-----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, WYd1QkqMmxOhwkTWrZxMYcpMDk0A5hPMpm6PY3bvbokh8ybQOBof+UKXkNcIiQfG hbdB8OVih/YiRDq3K60Ssg== 0000950146-96-001583.txt : 19960906 0000950146-96-001583.hdr.sgml : 19960906 ACCESSION NUMBER: 0000950146-96-001583 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960905 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: 1940 Act SEC FILE NUMBER: 811-03420 FILM NUMBER: 96626016 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 [FRONT COVER] Oppenheimer Value Stock Fund Semiannual Report June 30, 1996 [Picture of BarBQ] "We want to invest for growth in high quality companies that pay dividends, but we want their stocks at a good price." [LOGO-OPPENHEIMERFUNDS (R)] 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 stocks when they think they're overvalued. This strategy offers the potential for long-term capital appreciation through investment in high quality, well-established companies. Performance Total return at net asset value for the six months ended 6/30/96 was 8.36% for Class A shares, 7.95% for Class B shares, and 7.87% for Class C shares.(1) Your Fund's average annual total returns at maximum offering price for Class A shares for the 1- and 5-year periods ended 6/30/96 and since inception of the Class on 12/22/86 were 14.86%, 12.53% and 11.54%, respectively. For Class B shares, average annual total returns for the 1-year period and since inception of the Class on 5/1/93 were 15.96% and 13.04%, respectively. For Class C shares, cumulative total return since inception on 10/2/95 was 13.23%.(2) Outlook "We believe the Fund will do well, especially in light of recent increases in market volatility. It is precisely this type of investment environment that creates opportunity for value investors, allowing us to buy attractive companies at temporarily reduced prices, while at the same time selling stocks that have reached our target price." James MacAllen, Portfolio Manager Concert Capital Management, The Fund's Sub-Advisor June 30, 1996 Total returns include change in share price and reinvestment of dividends and capital gains distributions. Past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For more complete information, please review the prospectus carefully before you invest. 1. Based on the change in net asset value per share for the period shown, without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns show results of hypothetical investments on 6/30/95, 6/30/91 and 12/22/86 (inception of class), after deducting the current maximum initial sales charge of 5.75%. Prior to 3/29/91, the Fund's maximum sales charge rate for Class A shares was lower, so that actual account results would have been higher. Class B returns show results of hypothetical investments on 6/30/95 and 5/1/93 (inception of class), after the deduction of the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class C shares show results of a hypothetical investment on 10/2/95 after the 1% contingent deferred sales charge. An explanation of the different performance calculations is in the Fund's prospectus. 2 Oppenheimer Value Stock Fund Dear Shareholder, [PHOTO-JAMES C. SWAIN] James C. Swain Chairman Oppenheimer Value Stock Fund [PHOTO-BRIDGET A. MACASKILL] Bridget A. Macaskill President Oppenheimer Value Stock Fund Against all odds, the stock market showed remarkable strength during the first five months of 1996. However, in the few months that followed, the market experienced significant volatility that resulted in a decline in the Dow of about 7 percent. Many experts said the stock market, having advanced to record heights in 1995 and void of any real market correction since 1990, was due for a downturn. This was, after all, the longest bull market of the post-World War II era. Thanks to the 10% rise in blue chip stocks during the first half of 1996 and the early success of small stocks, the decline that occurred recently was somewhat cushioned. While it's impossible to tell what will happen next, we are optimistic that this turn was a correction within a bull market rather than the onset of a bear market. What made the market perform so well during the first part of the year? It was another surprise: corporate profits. Between 1992 and 1995, corporate profits of U.S. companies advanced at a double-digit rate. Investors widely expected this year's profit tallies to be flat compared to 1995. After all, the economy had been sluggish--growing at an annual rate of just 2.3% in the first quarter of 1996. But corporate America continued to perform. The reason corporate profits were so strong is that many U.S. companies continued to successfully reduce costs. Often when a company achieves a small increase in sales, the benefit goes straight to the bottom line. Indeed, the U.S. Commerce Department reports indicated that corporate profits rose 15% for the four quarters ended March 1996, while the economy grew only marginally. Still, profits are not what they were in the early 1990s. That's why investors are seeking out companies that can grow earnings regardless of the fortunes of the economy. Which is just what many small companies in such fields as technology, healthcare and specialty retailing have been doing, growing earnings at double-digit--and even triple-digit rates. So it's not surprising that the stocks of many of these small fast-growing companies have been such strong performers. The early strength of the stock market is all the more remarkable when you consider that during the same period, interest rates moved up sharply. The yield on the benchmark 30-year U.S. Treasury bond rose from about 6% in January to over 7% today. Interest rates have been rising partly because investors are concerned that the economy is growing fast enough to generate higher inflation. However, we are watching this very closely, and would become very cautious regarding the stock market's performance if inflation were to flare up. As always, remember stock investments are generally meant for long-term growth objectives, and often involve short-term volatility. So, it's critical for investors to keep their focus on long-term goals and to put near-term setbacks in proper prospective. Your portfolio managers discuss the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. 