-----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, Afe+denbqvIlvWg0qzgxFQUFJp8xs2qndGNmgFY07wi1yYTofMKeQDdnyJI0lO5l bvmI+e/GuiBFJOvHvFM3oQ== 0000935069-05-002974.txt : 20051028 0000935069-05-002974.hdr.sgml : 20051028 20051027183637 ACCESSION NUMBER: 0000935069-05-002974 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050831 FILED AS OF DATE: 20051028 DATE AS OF CHANGE: 20051027 EFFECTIVENESS DATE: 20051028 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03105 FILM NUMBER: 051161040 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 DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND INC DATE OF NAME CHANGE: 19870616 N-CSR 1 ra320_18560ncsr.txt RA320_18560NCSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-3105 OPPENHEIMER CAPITAL APPRECIATION FUND (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. Oppenheimerfunds, Inc. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: August 31 Date of reporting period: August 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- Media 9.1% - -------------------------------------------------------------------------------- Software 7.8 - -------------------------------------------------------------------------------- Pharmaceuticals 6.6 - -------------------------------------------------------------------------------- Industrial Conglomerates 6.2 - -------------------------------------------------------------------------------- Diversified Financial Services 6.1 - -------------------------------------------------------------------------------- Semiconductors & Semiconductor Equipment 5.4 - -------------------------------------------------------------------------------- Health Care Equipment & Supplies 5.2 - -------------------------------------------------------------------------------- Communications Equipment 4.5 - -------------------------------------------------------------------------------- Biotechnology 3.9 - -------------------------------------------------------------------------------- Aerospace & Defense 3.8 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- General Electric Co. 4.6% - -------------------------------------------------------------------------------- Microsoft Corp. 4.1 - -------------------------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 3.1 - -------------------------------------------------------------------------------- Exxon Mobil Corp. 2.6 - -------------------------------------------------------------------------------- Citigroup, Inc. 2.4 - -------------------------------------------------------------------------------- Amgen, Inc. 2.3 - -------------------------------------------------------------------------------- Medtronic, Inc. 2.2 - -------------------------------------------------------------------------------- Johnson & Johnson 2.2 - -------------------------------------------------------------------------------- Cisco Systems, Inc. 2.2 - -------------------------------------------------------------------------------- Time Warner, Inc. 2.1 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 8 | OPPENHEIMER CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Information Technology 25.1% Software 8.0 Semiconductors & Semiconductor Equipment 5.5 Communications Equipment 4.7 Computers & Peripherals 3.3 Electronic Equipment & Instruments 1.3 Internet Software & Services 1.2 IT Services 1.1 Consumer Discretionary 18.9 Health Care 18.4 Industrials 12.8 Financials 8.8 Energy 6.8 Consumer Staples 5.7 Materials 2.8 Telecommunication Services 0.7 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005, and are based on total market value of common stocks. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED AUGUST 31, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Over the 12-month period ended August 31, 2005, the Fund's returns proved slightly more modest than those of its benchmark, the S&P 500 Index. The Fund's overall performance was driven primarily by the stock market's generally upward trend throughout the period. Performance relative to the benchmark suffered largely as a result of our emphasis on large companies producing sustained long-term growth during a period in which the market favored smaller, more volatile issues. The Fund's investment strategy focuses on companies that we believe offer strong potential for above-average growth, but that exhibit reasonable valuations relative to their future growth prospects. In particular, we target companies with a history of positive earnings or cash flow. Our disciplined stock selection process produced its greatest gains relative to the benchmark in the technology and consumer discretionary sectors, where overweighted positions and good individual stock selections boosted performance. Several holdings contributed to returns in these two areas, most notably Internet services provider Yahoo!, Inc.; semiconductor chip maker Intel Corp.; online auctioneer eBay, Inc.; and a diverse group of retail stocks. In addition, although energy is not considered one of the market's traditional growth sectors, several key energy holdings positioned the Fund to participate to a significant degree in the energy sector's outstanding gains. Top performers included major integrated oil and gas companies, such as Exxon Mobil Corp., and oil service providers, such as Schlumberger Ltd., the latter of which delivered particularly strong returns during the final months of the reporting period. On the other hand, performance compared to the benchmark suffered from the Fund's failure to hold some of the market's better-performing consumer staples stocks, an area in which we found few attractive growth-oriented investment opportunities. Furthermore, large-cap pharmaceutical holdings, such as Pfizer, Inc. and Merck & Co., Inc. were hurt by product-related problems, although the Fund compensated for these declines in the health care sector with timely investments in strong-performing biotechnology firms, such as Genentech, Inc. and Amgen, Inc. Finally, a few other individual holdings, such as insurer American International Group, Inc.; discount retailer Wal-Mart Stores, Inc.; and beer distributor Anheuser-Busch Cos., Inc. encountered company-specific difficulties that detracted from the Fund's performance. Lastly, during the reporting 10 | OPPENHEIMER CAPITAL APPRECIATION FUND period, the Fund received a special dividend of $3 per share from Microsoft Corp. This special dividend represented a significant portion of the current period's income. The Fund's portfolio holdings, allocations and strategies are subject to change. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until August 31, 2005. In the case of Class A and Class C shares, performance is measured over a ten-fiscal-year period; in the case of Class B shares, from the inception of the class on November 1, 1995. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001, and in the case of Class Y shares, from the inception of the Class on November 3, 1997. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 11 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund (Class A) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund (Class A) S&P 500 Index ------------------- ------------- 12-31-1994 9,425 10,000 03-31-1995 10,275 10,973 06-30-1995 11,482 12,019 09-30-1995 12,486 12,973 12-31-1995 12,710 13,753 03-31-1996 13,622 14,491 06-30-1996 14,322 15,141 08-31-1996 1 14,271 14,778 11-30-1996 16,503 17,251 02-28-1997 16,871 18,106 05-31-1997 18,159 19,524 08-31-1997 20,054 20,782 11-30-1997 20,484 22,168 02-28-1998 22,237 24,441 05-31-1998 22,899 25,509 08-31-1998 19,238 22,469 11-30-1998 23,284 27,418 02-28-1999 26,074 29,270 05-31-1999 27,551 30,874 08-31-1999 28,350 31,414 11-30-1999 31,462 33,147 02-29-2000 38,813 32,703 05-31-2000 38,050 34,106 08-31-2000 41,961 36,536 11-30-2000 34,605 31,746 02-28-2001 34,138 30,023 05-31-2001 34,987 30,509 08-31-2001 30,891 27,630 11-30-2001 30,741 27,869 02-28-2002 28,838 27,169 05-31-2002 28,061 26,288 08-31-2002 23,637 22,661 11-30-2002 24,837 23,268 02-28-2003 22,067 21,009 05-31-2003 25,538 24,167 08-31-2003 27,230 25,393 11-30-2003 28,585 26,778 02-29-2004 30,416 29,097 05-31-2004 29,862 28,595 08-31-2004 28,908 28,299 11-30-2004 30,724 30,217 02-28-2005 31,155 31,125 05-31-2005 31,385 30,948 08-31-2005 31,893 31,852 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 3.99% 5-Year -6.45% 10-Year 9.56% 12 | OPPENHEIMER CAPITAL APPRECIATION FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund (Class B) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund (Class B) S&P 500 Index ------------------- ------------- 11-01-1995 10,000 10,000 12-31-1995 10,167 10,640 03-31-1996 10,873 11,211 06-30-1996 11,411 11,713 08-31-1996 1 11,352 11,432 11-30-1996 13,098 13,345 02-28-1997 13,362 14,007 05-31-1997 14,347 15,104 08-31-1997 15,813 16,077 11-30-1997 16,120 17,149 02-28-1998 17,458 18,907 05-31-1998 17,945 19,734 08-31-1998 15,044 17,382 11-30-1998 18,171 21,211 02-28-1999 20,310 22,643 05-31-1999 21,418 23,884 08-31-1999 21,995 24,301 11-30-1999 24,362 25,642 02-29-2000 29,998 25,299 05-31-2000 29,350 26,385 08-31-2000 32,305 28,264 11-30-2000 26,589 24,559 02-28-2001 26,179 23,226 05-31-2001 26,782 23,602 08-31-2001 23,601 21,375 11-30-2001 23,455 21,559 02-28-2002 22,003 21,018 05-31-2002 21,411 20,336 08-31-2002 18,035 17,530 11-30-2002 18,951 18,000 02-28-2003 16,837 16,253 05-31-2003 19,485 18,696 08-31-2003 20,777 19,644 11-30-2003 21,810 20,715 02-29-2004 23,207 22,509 05-31-2004 22,784 22,121 08-31-2004 22,056 21,892 11-30-2004 23,442 23,376 02-28-2005 23,771 24,078 05-31-2005 23,947 23,942 08-31-2005 24,334 24,640 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 4.36% 5-Year -6.44% Since Inception (11/1/95) 9.47% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from December 31 to August 31. 