-----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, EVEwZLSw6zov+epApesf840Mclpx+zrz6OTICp36ylERmZ6PkWgVnJtQ96EA4Vgq 1v7buZLm0sANTu9DQSCSGA== 0000935069-03-000512.txt : 20030423 0000935069-03-000512.hdr.sgml : 20030423 20030423164704 ACCESSION NUMBER: 0000935069-03-000512 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030228 FILED AS OF DATE: 20030423 EFFECTIVENESS DATE: 20030423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER CAPITAL APPRECIATION FUND CENTRAL INDEX KEY: 0000319767 IRS NUMBER: 133054122 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03105 FILM NUMBER: 03660448 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND INC DATE OF NAME CHANGE: 19870616 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND DATE OF NAME CHANGE: 19920703 N-30D 1 rs0320_6821vef.txt RS0320_6821VEF [GRAPHIC] February 28, 2003 - -------------------------------------------------------------------------------- Semiannual Oppenheimer Report ------ Capital Appreciation Fund Management Commentaries - -------------------------------------------------------------------------------- Fund Highlights Performance Update Investment Strategy Discussion Financial Statements "Over the long term, the Fund has produced a record of strong performance across a diverse range of market conditions. We continue to invest one company at a time, allocating the Fund's assets among a broadly diversified portfolio of stocks that we believe offer good prospects for growth at a reasonable price." 1 [LOGO] OppenheimerFunds(R) The Right Way to Invest HIGHLIGHTS Fund Objective Oppenheimer Capital Appreciation Fund seeks capital appreciation. Fund Highlight The Fund's Class A shares are ranked in the top 40% of its peer group of Multi-Cap Growth funds for the one-year period ended February 28, 2003. Over the five- and 10-year periods, the Fund ranked in the top quartile, #28/171 and #10/49, respectively. 1 CONTENTS 1 Letter to Shareholders 2 An Interview with Your Fund's Manager 8 Financial Statements 31 Trustees and Officers - --------------------------------- Cumulative Total Returns* For the 6-Month Period Ended 2/28/03 Without With Sales Chg. Sales Chg. - --------------------------------- Class A -6.64% -12.01% - --------------------------------- Class B -7.01 -11.66 - --------------------------------- Class C -7.02 -7.95 - --------------------------------- Class N -6.70 -7.63 - --------------------------------- Class Y -6.45 - --------------------------------- Average Annual Total Returns* For the 1-Year Period Ended 2/28/03 Without With Sales Chg. Sales Chg. - --------------------------------- Class A -23.48% -27.88% - --------------------------------- Class B -24.08 -27.88 - --------------------------------- Class C -24.05 -24.81 - --------------------------------- Class N -23.62 -24.39 - --------------------------------- Class Y -23.17 1. Lipper, Inc. Lipper rankings are based on total returns, but do not consider sales charges. The Fund's Class A shares ranked #140/397 for the one-year period ended 2/28/03. Lipper ranking is for the Class A share class only; other classes may have different performance characteristics. Rankings are relative peer group ratings and do not necessarily mean that the fund had high total returns. Past performance is no guarantee of future results. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. *See Notes on page 6 for further details. LETTER TO SHAREHOLDERS Dear Shareholder, At OppenheimerFunds, we take very seriously the responsibility of helping you achieve your goals. We understand that your investments with us may represent a future home, a college education or retirement. In good markets and in bad, we are committed to partnering with your advisor to provide you with investment products and services that can help you reach your financial objectives. In recent years, many of us have seen some of our assets decrease in value--sometimes significantly--making it difficult to maintain our long-term investing plans. Shifting markets can often blindside investors and unbalance portfolios. We believe it has never been more important than it is now to allocate your assets among stocks, bonds, and other investments based on what would be most appropriate depending on your goals and risk tolerance. Diversification is key. We encourage you to hold true to your long-term goals and adhere to the time-tested investment principles of asset allocation and diversification. Of course, when the financial markets make major moves, portfolio changes may be necessary to adjust risk exposure, rebalance asset class allocations or seek to maintain sufficient income flows. Monitor your investments, stay informed and--most importantly--work with your financial advisor so that any adjustments ultimately support your long-term goals. We continue to believe in the growth, ingenuity and underlying strengths of the economy and the markets. That said, we also expect the road ahead to present new and unique challenges. We strongly believe that one of the best ways to pursue your goals is to adhere to core investment principles. We hope you share our convictions, and we wish you the best in 2003. Thank you for your continued confidence in OppenheimerFunds, The Right Way to Invest. Sincerely, /S/ JOHN V. MURPHY - ------------------ John V. Murphy February 28, 2003 These general market views represent opinions of OppenheimerFunds, Inc. and are not intended to predict performance of the securities markets or any particular fund. Specific information that applies to your Fund is contained in the pages that follow. [PHOTO OF JOHN V. MURPHY] John V. Murphy President Oppenheimer Capital Appreciation Fund 1 | OPPENHEIMER CAPITAL APPRECIATION FUND AN INTERVIEW WITH YOUR FUND'S MANAGER Q How would you characterize the Fund's performance during the six-month period that ended February 28, 2003? A. The Fund delivered somewhat disappointing performance, suffering along with the overall market in response to geopolitical uncertainties and slow economic growth. However, we believe that these results represent short-term fluctuations, rather than long-term trends. Over the longer term, the Fund has produced a record of strong performance across a diverse range of market conditions, including periods of market strength, as well as market weakness. We remain confident that our disciplined, growth-at-a-reasonable-price investment strategy will continue to deliver the long-term results our investors have come to expect, while avoiding undue risk. What made this such a difficult period? Markets were battered during the period by conflicting economic and political forces. On the positive side, the U.S. economy showed signs of mild growth, and inflation and interest rates remained low. On the negative side, corporate capital spending remained weak, which inhibited growth in the areas of technology and manufacturing. Consumer sentiment declined as well, which hurt many consumer-related businesses. On balance, economic trends remained favorable, but geopolitical uncertainties related to the U.S.-led war on terrorism sapped investor confidence and led to high levels of volatility. Stocks rose and fell sharply in response to international political developments and fluctuating economic indicators, often without regard to company-specific business results. In general, stock prices climbed in October and November 2002 in anticipation of reinvigorated economic activity, then lost strength in early 2003 in the face of lackluster earnings and continuing concerns regarding the impending war with Iraq. [SIDEBAR] Portfolio Manager Jane Putnam 2 | OPPENHEIMER CAPITAL APPRECIATION FUND How did you manage the Fund in light of these conditions? Throughout the period, our investment strategy remained consistently focused on seeking individual stocks that we believed offered good growth potential at a reasonable price. In light of gradually improving economic trends, we tended to find a slightly greater-than-average number of attractive investment opportunities in areas more likely to benefit from economic growth. War worries undermined the performance of some economically sensitive stocks, contributing to the Fund's disappointing results. However, the Fund's success in identifying good individual investments in a wide range of industry areas enabled us to outperform the S&P 500 Index, the Fund's benchmark index, during the period. 2 The Fund enjoyed some of its best returns in the consumer discretionary area among media companies, such as Viacom, Inc., and Comcast Corp., that benefited from an improving business climate and increasing advertising revenue trends. 