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, 1996 3 Oppenheimer Value Stock Fund Q + A James MacAllen Portfolio Manager Q How has the Fund performed over the past six months? The Fund did well, though it slightly underperformed the broad market for the period ended June 30th. The Fund's investment objective seeks long-term growth of capital and income primarily through investments in stocks of well-established companies while also seeking to protect its principal against declines in the market. Because of this defensive approach, we can expect the Fund to lag somewhat in a bull market such as the recent period. However, we are confident over the long term that the Fund will perform well. What investments have made positive contributions to performance? We have structured a diversified portfolio of high quality companies. Our strongest performing investments were the stocks of companies in the machinery, electrical equipment, and retailing industries. Several of these stocks were hurt last year when people feared an economic slowdown. As the economy has regained its strength, many of these stocks have done well.(1) An interview with your Fund's managers. Were there any investments that didn't perform as you'd expected? Fortunately, we didn't have many negative surprises. In fact, the biggest surprise of all was the continued strength of the stock market, despite a rise in interest rates. Though the strength of the market has been justified, given the streamlined and improved operations of corporate America, we believe the likelihood that stocks will continue to rise in the face of higher rates is low. Our value approach to selecting investments is intended to limit an investor's risk exposure during high-priced markets. What areas of the market are you currently targeting? Recently, we've been trying to reduce the total number of holdings. We are evaluating our smaller holdings to determine whether they should be eliminated or increased. In addition, we're selectively adding companies we feel are well-positioned for growth but selling at relatively low prices. For example, we've increased our holdings in the insurance industry, where we've been able to buy companies with strong franchises whose dividend yields are attractive and are likely to grow. We're also adding to our energy holdings where we see profit margins increasing due to an improved outlook for refining and natural gas. What is your outlook for the Fund? We believe the Fund will do well, especially in light of recent increases in market volatility. It is precisely this type of investment environment that creates opportunity for value investors, allowing the Fund to buy attractive companies at temporarily reduced prices, while at the same time selling stocks that have reached our target price. We're confident that this approach should continue to provide superior returns over time. | | 1. The Fund's portfolio is subject to change. 4 Oppenheimer Value Stock Fund Statement of Investments June 30, 1996 (Unaudited)
Face Market Value Amount See Note 1 ==================================================================================================================================== Short-Term Notes--4.5% - ------------------------------------------------------------------------------------------------------------------------------------ Associates Corp. of North America, 5.39%, 7/22/96 $2,000,000 $1,993,712 ------------------------------------------------------------------------------------------------------- FINOVA Capital Corp., 5.45%, 7/9/96 2,000,000 1,997,591 ------------------------------------------------------------------------------------------------------- Sheffield Receivables Corp., 5.28%, 7/2/96 2,000,000 1,999,703 ------------------------------------------------------------------------------------------------------- The Hertz Corp., 5.31%, 7/17/96 2,000,000 1,995,235 ---------- Total Short-Term Notes (Cost $7,986,241) 7,986,241 Shares ==================================================================================================================================== Common Stocks--90.9% - ------------------------------------------------------------------------------------------------------------------------------------ Basic Materials--7.1% - ------------------------------------------------------------------------------------------------------------------------------------ Chemicals--4.0% Du Pont (E.I.) De Nemours & Co. 21,500 1,701,187 ------------------------------------------------------------------------------------------------------- Eastman Chemical Co. 25,000 1,521,875 ------------------------------------------------------------------------------------------------------- Lubrizol Corp. (The) 31,000 941,625 ------------------------------------------------------------------------------------------------------- Nalco Chemical Co. 43,600 1,373,400 ------------------------------------------------------------------------------------------------------- Rohm & Haas Co. 25,000 1,568,750 ---------- 7,106,837 - ------------------------------------------------------------------------------------------------------------------------------------ Paper--3.1% Temple-Inland, Inc. 40,000 1,870,000 ------------------------------------------------------------------------------------------------------- Westvaco Corp. 41,500 1,239,812 ------------------------------------------------------------------------------------------------------- Weyerhaeuser Co. 58,800 2,499,000 ---------- 