13 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund (Class C) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund (Class C) S&P 500 Index ------------------- ------------- 12-31-1994 10,000 10,000 03-31-1995 10,871 10,973 06-30-1995 12,116 12,019 09-30-1995 13,147 12,973 12-31-1995 13,356 13,753 03-31-1996 14,287 14,491 06-30-1996 14,987 15,141 08-31-1996 1 14,913 14,778 11-30-1996 17,209 17,251 02-28-1997 17,556 18,106 05-31-1997 18,855 19,524 08-31-1997 20,781 20,782 11-30-1997 21,183 22,168 02-28-1998 22,944 24,441 05-31-1998 23,583 25,509 08-31-1998 19,774 22,469 11-30-1998 23,883 27,418 02-28-1999 26,688 29,270 05-31-1999 28,144 30,874 08-31-1999 28,903 31,414 11-30-1999 32,010 33,147 02-29-2000 39,422 32,703 05-31-2000 38,576 34,106 08-31-2000 42,456 36,536 11-30-2000 34,939 31,746 02-28-2001 34,408 30,023 05-31-2001 35,195 30,509 08-31-2001 31,013 27,630 11-30-2001 30,804 27,869 02-28-2002 28,851 27,169 05-31-2002 28,012 26,288 08-31-2002 23,567 22,661 11-30-2002 24,711 23,268 02-28-2003 21,912 21,009 05-31-2003 25,312 24,167 08-31-2003 26,933 25,393 11-30-2003 28,217 26,778 02-29-2004 29,971 29,097 05-31-2004 29,362 28,595 08-31-2004 28,374 28,299 11-30-2004 30,094 30,217 02-28-2005 30,456 31,125 05-31-2005 30,621 30,948 08-31-2005 31,057 31,852 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 8.46% 5-Year -6.06% 10-Year 9.34% 14 | OPPENHEIMER CAPITAL APPRECIATION FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund (Class N) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund (Class N) S&P 500 Index ------------------- ------------- 03-01-2001 10,000 10,000 05-31-2001 10,206 10,162 08-31-2001 9,006 9,203 11-30-2001 8,956 9,283 02-28-2002 8,398 9,049 05-31-2002 8,164 8,756 08-31-2002 6,875 7,548 11-30-2002 7,221 7,750 02-28-2003 6,414 6,998 05-31-2003 7,418 8,050 08-31-2003 7,901 8,458 11-30-2003 8,288 8,919 02-29-2004 8,811 9,692 05-31-2004 8,643 9,524 08-31-2004 8,360 9,426 11-30-2004 8,879 10,065 02-28-2005 8,993 10,367 05-31-2005 9,052 10,308 08-31-2005 9,191 10,609 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 8.94% 5-Year N/A Since Inception (3/1/01) -1.86% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from December 31 to August 31. 15 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund (Class Y) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund (Class Y) S&P 500 Index - ------------------- ------------- 11-03-1997 10,000 10,000 11-30-1997 9,833 10,463 02-28-1998 10,680 11,535 05-31-1998 11,009 12,039 08-31-1998 9,255 10,605 11-30-1998 11,211 12,940 02-28-1999 12,564 13,815 05-31-1999 13,291 14,572 08-31-1999 13,688 14,826 11-30-1999 15,203 15,644 02-29-2000 18,778 15,435 05-31-2000 18,430 16,097 08-31-2000 20,347 17,244 11-30-2000 16,789 14,983 02-28-2001 16,579 14,170 05-31-2001 17,009 14,399 08-31-2001 15,034 13,041 11-30-2001 14,965 13,153 02-28-2002 14,053 12,823 05-31-2002 13,690 12,407 08-31-2002 11,541 10,695 11-30-2002 12,138 10,982 02-28-2003 10,797 9,916 05-31-2003 12,508 11,406 08-31-2003 13,349 11,984 11-30-2003 14,023 12,638 02-29-2004 14,938 13,733 05-31-2004 14,679 13,496 08-31-2004 14,223 13,356 11-30-2004 15,130 14,262 02-28-2005 15,356 14,690 05-31-2005 15,486 14,607 08-31-2005 15,749 15,033 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 8/31/05 1-Year 10.73% 5-Year -4.99% Since Inception (11/3/97) 5.97% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 1. The Fund changed its fiscal year end from December 31 to August 31. 16 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. 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. Investors should consider the Fund's investment objectives, risks, and other charges and expenses carefully before investing. The Fund's prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. 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. 17 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES - -------------------------------------------------------------------------------- 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. 18 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended August 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 19 | OPPENHEIMER CAPITAL APPRECIATION FUND FUND EXPENSES - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (3/1/05) (8/31/05) AUGUST 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,023.70 $ 5.42 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.86 5.41 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,019.30 9.87 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,015.48 9.85 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,019.70 9.41 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.93 9.39 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,022.00 7.26 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,018.05 7.25 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,025.60 3.53 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,021.73 3.52 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended August 31, 2005 are as follows: CLASS EXPENSE RATIOS - -------------------------------- Class A 1.06% - -------------------------------- Class B 1.93 - -------------------------------- Class C 1.84 - -------------------------------- Class N 1.42 - -------------------------------- Class Y 0.69 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 20 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS August 31, 2005 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--97.0% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--18.3% - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--2.3% Carnival Corp. 1,789,800 $ 88,308,732 - -------------------------------------------------------------------------------- McDonald's Corp. 1,544,200 50,109,290 - -------------------------------------------------------------------------------- Royal Caribbean Cruises Ltd. 1,423,600 60,816,192 ----------------- 199,234,214 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--1.6% eBay, Inc. 1 3,526,200 142,775,838 - -------------------------------------------------------------------------------- MEDIA--9.1% Clear Channel Communications, Inc. 1,049,530 34,949,349 - -------------------------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 1 8,924,425 269,339,147 - -------------------------------------------------------------------------------- News Corp., Inc., Cl. B 989,900 16,917,391 - -------------------------------------------------------------------------------- Time Warner, Inc. 10,280,600 184,228,352 - -------------------------------------------------------------------------------- Univision Communications, Inc., Cl. A 1 1,748,696 47,039,922 - -------------------------------------------------------------------------------- Viacom, Inc., Cl. B 4,966,200 168,801,138 - -------------------------------------------------------------------------------- Walt Disney Co. (The) 3,156,300 79,507,197 ----------------- 800,782,496 - -------------------------------------------------------------------------------- MULTILINE RETAIL--1.9% Federated Department Stores, Inc. 835,500 57,632,790 - -------------------------------------------------------------------------------- J.C. Penney Co., Inc. (Holding Co.) 1,164,500 56,629,635 - -------------------------------------------------------------------------------- Target Corp. 1,001,880 53,851,050 ----------------- 168,113,475 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--3.4% Bed Bath & Beyond, Inc. 1 1,015,641 41,184,243 - -------------------------------------------------------------------------------- Best Buy Co., Inc. 1,749,000 83,357,340 - -------------------------------------------------------------------------------- Home Depot, Inc. 1,729,400 69,729,408 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SPECIALTY RETAIL Continued Lowe's Cos., Inc. 774,100 $ 49,782,371 - -------------------------------------------------------------------------------- Staples, Inc. 321,300 7,055,748 - -------------------------------------------------------------------------------- Williams-Sonoma, Inc. 