-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nf/7vaz35noIUvhtmqDrO/QnSmUn0E/p4Hqx4mzQCg2DZTUE6/483nFYdRCnAtWM yUAIBkiFUX2q+U7oSLV45g== 0000701265-97-000015.txt : 19970912 0000701265-97-000015.hdr.sgml : 19970912 ACCESSION NUMBER: 0000701265-97-000015 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970908 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042912220 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-03420 FILM NUMBER: 97676385 BUSINESS ADDRESS: STREET 1: 3410 S GALENA CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 SOUTH GALENA STREET 3RD FL CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL INTEGRITY FUNDS DATE OF NAME CHANGE: 19910329 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL LIQUID ASSETS TRUST DATE OF NAME CHANGE: 19880403 N-30D 1 OPPENHEIMER VALUE STOCK FUND -- S/A/R [COVER PAGE] OPPENHEIMER VALUE STOCK FUND Semiannual Report June 30, 1997 [LOGO]OPPENHEIMERFUNDS/SM/ THE RIGHT WAY TO INVEST This Fund is for people who seek long-term growth and current income by investing in UNDERVALUED stocks of well-established companies. HOW YOUR FUND IS MANAGED Oppenheimer Value Stock Fund's basic investment strategy is to "buy low, sell high." The Fund's managers invest in stocks they believe are priced below their intrinsic value, and sell stock when they think they're overvalued. This strategy offers the potential for long-term capital appreciation through investment in well-established companies. PERFORMANCE Total returns for the 6 months ended 6/30/97 for Class A, B and C shares were 15.82%, 15.37% and 15.38%, respectively, without deducting sales charges.(1) Your Fund's average annual total returns for Class A shares for the 1-,5- and 10-year periods ended 6/30/97 were 20.28%, 15.10% and 12.04%, respectively. For Class B shares, average annual total returns for the 1-year period ended 6/30/97 and since inception on 5/1/93 were 21.65% and 16.25%, respectively. For Class C shares, average annual total returns for the 1-year period ended 6/30/97 and since inception on 10/2/95 were 25.63% and 23.57%, respectively.(2) ON JULY 25, 1997, OPPENHEIMER VALUE STOCK FUND WAS REORGANIZED INTO OPPENHEIMER DISCIPLINED VALUE FUND. Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. IN REVIEWING THE PERFORMANCE AND RANKINGS, PLEASE REMEMBER PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAT THE ORIGINAL COST. For more information, please review the prospectus carefully before you invest. On 1/1/97, the Fund's prior sub-adviser merged into its present sub-adviser. 1. Includes changes in net asset value per share without deducting sales charges. Such performance is not annualized and would have been lower if sales charges were taken into account. 2. Class A returns include the current maximum initial sales charge of 5.75%. Prior to 3/29/91, the Fund's maximum sales charge rate for Class A share was lower, so that actual results would have been higher. Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (since inception). Class C returns include the 1% contingent deferred sales change for the 1-year result. An explanation of the different calculations is in the Fund's prospectus. 2 Oppenheimer Value Stock Fund [PHOTO] James C. Swain Chairman Oppenheimer Value Stock Fund [PHOTO] Bridget A. Macaskill President Oppenheimer Value Stock Fund Dear Shareholder: As we consider the world's financial markets over the past six months, some global trends emerge. For example, inflation has hit its lowest level in three decades worldwide, which has helped spur many bullish financial markets. The United States has been a beneficiary of this low inflation environment, as well as a strong dollar, robust corporate earnings and a healthy economy. However, many financial analysts are now concerned that the United States has reached a point in the business cycle where earnings could decline because companies are unable to further reduce costs. On the other hand, a wave of corporate restructuring throughout Europe has resulted in some exciting changes and opportunities. Because a similar restructuring took place in the United States ten years ago, European companies have been able to enjoy the benefit of hindsight by following our footsteps. Latin America, too, has begun to shift its economies more toward the U.S. capitalist model and has reported positive earnings growth along the way. With major changes occurring in today's economies around the globe, it's more important than ever to maintain a diversified portfolio across different countries and market sectors. Now is the time to speak to your financial adviser to ensure that your assets are allocated properly, so you have the opportunity to benefit from investments in both domestic and international funds. It's important to remember that investing abroad can involve greater risk and expenses -- including political and economic uncertainties -- and should be undertaken with a long-term approach in mind. To keep in touch with our views on the markets, visit our website, WWW.OPPENHEIMERFUNDS.COM, where you can access your account information and fund performance data, 24 hours a day. The site also features prospectuses, timely market updates and insightful commentaries. Our new shareholder reports and presence on the Internet are just two examples of our commitment to keeping you well informed. Thank you for your confidence in OppenheimerFunds, THE RIGHT WAY TO INVEST. We look forward to helping you reach your investment goals in the future. /S/James C. Swain /S/Bridget A. Macaskill James C. Swain Bridget A. Macaskill July 22, 1997 3 Oppenheimer Value Stock Fund JAMES MACALLEN PORTFOLIO MANAGER Q + A An interview with your Fund's managers. HOW HAS THE FUND PERFORMED DURING THE FIRST HALF OF 1997? Oppenheimer Value Stock Fund's Class A shares were able to provide a cumulative total return of 15.82%, before sales charges, for the six month period ended June 30, 1997.