-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sMKiLIvsszDoVIXOaeRWf+JyK09en2Sf4LYEU4n/mQpMF0cLmB/l0mnAHfS06D4B BUqeGbtOiSqSadvqOukPCg== 0000912057-94-000825.txt : 19940310 0000912057-94-000825.hdr.sgml : 19940310 ACCESSION NUMBER: 0000912057-94-000825 CONFORMED SUBMISSION TYPE: ARS PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046474411 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: ARS SEC ACT: 34 SEC FILE NUMBER: 811-03420 FILM NUMBER: 94515166 BUSINESS ADDRESS: STREET 1: 3410 S GALENA CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 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 ARS 1 ANNUAL REPORT OPPENHEIMER VALUE STOCK FUND ANNUAL REPORT DECEMBER 31, 1993 [LOGO] "I WANT HER TO HAVE EVERYTHING MY PARENTS GAVE ME. "THIS FUND GIVES US THE POTENTIAL FOR THE KIND OF LONG-TERM GROWTH WE NEED." [GRAPHIC] FUND FACTS - ------------------------------------------------------------------------------- Five Facts Every Shareholder Should Know About Oppenheimer Value Stock Fund --------------------------------------------------------- 1 The Fund's objective is to seek long-term growth In this report: of capital and income, primarily through investments in the stocks of well-established Answers to two companies. The Fund invests primarily in stocks timely questions you that pay cash dividends. should ask your Fund's managers. --------------------------------------------------------- / /With the U.S. 2 The Fund's total return at net asset value for stock market at Class A shares was 8.97% in the 12 months ended record labels, December 31, 1993. Total return at net asset how can you find value for Class B shares from inception of the high-quality stocks Class on May 1, 1993 to December 31, 1993 was at attractive prices? 4.63%.(1) --------------------------------------------------------- / / How has the 3 Your Fund's managers use a value investment managers' value strategy, purchasing stocks that they believe are strategy benefited priced significantly below their normal levels and the portfolio? selling stocks that they believe have reached or exceeded normal valuations. --------------------------------------------------------- 4 The Fund's top five stock holdings at December 31, 1993, were:(2) GENERAL ELECTRIC CO. The sixth largest company in the U.S., with a diversified portfolio of operations. MINNESOTA MINING AND MANUFACTURING CO. Also known as 3M; an international manufacturer of industrial and consumer products. AMP, INC. The world's leading producer of electrical/electronic connection devices. PFIZER, INC. A leading drug company and manufacturer of medical devices, consumer products, specialty chemicals, and drugs. PITNEY BOWES, INC. A world leader in mailing, shipping, and weighing systems, as well as copiers and facsimile machines. --------------------------------------------------------- 5 "With the U.S. stock market near record highs, we are identifying value stock opportunities by focusing on well-known companies that are restructuring operations and refocusing on their core businesses. Many of our investments in consumer-driven companies have performed very well, producing substantial capital gains." PORTFOLIO MANAGER, DAVID SALERNO, DECEMBER 31, 1993 CONCERT CAPITAL MANAGEMENT, INC., THE FUND'S SUB-ADVISOR 1. Based on the change in net asset value per Class A share from 12/31/92 to 12/31/93. The Fund's average annual total returns after deducting the current maximum sales charge of 5.75%, for the 1- and 5-year periods ended 12/31/93 were 2.70% and 11.10%, respectively. Total return for Class B shares from 5/1/93 (inception of the class) and held until 12/31/93 was -0.37%. This reflects the change in value of a hypothetical investment made on 5/1/93 and held until 12/31/93, with all dividends and capital gains distributions reinvested and after applying the contingent deferred sales charge of 5%. All total returns include reinvestment of dividends and capital gains distributions. 2. The Fund's portfolio is subject to change. Past performance is not indicative of future results. An investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. 