1 1,184,500 47,676,125 ----------------- 298,785,235 - -------------------------------------------------------------------------------- CONSUMER STAPLES--5.5% - -------------------------------------------------------------------------------- BEVERAGES--1.8% PepsiCo, Inc. 2,894,110 158,741,933 - -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--2.0% Costco Wholesale Corp. 802,288 34,851,391 - -------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 3,144,400 141,372,224 ----------------- 176,223,615 - -------------------------------------------------------------------------------- FOOD PRODUCTS--0.1% Campbell Soup Co. 338,400 9,948,960 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--1.6% Procter & Gamble Co. (The) 2,538,500 140,835,980 - -------------------------------------------------------------------------------- ENERGY--6.6% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--3.2% GlobalSantaFe Corp. 1,207,600 56,612,288 - -------------------------------------------------------------------------------- Pride International, Inc. 1 273,800 6,927,140 - -------------------------------------------------------------------------------- Schlumberger Ltd. 1,637,500 141,201,625 - -------------------------------------------------------------------------------- Smith International, Inc. 399,000 13,861,260 - -------------------------------------------------------------------------------- Transocean, Inc. 1 1,008,900 59,565,456 ----------------- 278,167,769 - -------------------------------------------------------------------------------- OIL & GAS--3.4% Apache Corp. 206,000 14,753,720 - -------------------------------------------------------------------------------- Exxon Mobil Corp. 3,863,600 231,429,640 - -------------------------------------------------------------------------------- Kinder Morgan Management LLC 1,057,770 50,328,697 - -------------------------------------------------------------------------------- Occidental Petroleum Corp. 33,800 2,806,414 ----------------- 299,318,471 21 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- FINANCIALS--8.5% - -------------------------------------------------------------------------------- COMMERCIAL BANKS--0.5% Bank of America Corp. 1,124,900 $ 48,404,447 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--6.1% American Express Co. 2,185,240 120,712,658 - -------------------------------------------------------------------------------- Citigroup, Inc. 4,890,100 214,039,677 - -------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The) 786,900 87,487,542 - -------------------------------------------------------------------------------- JPMorgan Chase & Co. 1,552,320 52,608,125 - -------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. 250,500 26,467,830 - -------------------------------------------------------------------------------- Morgan Stanley 680,600 34,622,122 ----------------- 535,937,954 - -------------------------------------------------------------------------------- INSURANCE--1.9% American International Group, Inc. 883,000 52,273,600 - -------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. (The) 566,900 41,412,045 - -------------------------------------------------------------------------------- Prudential Financial, Inc. 1,078,500 69,423,045 ----------------- 163,108,690 - -------------------------------------------------------------------------------- HEALTH CARE--17.8% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.9% Amgen, Inc. 1 2,541,400 203,057,860 - -------------------------------------------------------------------------------- Genentech, Inc. 1 770,200 72,352,588 - -------------------------------------------------------------------------------- Genzyme Corp. (General Division) 1 1,006,000 71,597,020 ----------------- 347,007,468 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--5.2% Medtronic, Inc. 3,457,795 197,094,315 - -------------------------------------------------------------------------------- Millipore Corp. 1 1,187,800 75,959,810 - -------------------------------------------------------------------------------- PerkinElmer, Inc. 1,793,300 37,121,310 - -------------------------------------------------------------------------------- Stryker Corp. 1,702,200 92,855,010 - -------------------------------------------------------------------------------- Varian Medical Systems, Inc. 1 788,300 31,390,106 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES Continued Waters Corp. 1 560,600 $ 25,490,482 ----------------- 459,911,033 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.1% Aetna, Inc. 740,600 59,003,602 - -------------------------------------------------------------------------------- CIGNA Corp. 284,200 32,773,944 - -------------------------------------------------------------------------------- Laboratory Corp. of America Holdings 1 338,600 16,699,752 - -------------------------------------------------------------------------------- UnitedHealth Group, Inc. 1,462,900 75,339,350 ----------------- 183,816,648 - -------------------------------------------------------------------------------- PHARMACEUTICALS--6.6% Abbott Laboratories 1,128,800 50,942,744 - -------------------------------------------------------------------------------- Eli Lilly & Co. 326,600 17,969,532 - -------------------------------------------------------------------------------- Johnson & Johnson 3,085,000 195,558,150 - -------------------------------------------------------------------------------- Merck & Co., Inc. 1,434,621 40,499,351 - -------------------------------------------------------------------------------- Novartis AG 2,183,070 106,229,083 - -------------------------------------------------------------------------------- Pfizer, Inc. 3,087,889 78,648,533 - -------------------------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,720,250 88,244,910 ----------------- 578,092,303 - -------------------------------------------------------------------------------- INDUSTRIALS--12.4% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.8% Empresa Brasileira de Aeronautica SA, ADR 1,428,400 51,222,424 - -------------------------------------------------------------------------------- General Dynamics Corp. 318,900 36,542,751 - -------------------------------------------------------------------------------- Honeywell International, Inc. 1,085,300 41,545,284 - -------------------------------------------------------------------------------- L-3 Communications Holdings, Inc. 685,100 56,095,988 - -------------------------------------------------------------------------------- Lockheed Martin Corp. 1,210,500 75,341,520 - -------------------------------------------------------------------------------- United Technologies Corp. 1,463,600 73,180,000 ----------------- 333,927,967 22 | OPPENHEIMER CAPITAL APPRECIATION FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--1.5% Expeditors International of Washington, Inc. 769,106 $ 42,693,074 - -------------------------------------------------------------------------------- FedEx Corp. 1,112,300 90,585,712 ---------------- 133,278,786 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--6.2% 3M Co. 1,185,500 84,348,325 - -------------------------------------------------------------------------------- General Electric Co. 11,982,300 402,725,103 - -------------------------------------------------------------------------------- Tyco International Ltd. 2,191,200 60,981,096 ---------------- 548,054,524 - -------------------------------------------------------------------------------- MACHINERY--0.9% Ingersoll-Rand Co., Cl. A 1,009,500 80,376,390 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--24.5% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--4.5% Cisco Systems, Inc. 1 10,900,140 192,060,467 - -------------------------------------------------------------------------------- Lucent Technologies, Inc. 1 9,054,500 27,887,860 - -------------------------------------------------------------------------------- Motorola, Inc. 3,619,200 79,188,096 - -------------------------------------------------------------------------------- Nokia Corp., Sponsored ADR 4,453,100 70,225,387 - -------------------------------------------------------------------------------- QUALCOMM, Inc. 740,700 29,413,197 ---------------- 398,775,007 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--3.2% Dell, Inc. 1 2,060,300 73,346,680 - -------------------------------------------------------------------------------- EMC Corp. 1 1,966,300 25,286,618 - -------------------------------------------------------------------------------- International Business Machines Corp. 2,003,100 161,489,922 - -------------------------------------------------------------------------------- Sun Microsystems, Inc. 1 4,605,400 17,500,520 ---------------- 277,623,740 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3% Agilent Technologies, Inc. 1 1,439,800 46,303,968 - -------------------------------------------------------------------------------- Ingram Micro, Inc., Cl. A 1 1,834,200 32,116,842 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS Continued Tektronix, Inc. 1,432,900 $ 36,209,383 ---------------- 114,630,193 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--1.2% Yahoo!, Inc. 1 3,156,200 105,227,708 - -------------------------------------------------------------------------------- IT SERVICES--1.1% Automatic Data Processing, Inc. 2,280,100 97,474,275 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.4% Altera Corp. 1 799,600 17,487,252 - -------------------------------------------------------------------------------- Analog Devices, Inc. 1,192,040 43,449,858 - -------------------------------------------------------------------------------- Broadcom Corp., Cl. A 1 2,438,700 106,083,450 - -------------------------------------------------------------------------------- Intel Corp. 6,741,140 173,382,121 - -------------------------------------------------------------------------------- Linear Technology Corp. 1,176,100 44,609,473 - -------------------------------------------------------------------------------- Texas Instruments, Inc. 2,616,500 85,507,220 ---------------- 470,519,374 - -------------------------------------------------------------------------------- SOFTWARE--7.8% Adobe Systems, Inc. 2,743,468 74,183,375 - -------------------------------------------------------------------------------- Autodesk, Inc. 936,900 40,474,080 - -------------------------------------------------------------------------------- Cadence Design Systems, Inc. 1 1,965,000 31,459,650 - -------------------------------------------------------------------------------- Citrix Systems, Inc. 1 715,440 17,027,472 - -------------------------------------------------------------------------------- Mercury Interactive Corp. 1 1,088,100 39,900,627 - -------------------------------------------------------------------------------- Microsoft Corp. 13,277,711 363,809,281 - -------------------------------------------------------------------------------- SAP AG, Sponsored ADR 2,844,400 121,370,548 ---------------- 688,225,033 - -------------------------------------------------------------------------------- MATERIALS--2.8% - -------------------------------------------------------------------------------- CHEMICALS--2.8% Air Products & Chemicals, Inc. 1,136,600 62,967,640 - -------------------------------------------------------------------------------- E.I. DuPont de Nemours & Co. 2,091,300 82,752,741 - -------------------------------------------------------------------------------- Praxair, Inc. 2,002,100 96,701,430 ---------------- 242,421,811 23 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.6% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.6% Sprint Nextel Corp. 2,194,200 $ 56,895,603 ---------------- Total Common Stocks (Cost $7,746,326,162) 8,536,636,940 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------- SHORT-TERM NOTES--1.1% - -------------------------------------------------------------------------------- Gemini Securitization Corp., 3.52%, 9/19/05 2 $ 50,000,000 49,912,000 - -------------------------------------------------------------------------------- Sheffield Receivables Corp., 3.55%, 9/27/05 2 50,000,000 49,871,806 ---------------- Total Short-Term Notes (Cost $99,783,806) 99,783,806 - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--1.8% - -------------------------------------------------------------------------------- Undivided interest of 31.04% in joint repurchase agreement (Principal Amount/ Value $500,739,000, with a maturity value of $500,787,961) with Cantor Fitzgerald & Co./Cantor Fitzgerald Securities, 3.52%, dated 8/31/05, to be repurchased at $155,442,197 on 9/1/05, collateralized by U.S. Treasury Bonds, 6.25%-7.50%, 11/15/16-8/15/23, with a value of $468,462,803 and U.S. Treasury Nts., 6.50%, 2/15/10, with a value of $43,204,980 (Cost $155,427,000) 155,427,000 155,427,000 VALUE SEE NOTE 1 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $8,001,536,968) 99.9% $ 8,791,847,746 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.1 6,932,868 ------------------------------- NET ASSETS 100.0% $ 8,798,780,614 =============================== FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Security issued in an exempt transaction without registration under the Securities Act of 1933. Such securities amount to $99,783,806, or 1.13% of the Fund's net assets, and have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value (cost $8,001,536,968)--see accompanying statement of investments $ 8,791,847,746 - -------------------------------------------------------------------------------- Cash 1,145,904 - -------------------------------------------------------------------------------- Receivables and other assets: Investments sold 25,069,516 Interest and dividends 11,929,928 Shares of beneficial interest sold 4,297,408 Other 219,844 ---------------- Total assets 8,834,510,346 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 14,546,182 Investments purchased 14,057,725 Distribution and service plan fees 3,195,898 Transfer and shareholder servicing agent fees 1,804,602 Trustees' compensation 1,323,888 Shareholder communications 656,186 Other 145,251 ---------------- Total liabilities 35,729,732 - -------------------------------------------------------------------------------- NET ASSETS $ 8,798,780,614 ================ - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 215,517 - -------------------------------------------------------------------------------- Additional paid-in capital 8,457,505,152 - -------------------------------------------------------------------------------- Accumulated net investment income 49,282,479 - -------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (498,508,506) - -------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 790,285,972 ---------------- NET ASSETS $ 8,798,780,614 ================ 25 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF ASSETS AND LIABILITIES Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $5,633,687,779 and 135,929,730 shares of beneficial interest outstanding) $41.45 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $43.98 - -------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,041,045,050 and 27,339,460 shares of beneficial interest outstanding) $38.08 - -------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $691,466,793 and 18,327,629 shares of beneficial interest outstanding) $37.73 - -------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $245,932,341 and 6,012,252 shares of beneficial interest outstanding) $40.91 - -------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $1,186,648,651 and 27,907,947 shares of beneficial interest outstanding) $42.52
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF OPERATIONS For the Year Ended August 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $1,332,461) $ 142,938,972 - -------------------------------------------------------------------------------- Interest 8,622,900 ---------------- Total investment income 151,561,872 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Management fees 49,541,160 - -------------------------------------------------------------------------------- Distribution and service plan fees: Class A 13,537,595 Class B 10,973,112 Class C 6,804,810 Class N 1,102,660 - -------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 13,342,913 Class B 3,522,989 Class C 1,685,032 Class N 755,584 Class Y 1,487,780 - -------------------------------------------------------------------------------- Shareholder communications: Class A 711,955 Class B 453,776 Class C 147,954 Class N 16,291 - -------------------------------------------------------------------------------- Trustees' compensation 364,934 - -------------------------------------------------------------------------------- Custodian fees and expenses 120,585 - -------------------------------------------------------------------------------- Other 223,642 ---------------- Total expenses 104,792,772 Less reduction to custodian expenses (4,083) Less waivers and reimbursements of expenses (20,641) ---------------- Net expenses 104,768,048 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 46,793,824 27 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF OPERATIONS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - -------------------------------------------------------------------------------- Net realized gain on: Investments $ 264,337,264 Foreign currency transactions 8,851,809 -------------- Net realized gain 273,189,073 - -------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 560,915,696 Translation of assets and liabilities denominated in foreign currencies (3,956,895) -------------- Net change in unrealized appreciation 556,958,801 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 