(1) WHY DID STOCK PRICES RISE AND FALL SO SHARPLY DURING THE PERIOD? The past six months were indeed volatile ones. The stock market declined between January and mid-April, producing the largest correction in several years. This sell-off was mainly the result of investors' fears that an overheated economy might rekindle inflationary pressures, which erode the value of financial assets over time. Inflation concerns also prompted the nation's monetary policy makers at the Federal Reserve Board to raise key short-term interest rates. When the investment community later realized that inflationary forces were likely to remain benign and that future interest-rate increases would probably be modest, the market recaptured all of its losses - and surged to new highs - rising more than 1,000 points between mid-April and the end of June.(2) WHAT WAS YOUR STRATEGY DURING THESE UNCERTAIN MARKET CONDITIONS? We employed the same conservative strategy during the past six months that we've used consistently for many years: We sought large, dividend-paying stocks selling at prices that we believed were lower than their true values. We used disciplined principles of fundamental securities analysis to identify undervalued companies with a history of solid returns, strong balance sheets, competitive products and talented managements. DID YOU FIND ATTRACTIVE CANDIDATES FOR THE FUND DURING THE PERIOD? Yes. The market's weakness during March and April provided several opportunities to buy companies at attractive prices. For example, we added a large Western U.S. railroad company to the portfolio just as the market hit the bottom of the correction. This stock's price had been driven down because of short-term earnings disappointments that we believe are temporary and should not affect the company's positive longer term outlook. Similarly, we found attractive values in a leading 1. Includes change in net asset value per share without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. The Dow Jones Industrial Stock Average is a price-weighted average of 30 actively traded blue chip stocks. This widely recognized indicator of stock market performance includes dividend reinvestments but does not take capital gains distributions into consideration. 4 Oppenheimer Value Stock Fund manufacturer of industrial filters, and a diversified electric utility in Tampa Florida.(3) ARE YOU STILL FINDING GOOD VALUES AS THE STOCK MARKET HITS NEW HIGHS? Yes, but such values have been harder to find as stock prices rose. More importantly, rising stock prices brought some of our existing holdings to approach full valuations. For example, we recently reduced our positions in a major pharmaceutical company, and a leading insurer, when their stocks approached our target prices. We also sold shares of large international oil companies because their stock prices reflected our expectations for future oil price trends and can no longer be considered undervalued. DID THE BALANCE AMONG INDUSTRIES REPRESENTED IN THE FUND CHANGED? We strive to achieve broad diversification to help reduce portfolio risks so that a decline in any one stock would not severely affect the entire Fund. This diversification naturally led to a certain balance among industries. The industry weightings have not changed significantly, but on the margin, we believe that an increased commitment to well-selected electrical utilities might provide good total return at substantially lower risk. These stocks have underperformed the market, and they should show very good defensive characteristics, while having the opportunity to produce dependable earnings gains. WHAT IS YOUR OUTLOOK FOR THE FUTURE? We are cautiously optimistic about the stock market's prospects during the second half of 1997. On the positive side, the influences that have driven the market's advance remain in place: moderate economic growth, healthy corporate earnings, low inflation and rising retirement plan savings. Indeed, it appears that the high rate of economic growth that unsettled investors during March and April is abating and a "Goldilocks" economy (not too hot, not too cold) should prevail again. On the other hand, experience tells us that no market rises forever, and that corrections -- and more severe downtrends -- inevitably occur from time to time. Therefore, while we believe that further stock market gains are quite possible, we are prepared for the possibility that they may not materialize.// 3. The Fund's portfolio is subject to change. 5 Oppenheimer Value Stock Fund (Intentionally Left Blank)
================================================================================ STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) MARKET VALUE SHARES SEE NOTE 1 ============================================================================================================================== COMMON STOCKS - 91.6% - ------------------------------------------------------------------------------------------------------------------------------ BASIC MATERIALS - 6.5% - ------------------------------------------------------------------------------------------------------------------------------ CHEMICALS - 4.4% - ------------------------------------------------------------------------------------------------------------------------------ Du Pont (E.I.) De Nemours & Co. 43,000 $ 2,703,625 - ------------------------------------------------------------------------------------------------------------------------------ Lubrizol Corp. (The) 43,400 1,820,087 - ------------------------------------------------------------------------------------------------------------------------------ Nalco Chemical Co. 59,200 2,286,600 - ------------------------------------------------------------------------------------------------------------------------------ Rohm & Haas Co. 39,000 3,512,437 ------------- 10,322,749 - ------------------------------------------------------------------------------------------------------------------------------ PAPER - 2.1% - ------------------------------------------------------------------------------------------------------------------------------ Westvaco Corp. 64,500 2,027,719 - ------------------------------------------------------------------------------------------------------------------------------ Weyerhaeuser Co. 54,600 2,839,200 ------------- 4,866,919 - ------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICALS - 11.0% - ------------------------------------------------------------------------------------------------------------------------------ AUTOS & HOUSING - 5.2% - ------------------------------------------------------------------------------------------------------------------------------ Ford Motor Co. 73,100 2,759,525 - ------------------------------------------------------------------------------------------------------------------------------ Genuine Parts Co. 82,500 2,794,687 - ------------------------------------------------------------------------------------------------------------------------------ Goodyear Tire & Rubber Co. 73,000 4,621,812 - ------------------------------------------------------------------------------------------------------------------------------ Stanley Works (The) 47,900 1,916,000 ------------- 12,092,024 - ------------------------------------------------------------------------------------------------------------------------------ LEISURE & ENTERTAINMENT - 1.0% - ------------------------------------------------------------------------------------------------------------------------------ Eastman Kodak Co. 31,800 2,440,650 - ------------------------------------------------------------------------------------------------------------------------------ MEDIA - 1.4% - ------------------------------------------------------------------------------------------------------------------------------ McGraw-Hill, Inc. 57,000 3,352,312 - ------------------------------------------------------------------------------------------------------------------------------ RETAIL: GENERAL - 3.4% - ------------------------------------------------------------------------------------------------------------------------------ May Department Stores Cos. 61,500 2,905,875 - ------------------------------------------------------------------------------------------------------------------------------ Sears Roebuck & Co. 48,700 2,617,625 - ------------------------------------------------------------------------------------------------------------------------------ VF Corp. 27,500 2,330,625 ------------- 7,854,125 - ------------------------------------------------------------------------------------------------------------------------------ CONSUMER NON-CYCLICALS - 20.8% - ------------------------------------------------------------------------------------------------------------------------------ BEVERAGES - 1.7% - ------------------------------------------------------------------------------------------------------------------------------ Brown-Forman Corp., Cl. B 40,900 1,996,431 - ------------------------------------------------------------------------------------------------------------------------------ PepsiCo, Inc. 54,000 2,028,375 ------------- 4,024,806 - ------------------------------------------------------------------------------------------------------------------------------ FOOD - 6.8% - ------------------------------------------------------------------------------------------------------------------------------ Albertson's, Inc. 105,100 3,836,150 - ------------------------------------------------------------------------------------------------------------------------------ American Stores Co. 66,000 3,258,750 - ------------------------------------------------------------------------------------------------------------------------------ ConAgra, Inc. 46,000 2,949,750 - ------------------------------------------------------------------------------------------------------------------------------ CPC International, Inc. 37,000 3,415,562 - ------------------------------------------------------------------------------------------------------------------------------ Pioneer Hi-Bred International, Inc. 29,500 2,360,000 ------------- 15,820,212 - ------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE/DRUGS - 7.2% - ------------------------------------------------------------------------------------------------------------------------------ Bristol-Myers Squibb Co. 115,000 9,315,000 - ------------------------------------------------------------------------------------------------------------------------------ Cytogen Corp.(1) 79 385 - ------------------------------------------------------------------------------------------------------------------------------ Pfizer, Inc. 14,100 1,684,950 - ------------------------------------------------------------------------------------------------------------------------------ Pharmacia & Upjohn, Inc. 59,000 2,050,250 - ------------------------------------------------------------------------------------------------------------------------------ Schering-Plough Corp. 76,000 3,638,500 ------------- 16,689,085
7 Oppenheimer Value Stock Fund
============================================================================================================================= STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED) MARKET VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE/SUPPLIES & SERVICES - 1.4% - ------------------------------------------------------------------------------------------------------------------------------ Becton, Dickinson & Co. 62,000 $ 3,138,750 - ------------------------------------------------------------------------------------------------------------------------------ HOUSEHOLD GOODS - 1.1% - ------------------------------------------------------------------------------------------------------------------------------ Kimberly-Clark Corp. 51,000 2,537,250 - ------------------------------------------------------------------------------------------------------------------------------ TOBACCO - 2.6% - ------------------------------------------------------------------------------------------------------------------------------ Fortune Brands, Inc. 59,000 2,201,438 - ------------------------------------------------------------------------------------------------------------------------------ Gallaher Group plc, ADR(1) 59,000 1,087,813 - ------------------------------------------------------------------------------------------------------------------------------ UST, Inc. 