3 We also scored some successes in technology, where pent-up demand in areas of computer software and security led to improved earnings at leading companies, such as Microsoft Corp. Unfortunately, disappointing performance among, more cyclical areas, such as semiconductors, counterbalanced relatively good results in other areas of technology, leading to average performance in the area as a whole. The Fund also suffered disappointments among financial services companies, such as Citigroup, Inc., that were hurt by regulatory scrutiny and the slowdown in capital markets activity. Performance in the health care area proved mixed, with the positive impact of good individual stock selections undermined by the negative impact of the Fund's slightly underweight health care position. 2. The Fund's performance is compared to the S&P 500 Index, an unmanaged index of equity securities, which had a six-month return of -7.28% for the period ended 2/28/03. 3. The Fund's holdings and allocations are subject to change. 3 | OPPENHEIMER CAPITAL APPRECIATION FUND AN INTERVIEW WITH YOUR FUND'S MANAGER What is your outlook over the coming months? Looking ahead, we remain cautiously optimistic on prospects for the U.S. economy. Although war worries have acted as a brake on stock market advances, business fundamentals have firmed in many industries, and appear poised for recovery once geopolitical stabilization occurs. Broad economic indicators continue to show signs of gradual recovery, including improvements in industrial production and increases in manufacturing activity. At the same time, inflation and interest rates stand near historical lows, setting the stage for further business growth. As a result, we have slowly shifted the Fund's portfolio to emphasize stocks we believe are most likely to be among the earliest and strongest beneficiaries of improving economic fundamentals. For example, we currently hold a slightly greater percentage of stocks in the technology and consumer discretionary area than our benchmark index. At the same time, we remain fully committed to a balanced investment approach. We continue to maintain a significant exposure to defensive areas, such as consumer staples and health care. Most importantly, we continue to invest one company at a time, allocating the Fund's assets among a broadly diversified portfolio of stocks that we believe offer good prospects for growth at a reasonable price. It is this disciplined approach that has served our investors well in the past, and we believe makes Oppenheimer Capital Appreciation Fund a continuing part of The Right Way to Invest. Average Annual Total Returns with Sales Charge For the Periods Ended 3/31/03 4 Class A 1-Year 5-Year 10-Year - ----------------------------- - -30.87% -1.95% 8.82% Class B Since 1-Year 5-Year Inception - ----------------------------- - -30.87% -1.85% 7.40% Class C Since 1-Year 5-Year Inception - ----------------------------- - -27.92% -1.54% 8.94% Class N Since 1-Year 5-Year Inception - ----------------------------- - -27.49% N/A -18.87% Class Y Since 1-Year 5-Year Inception - ----------------------------- - -26.37% -0.42% 1.59% Past performance does not guarantee future results. 4. See Notes on page 6 for further details. 4 | OPPENHEIMER CAPITAL APPRECIATION FUND Sector Allocation 5 [PIE CHART] o Consumer Discretionary 30.1% Media 18.8 Hotels, Restaurants & Leisure 4.3 Multiline Retail 2.4 Specialty Retail 1.6 Automobiles 0.8 Internet & Catalog Retail 0.7 Household Durables 0.6 Leisure Equipment & Products 0.6 Textile & Apparel 0.3 o Information Technology 18.2 o Financials 15.1 o Health Care 12.4 o Consumer Staples 7.2 o Energy 7.1 o Industrials 4.4 o Materials 3.0 o Telecommuni- cation Services 1.4 o Utilities 1.1 Top Ten Common Stock Holdings 6 - -------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 4.0% - -------------------------------------------------------------- Microsoft Corp. 4.0 - -------------------------------------------------------------- Viacom, Inc., Cl. B 3.6 - -------------------------------------------------------------- Citigroup, Inc. 2.4 - -------------------------------------------------------------- Anheuser-Busch Cos., Inc. 2.2 - -------------------------------------------------------------- Pfizer, Inc. 2.0 - -------------------------------------------------------------- AOL Time Warner, Inc. 1.9 - -------------------------------------------------------------- Exxon Mobil Corp. 1.9 - -------------------------------------------------------------- Nokia Corp., Sponsored ADR, A Shares 1.7 - -------------------------------------------------------------- International Business Machines Corp. 1.7 For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com. Top Five Common Stock Industries 6 - -------------------------------------------------------------- Media 17.3% - -------------------------------------------------------------- Diversified Financials 8.9 - -------------------------------------------------------------- Software 6.0 - -------------------------------------------------------------- Oil & Gas 4.5 - -------------------------------------------------------------- Pharmaceuticals 4.5 5. Portfolio's holdings and allocations are subject to change. Percentages are as of February 28, 2003, and are based on total market value of common stock. 6. Portfolio's holdings and allocations are subject to change. Percentages are as of February 28, 2003, and are based on net assets. 5 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES In reviewing performance and rankings, please remember that past performance cannot 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. Because of ongoing market volatility, the Fund's performance may be subject to substantial fluctuations, and current performance may be more or less than the results shown. For updates on the Fund's performance, visit our website at www.oppenheimerfunds.com. Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Cumulative total returns are not annualized. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. For more complete information about the Fund, including charges, expenses and risks, please refer to the prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus carefully before you invest or send money. Class A shares of the Fund were first publicly offered on 1/22/81. Class A returns include the current maximum initial sales charge of 5.75%. Class B shares of the Fund were first publicly offered on 11/1/95. Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge. Class C shares of the Fund were first publicly offered on 12/1/93. Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. Class Y shares of the Fund were first publicly offered on 11/3/97. Class Y shares are offered only to certain institutional investors under special agreements with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 6 | OPPENHEIMER CAPITAL APPRECIATION FUND Financial Statements Pages 8-28 7 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS February 28, 2003 / Unaudited
Market Value Shares See Note 1 - ------------------------------------------------------------------------ Common Stocks--91.8% - ------------------------------------------------------------------------ Consumer Discretionary--27.7% - ------------------------------------------------------------------------ Automobiles--0.7% Harley-Davidson, Inc. 1,062,700 $ 42,072,293 - ------------------------------------------------------------------------ Hotels, Restaurants & Leisure--4.0% Brinker International, Inc. 1 1,331,200 36,900,864 - ------------------------------------------------------------------------ Carnival Corp. 3,630,200 83,385,694 - ------------------------------------------------------------------------ International Game Technology 1 332,700 26,143,566 - ------------------------------------------------------------------------ Mandalay Resort Group 1 548,000 13,831,520 - ------------------------------------------------------------------------ Royal Caribbean Cruises Ltd. 4,079,300 55,274,515 - ------------------------------------------------------------------------ Starwood Hotels & Resorts Worldwide, Inc. 365,500 8,263,955 --------------- 223,800,114 - ------------------------------------------------------------------------ Household Durables--0.5% Centex Corp. 120,000 6,633,600 - ------------------------------------------------------------------------ Ethan Allen Interiors, Inc. 775,170 22,534,192 --------------- 29,167,792 - ------------------------------------------------------------------------ Internet & Catalog Retail--0.6% eBay, Inc. 1 382,300 29,979,966 - ------------------------------------------------------------------------ ValueVision Media, Inc., Cl. A 1 376,400 4,426,464 --------------- 34,406,430 - ------------------------------------------------------------------------ Leisure Equipment & Products--0.6% Mattel, Inc. 1,553,200 33,114,224 - ------------------------------------------------------------------------ Media--17.3% AOL Time Warner, Inc. 1 9,316,000 105,457,120 - ------------------------------------------------------------------------ Cablevision Systems New York Group, Cl. A 1 1,314,300 23,381,397 - ------------------------------------------------------------------------ Clear Channel Communications, Inc. 1 2,238,030 81,710,475 Market Value Shares See Note 1 - ------------------------------------------------------------------------ Media Continued Comcast Corp., Cl. A Special, Non-Vtg. 1 8,082,250 $ 227,030,403 - ------------------------------------------------------------------------ Fox Entertainment Group, Inc., A Shares 1 1,233,300 32,966,109 - ------------------------------------------------------------------------ Gannett Co., Inc. 330,500 23,852,185 - ------------------------------------------------------------------------ Gray Television, Inc. 180,800 1,742,912 - ------------------------------------------------------------------------ Hispanic Broadcasting Corp. 1 1,054,225 22,180,894 - ------------------------------------------------------------------------ McGraw-Hill Cos., Inc. (The) 1,236,900 69,563,256 - ------------------------------------------------------------------------ New York Times Co., Cl. A 882,200 40,987,012 - ------------------------------------------------------------------------ News Corp. Ltd. (The), Sponsored ADR 2,808,100 70,202,500 - ------------------------------------------------------------------------ Omnicom Group, Inc. 873,800 46,293,924 - ------------------------------------------------------------------------ Univision Communications, Inc., Cl. A 1 880,000 21,797,600 - ------------------------------------------------------------------------ Viacom, Inc., Cl. B 1 5,402,600 200,598,538 --------------- 967,764,325 - ------------------------------------------------------------------------ Multiline Retail--2.2% Costco Wholesale Corp. 1 1,408,500 42,987,420 - ------------------------------------------------------------------------ Kohl's Corp. 1 728,400 35,618,760 - ------------------------------------------------------------------------ Target Corp. 1,629,800 46,693,770 --------------- 125,299,950 - ------------------------------------------------------------------------ Specialty Retail--1.5% Best Buy Co., Inc. 1 1,041,300 30,270,591 - ------------------------------------------------------------------------ Gap, Inc. (The) 2,361,000 30,787,440 - ------------------------------------------------------------------------ Gymboree Corp. 1 1,025,400 13,207,152 - ------------------------------------------------------------------------ Pier 1 Imports, Inc. 473,100 7,555,407 --------------- 81,820,590 - ------------------------------------------------------------------------ Textiles & Apparel--0.3% Nike, Inc., Cl. B 373,100 17,300,647
8 | OPPENHEIMER CAPITAL APPRECIATION FUND
Market Value Shares See Note 1 - ------------------------------------------------------------------------ Consumer Staples--6.6% - ------------------------------------------------------------------------ Beverages--3.7% Anheuser-Busch Cos., Inc. 2,687,700 $ 124,978,050 - ------------------------------------------------------------------------ PepsiCo, Inc. 2,110,700 80,882,024 --------------- 205,860,074 - ------------------------------------------------------------------------ Food & Drug Retailing--0.9% Safeway, Inc. 1 1,118,900 22,254,921 - ------------------------------------------------------------------------ Sysco Corp. 965,300 26,178,936 --------------- 48,433,857 - ------------------------------------------------------------------------ Food Products--1.5% Dean Foods Co. 1 990,200 41,756,734 - ------------------------------------------------------------------------ General Mills, Inc. 1,025,300 43,954,611 --------------- 85,711,345 - ------------------------------------------------------------------------ Personal Products--0.5% Avon Products, Inc. 321,800 16,733,600 - ------------------------------------------------------------------------ Estee Lauder Cos., Inc. (The), Cl. A 474,160 13,300,188 --------------- 30,033,788 - ------------------------------------------------------------------------ Energy--6.5% - ------------------------------------------------------------------------ Energy Equipment & Services--2.0% BJ Services Co. 1 1,209,100 41,556,767 - ------------------------------------------------------------------------ Halliburton Co. 852,300 17,267,598 - ------------------------------------------------------------------------ Nabors Industries Ltd. 1 77,500 3,072,875 - ------------------------------------------------------------------------ Noble Corp. 1 549,210 19,936,323 - ------------------------------------------------------------------------ Rowan Cos., Inc. 829,000 16,273,270 - ------------------------------------------------------------------------ Varco International, Inc. 1 649,500 12,314,520 --------------- 110,421,353 - ------------------------------------------------------------------------ Oil & Gas--4.5% ConocoPhillips 548,400 27,803,880 - ------------------------------------------------------------------------ Encana Corp. 1,260,880 41,149,138 - ------------------------------------------------------------------------ Exxon Mobil Corp. 3,053,300 103,873,266 - ------------------------------------------------------------------------ TotalFinaElf SA, Sponsored ADR 1,250,700 82,233,525 --------------- 255,059,809 Market Value Shares See Note 1 - ------------------------------------------------------------------------ Financials--13.8% - ------------------------------------------------------------------------ Banks--2.5% Bank of America Corp. 821,000 $ 56,846,040 - ------------------------------------------------------------------------ Bank One Corp. 2,344,600 84,475,938 --------------- 141,321,978 - ------------------------------------------------------------------------ Diversified Financials--8.9% American Express Co. 1,656,000 55,608,480 - ------------------------------------------------------------------------ Citigroup, Inc. 3,991,400 133,073,276 - ------------------------------------------------------------------------ Countrywide Financial Corp. 211,600 11,297,324 - ------------------------------------------------------------------------ Fannie Mae 521,200 33,408,920 - ------------------------------------------------------------------------ Freddie Mac 1,342,600 73,373,090 - ------------------------------------------------------------------------ Goldman Sachs Group, Inc. (The) 424,900 29,509,305 - ------------------------------------------------------------------------ J.P. Morgan Chase & Co. 1,414,700 32,085,396 - ------------------------------------------------------------------------ Merrill Lynch & Co., Inc. 917,700 31,275,216 - ------------------------------------------------------------------------ Morgan Stanley 1,987,600 73,243,060 - ------------------------------------------------------------------------ Schwab (Charles) Corp. 3,432,000 27,112,800 --------------- 499,986,867 - ------------------------------------------------------------------------ Insurance--2.0% American International Group, Inc. 1,417,700 69,878,433 - ------------------------------------------------------------------------ Everest Re Group Ltd. 237,200 12,666,480 - ------------------------------------------------------------------------ St. Paul Cos., Inc. 488,100 15,062,766 - ------------------------------------------------------------------------ XL Capital Ltd., Cl. A 222,800 15,805,432 --------------- 113,413,111 - ------------------------------------------------------------------------ Real Estate--0.4% Host Marriott Corp. 1 3,022,400 20,915,008 - ------------------------------------------------------------------------ Health Care--11.3% - ------------------------------------------------------------------------ Biotechnology--2.5% Amgen, Inc. 1 1,550,000 84,692,000 - ------------------------------------------------------------------------ Genentech, Inc. 1 1,030,700 36,445,552
9 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value Shares See Note 1 - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ Biotechnology Continued IDEC Pharmaceuticals Corp. 1 95,350 $ 2,741,312 - ------------------------------------------------------------------------ Serono SA, Sponsored ADR 1,368,200 15,392,250 --------------- 139,271,114 - ------------------------------------------------------------------------ Health Care Equipment & Supplies--3.0% Applera Corp./Applied Biosystems Group 1,457,980 26,753,933 - ------------------------------------------------------------------------ Becton, Dickinson & Co. 269,800 9,281,120 - ------------------------------------------------------------------------ Guidant Corp. 1 780,500 27,910,680 - ------------------------------------------------------------------------ Medtronic, Inc. 1,868,100 83,504,070 - ------------------------------------------------------------------------ Millipore Corp. 1 333,600 11,162,256 - ------------------------------------------------------------------------ St. Jude Medical, Inc. 1 85,700 3,914,776 - ------------------------------------------------------------------------ Steris Corp. 1 297,300 7,506,825 --------------- 170,033,660 - ------------------------------------------------------------------------ Health Care Providers & Services--1.3% Anthem, Inc. 1 408,800 24,368,568 - ------------------------------------------------------------------------ Apria Healthcare Group, Inc. 1 288,800 6,362,264 - ------------------------------------------------------------------------ Covance, Inc. 1 1,124,800 26,489,040 - ------------------------------------------------------------------------ Lincare Holdings, Inc. 1 266,100 7,956,390 - ------------------------------------------------------------------------ Quest Diagnostics, Inc. 1 208,200 10,984,632 --------------- 76,160,894 - ------------------------------------------------------------------------ Pharmaceuticals--4.5% Abbott Laboratories 991,200 35,306,544 - ------------------------------------------------------------------------ Merck & Co., Inc. 674,100 35,558,775 - ------------------------------------------------------------------------ Perrigo Co. 1,693,410 19,897,568 - ------------------------------------------------------------------------ Pfizer, Inc. 3,849,800 114,801,036 - ------------------------------------------------------------------------ Teva Pharmaceutical Industries Ltd., Sponsored ADR 1,191,300 45,007,314 --------------- 250,571,237 Market Value Shares See Note 1 - ------------------------------------------------------------------------ Industrials--4.0% - ------------------------------------------------------------------------ Aerospace & Defense--1.5% Boeing Co. 382,400 $ 10,538,944 - ------------------------------------------------------------------------ Honeywell International, Inc. 1,899,900 43,488,711 - ------------------------------------------------------------------------ Northrop Grumman Corp. 379,600 32,911,320 --------------- 86,938,975 - ------------------------------------------------------------------------ Commercial Services & Supplies--1.5% First Data Corp. 972,520 33,697,818 - ------------------------------------------------------------------------ Waste Management, Inc. 2,403,300 47,825,670 --------------- 81,523,488 - ------------------------------------------------------------------------ Industrial Conglomerates--0.2% Tyco International Ltd. 772,479 11,432,689 - ------------------------------------------------------------------------ Machinery--0.8% Dover Corp. 432,300 11,032,296 - ------------------------------------------------------------------------ Ingersoll-Rand Co., Cl. A 900,400 35,520,780 --------------- 46,553,076 - ------------------------------------------------------------------------ Information Technology--16.8% - ------------------------------------------------------------------------ Communications Equipment--3.3% Cisco Systems, Inc. 1 4,279,800 59,831,604 - ------------------------------------------------------------------------ Lucent Technologies, Inc. 1 6,320,700 10,365,948 - ------------------------------------------------------------------------ Nokia Corp., Sponsored ADR, A Shares 7,401,300 97,919,199 - ------------------------------------------------------------------------ QUALCOMM, Inc. 1 479,100 16,567,278 --------------- 184,684,029 - ------------------------------------------------------------------------ Computers & Peripherals--2.6% Dell Computer Corp. 1 1,841,000 49,633,360 - ------------------------------------------------------------------------ International Business Machines Corp. 1,214,100 94,639,095 - ------------------------------------------------------------------------ Seagate Technology International, Inc. Escrow Shares 1,2 1,000,000 -- --------------- 144,272,455
10 | OPPENHEIMER CAPITAL APPRECIATION FUND
Market Value Shares See Note 1 - ------------------------------------------------------------------------ Electronic Equipment & Instruments--0.9% Flextronics International Ltd. 1 1,019,000 $ 8,844,920 - ------------------------------------------------------------------------ Sanmina-SCI Corp. 1 4,725,800 20,320,940 Vishay Intertechnology, Inc. 1 1,882,400 19,012,240 --------------- 48,178,100 - ------------------------------------------------------------------------ Internet Software & Services--0.1% WebEx Communications, Inc. 1 771,200 8,552,608 - ------------------------------------------------------------------------ Semiconductor Equipment & Products--3.9% Analog Devices, Inc. 1 557,600 16,259,616 - ------------------------------------------------------------------------ Cypress Semiconductor Corp. 1 2,538,900 16,274,349 - ------------------------------------------------------------------------ Intel Corp. 4,514,000 77,866,500 - ------------------------------------------------------------------------ International Rectifier Corp. 1 1,161,500 25,959,525 - ------------------------------------------------------------------------ Micron Technology, Inc. 1 2,415,700 19,301,443 - ------------------------------------------------------------------------ National Semiconductor Corp. 1 1,286,600 22,039,458 - ------------------------------------------------------------------------ RF Micro Devices, Inc. 1 2,169,000 14,185,260 - ------------------------------------------------------------------------ Texas Instruments, Inc. 1,247,400 20,893,950 - ------------------------------------------------------------------------ Vitesse Semiconductor Corp. 1 1,603,900 3,624,814 --------------- 216,404,915 - ------------------------------------------------------------------------ Software--6.0% Cadence Design Systems, Inc. 1 1,958,900 20,744,751 - ------------------------------------------------------------------------ Electronic Arts, Inc. 1 1,049,630 55,420,464 - ------------------------------------------------------------------------ Microsoft Corp. 9,410,400 223,026,480 - ------------------------------------------------------------------------ Peoplesoft, Inc. 1 938,300 16,044,930 - ------------------------------------------------------------------------ Reynolds & Reynolds Co., Cl. A 124,900 3,053,805 - ------------------------------------------------------------------------ SAP AG (Systeme, Anwendungen, Produkte in der Datenverarbeitung), Sponsored ADR 914,100 19,104,690 --------------- 337,395,120 Market Value Shares See Note 1 - ------------------------------------------------------------------------ Materials--2.8% - ------------------------------------------------------------------------ Chemicals--2.1% Air Products & Chemicals, Inc. 672,500 $ 26,066,100 - ------------------------------------------------------------------------ International Flavors & Fragrances, Inc. 1,358,600 42,605,696 - ------------------------------------------------------------------------ Praxair, Inc. 922,300 48,743,555 --------------- 117,415,351 - ------------------------------------------------------------------------ Paper & Forest Products--0.7% International Paper Co. 1,039,200 36,403,176 - ------------------------------------------------------------------------ Telecommunication Services--1.3% - ------------------------------------------------------------------------ Diversified Telecommunication Services--0.6% Sprint Corp. (Fon Group) 649,100 8,243,570 - ------------------------------------------------------------------------ Telefonos de Mexico SA, Sponsored ADR 923,400 26,843,238 --------------- 35,086,808 - ------------------------------------------------------------------------ Wireless Telecommunication Services--0.7% AT&T Corp. 903,100 16,743,474 - ------------------------------------------------------------------------ Sprint Corp. (PCS Group) 1 441,500 1,748,340 - ------------------------------------------------------------------------ Vodafone Group plc, Sponsored ADR 1,046,000 18,932,600 --------------- 37,424,414 - ------------------------------------------------------------------------ Utilities--1.0% - ------------------------------------------------------------------------ Electric Utilities--0.4% Duke Energy Corp. 1,693,900 22,884,589 - ------------------------------------------------------------------------ Gas Utilities--0.5% Kinder Morgan Management LLC 886,180 28,286,865 - ------------------------------------------------------------------------ Water Utilities--0.1% Philadelphia Suburban Corp. 208,175 4,357,103 --------------- Total Common Stocks (Cost $6,654,998,572) 5,149,734,221 - ------------------------------------------------------------------------ Other Securities--0.5% Nasdaq-100 Unit Investment Trust 1 (Cost $27,743,620) 1,001,600 25,210,272
11 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------ Short-Term Notes--3.9% Barton Capital Corp.: 1.26%, 3/19/03 $23,980,000 $ 23,964,893 1.27%, 3/27/03 30,000,000 29,972,483 1.29%, 3/6/03 20,000,000 19,996,500 - ------------------------------------------------------------------------ New Center Asset Trust: 1.24%, 3/18/03 25,000,000 24,985,361 1.27%, 3/12/03 50,000,000 49,980,597 - ------------------------------------------------------------------------ Sheffield Receivables Corp.: 1.27%, 3/17/03 41,890,000 41,866,356 1.27%, 3/19/03 30,000,000 29,980,950 --------------- Total Short-Term Notes (Cost $220,747,140) 220,747,140 - ------------------------------------------------------------------------ Joint Repurchase Agreements--3.9% Undivided interest of 43.86% in joint repurchase agreement (Market Value $500,298,000) with DB Alex Brown LLC, 1.31%, dated 2/28/03, to be repurchased at $219,451,954 on 3/3/03, collateralized by U.S. Treasury Bonds, 6.25%--7.50%, 11/15/16--8/15/23, with a value of $511,094,634 (Cost $219,428,000) 219,428,000 219,428,000 Market Value See Note 1 - ------------------------------------------------------------------------ Total Investments, at Value (Cost $7,122,917,332) 100.1% $5,615,119,633 - ------------------------------------------------------------------------ Liabilities in Excess of Other Assets (0.1) (6,158,897) ---------------------------------------- Net Assets 100.0% $5,608,960,736 ========================================