2 Oppenheimer Value Stock Fund REPORT TO SHAREHOLDERS - ------------------------------------------------------------------------------- Oppenheimer Value Stock Fund Class A produced a total return at net asset value of 8.97% for the 12 months ended December 31, 1993. Total return at net asset value for Class B shares from inception of the Class on May 1, 1993 to December 31, 1993, was 4.63%(3). To seek capital appreciation, the Fund's managers use a value strategy--purchasing stocks whose prices have dropped below their perceived normal valuations and holding them until the managers believe they have fully realized their true value. To maximize the portfolio's stability, we invest primarily in high-quality companies that (1) have achieved above-average profitability; (2) have strong balance sheets; and (3) appear positioned to generate above-average dividend growth. The U.S. economy remains in a period of moderate growth, and interest rates have continued to decline steadily for most of the year. In this environment, and with the U.S. stock market reaching record highs, our challenge has been to find companies meeting these criteria at attractive valuations. In the current environment, we have identified opportunities for growth by seeking out high-quality companies that are restructuring their operations to focus on core businesses. For example, we recently invested in American Express, which has sold off its Shearson Lehman brokerage business to focus on its travel service and charge card operations. We also invested in K Mart, which has divested parts of its specialty retailing group and used the proceeds to upgrade its discount stores. A third example is Xerox, which is in the process of selling its financial services operations and has gained an advantage over its Japanese competitors in the document processing equipment business as a result of the dramatic strengthening of the yen against the dollar. Another interesting recent investment is Pioneer Hi-Bred International, the nation's leading supplier of seed corn to farmers. We have built a position in this company in anticipation of much higher plantings after the flood in the Mid West during 1993. In the past six months, the Fund realized substantial gains from our value stock strategy. For example, Eastman Kodak, which we purchased in early 1993, has worked through its highly publicized management difficulties, allowing us to sell a portion of our investment at a significant gain. We are pleased that Oppenheimer Value Stock Fund continues to produce attractive total returns, and we look forward to serving your investment needs in the year ahead. /s/ James C. Swain /s/Jon S. Fossel Chairman, Oppenheimer President, Oppenheimer Integrity Funds Integrity Funds for Oppenheimer for Oppenheimer Value Value Stock Fund Stock Fund January 21, 1994 3. See footnote 1, page 2. 3 Oppenheimer Value Stock Fund STATEMENT OF INVESTMENTS December 31, 1993
FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES-9.1% - ----------------------------------------------------------------------------------------------------------------------------- Caterpillar Financial Services Corp., 3.40%, 1/6/94 $2,000,000 $1,999,056 ------------------------------------------------------------------------------------------ ConAgra, Inc., 3.40%, 1/11/94 910,000 909,140 ------------------------------------------------------------------------------------------ Corning, Inc., 3.50%, 1/5/94 1,900,000 1,899,261 ------------------------------------------------------------------------------------------ General Motors Acceptance Corp., 3.05%, 1/5/94 645,000 645,000 ------------------------------------------------------------------------------------------ Indiana Michigan Power Co., 3.50%, 1/4/94 1,330,000 1,329,612 ------------------------------------------------------------------------------------------ Public Service Co. of Colorado, 3.70%, 1/7/94 1,870,000 1,868,847 ---------- Total Short-Term Notes (Cost $8,650,916) 8,650,916 SHARES - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS-89.5% - ----------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS-7.1% - ----------------------------------------------------------------------------------------------------------------------------- ALUMINUM-0.9% Reynolds Metals Co. 18,000 816,750 - ----------------------------------------------------------------------------------------------------------------------------- CHEMICALS-1.3% Du Pont (E.I.) De Nemours & Co. 25,000 1,206,250 - ----------------------------------------------------------------------------------------------------------------------------- CHEMICALS: SPECIALTY-1.9% Lubrizol Corp. (The) 25,500 870,187 ------------------------------------------------------------------------------------------ Nalco Chemical Co. 26,500 993,750 ---------- 1,863,937 - ----------------------------------------------------------------------------------------------------------------------------- METAL: MISCELLANEOUS-1.2% Phelps Dodge Corp. 23,500 1,145,625 - ----------------------------------------------------------------------------------------------------------------------------- PAPER AND FOREST PRODUCTS-1.8% Westvaco Corp. 23,000 819,375 ------------------------------------------------------------------------------------------ Willamette Industries, Inc. 19,000 940,500 ---------- 1,759,875 - ----------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS-15.9% - ----------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES-1.8% Ford Motor Co. 27,000 1,741,500 - ----------------------------------------------------------------------------------------------------------------------------- AUTO PARTS: AFTER MARKET-1.9% Genuine Parts Co. 48,500 1,824,813 - ----------------------------------------------------------------------------------------------------------------------------- HARDWARE AND TOOLS-1.3% Stanley Works (The) 28,500 1,268,250 - ----------------------------------------------------------------------------------------------------------------------------- LEISURE TIME-1.4% Eastman Kodak Co. 24,800 1,388,800 - ----------------------------------------------------------------------------------------------------------------------------- PUBLISHING-3.6% Dun & Bradstreet Corp. (The) 30,000 1,848,750 ------------------------------------------------------------------------------------------ McGraw-Hill, Inc. 23,000 1,555,375 ---------- 3,404,125 - ----------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: DEPARTMENT May Department Stores Co. 40,500 1,594,687 STORES-1.7% - ----------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL K Mart Corp. 42,100 894,625 ------------------------------------------------------------------------------------------ MERCHANDISE CHAINS-2.4% Penney (J.C.) Co., Inc. 26,500 1,387,938 ---------- 2,282,563 - ----------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY-0.7% Rite Aid Corp. 40,000 635,000 - ----------------------------------------------------------------------------------------------------------------------------- TEXTILES: APPAREL V.F. Corp. 22,500 1,037,812 MANUFACTURERS-1.1% - ----------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS-10.8% - ----------------------------------------------------------------------------------------------------------------------------- BEVERAGES: ALCOHOLIC-1.4% Brown-Forman Corp., Cl. B 15,500 1,352,375 - ----------------------------------------------------------------------------------------------------------------------------- DRUGS-2.3% Pfizer, Inc. 32,500 2,242,500
4 Oppenheimer Value Stock Fund
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------- FOOD PROCESSING-2.9% CPC International, Inc. 28,000 $1,333,500 ------------------------------------------------------------------------------------------ Gerber Products Co. 19,000 539,125 ------------------------------------------------------------------------------------------ Pioneer Hi-Bred International, Inc. 21,000 819,000 ---------- 2,691,625 - ----------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: DIVERSIFIED-2.0% Bristol-Myers Squibb Co. 33,000 1,918,125 - ----------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS-1.0% Clorox Co. (The) 18,300 992,775 - ----------------------------------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS-1.2% Becton, Dickinson & Co. 30,600 1,097,775 - ----------------------------------------------------------------------------------------------------------------------------- ENERGY-7.9% - ----------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED DOMESTIC-1.7% Atlantic Richfield Co. 10,500 1,105,125 ------------------------------------------------------------------------------------------ USX-Marathon Group 32,000 528,000 ---------- 1,633,125 - ----------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED Amoco Corp. 26,500 1,401,187 INTERNATIONAL-6.2% ------------------------------------------------------------------------------------------ Chevron Corp. 22,000 1,916,750 ------------------------------------------------------------------------------------------ Mobil Corp. 19,500 1,540,500 ------------------------------------------------------------------------------------------ Royal Dutch Petroleum Co. 10,200 1,064,625 ---------- 5,923,062 - ----------------------------------------------------------------------------------------------------------------------------- FINANCIAL-10.7% - ----------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: American Express Co. 40,500 1,250,438 MISCELLANEOUS-1.3% - ----------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE-1.0% Jefferson-Pilot Corp. 19,850 930,469 - ----------------------------------------------------------------------------------------------------------------------------- INSURANCE: MULTI-LINE-1.1% Unitrin, Inc. 23,500 1,022,250 - ----------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND Chubb Corp. (The) 9,500 739,812 CASUALTY-2.5% ------------------------------------------------------------------------------------------ SAFECO Corp. 30,000 1,650,000 ---------- 2,389,812 - ----------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: REGIONAL-4.8% Comerica, Inc. 51,000 1,357,875 ------------------------------------------------------------------------------------------ CoreStates Financial Corp. 56,000 1,463,000 ------------------------------------------------------------------------------------------ Norwest Corp. 38,000 926,250 ------------------------------------------------------------------------------------------ Wachovia Corp. 25,540 855,590 ---------- 4,602,715 - ----------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL-16.5% - ----------------------------------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES-1.4% Donnelley (R.R.) & Sons Co. 28,500 887,062 ------------------------------------------------------------------------------------------ Omnicom Group, Inc. 10,000 462,500 ---------- 1,349,562 - ----------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT-8.4% AMP, Inc. 40,000 2,525,000 ------------------------------------------------------------------------------------------ General Electric Co. 29,000 3,041,375 ------------------------------------------------------------------------------------------ Grainger (W.W.), Inc. 22,000 1,265,000 ------------------------------------------------------------------------------------------ Hubbell, Inc., Cl.B 22,021 1,191,887 ---------- 8,023,262
5 Oppenheimer Value Stock Fund STATEMENT OF INVESTMENTS (Continued)
MARKET VALUE SHARES SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------- MANUFACTURING: DIVERSIFIED Crane Co. 17,800 $ 440,550 INDUSTRIALS-5.2% ------------------------------------------------------------------------------------------ Dover Corp. 19,500 1,184,625 ------------------------------------------------------------------------------------------ General Signal Corp. 37,500 1,289,063 ------------------------------------------------------------------------------------------ Harsco Corp. 24,000 975,000 ------------------------------------------------------------------------------------------ Parker-Hannifin Corp. 29,000 1,094,750 ---------- 4,983,988 - ----------------------------------------------------------------------------------------------------------------------------- RAILROADS-1.5% Norfolk Southern Corp. 20,000 1,410,000 - ----------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY-13.3% AEROSPACE/DEFENSE-4.1% Boeing Co. (The) 14,700 635,775 ------------------------------------------------------------------------------------------ Lockheed Corp. 25,000 1,706,250 ------------------------------------------------------------------------------------------ Rockwell International Corp. 22,000 816,750 ------------------------------------------------------------------------------------------ TRW, Inc. 10,500 727,125 ---------- 3,885,900 - ----------------------------------------------------------------------------------------------------------------------------- COMPUTER SYSTEMS-0.9% International Business Machines Corp. 14,300 807,950 - ----------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: INSTRUMENTATION-2.1% Hewlett-Packard Co. 25,500 2,014,500 - ----------------------------------------------------------------------------------------------------------------------------- OFFICE EQUIPMENT AND Minnesota Mining and Manufacturing Co. 25,000 2,718,750 SUPPLIES-6.2% ------------------------------------------------------------------------------------------ Pitney Bowes, Inc. 50,000 2,068,750 ------------------------------------------------------------------------------------------ Xerox Corp. 13,500 1,206,562 ---------- 5,994,062 - ----------------------------------------------------------------------------------------------------------------------------- UTILITIES-7.3% - ----------------------------------------------------------------------------------------------------------------------------- ELECTRIC COS.-3.7% Allegheny Power System, Inc. 11,000 291,500 ------------------------------------------------------------------------------------------ Niagara Mohawk Power Corp. 46,000 931,500 ------------------------------------------------------------------------------------------ NIPSCO Industries, Inc. 26,000 854,750 ------------------------------------------------------------------------------------------ SCANA Corp. 16,500 820,875 ------------------------------------------------------------------------------------------ Union Electric Co. 16,000 628,000 ---------- 3,526,625 NATURAL GAS-1.0% Consolidated Natural Gas Co. 20,500 963,500 - ----------------------------------------------------------------------------------------------------------------------------- TELEPHONE (NEW)-2.6% Ameritech Corp. 15,600 1,197,300 ------------------------------------------------------------------------------------------ Bell Atlantic Corp. 7,600 448,400 ------------------------------------------------------------------------------------------ Southern New England Telecommunications Corp. 24,500 885,063 ---------- 2,530,763 Total Common Stocks (Cost $69,387,905) 85,507,145 - ----------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $78,038,820) 98.6% 94,158,061 - ----------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.4 1,470,159 ------- ---------- NET ASSETS 100.0% $95,628,220 ------- ---------- ------- ----------