101,000 2,802,750 ------------- 6,092,001 - ------------------------------------------------------------------------------------------------------------------------------ ENERGY - 6.4% - ------------------------------------------------------------------------------------------------------------------------------ OIL-INTEGRATED - 6.4% - ------------------------------------------------------------------------------------------------------------------------------ Amoco Corp. 49,500 4,303,406 - ------------------------------------------------------------------------------------------------------------------------------ Kerr-McGee Corp. 28,500 1,806,188 - ------------------------------------------------------------------------------------------------------------------------------ Mobil Corp. 47,000 3,284,125 - ------------------------------------------------------------------------------------------------------------------------------ Occidental Petroleum Corp. 80,500 2,017,531 - ------------------------------------------------------------------------------------------------------------------------------ Union Pacific Resources Group, Inc. 68,600 1,706,425 - ------------------------------------------------------------------------------------------------------------------------------ Unocal Corp. 44,100 1,711,631 ------------- 14,829,306 - ------------------------------------------------------------------------------------------------------------------------------ FINANCIAL - 14.2% - ------------------------------------------------------------------------------------------------------------------------------ BANKS - 5.8% - ------------------------------------------------------------------------------------------------------------------------------ Bank of New York Co., Inc. (The) 95,000 4,132,500 - ------------------------------------------------------------------------------------------------------------------------------ Comerica, Inc. 33,500 2,278,000 - ------------------------------------------------------------------------------------------------------------------------------ CoreStates Financial Corp. 52,000 2,795,000 - ------------------------------------------------------------------------------------------------------------------------------ Norwest Corp. 36,500 2,053,125 - ------------------------------------------------------------------------------------------------------------------------------ Wachovia Corp. 36,240 2,113,245 ------------- 13,371,870 - ------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL - 1.6% - ------------------------------------------------------------------------------------------------------------------------------ American Express Co. 50,000 3,725,000 - ------------------------------------------------------------------------------------------------------------------------------ INSURANCE - 6.8% - ------------------------------------------------------------------------------------------------------------------------------ Jefferson-Pilot Corp. 32,825 2,293,647 - ------------------------------------------------------------------------------------------------------------------------------ Marsh & McLennan Cos., Inc. 70,000 4,996,250 - ------------------------------------------------------------------------------------------------------------------------------ MBIA, Inc. 33,500 3,779,219 - ------------------------------------------------------------------------------------------------------------------------------ Safeco Corp. 99,500 4,645,406 ------------- 15,714,522 - ------------------------------------------------------------------------------------------------------------------------------ INDUSTRIAL - 16.7% - ------------------------------------------------------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT - 8.0% - ------------------------------------------------------------------------------------------------------------------------------ AMP, Inc. 100,300 4,187,525 - ------------------------------------------------------------------------------------------------------------------------------ General Electric Co. 103,000 6,733,625 - ------------------------------------------------------------------------------------------------------------------------------ General Signal Corp. 5,500 239,938 - ------------------------------------------------------------------------------------------------------------------------------ Grainger (W.W.), Inc. 32,000 2,502,000 - ------------------------------------------------------------------------------------------------------------------------------ Honeywell, Inc. 28,000 2,124,500 - ------------------------------------------------------------------------------------------------------------------------------ Hubbell, Inc., Cl. B 61,994 2,727,736 ------------------ 18,515,324 - ------------------------------------------------------------------------------------------------------------------------------ INDUSTRIAL MATERIALS - 0.9% - ------------------------------------------------------------------------------------------------------------------------------ Temple-Inland, Inc. 40,000 2,160,000 - ------------------------------------------------------------------------------------------------------------------------------ INDUSTRIAL SERVICES - 0.8% - ------------------------------------------------------------------------------------------------------------------------------ Donnelley (R.R.) & Sons Co. 48,000 1,758,000
8 Oppenheimer Value Stock Fund