Footnotes to Statement of Investments 1. Non-income producing security. 2. Identifies issues considered to be illiquid--See Note 6 of Notes to Financial Statements. See accompanying Notes to Financial Statements. 12 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited
February 28, 2003 - -------------------------------------------------------------------------------------------------------------- Assets Investments, at value (cost $7,122,917,332)--see accompanying statement $ 5,615,119,633 - -------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 46,330,287 Shares of beneficial interest sold 9,491,596 Interest and dividends 5,857,465 Other 65,694 ---------------- Total assets 5,676,864,675 - -------------------------------------------------------------------------------------------------------------- Liabilities Bank overdraft 1,052,289 - -------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 51,347,033 Shares of beneficial interest redeemed 10,019,708 Distribution and service plan fees 1,942,018 Transfer and shareholder servicing agent fees 1,522,502 Trustees' compensation 941,944 Shareholder reports 639,226 Other 439,219 ---------------- Total liabilities 67,903,939 - -------------------------------------------------------------------------------------------------------------- Net Assets $ 5,608,960,736 ================ - -------------------------------------------------------------------------------------------------------------- Composition of Net Assets Par value of shares of beneficial interest $ 198,333 - -------------------------------------------------------------------------------------------------------------- Additional paid-in capital 7,917,652,447 - -------------------------------------------------------------------------------------------------------------- Accumulated net investment loss (6,301,586) - -------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (794,790,758) - -------------------------------------------------------------------------------------------------------------- Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign currencies (1,507,797,700) --------------- Net Assets $ 5,608,960,736 ================
13 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued - -------------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $3,358,034,492 and 117,077,910 shares of beneficial interest outstanding) $28.68 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $30.43 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $917,467,579 and 34,075,658 shares of beneficial interest outstanding) $26.92 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $422,155,257 and 15,856,761 shares of beneficial interest outstanding) $26.62 - -------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $79,182,656 and 2,773,253 shares of beneficial interest outstanding) $28.55 - -------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $832,120,752 and 28,549,218 shares of beneficial interest outstanding) $29.15 See accompanying Notes to Financial Statements. 14 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended February 28, 2003 - -------------------------------------------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $197,287) $ 27,533,849 - -------------------------------------------------------------------------------------------------------------------- Interest 4,525,482 -------------- Total investment income 32,059,331 - -------------------------------------------------------------------------------------------------------------------- Expenses Management fees 16,852,682 - -------------------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 4,124,219 Class B 4,874,568 Class C 2,144,243 Class N 191,588 - -------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 4,886,534 Class B 2,403,325 Class C 730,708 Class N 66,534 Class Y 578,157 - -------------------------------------------------------------------------------------------------------------------- Shareholder reports 1,200,600 - -------------------------------------------------------------------------------------------------------------------- Trustees' compensation 190,852 - -------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 25,043 - -------------------------------------------------------------------------------------------------------------------- Other 88,480 -------------- Total expenses 38,357,533 Less reduction to custodian expenses (8,170) Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (846,842) -------------- Net expenses 37,502,521 - -------------------------------------------------------------------------------------------------------------------- Net Investment Loss (5,443,190) - -------------------------------------------------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (449,798,320) Foreign currency transactions 132,291 -------------- Net realized loss (449,666,029) - -------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 49,699,376 Translation of assets and liabilities denominated in foreign currencies 1,303,475 -------------- Net change 51,002,851 -------------- Net realized and unrealized loss (398,663,178) - -------------------------------------------------------------------------------------------------------------------- Net Decrease in Net Assets Resulting from Operations $(404,106,368) ==============
See accompanying Notes to Financial Statements. 15 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended Ended February 28, 2003 August 31, (Unaudited) 2002 - ---------------------------------------------------------------------------------------------- Operations Net investment loss $ (5,443,190) $ (18,671,997) - ---------------------------------------------------------------------------------------------- Net realized loss (449,666,029) (330,072,053) - ---------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 51,002,851 (1,276,143,258) ---------------------------------- Net decrease in net assets resulting from operations (404,106,368) (1,624,887,308) - ---------------------------------------------------------------------------------------------- Dividends and/or Distributions to Shareholders Distributions from net realized gain: Class A -- (78,925,210) Class B -- (32,881,006) Class C -- (12,072,075) Class N -- (448,693) Class Y -- (23,930,560) - ---------------------------------------------------------------------------------------------- Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 372,975,535 1,117,051,404 Class B (39,799,131) 155,846,095 Class C 4,068,560 173,690,841 Class N 12,473,689 78,890,789 Class Y 27,031,586 178,600,006 - ---------------------------------------------------------------------------------------------- Net Assets Total decrease (27,356,129) (69,065,717) - ---------------------------------------------------------------------------------------------- Beginning of period 5,636,316,865 5,705,382,582 ---------------------------------- End of period [including accumulated net investment loss of $6,301,586 and $858,396, respectively] $5,608,960,736 $ 5,636,316,865 ==================================
See accompanying Notes to Financial Statements. 16 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS
Six Months Year Ended Ended February 28, 2003 August 31, Class A (Unaudited) 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $30.72 $41.11 $62.12 $44.73 $32.53 $38.63 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.02) (.09) .10 (.02) (.04) .17 Net realized and unrealized gain (loss) (2.02) (9.31) (15.86) 20.63 14.87 (1.55) ------------------------------------------------------------------------------ Total from investment operations (2.04) (9.40) (15.76) 20.61 14.83 (1.38) - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.09) (.15) Distributions from net realized gain -- (.99) (5.25) (3.22) (2.54) (4.57) ------------------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.99) (5.25) (3.22) (2.63) (4.72) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $28.68 $30.72 $41.11 $62.12 $44.73 $32.53 ============================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 1 (6.64)% (23.48)% (26.38)% 48.01% 47.36% (4.06)% - ----------------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $3,358,034 $3,219,391 $3,055,197 $3,648,961 $2,071,317 $1,233,958 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $3,454,447 $3,204,793 $3,255,995 $2,898,088 $1,788,774 $1,352,628 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income (loss) (0.05)% (0.15)% 0.28% 0.00% (0.05)% 0.48% Expenses 1.17% 1.22% 1.03% 1.06% 1.04% 1.00% 3 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 16% 28% 46% 44% 59% 60%