See accompanying Notes to Financial Statements. 6 Oppenheimer Value Stock Fund STATEMENT OF ASSETS AND LIABILITIES December 31, 1993 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $78,038,820)-see accompanying statement $94,158,061 ------------------------------------------------------------------------------------------ Cash 1,516,373 ------------------------------------------------------------------------------------------ Receivables: Shares of beneficial interest sold 540,617 Dividends and interest 176,365 Investments sold 13,685 ------------------------------------------------------------------------------------------ Other 9,052 ----------- Total assets 96,414,153 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payables and other liabilities: Investments purchased 403,474 Shares of beneficial interest redeemed 240,929 Distribution assistance-Note 4 57,283 Dividends and distributions 34,797 Deferred trustee fees-Note 5 8,765 Other 40,685 ----------- Total liabilities 785,933 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS $95,628,220 ----------- ----------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF Paid-in capital $79,551,976 NET ASSETS ------------------------------------------------------------------------------------------ Undistributed net investment income 225 ------------------------------------------------------------------------------------------ Distributions in excess of net realized gain from investment transactions (43,222) ------------------------------------------------------------------------------------------ Net unrealized appreciation on investments-Note 3 16,119,241 ----------- Net assets $95,628,220 ----------- ----------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE Class A Shares: PER SHARE Net asset value and redemption price per share (based on net assets of $90,469,747 and 6,279,938 shares of beneficial interest outstanding) $14.41 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $15.29 ------------------------------------------------------------------------------------------ Class B Shares: Net asset value, redemption price and offering price per share (based on net assetsof $5,158,473 and 359,470 shares of beneficial interest outstanding) $14.35
See accompanying Notes to Financial Statements. 7 Oppenheimer Value Stock Fund STATEMENT OF OPERATIONS For the Year Ended December 31, 1993 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Dividends $2,301,756 ------------------------------------------------------------------------------------------ Interest 324,670 ---------- Total income 2,626,426 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fees-Note 4 614,932 ------------------------------------------------------------------------------------------ Distribution assistance: Class A-Note 4 198,834 Class B-Note 4 16,056 ------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees-Note 4 72,447 ------------------------------------------------------------------------------------------ Shareholder reports 57,937 ------------------------------------------------------------------------------------------ Legal and auditing fees 20,583 ------------------------------------------------------------------------------------------ Custodian fees and expenses 20,266 ------------------------------------------------------------------------------------------ Registration and filing fees: Class A 8,929 Class B 1,337 ------------------------------------------------------------------------------------------ Trustees' fees and expenses 7,731 ------------------------------------------------------------------------------------------ Other 9,117 ---------- Total expenses 1,028,169 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 1,598,257 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED Net realized gain on investments 4,772,844 ------------------------------------------------------------------------------------------ GAIN (LOSS) ON INVESTMENTS Net change in unrealized appreciation on investments (52,118) ---------- Net realized and unrealized gain on investments 4,720,726 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,318,983