============================================================================================================================= STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED) MARKET VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------ MANUFACTURING - 4.3% - ------------------------------------------------------------------------------------------------------------------------------ Dover Corp. 41,500 $ 2,552,250 - ------------------------------------------------------------------------------------------------------------------------------ Harsco Corp. 46,000 1,863,000 - ------------------------------------------------------------------------------------------------------------------------------ Minnesota Mining & Manufacturing Co. 21,300 2,172,600 - ------------------------------------------------------------------------------------------------------------------------------ Pall Corp. 62,600 1,455,450 - ------------------------------------------------------------------------------------------------------------------------------ Parker-Hannifin Corp. 30,400 1,844,900 ------------- 9,888,200 - ------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 2.7% - ------------------------------------------------------------------------------------------------------------------------------ Burlington Northern Santa Fe Corp. 34,600 3,109,675 - ------------------------------------------------------------------------------------------------------------------------------ Norfolk Southern Corp. 31,000 3,123,250 ------------- 6,232,925 - ------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY - 10.5% - ------------------------------------------------------------------------------------------------------------------------------ AEROSPACE/DEFENSE - 2.9% - ------------------------------------------------------------------------------------------------------------------------------ Boeing Co. 33,000 1,751,063 - ------------------------------------------------------------------------------------------------------------------------------ Raytheon Co. 60,000 3,060,000 - ------------------------------------------------------------------------------------------------------------------------------ TRW, Inc. 32,000 1,818,000 ------------- 6,629,063 - ------------------------------------------------------------------------------------------------------------------------------ COMPUTER HARDWARE - 7.3% - ------------------------------------------------------------------------------------------------------------------------------ Hewlett-Packard Co. 80,000 4,480,000 - ------------------------------------------------------------------------------------------------------------------------------ International Business Machines Corp. 45,000 4,058,438 - ------------------------------------------------------------------------------------------------------------------------------ Pitney Bowes, Inc. 54,500 3,787,750 - ------------------------------------------------------------------------------------------------------------------------------ Xerox Corp. 57,000 4,495,875 ------------- 16,822,063 - ------------------------------------------------------------------------------------------------------------------------------ TELECOMMUNICATIONS-TECHNOLOGY - 0.3% - ------------------------------------------------------------------------------------------------------------------------------ AT&T Corp. 16,900 592,556 - ------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 5.5% - ------------------------------------------------------------------------------------------------------------------------------ ELECTRIC UTILITIES - 2.0% - ------------------------------------------------------------------------------------------------------------------------------ NIPSCO Industries, Inc. 25,500 1,053,469 - ------------------------------------------------------------------------------------------------------------------------------ SCANA Corp. 81,800 2,029,663 - ------------------------------------------------------------------------------------------------------------------------------ Teco Energy, Inc. 61,500 1,572,094 ------------- 4,655,226 - ------------------------------------------------------------------------------------------------------------------------------ TELEPHONE UTILITIES - 3.5% - ------------------------------------------------------------------------------------------------------------------------------ Ameritech Corp. 28,000 1,902,250 - ------------------------------------------------------------------------------------------------------------------------------ Frontier Corp. 107,300 2,139,294 - ------------------------------------------------------------------------------------------------------------------------------ GTE Corp. 57,600 2,527,200 - ------------------------------------------------------------------------------------------------------------------------------ Southern New England Telecommunications Corp. 40,100 1,558,887 ------------- 8,127,631 ------------- Total Common Stocks (Cost $123,000,389) 212,252,569 FACE AMOUNT ============================================================================================================================== REPURCHASE AGREEMENTS - 7.9% - ------------------------------------------------------------------------------------------------------------------------------ Repurchase agreement with Zion First National Bank, 5.95%, dated 6/30/97, to be repurchased at $18,303,025 on 7/1/97, collateralized by U.S. Treasury Bonds, 12.50%, 8/15/14, with a value of $4,632,950 and U.S. Treasury Nts., 5.125%-7.25%, 5/31/98-8/15/04, with a value of $14,052,869 (Cost $18,300,000) $18,300,000 18,300,000
9 Oppenheimer Value Stock Fund
================================================================================ STATEMENT OF INVESTMENTS (UNAUDITED)(CONTINUED) MARKET VALUE SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $141,300,389) 99.5% $230,552,569 - ------------------------------------------------------------------------------------------------------------------------------ OTHER ASSETS NET OF LIABILITIES 0.5 1,217,162 ------ ------------- NET ASSETS 100.0% $231,769,731 ====== =============
1. Non-income producing security. See accompanying Notes to Financial Statements. 10 Oppenheimer Value Stock Fund