5,608,812 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Cyclicals--12.3% - ------------------------------------------------------------------------------------------------------------------------------------ Autos & Housing--5.7% Ford Motor Co. 73,100 2,366,612 ------------------------------------------------------------------------------------------------------- Genuine Parts Co. 55,000 2,516,250 ------------------------------------------------------------------------------------------------------- Goodyear Tire & Rubber Co. 60,000 2,895,000 ------------------------------------------------------------------------------------------------------- Stanley Works (The) 80,000 2,380,000 ---------- 10,157,862 - ------------------------------------------------------------------------------------------------------------------------------------ Leisure & Entertainment--1.3% Eastman Kodak Co. 29,000 2,254,750 - ------------------------------------------------------------------------------------------------------------------------------------ Media--2.4% Dun & Bradstreet Corp. 27,000 1,687,500 ------------------------------------------------------------------------------------------------------- McGraw-Hill, Inc. 57,000 2,607,750 ---------- 4,295,250 - ------------------------------------------------------------------------------------------------------------------------------------ Retail: General--2.9% May Department Stores Co. 46,500 2,034,375 ------------------------------------------------------------------------------------------------------- Sears Roebuck & Co. 31,000 1,507,375 ------------------------------------------------------------------------------------------------------- VF Corp. 27,500 1,639,687 ---------- 5,181,437
5 Oppenheimer Value Stock Fund
Statement of Investments (Unaudited) (Continued) Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Non-Cyclicals--20.1% - ------------------------------------------------------------------------------------------------------------------------------------ Beverages--2.0% Brown-Forman Corp., Cl. B 40,900 $1,636,000 ------------------------------------------------------------------------------------------------------- PepsiCo, Inc. 54,000 1,910,250 ---------- 3,546,250 - ------------------------------------------------------------------------------------------------------------------------------------ Food--4.9% Albertson's, Inc. 62,000 2,565,250 ------------------------------------------------------------------------------------------------------- American Stores Co. 20,500 845,625 ------------------------------------------------------------------------------------------------------- ConAgra, Inc. 24,100 1,093,537 ------------------------------------------------------------------------------------------------------- CPC International, Inc. 37,000 2,664,000 ------------------------------------------------------------------------------------------------------- Pioneer Hi-Bred International, Inc. 29,500 1,559,812 ---------- 8,728,224 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Drugs--6.8% Bristol-Myers Squibb Co. 66,000 5,940,000 ------------------------------------------------------------------------------------------------------- Cytogen Corp. (1) 79 716 ------------------------------------------------------------------------------------------------------- Pfizer, Inc. 47,500 3,390,312 ------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 45,500 2,855,125 ---------- 12,186,153 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Supplies & Services--1.4% Becton, Dickinson & Co. 31,000 2,487,750 - ------------------------------------------------------------------------------------------------------------------------------------ Household Goods--2.1% Clorox Co. (The) 20,500 1,816,812 ------------------------------------------------------------------------------------------------------- Kimberly-Clark Corp. 25,500 1,969,875 ---------- 3,786,687 - ------------------------------------------------------------------------------------------------------------------------------------ Tobacco--2.9% American Brands, Inc. 59,000 2,677,125 ------------------------------------------------------------------------------------------------------- UST, Inc. 75,000 2,568,750 ---------- 5,245,875 - ------------------------------------------------------------------------------------------------------------------------------------ Energy--8.1% - ------------------------------------------------------------------------------------------------------------------------------------ Energy Services & Producers--1.0% Kerr-McGee Corp. 28,500 1,734,937 - ------------------------------------------------------------------------------------------------------------------------------------ Oil-Integrated--7.1% Amoco Corp. 49,500 3,582,563 ------------------------------------------------------------------------------------------------------- Atlantic Richfield Co. 13,700 1,623,450 ------------------------------------------------------------------------------------------------------- Chevron Corp. 45,000 2,655,000 ------------------------------------------------------------------------------------------------------- Mobil Corp. 23,500 2,634,938 ------------------------------------------------------------------------------------------------------- Unocal Corp. 44,100 1,488,375 ------------------------------------------------------------------------------------------------------- USX-Marathon Group 32,400 652,050 ---------- 12,636,376
6 Oppenheimer Value Stock Fund
Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Financial--13.3% - ------------------------------------------------------------------------------------------------------------------------------------ Banks--5.2% Bank of New York Co., Inc. (The) 55,000 $2,818,750 ------------------------------------------------------------------------------------------------------- Comerica, Inc. 38,000 1,695,750 ------------------------------------------------------------------------------------------------------- CoreStates Financial Corp. 52,000 2,002,000 ------------------------------------------------------------------------------------------------------- Norwest Corp. 36,500 1,272,938 ------------------------------------------------------------------------------------------------------- Wachovia Corp. 36,240 1,585,500 ---------- 9,374,938 - ------------------------------------------------------------------------------------------------------------------------------------ Diversified Financial--1.3% - ------------------------------------------------------------------------------------------------------------------------------------ American Express Co. 50,000 2,231,250 - ------------------------------------------------------------------------------------------------------------------------------------ Insurance--6.8% Allstate Corp. 23,748 1,083,503 ------------------------------------------------------------------------------------------------------- Jefferson-Pilot Corp. 26,325 1,359,028 ------------------------------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 27,300 2,634,450 ------------------------------------------------------------------------------------------------------- MBIA, Inc. 33,500 2,608,813 ------------------------------------------------------------------------------------------------------- Safeco Corp. 99,500 3,519,813 ------------------------------------------------------------------------------------------------------- Unitrin, Inc. 19,000 893,000 ---------- 12,098,607 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial--15.5% - ------------------------------------------------------------------------------------------------------------------------------------ Electrical Equipment--8.1% AMP, Inc. 75,300 3,021,413 ------------------------------------------------------------------------------------------------------- General Electric Co. 58,500 5,060,250 ------------------------------------------------------------------------------------------------------- Grainger (W.W.), Inc. 32,000 2,480,000 ------------------------------------------------------------------------------------------------------- Honeywell, Inc. 35,000 1,907,500 ------------------------------------------------------------------------------------------------------- Hubbell, Inc., Cl. B 30,997 2,053,551 ---------- 14,522,714 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Services--0.9% Donnelley (R.R.) & Sons Co. 48,000 1,674,000 - ------------------------------------------------------------------------------------------------------------------------------------ Manufacturing--5.0% Dover Corp. 41,500 1,914,188 ------------------------------------------------------------------------------------------------------- General Signal Corp. 31,000 1,174,125 ------------------------------------------------------------------------------------------------------- Harsco Corp. 23,000 1,546,750 ------------------------------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 43,500 3,001,500 ------------------------------------------------------------------------------------------------------- Parker-Hannifin Corp. 30,400 1,288,200 ---------- 8,924,763 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation--1.5% Norfolk Southern Corp. 31,000 2,627,250 - ------------------------------------------------------------------------------------------------------------------------------------ Technology--11.6% - ------------------------------------------------------------------------------------------------------------------------------------ Aerospace/Defense--2.3% Boeing Co. 26,500 2,308,813 ------------------------------------------------------------------------------------------------------- TRW, Inc. 21,000 1,887,375 ---------- 4,196,188
7 Oppenheimer Value Stock Fund
Statement of Investments (Unaudited) (Continued) Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Computer Hardware--4.4% International Business Machines Corp. 22,500 $2,227,500 ------------------------------------------------------------------------------------------------------- Pitney Bowes, Inc. 54,500 2,602,375 ------------------------------------------------------------------------------------------------------- Xerox Corp. 57,000 3,049,500 ----------- 7,879,375 - ------------------------------------------------------------------------------------------------------------------------------------ Electronics--2.2% Hewlett-Packard Co. 40,000 3,985,000 - ------------------------------------------------------------------------------------------------------------------------------------ Telecommunications- Technology--2.7% AT&T Corp. 52,500 3,255,000 ------------------------------------------------------------------------------------------------------- Frontier Corp. 54,000 1,653,750 ----------- 4,908,750 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities--2.9% - ------------------------------------------------------------------------------------------------------------------------------------ Electric Utilities--1.3% NIPSCO Industries, Inc. 25,500 1,026,375 ------------------------------------------------------------------------------------------------------- SCANA Corp. 48,500 1,364,063 ----------- 2,390,438 - ------------------------------------------------------------------------------------------------------------------------------------ Telephone Utilities--1.6% Ameritech Corp. 24,000 1,425,000 ------------------------------------------------------------------------------------------------------- Southern New England Telecommunications Corp. 32,000 1,344,000 ----------- 2,769,000 ----------- Total Common Stocks (Cost $108,094,850) 162,539,473 Face Amount ==================================================================================================================================== Repurchase Agreement--4.2% Repurchase agreement with J. P. Morgan Securities, Inc., 5.45%, dated 6/28/96, to be repurchased at $7,603,452 on 7/1/96, collateralized by U.S. Treasury Bonds, 11.25%, 2/15/15, with a value of $7,096,256, and U.S. Treasury Nts., 8.50%, 5/15/97 with a value of $713,765 (Cost $7,600,000) $7,600,000 7,600,000 - ------------------------------------------------------------------------------------------------------------------------------------ Total Investments, at Value (Cost $123,681,091) 99.6% 178,125,714 - ------------------------------------------------------------------------------------------------------------------------------------ Other Assets Net of Liabilities 0.4 739,223 -------- ------------ Net Assets 100.0% $178,864,937 ======== ============
1. Non-income producing security. See accompanying Notes to Financial Statements. 8 Oppenheimer Value Stock Fund
Statement of Assets and Liabilities June 30, 1996 (Unaudited) ==================================================================================================================================== Assets Investments, at value (cost $123,681,091)--see accompanying statement $178,125,714 ------------------------------------------------------------------------------------------------------- Cash 257,566 ------------------------------------------------------------------------------------------------------- Receivables: Investments sold 364,102 Interest and dividends 278,385 Shares of beneficial interest sold 167,028 ------------------------------------------------------------------------------------------------------- Other 5,181 ------------ Total assets 179,197,976 ==================================================================================================================================== Liabilities Payables and other liabilities: Shares of beneficial interest redeemed 148,774 Distribution and service plan fees 105,772 Shareholder reports 43,472 Transfer and shareholder servicing agent fees 12,684 Custodian fees 4,244 Investments purchased 3,106 Other 14,987 ------------ Total liabilities 333,039 ==================================================================================================================================== Net Assets $178,864,937 ============ ==================================================================================================================================== Composition of Net Assets Paid-in capital $122,394,833 ------------------------------------------------------------------------------------------------------- Undistributed net investment income 106,512 ------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 1,918,969 ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 54,444,623 ------------ Net assets $178,864,937 ============ ==================================================================================================================================== Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $144,468,983 and 7,531,679 shares of beneficial interest outstanding) $19.18 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $20.35 ------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $33,589,738 and 1,762,880 shares of beneficial interest outstanding) $19.05 ------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $806,216 and 42,181 shares of beneficial interest outstanding) $19.11
See accompanying Notes to Financial Statements. 9 Oppenheimer Value Stock Fund
Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited) ==================================================================================================================================== Investment Income Dividends $ 2,071,336 ------------------------------------------------------------------------------------------------------- Interest 421,386 ----------- Total income 2,492,722 ==================================================================================================================================== Expenses Management fees--Note 4 633,087 ------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 167,442 Class B 152,660 Class C 2,511 ------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 109,319 ------------------------------------------------------------------------------------------------------- Shareholder reports 11,081 ------------------------------------------------------------------------------------------------------- Legal and auditing fees 6,278 ------------------------------------------------------------------------------------------------------- Custodian fees and expenses 6,205 ------------------------------------------------------------------------------------------------------- Trustees' fees and expenses 2,950 ------------------------------------------------------------------------------------------------------- Registration and filing fees: Class B 2,009 Class C 224 ------------------------------------------------------------------------------------------------------- Other 110 ----------- Total expenses 1,093,876 ==================================================================================================================================== Net Investment Income 1,398,846 ==================================================================================================================================== Realized and Unrealized Gain Net realized gain on investments 1,908,167 ------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 10,196,070 ----------- Net realized and unrealized gain 12,104,237 ==================================================================================================================================== Net Increase in Net Assets Resulting From Operations $13,503,083 ===========
See accompanying Notes to Financial Statements. 10 Oppenheimer Value Stock Fund Statements of Changes in Net Assets
