGE>
- - -------------------------------------------------------------------------------
OPPENHEIMER DISCOVERY FUND
- - -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- - -------------------------------------------------------------------------------
INVESTMENT ADVISOR Oppenheimer Management Corporation
- - -------------------------------------------------------------------------------
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
- - -------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER
SERVICING AGENT Oppenheimer Shareholder Services
- - -------------------------------------------------------------------------------
CUSTODIAN OF
PORTFOLIO SECURITIES The Bank of New York
- - -------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG Peat Marwick
- - -------------------------------------------------------------------------------
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been
taken from the records of the Fund without
examination by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Discovery Fund. This report must be
preceded or accompanied by a Prospectus of
Oppenheimer Discovery Fund. For material
information concerning the Fund, see the
Prospectus.
18 Oppenheimer Discovery Fund
<PAGE>
-------------------------------------------------
THE FAMILY OF OPPENHEIMERFUNDS
- - -------------------------------------------------------------------------------
OppenheimerFunds offers over 35 funds designed to
fit virtually every investment goal. Whether
you're investing for retirement, your children's
education, or tax-free income, we have the funds
to help you seek your objective.
When you invest with OppenheimerFunds, you
can feel comfortable knowing that you are
investing with a respected financial institution
with over 30 years of experience in helping
people just like you reach their financial goals.
And you're investing with a leader in global,
growth stock, and flexible fixed income
investments--with over 1.8 million shareholder
accounts and more than 26 billion under
Oppenheimer's management and that of our
affiliates.
As an OppenheimerFunds shareholder, you can
easily exchange shares of eligible funds of the
same class by mail or by telephone for a small
administrative fee.(1) For more information on
OppenheimerFunds, please contact your financial
advisor or call us at 1-800-525-7048 for a
prospectus. You may also write us at the address
shown on the back cover. As always, please read
the prospectus carefully before you invest.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SPECIALTY STOCK FUNDS Global Bio-Tech Fund Gold & Special Minerals Fund
Global Environment Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
STOCK FUNDS Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
STOCK AND BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
BOND FUNDS High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Limited-Term Government(2)
Strategic Investment Grade Bond Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(3) New Jersey Tax-Exempt Fund(3)
California Tax-Exempt Fund(3) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(3) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(3) Intermediate Tax-Exempt Bond Fund
- - ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS Money Market Fund Tax-Exempt Cash Reserves
Cash Reserves
<FN>
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange privileges are
subject to change or termination.
2. Formerly Government Securities Fund.
3. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two World Trade Center, New
York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management Corporation. All rights reserved.
</TABLE>
19 Oppenheimer Discovery Fund
<PAGE>
Monday, May 23, 1994 11:27 am
"How may I help you?"
- - ------------
"Just as OppenheimerFunds offers over 35 different mutual 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.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's 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 a 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 the hours shown to the left.
"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 awarded Oppenheimer Shareholder Services a 1993 Award of Excellence
for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
1993 AWARD OF EXCELLENCE LOGO
B&W PHOTO
Barbara Hennigar
Chief Executive Officer
Oppenheimer Shareholder Services
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
1-800-852-8457
Make account transactions with a Customer Service Representative. Monday through
Friday from
8:30 a.m. to 8:00 p.m. ET.
PhoneLink
1-800-533-3310
<PAGE>
Get automated information or make automated transactions. 24 hours a day, 7 days
a week.
Telecommunication
Device for the Deaf
1-800-843-4461
Service for the hearing impaired.
Monday through Friday from 8:30 a.m. to 8:00 p.m. ET.
OppenheimerFunds
Information Hotline
1-800-835-3104
Hear timely and insightful messages on the economy and issues that affect your
finances.
24 hours a day, 7 days a week.
RS500.0594.N
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- - ------------
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
- - ------------