1. Assumes an 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. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 17 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS Continued
Six Months Year Ended Ended February 28, 2003 August 31, Class B (Unaudited) 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $28.95 $39.09 $59.80 $43.48 $31.85 $38.07 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.15) (.26) (.07) (.20) (.21) (.02) Net realized and unrealized gain (loss) (1.88) (8.89) (15.39) 19.74 14.38 (1.62) ------------------------------------------------------------------------------- Total from investment operations (2.03) (9.15) (15.46) 19.54 14.17 (1.64) - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- (.01) Distributions from net realized gain -- (.99) (5.25) (3.22) (2.54) (4.57) ------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.99) (5.25) (3.22) (2.54) (4.58) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $26.92 $28.95 $39.09 $59.80 $43.48 $31.85 =============================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 1 (7.01)% (24.07)% (26.95)% 46.88% 46.20% (4.86)% - ----------------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $917,468 $1,029,322 1,242,098 $1,333,387 $531,625 $193,638 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $982,381 $1,221,005 1,265,753 $ 922,480 $372,157 $132,908 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment loss (0.85)% (0.92)% (0.48)% (0.76)% (0.86)% (0.37)% Expenses 2.13% 1.99% 1.80% 1.83% 1.84% 1.81% 3 Expenses, net of voluntary waiver of transfer agent fees and/or reduction to custodian expenses 1.96% 1.99% 1.80% 1.83% 1.84% 1.81% - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 16% 28% 46% 44% 59% 60%
1. Assumes an 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. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 18 | OPPENHEIMER CAPITAL APPRECIATION FUND
Six Months Year Ended Ended February 28, 2003 August 31, Class C (Unaudited) 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $28.63 $38.64 $59.19 $43.06 $31.57 $37.76 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.11) (.11) (.01) (.18) (.23) (.03) Net realized and unrealized gain (loss) (1.90) (8.91) (15.29) 19.53 14.26 (1.59) ------------------------------------------------------------------------------ Total from investment operations (2.01) (9.02) (15.30) 19.35 14.03 (1.62) - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- -- Distributions from net realized gain -- (.99) (5.25) (3.22) (2.54) (4.57) ------------------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.99) (5.25) (3.22) (2.54) (4.57) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $26.62 $28.63 $38.64 $59.19 $43.06 $31.57 ============================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 1 (7.02)% (24.01)% (26.95)% 46.89% 46.16% (4.84)% - ----------------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $422,155 $450,989 $426,476 $402,442 $165,231 $76,058 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $443,350 $477,369 $400,009 $278,800 $126,443 $61,503 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment loss (0.83)% (0.87)% (0.48)% (0.76)% (0.86)% (0.36)% Expenses 1.95% 1.94% 1.80% 1.83% 1.85% 1.82% 3 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 16% 28% 46% 44% 59% 60%
1. Assumes an 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. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 19 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS Continued
Six Months Year Ended Ended February 28, 2003 August 31, Class N (Unaudited) 2002 2001 1 - ----------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $30.60 $41.05 $45.58 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.03) (.07) 2 (.01) Net realized and unrealized loss (2.02) (9.39) 2 (4.52) ------------------------------------- Total from investment operations (2.05) (9.46) (4.53) - ----------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- Distributions from net realized gain -- (.99) -- ------------------------------------- Total dividends and/or distributions to shareholders -- (.99) -- - ----------------------------------------------------------------------------------------- Net asset value, end of period $28.55 $30.60 $41.05 ===================================== - ----------------------------------------------------------------------------------------- Total Return, at Net Asset Value 3 (6.70)% (23.67)% (9.94)% - ----------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $79,183 $72,178 $6,791 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $77,307 $38,232 $3,173 - ----------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (0.19)% (0.37)% (0.11)% Expenses 1.31% 1.46% 1.36% - ----------------------------------------------------------------------------------------- Portfolio turnover rate 16% 28% 46%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 20 | OPPENHEIMER CAPITAL APPRECIATION FUND
Six Months Year Ended Ended February 28, 2003 August 31, Class Y (Unaudited) 2002 2001 2000 1999 1998 1 - ----------------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $31.16 $41.55 $62.51 $44.81 $32.56 $40.15 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .04 .02 2 .27 .13 .13 .30 Net realized and unrealized gain (loss) (2.05) (9.42) 2 (15.98) 20.79 14.85 (3.11) ------------------------------------------------------------------------------- Total from investment operations (2.01) (9.40) (15.71) 20.92 14.98 (2.81) - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.19) (.21) Distributions from net realized gain -- (.99) (5.25) (3.22) (2.54) (4.57) ------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.99) (5.25) (3.22) (2.73) (4.78) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $29.15 $31.16 $41.55 $62.51 $44.81 $32.56 =============================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 3 (6.45)% (23.23)% (26.12)% 48.64% 47.90% (7.45)% - ----------------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $832,121 $864,437 $ 974,820 $1,295,087 $420,455 $180,512 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $865,485 $968,867 $1,095,575 $ 855,270 $307,498 $139,050 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.34% 0.17% 0.66% 0.45% 0.30% 0.75% Expenses 0.77% 0.89% 0.66% 0.64% 0.68% 0.69% 5 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 16% 28% 46% 44% 59% 60%
1. For the period from November 3, 1997 (inception of offering) to August 31, 1998. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized for periods of less than one full year. 5. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 21 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Oppenheimer Capital Appreciation Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. 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. - -------------------------------------------------------------------------------- Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. 22 | OPPENHEIMER CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- Joint Repurchase Agreements. The Fund, along with other affiliated funds of the Manager, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), 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 capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. As of February 28, 2003, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $764,675,348. This estimated capital loss carryforward represents the carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules for the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. As of August 31, 2002, the Fund had available for federal income tax purposes an unused capital loss carryforward as follows: Expiring ---------------------- 2010 $61,636,235 - -------------------------------------------------------------------------------- Trustees' Compensation. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the six months ended February 28, 2003, the Fund's projected benefit obligations were increased by $66,415 and payments of $24,982 were made to retired trustees, resulting in an accumulated liability of $899,864 as of February 28, 2003. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is invested by the Fund in the fund(s) selected by the trustee. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. 