See accompanying Notes to Financial Statements. 8 Oppenheimer Value Stock Fund STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, ------------------------------- 1993 1992 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 1,598,257 $ 1,250,163 ------------------------------------------------------------------------------------------ Net realized gain on investments 4,772,844 1,430,983 ------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on investments (52,118) 2,336,062 ----------- ----------- Net increase in net assets resulting from operations 6,318,983 5,017,208 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND Dividends from net investment income: DISTRIBUTIONS TO Class A ($.288 and $.322 per share, respectively) (1,573,023) (1,252,511) SHAREHOLDERS Class B ($.166 per share) (33,142) -- ------------------------------------------------------------------------------------------ Distributions from net realized gain on investments: Class A ($.76 and $.346 per share, respectively) (4,515,011) (1,431,916) Class B ($.76 per share) (258,413) -- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST Net increase in net assets resulting from TRANSACTIONS Class A beneficial interest transactions-Note 2 30,973,434 7,662,567 ------------------------------------------------------------------------------------------ Net increase in net assets resulting from Class B beneficial interest transactions-Note 2 5,339,170 -- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase 36,251,998 9,995,348 ------------------------------------------------------------------------------------------ Beginning of year 59,376,222 49,380,874 ----------- ----------- End of year (including undistributed net investment income of $225 and $8,133, respectively) $95,628,220 $59,376,222 ----------- ----------- ----------- -----------
See accompanying Notes to Financial Statements. 9 Oppenheimer Value Stock Fund FINANCIAL HIGHLIGHTS
CLASS A CLASS B --------------------------------------------------------------------------------- ------------ YEAR ENDED PERIOD ENDED DECEMBER 31, DECEMBER 31, 1993 1992 1991(3) 1990 1989 1988 1987 1986(2) 1993(1) - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period - ------------------------------------------------------------------------------------------------------------------------------------ $14.19 $13.57 $11.39 $12.08 $10.47 $ 9.51 $9.98 $10.16 $14.60 Income (loss) from investment operations: Net investment income .29 .32 .33 .37 .40 .33 .34 .01 .17 Net realized and unrealized gain (loss) on investments .98 .97 2.49 (.57) 1.87 1.15 (.22) (.19) .51 ------- ------ ------ ------ ------ ------ ------ ------ --------- Total income (loss) from investment operations 1.27 1.29 2.82 (.20) 2.27 1.48 .12 (.18) .68 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.29) (.32) (.33) (.39) (.41) (.33) (.41) -- (.17) Distributions from net realized gain on investments (.76) (.35) (.31) (.10) (.25) (.19) (.18) -- (.76) ------- ------ ------ ------ ------ ------ ------ ------ --------- Total dividends and distributions to shareholders (1.05) (.67) (.64) (.49) (.66) (.52) (.59) -- (.93) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $14.41 $14.19 $13.57 $11.39 $12.08 $10.47 $9.51 $ 9.98 $14.35 ------- ------ ------ ------ ------ ------ ------ ------ --------- ------- ------ ------ ------ ------ ------ ------ ------ --------- - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE(4) 8.97% 9.61% 25.23% (1.53)% 21.93% 15.61% 1.10% (1.77)% 4.63% - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $90,470 $59,376 $49,381 $40,153 $37,713 $27,434 $19,377 $20,162 $5,158 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $80,229 $53,485 $45,581 $39,104 $33,742 $24,658 $22,322 (2) $2,527 - ------------------------------------------------------------------------------------------------------------------------------------ Number of shares outstanding at end of period (in thousands) 6,280 4,184 3,639 3,526 3,122 2,620 2,039 2,021 359 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 1.97% 2.34% 2.59% 3.22% 3.51% 3.45% 3.15% (2) .97%(5) Expenses, before voluntary reimbursement 1.24% 1.19% 1.31% 1.36% 1.40% 1.21% .70% (2) 2.14%(5) Expenses, net of voluntary reimbursement N/A N/A 1.26% 1.30% 1.30% 1.19% N/A (2) N/A - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(6) 24.3% 12.3% 14.5% 13.5% 14.9% 13.1% 10.8% (2) 24.3% 1. For the period from May 1, 1993 (inception of offering) to December 31, 1993. 2. For the period from December 22, 1986 to December 31, 1986. Ratios during this development period would not be indicative of representative results. 3. On March 28, 1991, Oppenheimer Management Corporation became the investment advisor to the Fund. 4. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. 5. Annualized. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1993 were $25,469,747 and $17,554,755, respectively.