================================================================================ STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED) ================================================================================================================ ASSETS Investments, at value (cost $141,300,389) - see accompanying statement $230,552,569 - ---------------------------------------------------------------------------------------------------------------- Cash 227,817 - ---------------------------------------------------------------------------------------------------------------- Receivables: Investments sold 733,510 Shares of beneficial interest sold 422,791 Interest and dividends 362,329 - ---------------------------------------------------------------------------------------------------------------- Other 4,996 ------------- Total assets 232,304,012 ================================================================================================================ LIABILITIES Payables and other liabilities: Shares of beneficial interest redeemed 277,624 Distribution and service plan fees 131,830 Shareholder reports 69,983 Transfer and shareholder servicing agent fees 35,488 Custodian fees 7,393 Other 11,963 ------------- Total liabilities 534,281 ================================================================================================================ NET ASSETS $231,769,731 ============= ================================================================================================================ COMPOSITION OF NET ASSETS Paid-in capital $134,584,200 - ---------------------------------------------------------------------------------------------------------------- Undistributed net investment income 156,731 - ---------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 7,776,620 - ---------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments - Note 3 89,252,180 ------------- Net assets $231,769,731 ============= ================================================================================================================ NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $176,434,934 and 7,536,401 shares of beneficial interest outstanding) $23.41 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $24.84 - ---------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $52,104,431 and 2,242,542 shares of beneficial interest outstanding) $23.23 - ---------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $3,230,366 and 138,684 shares of beneficial interest outstanding) $23.29
See accompanying Notes to Financial Statements. 11 Oppenheimer Value Stock Fund
================================================================================ STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) ================================================================================================================ INVESTMENT INCOME Interest $ 2,307,864 - ---------------------------------------------------------------------------------------------------------------- Dividends 363,163 ------------ Total income 2,671,027 ================================================================================================================ EXPENSES Management fees - Note 4 757,435 - ---------------------------------------------------------------------------------------------------------------- Distribution and service plan fees - Note 4: Class A 195,213 Class B 224,450 Class C 12,450 - ---------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees - Note 4 160,468 - ---------------------------------------------------------------------------------------------------------------- Shareholder reports 51,829 - ---------------------------------------------------------------------------------------------------------------- Legal and auditing fees 11,659 - ---------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 8,392 - ---------------------------------------------------------------------------------------------------------------- Trustees' fees and expenses 3,711 - ---------------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 1,623 Class B 1,652 Class C 301 - ---------------------------------------------------------------------------------------------------------------- Insurance expenses 2,759 - ---------------------------------------------------------------------------------------------------------------- Other 2,492 ------------ Total expenses 1,434,434 ================================================================================================================ NET INVESTMENT INCOME 1,236,593 ================================================================================================================ REALIZED AND UNREALIZED GAIN Net realized gain on investments 6,162,006 - ---------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 23,546,636 ------------ Net realized and unrealized gain 29,708,642 ================================================================================================================ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $30,945,235 ============
See accompanying Notes to Financial Statements. 12 Oppenheimer Value Stock Fund
================================================================================ STATEMENTS OF CHANGES IN NET ASSETS SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 ================================================================================================================ OPERATIONS Net investment income $ 1,236,593 $ 2,823,020 - ---------------------------------------------------------------------------------------------------------------- Net realized gain 6,162,006 7,161,305 - ---------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 23,546,636 21,456,991 ---------------------------------- Net increase in net assets resulting from operations 30,945,235 31,441,316 ================================================================================================================ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Class A (969,643) (2,534,251) Class B (126,673) (366,547) Class C (7,205) (13,143) - ---------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (4,334,550) Class B -- (1,169,914) Class C -- (53,029) ================================================================================================================ BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions - Note 2: Class A 5,355,618 (6,902,321) Class B 5,450,218 9,380,312 Class C 995,047 1,632,938 ================================================================================================================ NET ASSETS Total increase 41,642,597 27,080,811 - ---------------------------------------------------------------------------------------------------------------- Beginning of period 190,127,134 163,046,323 ---------------------------------- End of period (including undistributed net investment income of $156,731 and $23,659, respectively) $231,769,731 $190,127,134 ==================================