876,941,698 ============== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- YEAR ENDED AUGUST 31, 2005 2004 - -------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------- Net investment income (loss) $ 46,793,824 $ (3,605,969) - -------------------------------------------------------------------------------- Net realized gain 273,189,073 304,533,281 - -------------------------------------------------------------------------------- Net change in unrealized appreciation 556,958,801 116,017,058 ------------------------------- Net increase in net assets resulting from operations 876,941,698 416,944,370 - -------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - -------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A (134,210,079) 678,678,523 Class B (162,283,904) (70,119,032) Class C (7,839,660) 71,136,610 Class N 34,784,677 74,734,764 Class Y (352,359,573) 166,178,783 - -------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------- Total increase 255,033,159 1,337,554,018 - -------------------------------------------------------------------------------- Beginning of period 8,543,747,455 7,206,193,437 ------------------------------- End of period (including accumulated net investment income (loss) of $49,282,479 and $(1,140,376), respectively) $8,798,780,614 $8,543,747,455 =============================== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 37.57 $ 35.39 $ 30.72 $ 41.11 $ 62.12 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) .26 1,2 .01 (.05) (.09) .10 Net realized and unrealized gain (loss) 3.62 2.17 4.72 (9.31) (15.86) ---------------------------------------------------------------------------------- Total from investment operations 3.88 2.18 4.67 (9.40) (15.76) - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Distributions from net realized gain -- -- -- (.99) (5.25) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 41.45 $ 37.57 $ 35.39 $ 30.72 $ 41.11 ================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 10.33% 6.16% 15.20% (23.48)% (26.38)% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 5,633,688 $ 5,218,310 $ 4,288,332 $ 3,219,391 $ 3,055,197 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 5,597,821 $ 4,971,315 $ 3,655,594 $ 3,204,793 $ 3,255,995 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income (loss) 0.64% 2 0.09% (0.11)% (0.15)% 0.28% Total expenses 1.06% 5 1.09% 5,6 1.17% 5 1.22% 5,6 1.03% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 38% 45% 42% 28% 46%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Net investment income per share and the net investment income ratio include $.17 and 0.43%, respectively, resulting from a special dividend from Microsoft Corp. in November 2004. 3. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER CAPITAL APPRECIATION FUND
CLASS B YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 34.82 $ 33.09 $ 28.95 $ 39.09 $ 59.80 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.08) 1,2 (.36) (.31) (.26) (.07) Net realized and unrealized gain (loss) 3.34 2.09 4.45 (8.89) (15.39) --------------------------------------------------------------------------------- Total from investment operations 3.26 1.73 4.14 (9.15) (15.46) - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Distributions from net realized gain -- -- -- (.99) (5.25) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 38.08 $ 34.82 $ 33.09 $ 28.95 $ 39.09 ================================================================================= - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 9.36% 5.23% 14.30% (24.07)% (26.95)% - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,041,045 $ 1,104,348 $ 1,114,052 $ 1,029,322 $ 1,242,098 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,099,380 $ 1,169,402 $ 1,001,311 $ 1,221,005 $ 1,265,753 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (0.21)% 2 (0.81)% (0.89)% (0.92)% (0.48)% Total expenses 1.93% 1.99% 2.10% 1.99% 1.80% Expenses after payments and waivers and reduction to custodian expenses N/A 5,6 1.97% 1.96% N/A 5,6 N/A 5 - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 38% 45% 42% 28% 46%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Net investment loss per share and the net investment loss ratio include $.16 and 0.43%, respectively, resulting from a special dividend from Microsoft Corp. in November 2004. 3. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 34.47 $ 32.72 $ 28.63 $ 38.64 $ 59.19 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment loss (.05) 1,2 (.16) (.23) (.11) (.01) Net realized and unrealized gain (loss) 3.31 1.91 4.32 (8.91) (15.29) ---------------------------------------------------------------------------------- Total from investment operations 3.26 1.75 4.09 (9.02) (15.30) - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Distributions from net realized gain -- -- -- (.99) (5.25) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 37.73 $ 34.47 $ 32.72 $ 28.63 $ 38.64 ================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 9.46% 5.35% 14.28% (24.01)% (26.95)% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 691,467 $ 638,676 $ 540,118 $ 450,989 $ 426,476 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 681,646 $ 623,172 $ 463,768 $ 477,369 $ 400,009 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment loss (0.14)% 2 (0.69)% (0.89)% (0.87)% (0.48)% Total expenses 1.84% 5 1.87% 5,6 1.96% 5 1.94% 5,6 1.80% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 38% 45% 42% 28% 46%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Net investment loss per share and the net investment loss ratio include $.16 and 0.43%, respectively, resulting from a special dividend from Microsoft Corp. in November 2004. 3. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER CAPITAL APPRECIATION FUND
CLASS N YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 37.21 $ 35.17 $ 30.60 $ 41.05 $ 45.58 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) .11 2,3 (.08) (.10) (.07) 2 (.01) Net realized and unrealized gain (loss) 3.59 2.12 4.67 (9.39) 2 (4.52) ---------------------------------------------------------------------------------- Total from investment operations 3.70 2.04 4.57 (9.46) (4.53) - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Distributions from net realized gain -- -- -- (.99) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 40.91 $ 37.21 $ 35.17 $ 30.60 $ 41.05 ================================================================================== TOTAL RETURN, AT NET ASSET VALUE 4 9.94% 5.80% 14.94% (23.67)% (9.94)% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 245,932 $ 190,696 $ 111,374 $ 72,178 $ 6,791 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 221,007 $ 154,605 $ 86,761 $ 38,232 $ 3,173 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 5 Net investment income (loss) 0.27% 3 (0.25)% (0.35)% (0.37)% (0.11)% Total expenses 1.42% 1.46% 1.46% 1.46% 1.36% Expenses after payments and waivers and reduction to custodian expenses N/A 6,7 1.44% 1.42% N/A 6,7 N/A 6 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 38% 45% 42% 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. Net investment income per share and the net investment income ratio include $.17 and 0.43%, respectively, resulting from a special dividend from Microsoft Corp. in November 2004. 4. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 5. Annualized for periods of less than one full year. 6. Reduction to custodian expenses less than 0.01%. 7. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 38.40 $ 36.04 $ 31.16 $ 41.55 $ 62.51 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .45 1,2 .09 .01 .02 1 .27 Net realized and unrealized gain (loss) 3.67 2.27 4.87 (9.42) 1 (15.98) ---------------------------------------------------------------------------------- Total from investment operations 4.12 2.36 4.88 (9.40) (15.71) - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Distributions from net realized gain -- -- -- (.99) (5.25) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 42.52 $ 38.40 $ 36.04 $ 31.16 $ 41.55 ================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 10.73% 6.55% 15.66% (23.23)% (26.12)% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 1,186,649 $ 1,391,718 $ 1,152,318 $ 864,437 $ 974,820 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 1,210,587 $ 1,327,404 $ 930,500 $ 968,867 $ 1,095,575 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income 1.10% 2 0.47% 0.29% 0.17% 0.66% Total expenses 0.69% 5 0.71% 5 0.78% 5,6 0.89% 5 0.66% 5 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 38% 45% 42% 28% 46%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Net investment income per share and the net investment income ratio include $.18 and 0.43%, respectively, resulting from a special dividend from Microsoft Corp. in November 2004. 3. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class 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. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed or traded on National Stock Exchanges or other domestic 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. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ 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 traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities may be valued primarily 35 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using 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 Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. 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. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. 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. 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 on a daily basis to each class of shares based upon the relative proportion of net assets represented by such 36 | OPPENHEIMER CAPITAL APPRECIATION FUND class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company 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. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3,4 TAX PURPOSES ---------------------------------------------------------------------------- $45,160,630 $-- $454,577,631 $751,763,996 1. As of August 31, 2005, the Fund had $454,510,399 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of August 31, 2005, details of the capital loss carryforwards were as follows: EXPIRING ----------------------------- 2011 $ 157,924,077 2012 296,586,322 ---------------- Total $ 454,510,399 ================ 2. The Fund had $67,232 of post-October foreign currency losses which were deferred. 3. During the fiscal year ended August 31, 2005, the Fund utilized $278,650,934 of capital loss carryforward to offset capital gains realized in that fiscal year. 4. During the fiscal year ended August 31, 2004, the Fund did not utilize any capital loss carryforward. Net investment income (loss) and net realized gain (loss) may differ for financial statement and 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. Accordingly, the following amounts have been reclassified for August 31, 2005. Net assets of the Fund were unaffected by the reclassifications. INCREASE TO REDUCTION TO ACCUMULATED ACCUMULATED NET REDUCTION TO NET INVESTMENT REALIZED LOSS PAID-IN CAPITAL INCOME ON INVESTMENTS ---------------------------------------------------- $5,072,075 $3,629,031 $1,443,044 37 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued No distributions were paid during the years ended August 31, 2005 and August 31, 2004. The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of August 31, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 8,040,058,944 ================= Gross unrealized appreciation $ 1,196,463,625 Gross unrealized depreciation (444,699,629) ----------------- Net unrealized appreciation $ 751,763,996 ================= - -------------------------------------------------------------------------------- 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 year ended August 31, 2005, the Fund's projected benefit obligations were increased by $120,943 and payments of $63,775 were made to retired trustees, resulting in an accumulated liability of $1,075,289 as of August 31, 2005. 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. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. 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. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- 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. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- 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. 38 | OPPENHEIMER CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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 U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 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:
YEAR ENDED AUGUST 31, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------- CLASS A Sold 40,436,717 $ 1,618,214,799 44,049,927 $ 1,683,774,151 Redeemed (43,402,126) (1,752,424,878) (26,327,315) (1,005,095,628) ------------------------------------------------------------------ Net increase (decrease) (2,965,409) $ (134,210,079) 17,722,612 $ 678,678,523 ================================================================== - ----------------------------------------------------------------------------------------------- CLASS B Sold 4,382,455 $ 161,855,078 6,370,743 $ 226,256,788 Redeemed (8,760,712) (324,138,982) (8,319,344) (296,375,820) ------------------------------------------------------------------ Net decrease (4,378,257) $ (162,283,904) (1,948,601) $ (70,119,032) ================================================================== - ----------------------------------------------------------------------------------------------- CLASS C Sold 4,571,487 $ 167,476,288 5,516,439 $ 193,981,052 Redeemed (4,774,468) (175,315,948) (3,492,729) (122,844,442) ------------------------------------------------------------------ Net increase (decrease) (202,981) $ (7,839,660) 2,023,710 $ 71,136,610 ================================================================== - ----------------------------------------------------------------------------------------------- CLASS N Sold 3,078,565 $ 122,153,412 3,052,463 $ 116,239,098 Redeemed (2,190,999) (87,368,735) (1,094,111) (41,504,334) ------------------------------------------------------------------ Net increase 887,566 $ 34,784,677 1,958,352 $ 74,734,764 ==================================================================
39 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED AUGUST 31, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------- CLASS Y Sold 8,329,891 $ 344,067,572 9,392,719 $ 365,551,482 Redeemed (16,663,524) (696,427,145) (5,128,257) (199,372,699) ---------------------------------------------------------------- Net increase (decrease) (8,333,633) $(352,359,573) 4,264,462 $ 166,178,783 ================================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended August 31, 2005, were as follows: PURCHASES SALES ---------------------------------------------------------- Investment securities $3,227,875,219 $3,732,467,340 - -------------------------------------------------------------------------------- 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 at an annual rate of 0.75% of the first $200 million of average annual net assets of the Fund, 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 $2.0 billion, 0.52% of the next $2.0 billion, and 0.50% of average annual 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 per account fee. For the year ended August 31, 2005, the Fund paid $20,770,239 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum 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. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- 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. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor 40 | OPPENHEIMER CAPITAL APPRECIATION FUND incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- 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 to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B and Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at August 31, 2005 for Class B, Class C and Class N shares were $19,222,958, $9,952,252 and $2,809,939, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ---------------------------------------------------------------------------------------------------- August 31, 2005 $2,594,826 $32,458 $2,448,819 $143,743 $173,648
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended August 31, 2005, OFS waived $15,294 and $5,347 for Class B and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 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 to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. 41 | OPPENHEIMER CAPITAL APPRECIATION FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued 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 prevailing foreign currency exchange rates. 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 transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of August 31, 2005, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 42 | OPPENHEIMER CAPITAL APPRECIATION FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER CAPITAL APPRECIATION FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Capital Appreciation Fund, including the statement of investments, as of August 31, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Capital Appreciation Fund as of August 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado October 17, 2005 43 | OPPENHEIMER CAPITAL APPRECIATION FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends, if any, paid by the Fund during the fiscal year ended August 31, 2005 which are not designated as capital gain distributions should be multiplied by 100% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended August 31, 2005 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $139,144,661 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2006, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 44 | OPPENHEIMER CAPITAL APPRECIATION FUND REPORT OF SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- On August 17, 2005, a joint special meeting of shareholders was held at which the eleven Trustees identified below were elected (Proposal No. 1) and changes in, or the addition or elimination of, certain fundamental investment policies were approved (Proposal No. 2) as described in the Fund's proxy statement for that meeting. The following is a report of the votes cast:
- -------------------------------------------------------------------------------- PROPOSAL NO.1 NOMINEE FOR WITHHELD TOTAL - -------------------------------------------------------------------------------- TRUSTEES Matthew P. Fink 130,221,591.545 1,713,898.417 131,935,489.962 Robert G. Galli 130,141,578.604 1,793,911.358 131,935,489.962 Phillip A. Griffiths 130,205,650.404 1,729,839.558 131,935,489.962 Mary F. Miller 130,191,926.358 1,743,563.604 131,935,489.962 Joel W. Motley 130,240,275.132 1,695,214.830 131,935,489.962 John V. Murphy 130,196,273.786 1,739,216.176 131,935,489.962 Kenneth A. Randall 130,071,107.067 1,864,382.895 131,935,489.962 Russell S. Reynolds, Jr. 130,068,237.561 1,867,252.401 131,935,489.962 Joseph M. Wikler 130,227,983.383 1,707,506.579 131,935,489.962 Peter I. Wold 130,237,354.472 1,698,135.490 131,935,489.962 Clayton K. Yeutter 130,094,236.722 1,841,253.240 131,935,489.962
- -------------------------------------------------------------------------------- PROPOSAL NO. 2: TO APPROVE A MODIFICATION TO THE FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE
BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL - -------------------------------------------------------------------------------- 2B: Concentration of Investments 90,009,507.627 2,185,617.093 2,154,459.242 37,585,906.000 131,935,489.962 2C: Diversification of Investments 90,245,360.157 2,026,442.954 2,077,780.851 37,585,906.000 131,935,489.962 2K: Real Estate and Commodities 90,025,889.218 2,275,323.582 2,048,371.162 37,585,906.000 131,935,489.962 2L: Senior Securities 90,150,320.740 1,978,268.808 2,220,994.414 37,585,906.000 131,935,489.962
45 | OPPENHEIMER CAPITAL APPRECIATION FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 46 | OPPENHEIMER CAPITAL APPRECIATION FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's advisory agreement. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information, that the Board requests for this purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory agreement for the current year, the Board evaluated the nature and extent of the services provided by the Manager and its affiliates. The Manager provides the Fund with office space, facilities and equipment; administrative, accounting, clerical, legal and compliance personnel; securities trading services; oversight of third party service providers and the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments. QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that were available to the Fund. The Board noted that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services and information the Board received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. The Board members also considered their experiences as directors or trustees of the Fund and other funds advised by the Manager. The Board received and reviewed information regarding the quality of services provided by affiliates of the Manager, which it also reviews at other times during the year in connection with the renewal of the Fund's service agreements. The Board was aware that there are alternatives to retaining the Manager. PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality of the portfolio management services to be provided, the Board considered the experience of Jane Putnam and the Manager's Growth investment team and analysts. Ms. Putnam has had over 15 years of experience managing equity investments. Ms. Putnam had been primarily responsible for the day-to-day management of the Fund's portfolio since July 1995 and was a Vice President of the Fund and of the Manager and portfolio manager of other Oppenheimer funds. 47 | OPPENHEIMER CAPITAL APPRECIATION FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of other large-cap core funds advised by other investment advisers. The Board also receives and reviews comparative performance information regarding the Fund and other funds at each Board meeting. The Board noted that the Fund's five-year and ten-year performance were better than its peer group average. However, its one-year and three-year performance were below its peer group average. MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including comparative information, regarding the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other large-cap core funds and other funds with comparable asset levels and distribution features. The Board considered that the Fund's management fees and its total expenses were higher than its peer group average. In addition, the Board evaluated the comparability of the fees charged and the services provided to the Fund to the fees charged and services provided to other types of entities advised by the Manager. PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information regarding the cost of services provided by the Manager and its affiliates and the Manager's profitability. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. In addition the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board considered that the Fund has recently experienced significant asset growth and that, based on current asset levels, the Fund has passed its last management fee breakpoint. CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and the independent Trustees. Fund counsel is independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. 48 | OPPENHEIMER CAPITAL APPRECIATION FUND Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, concluded that the nature, extent and quality of the services provided to the Fund by the Manager are a benefit to the Fund and in the best interest of the Fund's shareholders and that the amount and structure of the compensation received by the Manager and its affiliates are reasonable in relation to the services provided. Accordingly, the Board elected to continue the advisory agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the advisory agreement, including the management fee, in light of all of the surrounding circumstances. 49 | OPPENHEIMER CAPITAL APPRECIATION FUND TRUSTEES AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, NEW TRUSTEES YORK, NY 10281-1008. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January 2005); Chairman of the Board Attorney at Hogan & Hartson (law firm) (since June 1993); Director of Danielson of Trustees (since 2003); Holding Corp. (waste-to-energy company) (since 2002); Director of Weyerhaeuser Trustee (since 1993) Corp. (1999-April 2004); Director of Caterpillar, Inc. (1993-December 2002); Age: 74 Director of ConAgra Foods (1993-2001); Director of Texas Instruments (1993-2001); Director of FMC Corporation (1993-2001). Oversees 38 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) Trustee (since 2005) (since 2005); Director of ICI Education Foundation (education foundation) (since Age: 64 October 1991); President of the Investment Company Institute (trade association) (1991-2004); Director of ICI Mutual Insurance Company (insurance company) (1991-2004). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in the Trustee (since 1993) OppenheimerFunds complex. Age: 71 PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier) (since 2001); Trustee (since 1999) Trustee of Woodward Academy (since 1983); Senior Advisor of The Andrew W. Mellon Age: 67 Foundation (since 2001); Member of the National Academy of Sciences (since 1979); Member of the American Philosophical Society (since 1996); Council on Foreign Relations (since 2002); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999). Oversees 38 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); Trustee (since 2004) and Senior Vice President and General Auditor of American Express Company Age: 62 (financial services company) (July 1998-February 2003). Oversees 38 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) Trustee (since 2002) (since 2002); Managing Director of Carmona Motley, Inc. (privately-held financial Age: 53 adviser) (since January 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (since Trustee (since 1987) February 1972); Former Director of Prime Retail, Inc. (real estate investment Age: 78 trust), Dominion Energy Inc. (electric power and oil & gas producer), Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research). Oversees 38 portfolios in the OppenheimerFunds complex.