See accompanying Notes to Financial Statements. 10 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- 1. SIGNIFICANT Oppenheimer Value Stock Fund (the Fund) is a separate ACCOUNTING POLICIES fund of Oppenheimer Integrity Funds, a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment advisor is Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class B shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent deferred sales charge. Both classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. ----------------------------------------------------- INVESTMENT VALUATION. Portfolio securities are valued at 4:00 p.m. (New York time) on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Short-term debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Securities for which market quotes are not readily available are valued under procedures established by the Board of Trustees to determine fair value in good faith. ----------------------------------------------------- ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. ----------------------------------------------------- FEDERAL INCOME TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income tax provision is required. ----------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. ----------------------------------------------------- OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. - ------------------------------------------------------------------------------- 2. SHARES OF The Fund has authorized an unlimited number of no par BENEFICIAL INTEREST value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED DECEMBER 31, 1993(1) YEAR ENDED DECEMBER 31, 1992 ------------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ---------------------------------------------------------------------------------------------------------- Class A: Sold 2,167,501 $19,481,793 741,739 $10,397,819 Issued in connection with the acquisition of Oppenheimer Blue Chip Fund-Note 6 1,356,899 20,149,959 -- -- Dividends and distributions reinvested 379,876 5,528,826 58,050 817,191 Redeemed (1,808,202) (14,187,144) (254,477) (3,552,443) --------- ----------- ------- ----------- Net increase 2,096,074 $30,973,434 545,312 $ 7,662,567 --------- ----------- ------- ----------- --------- ----------- ------- ----------- ---------------------------------------------------------------------------------------------------------- Class B: Sold 357,108 $ 5,313,077 -- $ -- Dividends and distributions reinvested 18,763 270,609 -- -- Redeemed (16,401) (244,516) -- -- Net increase 359,470 $ 5,339,170 -- $ -- 1. For the year ended December 31, 1993 for Class A shares and for the period from May 1, 1993 (inception of offering) to December 31, 1993 for Class B shares.
11 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (Continued) - ------------------------------------------------------------------------------- 3. UNREALIZED GAINS AND At December 31, 1993, net unrealized appreciation of LOSSES ON INVESTMENTS investments of $16,119,241 was composed of gross appreciation of $18,112,985, and gross depreciation of $1,993,744. 4. MANAGEMENT FEES Management fees paid to the Manager were in accordance AND OTHER with the investment advisory agreement with the Fund TRANSACTIONS WITH which provides for an annual fee of .75% on the first AFFILIATES $100 million of net assets with a reduction of .03% on each $200 million thereafter, to .66% on net assets in excess of $500 million. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent applicable regulatory limit on Fund expenses. For the year ended December 31, 1993, commissions (sales charges paid by investors) on sales of Class A shares totaled $296,555, of which $232,226 was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. During the year ended December 31, 1993, OFDI received contingent deferred sales charges of $58 upon redemption of Class B shares. Oppenheimer Shareholder Services (OSS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OSS's total costs of providing such services are allocated ratably to these companies. Under separate approved plans of distribution, each class may expend up to .25% of its net assets annually to reimburse OFDI for costs incurred in distributing shares of the Fund, including amounts paid to brokers, dealers, banks and other institutions. In addition, Class B shares are subject to an asset-based sales charge of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its own resources at the time of sale and associated financing costs. In the event of termination or discontinuance of the Class B plan of distribution, the Fund would be contractually obligated to pay OFDI for any expenses not previously reimbursed or recovered through contingent deferred sales charges. During the year ended December 31, 1993, OFDI paid $149,525 to an affiliated broker/dealer as reimbursement for Class A distribution-related expenses and retained $16,056 as reimbursement for Class B distribution-related expenses and sales commissions. - ------------------------------------------------------------------------------- 5. DEFERRED TRUSTEE A former trustee elected to defer receipt of fees COMPENSATION earned. These deferred fees earn interest at a rate determined by the current Board of Trustees at the beginning of each calendar year, compounded each quarter-end. As of December 31, 1993, the Fund was incurring interest at a rate of 6.01% per annum. Deferred fees are payable in annual installments, with accrued interest, each April 1 through 1995. - ------------------------------------------------------------------------------- 6. ACQUISITION OF On