23 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - -------------------------------------------------------------------------------- Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of dividends and distributions made during the fiscal 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 dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. The tax character of distributions paid during the six months ended February 28, 2003 and the year ended August 31, 2002 was as follows: Six Months Ended Year Ended February 28, 2003 August 31, 2002 ---------------------------------------------------------------- Distributions paid from: Ordinary income $-- $ -- Long-term capital gain -- 148,257,544 Return of capital -- -- ---------------------- Total $-- $148,257,544 ====================== - -------------------------------------------------------------------------------- Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. 24 | OPPENHEIMER CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Six Months Ended February 28, 2003 Year Ended August 31, 2002 Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Class A Sold 27,567,388 $ 826,471,667 53,070,823 $1,905,539,371 Dividends and/or distributions reinvested -- -- 1,755,869 72,763,164 Redeemed (15,287,709) (453,496,132) (24,347,868) (861,251,131) ---------------------------------------------------------------------------------------------- Net increase 12,279,679 $ 372,975,535 30,478,824 $1,117,051,404 ============================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- Class B Sold 3,375,111 $ 95,384,548 12,282,673 $ 436,416,730 Dividends and/or distributions reinvested -- -- 786,310 30,886,268 Redeemed (4,853,509) (135,183,679) (9,289,206) (311,456,903) ---------------------------------------------------------------------------------------------- Net increase (decrease) (1,478,398) $ (39,799,131) 3,779,777 $ 155,846,095 ============================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- Class C Sold 2,597,598 $ 72,731,119 8,394,929 $ 291,814,714 Dividends and/or distributions reinvested -- -- 277,019 10,753,885 Redeemed (2,495,688) (68,662,559) (3,953,474) (128,877,758) ---------------------------------------------------------------------------------------------- Net increase 101,910 $ 4,068,560 4,718,474 $ 173,690,841 ============================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- Class N Sold 794,794 $ 23,776,598 2,573,390 $ 92,009,980 Dividends and/or distributions reinvested -- -- 10,848 448,566 Redeemed (380,116) (11,302,909) (391,091) (13,567,757) ---------------------------------------------------------------------------------------------- Net increase 414,678 $ 12,473,689 2,193,147 $ 78,890,789 ============================================================================================== - ---------------------------------------------------------------------------------------------------------------------------------- Class Y Sold 4,738,550 $ 144,872,565 10,706,767 $ 404,655,100 Dividends and/or distributions reinvested -- -- 557,609 23,369,417 Redeemed (3,933,850) (117,840,979) (6,979,040) (249,424,511) ---------------------------------------------------------------------------------------------- Net increase 804,700 $ 27,031,586 4,285,336 $ 178,600,006 ==============================================================================================
- -------------------------------------------------------------------------------- 3. Purchases and Sales of Securities The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended February 28, 2003, were $1,376,866,346 and $810,231,730, respectively. 25 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.75% of the first $200 million of aggregate net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $700 million, 0.58% of the next $1.0 billion, 0.56% of the next $2.0 billion, 0.54% of the next $4.0 billion, and 0.52% of aggregate net assets over $8.5 billion. - -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. Additionally, Class Y shares are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.35% of average annual net assets for all classes. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- Distribution and Service Plan (12b-1) Fees. Under its General Distributor's Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund. The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions Front-End Front-End on Class A on Class B on Class C on Class N Sales Charges Sales Charges Shares Shares Shares Shares Six Months on Class A Retained by Advanced by Advanced by Advanced by Advanced by Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1 - --------------------------------------------------------------------------------------------------------------------------------- February 28, 2003 $3,477,654 $599,091 $1,455,413 $2,721,348 $545,943 $153,947
1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale.
Class A Class B Class C Class N Contingent Contingent Contingent Contingent Deferred Deferred Deferred Deferred Sales Charges Sales Charges Sales Charges Sales Charges Retained by Retained by Retained by Retained by Six Months Ended Distributor Distributor Distributor Distributor - -------------------------------------------------------------------------------------------------------------- February 28, 2003 $32,759 $1,731,971 $85,247 $146,939
- -------------------------------------------------------------------------------- Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A Shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. For the six months ended February 28, 2003, payments under the Class A Plan totaled $4,124,219, all 26 | OPPENHEIMER CAPITAL APPRECIATION FUND of which were paid by the Distributor to recipients, and included $152,650 paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. - -------------------------------------------------------------------------------- Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and the Fund pays the Distributor an annual asset-based sales charge of 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. Distribution fees paid to the Distributor for the six months ended February 28, 2003, were as follows:
Distributor's Distributor's Aggregate Aggregate Unreimbursed Unreimbursed Expenses as % Total Payments Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class - ----------------------------------------------------------------------------------------------------------- Class B Plan $4,874,568 $3,947,797 $28,067,055 3.06% Class C Plan 2,144,243 808,810 6,956,672 1.65 Class N Plan 191,588 177,697 1,214,831 1.53
- -------------------------------------------------------------------------------- 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. 27 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- 6. Illiquid Securities As of February 28, 2003, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of February 28, 2003 was zero. - -------------------------------------------------------------------------------- 7. Bank Borrowings The Fund had the ability to borrow from a bank for temporary or emergency purposes provided asset coverage for borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in a $400 million unsecured line of credit with a bank. Under that unsecured line of credit, interest was charged to each fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility, the Fund paid a commitment fee equal to its pro rata share of the average unutilized amount of the credit facility at a rate of 0.08% per annum. The credit facility was terminated on November 12, 2002. The Fund had no borrowings through November 12, 2002. 28 | OPPENHEIMER CAPITAL APPRECIATION FUND SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- On November 22, 2002, the initial shareholder meeting was held at which shareholders elected all of the nominated Trustees and approved proposals 2(a) - 2(d), 2(f), 2(i) and 2(j), 3(a) - 3(d) and 4 as described in the Fund's proxy statement for the meeting. The initial meeting was adjourned until December 18, 2002 with respect to proposals 2(e), 2(g) and 2(h) in order to solicit additional votes. On December 18, 2002, shareholders approved proposals 2(e), 2(g) and 2(h) as described in the Trust's proxy statement for that meeting. The following is a report of the votes cast at the meetings: - -------------------------------------------------------------------------------- (Proposal No. 1) 1. The twelve* persons named below to serve as Trustee of the Fund until their successors are elected and shall qualify: Nominee For Withheld Total Leon Levy* 94,011,274.662 3,463,642.662 97,474,917.324 Donald W. Spiro 94,202,655.174 3,272,262.150 97,474,917.324 John V. Murphy 94,039,849.423 3,435,067.901 97,474,917.324 Robert G. Galli 94,304,895.405 3,170,021.919 97,474,917.324 Phillip A. Griffiths 94,465,790.326 3,009,126.998 97,474,917.324 Benjamin Lipstein 94,128,273.556 3,346,643.768 97,474,917.324 Joel W. Motley 94,343,602.930 3,131,314.394 97,474,917.324 Elizabeth B. Moynihan 94,248,413.333 3,226,503.991 97,474,917.324 Kenneth A. Randall 94,317,230.179 3,157,687.145 97,474,917.324 Edward V. Regan 94,331,204.164 3,143,713.160 97,474,917.324 Russell S. Reynolds, Jr. 94,362,502.585 3,112,414.739 97,474,917.324 Clayton K. Yeutter 94,256,885.508 3,218,031.816 97,474,917.324 * Mr. Levy resigned from the Board of Trustees effective January 1, 2003.