Six Months Ended Year Ended June 30, 1996 December 31, (Unaudited) 1995 ==================================================================================================================================== Operations Net investment income $ 1,398,846 $ 2,504,015 ------------------------------------------------------------------------------------------------------- Net realized gain 1,908,167 2,126,048 ------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 10,196,070 29,893,727 ------------ ------------ Net increase in net assets resulting from operations 13,503,083 34,523,790 ==================================================================================================================================== Dividends and Distributions to Shareholders Dividends from net investment income: Class A (1,122,607) (2,195,920) Class B (149,516) (239,821) Class C (3,514) (429) ------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (1,793,905) Class B -- (351,137) Class C -- (1,561) ==================================================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions--Note 2: Class A (1,878,781) 17,673,851 Class B 4,818,560 11,681,792 Class C 651,389 129,003 ==================================================================================================================================== Net Assets Total increase 15,818,614 59,425,663 ------------------------------------------------------------------------------------------------------- Beginning of period 163,046,323 103,620,660 ------------ ------------ End of period [including undistributed (overdistributed) net investment income of $106,512 and ($16,697), respectively] $178,864,937 $163,046,323 ============ ============
See accompanying Notes to Financial Statements. 11 Oppenheimer Value Stock Fund Financial Highlights
Class A -------------------------------------------------------------- Six Months Ended June 30, 1996 Year Ended December 31, (Unaudited) 1995 1994 1993 ======================================================================================================================= Per Share Operating Data: Net asset value, beginning of period $17.84 $14.16 $14.41 $14.19 - ------------------------------------------------------------------------------------------------------------------------ Income from investment operations: Net investment income .16 .32 .31 .29 Net realized and unrealized gain 1.33 3.90 .16 .98 ------ ------ ------ ------ Total income from investment operations 1.49 4.22 .47 1.27 - ------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.15) (.30) (.31) (.29) Dividends in excess of net investment income -- -- (.01) -- Distributions from net realized gain -- (.24) (.40) (.76) ------ ------ ------ ------ Total dividends and distributions to shareholders (.15) (.54) (.72) (1.05) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $19.18 $17.84 $14.16 $14.41 ====== ====== ====== ====== ======================================================================================================================== Total Return, at Net Asset Value(4) 8.36% 30.04% 3.28% 8.97% ======================================================================================================================== Ratios/Supplemental Data: Net assets, end of period (in thousands) $144,469 $136,270 $92,728 $90,470 - ------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $141,517 $115,137 $90,158 $80,229 - ------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 1.77%(5) 1.98% 2.16% 1.97% Expenses, before voluntary reimbursement 1.13%(5) 1.28% 1.27% 1.24% Expenses, net of voluntary reimbursement N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(6) 6.1% 11.8% 16.3% 24.3% Average brokerage commission rate(7) $0.0572 $0.0597 -- --
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. On March 28, 1991, OppenheimerFunds, Inc. 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 (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. 12 Oppenheimer Value Stock Fund
Class B Class C - ----------------------------- ---------------------------------------------------------- -------------------------------- Period Six Months Ended Six Months Ended Ended June 30, 1996 Year Ended December 31, June 30, 1996 Dec. 31, 1992 1991(3) (Unaudited) 1995 1994 1993(2) (Unaudited) 1995(1) ==================================================================================================================================== $13.57 $11.39 $17.73 $14.09 $14.35 $14.60 $17.81 $17.12 - ------------------------------------------------------------------------------------------------------------------------------------ .32 .33 .09 .21 .17 .17 .06 .02 .97 2.49 1.32 3.86 .19 .51 1.34 .97 ------ ------ ------ ------ ------ ------ ------ ------ 1.29 2.82 1.41 4.07 .36 .68 1.40 .99 - ------------------------------------------------------------------------------------------------------------------------------------ (.32) (.33) (.09) (.19) (.21) (.17) (.10) (.06) -- -- -- -- (.01) -- -- -- (.35) (.31) -- (.24) (.40) (.76) -- (.24) ------ ------ ------ ------ ------ ------ ------ ------ (.67) (.64) (.09) (.43) (.62) (.93) (.10) (.30) - ------------------------------------------------------------------------------------------------------------------------------------ $14.19 $13.57 $19.05 $17.73 $14.09 $14.35 $19.11 $17.81 ====== ====== ====== ====== ====== ====== ====== ====== ==================================================================================================================================== 9.61% 25.23% 7.95% 29.03% 2.50% 4.63% 7.87% 5.89% ==================================================================================================================================== $59,376 $49,381 $33,590 $26,647 $10,893 $5,158 $806 $130 - ------------------------------------------------------------------------------------------------------------------------------------ $53,485 $45,581 $30,717 $18,857 $7,834 $2,527 $508 $57 - ------------------------------------------------------------------------------------------------------------------------------------ 2.34% 2.59% 0.98%(5) 1.19% 1.45% 0.97%(5) 0.93%(5) 0.56%(5) 1.19% 1.31% 1.91%(5) 2.07% 2.01% 2.14%(5) 1.96%(5) 2.37%(5) N/A 1.26% N/A N/A N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------------------------------------------ 12.3% 14.5% 6.1% 11.8% 16.3% 24.3% 6.1% 11.8% -- -- $0.0572 $0.0597 -- -- $0.0572 $0.0597