50 | OPPENHEIMER CAPITAL APPRECIATION FUND RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting Trustee (since 1989) and executive recruiting) (since 1993); Life Trustee of International House Age: 73 (non-profit educational organization); Former Trustee of The Historical Society of the Town of Greenwich. Oversees 38 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER Director of the following medical device companies: Medintec (since 1992) and Trustee (since 2005) Cathco (since 1996); Director of Lakes Environmental Association (since 1996); Age: 64 Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 39 portfolios in the OppenheimerFunds complex. PETER I. WOLD President of Wold Oil Properties, Inc. (oil and gas exploration and production Trustee (since 2005) company) (since 1994); Vice President, Secretary and Treasurer of Wold Trona Age: 57 Company, Inc. (soda ash processing and production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH AND OFFICER FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM AND AS AN OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President President and (since September 2000) of the Manager; President and Director or Trustee of other Principal Executive Officer Oppenheimer funds; President and Director of Oppenheimer Acquisition Corp. ("OAC") (since 2001) (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, and Trustee Inc. (holding company subsidiary of the Manager) (since July 2001); Director of (since 2001) OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November Age: 56 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77
51 | OPPENHEIMER CAPITAL APPRECIATION FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- JOHN V. MURPHY, portfolios as a Director or Trustee and 10 additional portfolios as officer in the Continued OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------- OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. OF THE FUND BAYLIN, WILBY, PUTNAM AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, FOR MESSERS. WIXTED AND VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. WILBY* Senior Vice President of the Manager since July 1994 and Senior Investment Officer Vice President and Director of Equities of the Manager since July 2004. Mr. Wilby was Director of (since 2005) International Equities of the Manager from May 2000 through July 2004 and Senior Age: 61 Vice President of HarbourView Asset Management Corporation from May 1999 through November 2001. Before joining OppenheimerFunds in 1991, Mr. Wilby was an International Strategist at Brown Brothers Harriman & Co., a Managing Director and Portfolio Manager at AIG Global Investors, an International Pension Manager at Northern Trust Bank in Chicago and an International Financial Economist at Northern Trust Bank and at the Federal Reserve Bank in Chicago. A portfolio manager of other Oppenheimer funds. MARC L. BAYLIN* Vice President of the Manager and a member of the Growth Equity Investment Team. Vice President He was Managing Director and Lead Portfolio Manager at JP Morgan Fleming (since 2005) Investment Management from June 2002 to August 2005 and was a Vice President of T. Age: 37 Rowe Price, where he was an analyst from June 1993 and a portfolio manager from March 1999 to June 2002. A portfolio manager of other Oppenheimer funds. JANE PUTNAM,* Vice President of the Manager since October 1995; an officer of 2 portfolios in Vice President the OppenheimerFunds complex. (since 1995) MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March Vice President and 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Chief Compliance Officer Management Corporation and Shareholder Services, Inc. (since June 1983). Former (since 2004) Vice President and Director of Internal Audit of the Manager (1997-February Age: 55 2004). An officer of 87 portfolios in the OppenheimerFunds complex. BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer Treasurer and of the following: HarbourView Asset Management Corporation, Shareholder Financial Principal Financial and Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management Accounting Officer Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI (since 1999) Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. Age: 46 (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex.
52 | OPPENHEIMER CAPITAL APPRECIATION FUND ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March Secretary (since 2001) 2002) of the Manager; General Counsel and Director of the Distributor (since Age: 57 December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
*William L. Wilby and Marc L. Baylin became the portfolio managers of the Fund effective October 1, 2005 and became Vice Presidents of the Fund effective October 25, 2005. Jane Putnam retired as a Fund officer as of September 30, 2005. THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 53 | OPPENHEIMER CAPITAL APPRECIATION FUND ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees of the registrant has determined that the registrant does not have an audit committee financial expert serving on its Audit Committee. In this regard, no member of the Audit Committee was identified as having all of the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as an "audit committee financial expert," whether through the type of specialized education or experience described in that Instruction. The Board has concluded that while the members of the Audit Committee collectively have the necessary attributes and experience required to serve effectively as an Audit Committee, no single member possesses all of the required technical attributes through the particular methods of education or experience set forth in the Instructions to be designated as an audit committee financial expert. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $45,000 in fiscal 2005 and $45,000 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $132,059 in fiscal 2005 and $39,500 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: Preparation of Form 5500 and tax consultations on pass through of foreign withholding taxes and mortgage dollar roll transactions. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $137,059 in fiscal 2005 and $45,500 in fiscal 2004 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of August 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Capital Appreciation Fund By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: October 17, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: October 17, 2005 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: October 17, 2005 EX-99.CODE ETH 2 ra320_18560ethics.txt RA320_18560ETHICS EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. PURPOSE OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and - ---------- (1) The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. ANNUAL RENEWAL At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; - ---------- (2) An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel Exhibit A Positions Covered by this Code of Ethics for Senior Officers EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra320_18560ex302.txt RA320_18560EX302 Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Capital Appreciation Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 17, 2005 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Capital Appreciation Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 17, 2005 /s/ Brian W. Wixted - ------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 4 ra320_18560ex906.txt RA320_18560EX906 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Capital Appreciation Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended August 31, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer Capital Appreciation Fund Oppenheimer Capital Appreciation Fund /s/ John V. Murphy /s/ Brian W. Wixted - ------------------ ------------------- John V. Murphy Brian W. Wixted Date: October 17, 2005 Date: October 17, 2005 -----END PRIVACY-ENHANCED MESSAGE-----