Broker For Against Abstain Non-Votes Total - ---------------------------------------------------------------------------------------- (Proposal No. 2a-j) 2(a). Eliminate the Fund's fundamental investment policy with respect to purchasing securities on margin: 83,805,624.192 7,985,628.141 3,537,719.991 2,145,945.000 97,474,917.324 2(b). Amend the Fund's fundamental investment policy with respect to investing in real estate: 69,735,567.196 22,555,819.265 3,037,585.863 2,145,945.000 97,474,917.324 2(c). Eliminate the Fund's fundamental investment policy with respect to purchasing securities of issuers in which officers or trustees have interest: 81,373,425.919 10,293,106.872 3,662,439.533 2,145,945.000 97,474,917.324 2(d). Eliminate the Fund's fundamental investment policy with respect to investing in oil, gas or other mineral exploration or development programs: 68,071,702.221 23,679,735.814 3,577,534.289 2,145,945.000 97,474,917.324 2(e). Eliminate the Fund's fundamental investment policy with respect to investing in a company for the purpose of acquiring control: 69,011,000.925 25,027,274.195 3,762,695.884 983,116.000 98,784,087.004 2(f). Replacement of the fundamental investment policy with respect to investing in other investment companies with a non-fundamental investment policy: 85,647,032.724 6,061,944.189 3,619,995.411 2,145,945.000 97,474,917.324 2(g). Amend the Fund's fundamental investment policy with respect to borrowing: 67,603,572.411 26,626,207.596 3,571,190.997 983,116.000 98,784,087.004 2(h). Eliminate the Fund's fundamental investment policy with respect to pledging or mortgaging assets: 67,573,287.758 26,633,567.545 3,594,115.701 983,116.000 98,784,087.004 2(i). Amend the Fund's fundamental investment policy with respect to lending: 66,781,867.602 24,937,951.207 3,609,153.515 2,145,945.000 97,474,917.324
29 | OPPENHEIMER CAPITAL APPRECIATION FUND SHAREHOLDER MEETING Unaudited/Continued
Broker For Against Abstain Non-Votes Total - ---------------------------------------------------------------------------------------- 2(j). Amend the Fund's fundamental investment policy with respect investing in commodities: 66,809,144.418 24,964,978.386 3,554,849.520 2,145,945.000 97,474,917.324 - ---------------------------------------------------------------------------------------- (Proposal No. 3a-d) 3. Approval authorizing the Fund's Trustees to adopt an Amended and Restated Declaration of Trust: (a) Future amendments of the Declaration of Trust: 67,157,257.198 23,541,858.835 4,629,856.291 2,145,945.000 97,474,917.324 (b) Reorganization of the Fund or its series or class: 85,567,665.971 5,104,564.424 4,656,741.929 2,145,945.000 97,474,917.324 (c) Involuntary redemptions: 84,268,992.778 6,112,107.112 4,947,872.434 2,145,945.000 97,474,917.324 (d) Other changes under the new Declaration of Trust: 66,923,919.972 23,612,418.953 4,792,633.399 2,145,945.000 97,474,917.324 - ---------------------------------------------------------------------------------------- (Proposal No. 4) 4. Approval of an Amended and Restated Class C 12b-1 Distribution and Service Plan and Agreement (Class C shareholders only): 5,766,111.980 366,912.404 483,534.895 1,492,358.000 8,108,917.279
30 | OPPENHEIMER CAPITAL APPRECIATION FUND OPPENHEIMER CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- Trustees and Officers Clayton K. Yeutter, Chairman and Trustee Donald W. Spiro, Vice Chairman and Trustee John V. Murphy, President and Trustee Robert G. Galli, Trustee Phillip A. Griffiths, Trustee Benjamin Lipstein, Trustee Joel W. Motley, Trustee Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee Jane Putnam, Vice President Robert G. Zack, Secretary Brian W. Wixted, Treasurer - -------------------------------------------------------------------------------- Investment Advisor OppenheimerFunds, Inc. - -------------------------------------------------------------------------------- Distributor OppenheimerFunds Distributor, Inc. - -------------------------------------------------------------------------------- Transfer and Shareholder OppenheimerFunds Services Servicing Agent - -------------------------------------------------------------------------------- Independent Auditors KPMG LLP - -------------------------------------------------------------------------------- Legal Counsel Mayer Brown Rowe & Maw The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent auditors. (C)Copyright 2003 OppenheimerFunds, Inc. All rights reserved. 31 | OPPENHEIMER CAPITAL APPRECIATION FUND 1.800.CALL OPP PHONELINK Call 1.800.CALL OPP (1.800.225.5677) for answers to many of your questions. Our automated speech recognition system provides you access to all the information and services you need. With PhoneLink you can: o Obtain account balances, share price (NAV) and dividends paid o Verify your most recent transactions o Buy, redeem or exchange mutual fund shares o Create custom lists of your accounts, funds or market indices o Order duplicate statements or Form 1099 DIV o Obtain market data (closing market information for Dow Jones Industrial Average, Nasdaq Composite and S&P 500 Index) o Speak to a Customer Service Representative 1 by saying "Agent" when prompted o And more! Quick list of PhoneLink commands Say To: [Account # or Social Security # + PIN] Get dollar and share balances, NAVs, transaction history or request transactions [Fund name, share class] Get current price/dividend information Balance Hear your balance/list of accounts History Hear your most recent transactions Purchase or buy Buy shares Exchange Exchange shares Liquidation or redemption Sell shares Dow Jones or Market Indices Hear closing market information (Dow Jones Industrial Average, Nasdaq Composite and S&P 500) Custom list Create, play or edit custom list of your accounts, funds or market indices 1. You may speak to a Customer Service Representative during normal business hours. 32 | OPPENHEIMER CAPITAL APPRECIATION FUND INFORMATION AND SERVICES [GRAPHIC] eDocs Direct Get This Report Online! You can quickly view, download and print this report at your convenience. It's EASY, FAST, CONVENIENT, and FREE! With OppenheimerFunds eDocs Direct, you'll receive email notification when shareholder reports, prospectuses or prospectus supplements for your fund(s) become available online, instead of receiving them through the mail. You'll cut down on paper mail and help reduce fund expenses! Sign up for eDocs Direct today at www.oppenheimerfunds.com Internet 24-hr access to account information and transactions 1 www.oppenheimerfunds.com - -------------------------------------------------------------------------------- PhoneLink 1 and General Information 24-hr automated information and automated transactions Representatives also available Mon-Fri 8am-9pm ET Sat (January-April) 10am-4pm ET 1.800.CALL OPP (1.800.225.5677) - -------------------------------------------------------------------------------- Written Correspondence and Transaction Requests OppenheimerFunds Services P.O. Box 5270, Denver, CO 80217-5270 For Overnight Delivery OppenheimerFunds Services 10200 East Girard Avenue, Building D Denver, CO 80231 - -------------------------------------------------------------------------------- Ticker Symbols Class A: OPTFX Class B: OTGBX Class C: OTFCX Class N: OTCNX Class Y: OTCYX 1. At times the website or PhoneLink may be inaccessible or their transaction features may be unavailable. [LOGO] OppenheimerFunds(R) Distributor, Inc. RS0320.001.0203 April 29, 2003 -----END PRIVACY-ENHANCED MESSAGE-----