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 period ended June 30, 1996 were $13,415,625 and $9,544,579, respectively. 7. 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. 13 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 advisor 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 three 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 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 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 asked price 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 the 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 their 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 year that the income or realized gain (loss) 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. 14 Oppenheimer Value Stock Fund ================================================================================ 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, 1996 Year Ended December 31, 1995(1) ------------------------------ ------------------------------- Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------------------------------ Class A: Sold 651,233 $12,134,501 1,806,348 $29,186,663 Dividends and distributions reinvested 48,239 916,498 228,838 3,970,434 Redeemed (806,969) (14,929,780) (944,270) (15,420,246) -------- ----------- --------- ----------- Net increase (decrease) (107,497) $(1,878,781) 1,090,916 $17,673,851 ======== =========== ========= =========== - ------------------------------------------------------------------------------------------------------------------------------------ Class B: Sold 408,604 $7,585,365 982,843 $15,746,572 Dividends and distributions reinvested 7,348 138,861 32,137 551,627 Redeemed (155,778) (2,905,666) (285,236) (4,616,407) -------- ----------- --------- ----------- Net increase 260,174 $4,818,560 729,744 $11,681,792 ======== =========== ========= =========== - ------------------------------------------------------------------------------------------------------------------------------------ Class C: Sold 41,034 $767,052 7,236 $128,066 Dividends and distributions reinvested 181 3,428 112 1,972 Redeemed (6,324) (119,091) (58) (1,035) -------- ----------- --------- ----------- Net increase 34,891 $651,389 7,290 $129,003 ======== =========== ========= ===========
1. For the year ended December 31, 1995 for Class A and Class B shares and for the period from October 2, 1995 to December 31, 1995 for Class C shares. ================================================================================ 3. Unrealized Gains and Losses on Investments At June 30, 1996, net unrealized appreciation on investments of $54,444,623 was composed of gross appreciation of $54,726,852, and gross depreciation of $282,229. ================================================================================ 4. Management Fees and Other Transactions 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% on the first $100 million of average annual net assets with a reduction of 0.03% on each $200 million, thereafter, to 0.66% 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. The Manager has entered into a sub-advisory agreement with Concert Capital Management, Inc. (the Sub-Advisor). The Manager pays Concert Capital Management, Inc. based on the fee schedule set forth in the Prospectus. For the six months ended June 30, 1996, the Manager paid $221,555 to the Sub-Advisor. For the six months ended June 30, 1996, commissions (sales charges paid by investors) on sales of Class A shares totaled $182,380, of which $109,693 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 $222,894 and $6,401, of which $40,637 and $1,398, respectively, was paid to an affiliated broker/dealer. During the six months ended June 30, 1996, OFDI received contingent deferred sales charges of $20,273 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 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, 1996, OFDI paid $107,326 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. 15 Oppenheimer Value Stock Fund Notes to Financial Statements (Unaudited) (Continued) ================================================================================ 4. Management Fees and Other Transactions With Affiliates (continued) The Fund has adopted a reimbursement type 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 that are outstanding for 6 years or less. 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. 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. During the six months ended June 30, 1996, OFDI paid $4,823 to an affiliated broker/dealer as reimbursement for Class B personal service and maintenance expenses and retained $129,277 as reimbursement for Class B sales commissions and service fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred unreimbursed expenses of $919,534 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. 