See accompanying Notes to Financial Statements. 13 Oppenheimer Value Stock Fund
FINANCIAL HIGHLIGHTS CLASS A CLASS B ------------------------------------------------------------------------- ---------- SIX MONTHS SIX MONTHS ENDED ENDED JUNE 30, YEAR ENDED DECEMBER 31, JUNE 30, 1997 1997 (UNAUDITED) 1996 1995 1994 1993 1992 (UNAUDITED) ==================================================================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $20.33 $17.84 $14.16 $14.41 $14.19 $13.57 $20.19 - ------------------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income .15 .34 .32 .31 .29 .32 .07 Net realized and unrealized gain 3.06 3.11 3.90 .16 .98 .97 3.03 - ------------------------------------------------------------------------------------------------------------------------------------ Total income from investment operations 3.21 3.45 4.22 .47 1.27 1.29 3.10 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.13) (.35) (.30) (.31) (.29) (.32) (.06) Dividends in excess of net investment income -- -- -- (.01) -- -- -- Distributions from net realized gain -- (.61) (.24) (.40) (.76) (.35) -- - ------------------------------------------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (.13) (.96) (.54) (.72) (1.05) (.67) (.06) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $23.41 $20.33 $17.84 $14.16 $14.41 $14.19 $23.23 ========================================================================================= - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE(3) 15.82% 19.39% 30.04% 3.28% 8.97% 9.61% 15.37% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $176,435 $148,129 $136,270 $92,728 $90,470 $59,376 $52,104 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $160,384 $144,498 $115,137 $90,158 $80,229 $53,485 $45,303 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 1.37%(4) 1.73% 1.98% 2.16% 1.97% 2.34% 0.61%(4) Expenses 1.21%(4) 1.20% 1.28% 1.27% 1.24% 1.19% 1.98%(4) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(5) 7.5% 14.5% 11.8% 16.3% 24.3% 12.3% 7.5% Average brokerage commission rate(6) $0.0593 $0.0573 $0.0597 -- -- -- $0.0593
1. For the period from October 2, 1995 (inception of offering) to December 31, 1995. 2. For the period from May 1, 1993 (inception of offering) to December 31, 1993. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized. 14 Oppenheimer Value Stock Fund
FINANCIAL HIGHLIGHTS CLASS B (CONTINUED) CLASS C ---------------------------------------------- ------------------------------------- SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1997 YEAR ENDED DECEMBER 31, 1996 1995 1994 1993(2) (UNAUDITED) 1996 1995(1) ==================================================================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $17.73 $14.09 $14.35 $14.60 $20.24 $17.81 $17.12 - ------------------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income .19 .21 .17 .17 .08 .22 .02 Net realized and unrealized gain 3.09 3.86 .19 .51 3.03 3.05 .97 - ------------------------------------------------------------------------------------------------------------------------------------ Total income from investment operations 3.28 4.07 .36 .68 3.11 3.27 .99 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.21) (.19) (.21) (.17) (.06) (.23) (.06) Dividends in excess of net investment income -- -- (.01) -- -- -- -- Distributions from net realized gain (.61) (.24) (.40) (.76) -- (.61) (.24) - ------------------------------------------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (.82) (.43) (.62) (.93) (.06) (.84) (.30) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $20.19 $17.73 $14.09 $14.35 $23.29 $20.24 $17.81 ======================================================================================= ==================================================================================================================================== TOTAL RETURN, AT NET ASSET VALUE(3) 18.50% 29.03% 2.50% 4.63% 15.38% 18.39% 5.89% ==================================================================================================================================== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $40,142 $26,647 $10,893 $5,158 $3,230 $1,856 $130 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $33,258 $18,857 $ 7,834 $2,527 $2,518 $ 904 $ 57 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 0.96% 1.19% 1.45% 0.97%(4) 0.60%(4) 0.92% 0.56%(4) Expenses 1.97% 2.07% 2.01% 2.14%(4) 1.99%(4) 2.02% 2.37%(4) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(5) 14.5% 11.8% 16.3% 24.3% 7.5% 14.5% 11.8% Average brokerage commission rate(6) $0.0573 $0.0597 -- -- $0.0593 $0.0573 $0.0597
5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended June 30, 1997 were $17,693,482 and $14,565,040, respectively. 6. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the number of related shares purchased and sold. See accompanying Notes to Financial Statements. 15 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Value Stock Fund (the Fund) is a separate 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 objective is to seek long-term growth of capital and income primarily through investments in stocks of well established companies. The Fund's investment adviser is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to that class and exclusive voting rights with respect to matters affecting that 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 the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by an approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. 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. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. 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. ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund. OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 16 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, 1996 ------------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT Class A: Sold 686,537 $ 14,785,708 1,459,943 $ 28,270,600 Dividends and distributions reinvested 31,660 707,729 250,205 5,056,348 Redeemed (468,748) (10,137,819) (2,062,372) (40,229,269) --------- ------------- ----------- ------------- Net increase (decrease) 249,449 $ 5,355,618 (352,224) $ (6,902,321) ========= ============= =========== ============= Class B: Sold 451,643 $ 9,679,194 730,295 $ 13,930,290 Dividends and distributions reinvested 5,367 118,425 71,393 1,445,827 Redeemed (202,911) (4,347,401) (315,951) (5,995,805) --------- -------------- ----------- ------------- Net increase 254,099 $ 5,450,218 485,737 $ 9,380,312 ========= ============== =========== ============= Class C: Sold 56,890 $ 1,208,367 93,935 $ 1,815,265 Dividends and distributions reinvested 317 7,027 3,157 64,356 Redeemed (10,208) (220,347) (12,697) (246,683) --------- -------------- ----------- ------------- Net increase 46,999 $ 995,047 84,395 $ 1,632,938 ========= ============== =========== =============
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At June 30, 1997, net unrealized appreciation on investments of $89,252,180 was composed of gross appreciation of $90,241,607, and gross depreciation of $989,427. 4. MANAGEMENT FEES AND OTHER TRANSACTION WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.75% of the first $100 million of the average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million of net assets, and 0.66% of average annual net assets in excess of $500 million. For the six months ended June 30, 1997, commissions (sales charges paid by investors) on sales of Class A shares totaled $204,963, of which $91,300 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and Class C shares totaled $270,637 and $10,217, of which $40,798 and $2,703, respectively, was paid to an affiliated broker/dealer. During the six months ended June 30, 1997, OFDI received contingent deferred sales charges of $31,595 upon redemption of Class B shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund and for other registered investment companies. OFS's total costs of providing such services are allocated ratably to these companies. The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a portion of its costs incurred in connection with the personal service and maintenance of shareholder accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate that may not exceed 0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and other financial institutions quarterly for providing personal service and maintenance of accounts of their customers that hold Class A shares. During the six months ended June 30, 1997, OFDI paid $110,205 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. 17 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED) 4. MANAGEMENT FEES AND OTHER TRANSACTION WITH AFFILIATES (Continued) The Fund has adopted a Distribution and Service Plan for Class B shares to reimburse OFDI for its services and costs in distributing Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B shares. OFDI also receives a service fee of 0.25% per year to reimburse dealers for providing personal services for accounts that hold Class B shares. Both fees are computed on the average annual net assets of Class B shares, determined as of the close of each regular business day. During the six months ended June 30, 1997, OFDI paid $8,652 to an affiliated broker/dealer as reimbursement for Class B personal service and maintenance expenses and retained $182,772 as reimbursement for Class B sales commissions and service fee advances, as well as financing costs. If either Plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to OFDI for distributing shares before the Plan was terminated. As of June 30, 1997, OFDI had incurred unreimbursed expenses of $1,034,129 for Class B. The Fund has adopted a compensation type Distribution and Service Plan for Class C shares to compensate OFDI for its services and costs in distributing Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class C shares. Both fees are computed on the average annual net assets of Class C shares, determined as of the close of each regular business day. During the six months ended June 30, 1997, OFDI paid retained $9,187 as compensation for Class C sales commissions and service fee advances, as well as financing costs. If the Plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plan was terminated. As of June 30, 1997, OFDI had incurred unreimbursed expenses of $47,970 for Class C. 5. SUBSEQUENT EVENT At a shareholder meeting on July 21, 1997, shareholders of Oppenheimer Value Stock Fund approved a reorganization of Oppenheimer Value Stock Fund with and into Oppenheimer Disciplined Value Fund. Shareholders of Oppenheimer Value Stock Fund received shares of Oppenheimer Disciplined Value Fund and Oppenheimer Value Stock Fund was liquidated. The reorganization occurred on July 25, 1997. 18 Oppenheimer Value Stock Fund (Intentionally Left Blank) OPPENHEIMER VALUE STOCK FUND A SERIES OF OPPENHEIMER INTEGRITY FUNDS OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, President Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee George C. Bowen, Vice President, Treasurer and Assistant Secretary Andrew J. Donohue, Vice President and Secretary James W. MacAllen, Vice President Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary INVESTMENT ADVISER OppenheimerFunds, Inc. SUB-ADVISER David L. Babson & Company DISTRIBUTOR OppenheimerFunds Distributor, Inc. TRANSFER AND OppenheimerFunds Services SHAREHOLDER SERVICING AGENT CUSTODIAN OF PORTFOLIO The Bank of New York SECURITIES INDEPENDENT AUDITORS Deloitte & Touche LLP LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. 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 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. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. --------------------- Bulk Rate U.S. Postage PAID Permit No. 130 Torrington, CT --------------------- -----END PRIVACY-ENHANCED MESSAGE-----