March 26, 1993, the Fund acquired all of the net OPPENHEIMER assets of Oppenheimer Blue Chip Fund (Blue Chip), BLUE CHIP FUND pursuant to an Agreement and Plan of Reorganization approved by the Blue Chip shareholders on January 28, 1993. The Fund issued 1,356,899 shares of beneficial interest, valued at $20,149,959, in exchange for the net assets, resulting in combined net assets of $83,976,756 on March 26, 1993. The net assets acquired included net unrealized appreciation of $2,523,063. The exchange was tax-free. 12 Oppenheimer Value Stock Fund INDEPENDENT AUDITORS' REPORT - ------------------------------------------------------------------------------- The Board of Trustees and Shareholders of Oppenheimer Value Stock Fund: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Oppenheimer Value Stock Fund as of December 31, 1993, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1993 and 1992, and the financial highlights for the period January 1, 1991 to December 31, 1993. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights (except for total return) for the period December 22, 1986 to December 31, 1990 were audited by other auditors whose report dated February 4, 1991, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1993 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Value Stock Fund at December 31, 1993, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE Denver, Colorado January 21, 1994 13 Oppenheimer Value Stock Fund FEDERAL INCOME TAX INFORMATION (Unaudited) - ------------------------------------------------------------------------------- In early 1994, shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1993. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. A distribution of $.76 per share was paid on December 30, 1993, of which $.671 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended December 31, 1993 which are not designated as capital gain distributions should be multiplied by 100% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 14 Oppenheimer Value Stock Fund OPPENHEIMER VALUE STOCK FUND A Series of Oppenheimer Integrity Funds - ------------------------------------------------------------------------------- OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee and President Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee Andrew J. Donohue, Vice President David B. Salerno, Vice President George C. Bowen, Vice President, Secretary and Treasurer Lynn M. Coluccy, Assistant Treasurer Robert G. Zack, Assistant Secretary ------------------------------------------------------- INVESTMENT ADVISOR Oppenheimer Management Corporation ------------------------------------------------------- SUB-ADVISOR Concert Capital Management, Inc. ------------------------------------------------------- DISTRIBUTOR Oppenheimer Funds Distributor, Inc. ------------------------------------------------------- TRANSFER AND Oppenheimer Shareholder SHAREHOLDER Services SERVICING AGENT ------------------------------------------------------- CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES ------------------------------------------------------- INDEPENDENT AUDITORS Deloitte & Touche ------------------------------------------------------- LEGAL COUNSEL Myer, Swanson & Adams, P.C. This is a copy of a report to shareholders of Oppenheimer Value Stock Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Value Stock Fund. For material information concerning the Fund, see the Prospectus. 15 Oppenheimer Value Stock Fund "HOW MAY I HELP YOU?" GENERAL INFORMATION 1-800-525-7048 Talk to a Customer Service Representative. Monday through Friday from 8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m. to 2:00 p.m. ET. TELEPHONE TRANSACTIONS 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 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. OPPENHEIMER FUNDS INFORMATION HOTLINE 1800-835-3104 Hear timely and insightful messages on the economy and issues that affect your finances. 24 hours a day, 7 days a week. "Just as OppenheimerFunds offers over 30 different funds designed to help meet virtually every investment need, Oppenheimer Shareholder Services offers a variety of services to satisfy your individual needs. Whenever you require help, we're only a toll-free phone call away. [PHOTO] Barbara Hennigar President Oppenheimer Shareholder Services "For personalized assistance and account information, call our General Information number to speak with our knowledgeable Customer Service Representatives. "We also make it easy for you to redeem shares, exchange shares, or conduct AccountLink transactions, simply by calling our Telephone Transactions number. "And for added convenience, OppenheimerFunds' PhoneLink, an automated voice response system, is available 24 hours a day, 7 days a week. PhoneLink gives you access to variety of fund, account, and market information. You can even make purchases, exchanges and redemptions using your touch-tone phone. Of course, PhoneLink will always give you the option to speak with a Customer Service Representative during regular business hours. [GRAPHIC] "When you invest in OppenheimerFunds, you know you'll receive a high level of customer service. The International Customer Service Association knows it, too, as it recently awarded Oppenheimer Shareholder Services a 1993 Award of Excellence for consistently demonstrating superior customer service. "Whatever your needs, we're ready to assist you." [LOGO]Oppenheimer Funds Distributors, Inc. Bulk Rate P.O. Box 5270 U.S. Postage Denver, CO 80217-5270 PAID Permit No. 314 Farmingdale, NY -----END PRIVACY-ENHANCED MESSAGE-----