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. During the six months ended June 30, 1996, OFDI retained $2,511 as compensation for Class C sales commissions and service fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred unreimbursed expenses of $26,144 for Class C. 16 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 Bridget A. Macaskill, President Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., 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 Advisor OppenheimerFunds, Inc. ================================================================================ Sub-Advisor Concert Capital Management, Inc. ================================================================================ Distributor OppenheimerFunds Distributor, Inc. ================================================================================ Transfer and Shareholder Servicing Agent OppenheimerFunds Services ================================================================================ Custodian of Portfolio Securities The Bank of New York ================================================================================ 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. 17 Oppenheimer Value Stock Fund OppenheimerFunds Family ================================================================================ OppenheimerFunds offers over 50 funds designed to fit virtually every investment goal. Whether you're investing for retirement, your children's education or tax-free income, we have the funds to help you seek your objective. When you invest with OppenheimerFunds, you can feel comfortable knowing that you are investing with a respected financial institution with over 35 years of experience in helping people just like you reach their financial goals. And you're investing with a leader in global, growth stock and flexible fixed-income investments--with over 3 million shareholder accounts and more than $50 billion under OppenheimerFunds' management and that of our affiliates. At OppenheimerFunds we don't charge a fee to exchange shares. And you can exchange shares easily by mail or by telephone.(1) For more information on Oppenheimer funds, please contact your financial advisor or call us at 1-800-525-7048 for a prospectus. You may also write us at the address shown on the back cover. As always, please read the prospectus carefully before you invest. ================================================================================ Stock Funds Global Emerging Growth Fund Growth Fund Enterprise Fund(2) Global Fund International Growth Fund Quest Global Value Fund Discovery Fund Disciplined Value Fund Quest Small Cap Value Fund Oppenheimer Fund Gold & Special Minerals Fund Value Stock Fund Target Fund Quest Value Fund ================================================================================ Stock & Bond Funds Main Street Income & Growth Fund Equity Income Fund Quest Opportunity Value Fund Disciplined Allocation Fund Total Return Fund Asset Allocation Fund Quest Growth & Income Value Fund Strategic Income & Growth Fund Global Growth & Income Fund Bond Fund for Growth ================================================================================ Bond Funds International Bond Fund Bond Fund High Yield Fund U.S. Government Trust Champion Income Fund Limited-Term Government Fund Strategic Income Fund ================================================================================ Tax-Exempt Funds California Tax-Exempt Fund(3) Insured Tax-Exempt Fund Florida Tax-Exempt Fund(3) Intermediate Tax-Exempt Fund New Jersey Tax-Exempt Fund(3) New York Tax-Exempt Fund(3) Rochester Division Pennsylvania Tax-Exempt Fund(3) Rochester Fund Municipals Tax-Free Bond Fund Limited Term New York Municipal Fund ================================================================================ Money Market Funds(4) Money Market Fund Cash Reserves ================================================================================ LifeSpan Growth Fund Income Fund Balanced Fund 1. Exchange privileges are subject to change or termination. Shares may be exchanged only for shares of the same class of eligible funds. 2. Effective 4/1/96, the Fund is closed to new investors. 3. Available only to investors in certain states. 4. An investment in money market funds is neither insured nor guaranteed by the U.S. government and there can be no assurance that a money market fund will be able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. (Copyright symbol) Copyright 1996 OppenheimerFunds, Inc. All rights reserved. 18 Oppenheimer Value Stock Fund [BACK COVER] Information General Information Monday-Friday 8:30 a.m.-9 p.m. ET Saturday 10 a.m.-2 p.m. ET 1-800-525-7048 Telephone Transactions Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-852-8457 PhoneLink 24 hours a day, automated information and transactions 1-800-533-3310 Telecommunications Device for the Deaf (TDD) Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-843-4461 OppenheimerFunds Information Hotline 24 hours a day, timely and insightful messages on the economy and issues that affect your investments 1-800-835-3104 RS0325.001.0696 August 31, 1996 [Picture of Jennifer Leonard] [Caption] Jennifer Leonard, Customer Service Representative OppenheimerFunds Services "How may I help you?" As an Oppenheimer fund shareholder, you have some special privileges. Whether it's automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that "links" your Oppenheimer funds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get automated information with OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you access to a variety of fund, account, and market information. Of course, you can always speak with a Customer Service Representative during the General Information hours shown at the left. You can count on us whenever you need assistance. That's why the International Customer Service Association, an independent, nonprofit organization made up of over 3,200 customer service management professionals from around the country, honored the Oppenheimer funds' transfer agent, OppenheimerFunds Services, with their Award of Excellence in 1993. So call us today--we're here to help. [Oppenheimer Logo(r)] OppenheimerFunds Distributor, Inc. P.O. Box 5270 Denver, CO 80217-5270 - ------------------- Bulk Rate U.S. Postage PAID Permit No. 314 Farmingdale, NY - ------------------- -----END PRIVACY-ENHANCED MESSAGE-----