N-CSR 1 ra270_35014ncsr.txt RA270_35014NCSR 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 811-2306 OPPENHEIMER GROWTH 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 Date of reporting period: 08/31/2006 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES -------------------------------------------------------------------------------- Communications Equipment 10.6% -------------------------------------------------------------------------------- Computers & Peripherals 7.9 -------------------------------------------------------------------------------- Internet Software & Services 7.3 -------------------------------------------------------------------------------- Health Care Equipment & Supplies 7.2 -------------------------------------------------------------------------------- Biotechnology 5.9 -------------------------------------------------------------------------------- Specialty Retail 5.8 -------------------------------------------------------------------------------- Software 5.5 -------------------------------------------------------------------------------- Semiconductors & Semiconductor Equipment 5.0 -------------------------------------------------------------------------------- Household Products 4.0 -------------------------------------------------------------------------------- Energy Equipment & Services 4.0 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2006, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS -------------------------------------------------------------------------------- Cisco Systems, Inc. 4.4% -------------------------------------------------------------------------------- EMC Corp. 3.6 -------------------------------------------------------------------------------- American International Group, Inc. 3.6 -------------------------------------------------------------------------------- Apple Computer, Inc. 3.5 -------------------------------------------------------------------------------- Google, Inc., Cl. A 2.9 -------------------------------------------------------------------------------- Corning, Inc. 2.9 -------------------------------------------------------------------------------- Varian Medical Systems, Inc. 2.9 -------------------------------------------------------------------------------- Monsanto Co. 2.8 -------------------------------------------------------------------------------- Staples, Inc. 2.8 -------------------------------------------------------------------------------- Procter & Gamble Co. (The) 2.3 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2006, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. -------------------------------------------------------------------------------- 8 | OPPENHEIMER GROWTH FUND -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Information Technology 37.8% Communications Equipment 10.6 Computers & Peripherals 7.9 Internet Software & Services 7.4 Software 5.5 Semiconductors & Semiconductor Equipment 5.0 IT Services 1.4 Health Care 18.6 Consumer Discretionary 15.6 Financials 8.7 Consumer Staples 6.8 Energy 5.3 Industrials 3.6 Materials 2.8 Telecommunication Services 0.8 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2006, and are based on the total market value of common stocks. -------------------------------------------------------------------------------- 9 | OPPENHEIMER GROWTH 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, 2006, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Despite a challenging period for growth stocks, the Fund produced a net positive return but trailed its benchmark, the S&P 500 Index. We attribute this underperformance to two significant structural issues. First, the growth style of investing fell out of favor as investors flocked to high performing commodity based companies. Second, technology stocks, a sector in which the Fund maintains an overweighted position, outperformed fundamentals and experienced intense volatility. This, in return, produced exaggerated effects on stocks, with some stocks up or down 20-40% in a very short time frame. In contrast to the Fund's overall modest returns, the Fund benefited from positive performance generated by individual securities within the materials, technology, healthcare and consumer staples sectors. Over the period, investors' intense interest in commodity-based companies, which many argue are currently benefiting from the growing power of China and India, dominated the market. Money that could have flowed into growth type companies was being diverted to commodity-based companies, which resulted in less long-term investment capital flowing into growth stocks. And since the Fund's fundamental investment style and strategy minimize owning these types of investments, it clearly was at a disadvantage over the period. However, we believe by investing in companies that have a structural advantage, and are not in a commodity business, it will benefit the Fund over the long-term. The technology sector proved to be the other significant detractor from overall performance. This sector, particularly in the second half of the period, was plagued by volatility caused by seasonal investors taking stock prices to extreme levels along with market fears over inflation and rising interest rates. Among the stocks that detracted most from performance were Microsoft Corp., EMC Corp. and eBay, Inc. Microsoft, which we sold, suffered as investors struggled to understand its future business plans along with more delays of its Vista, an upgrade to Windows, launch. EMC Corp., a maker of data-storage systems, experienced a slight shortfall in the second quarter but because of intense market volatility, we believe this shortfall resulted in an overly negative decline for the stock. Lastly, eBay, Inc. underperformed due to negative market reaction to its expanded business model. Additional performance detractors included securities within the financials and consumer discretionary sectors as well as any stock caught up in the options scandal. Within financials, Legg Mason, Inc., suffered due to concerns over the integration of a recent acquisition. In consumer discretionary, specialty-retailing stocks declined as investors' concern grew over an anticipated slowdown in consumer spending. Among the performance 10 | OPPENHEIMER GROWTH FUND detractors were Williams-Sonoma, Inc., Chico's FAS, Inc., and Urban Outfitters, Inc. However, this weak performance was slightly offset by the strong performance generated by Staples, Inc., Starbucks Corp. and Kohl's Corp. On the positive side, the Fund benefited from individual holdings within the materials, technology, healthcare and consumer staples sectors. The best performing stock within the materials sector was Monsanto Co., an agricultural company with strong patent protection. Monsanto's earnings growth and stock performance continued to excel as the company successfully maintained its competitive advantage in the seed business. Within technology, despite its decline since January, Apple Computer, Inc.'s overall contribution was positive primarily due to a put position we established in the second half of the period. Internet search leader, Google, Inc., gained as the company's advertising revenues continued to grow. And Cisco Systems, Inc., which has recently experienced a turnaround due to strong quarterly performance, benefited the Fund. Strong stock selection proved to be the chief contributor to performance within healthcare, with Varian Medical Systems, Inc., excelling the most. The market defensive consumer staples sector proved to be an area of strength for the Fund. Top contributors included Colgate-Palmolive Co., Procter & Gamble Co. (The), and PepsiCo, Inc., all of which benefited from stable earnings during turbulent market conditions. 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, 2006. In the case of Class A, Class B, Class C and Class Y shares, performance is measured over a ten-fiscal-year period. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. 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 S&P 500 Index, an unmanaged index of equity securities. 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 GROWTH FUND FUND PERFORMANCE DISCUSSION -------------------------------------------------------------------------------- CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Growth Fund (Class A) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Growth Fund (Class A) S&P 500 Index 08/31/1996 9,425 10,000 11/30/1996 10,670 11,673 02/28/1997 11,070 12,252 05/31/1997 11,741 13,211 08/31/1997 12,726 14,062 11/30/1997 12,560 15,001 02/28/1998 13,356 16,539 05/31/1998 13,520 17,261 08/31/1998 11,248 15,204 11/30/1998 13,245 18,553 02/28/1999 13,991 19,807 05/31/1999 14,554 20,892 08/31/1999 15,678 21,257 11/30/1999 17,814 22,429 02/29/2000 23,831 22,129 05/31/2000 20,488 23,079 08/31/2000 26,198 24,723 11/30/2000 17,995 21,482 02/28/2001 15,794 20,316 05/31/2001 14,742 20,645 08/31/2001 13,132 18,697 11/30/2001 13,424 18,858 02/28/2002 12,801 18,384 05/31/2002 12,394 17,788 08/31/2002 10,930 15,334 11/30/2002 10,560 15,745 02/28/2003 9,737 14,216 05/31/2003 10,998 16,353 08/31/2003 11,554 17,183 11/30/2003 11,576 18,120 02/29/2004 12,177 19,689 05/31/2004 12,182 19,350 08/31/2004 11,215 19,149 11/30/2004 12,082 20,447 02/28/2005 11,924 21,061 05/31/2005 12,394 20,942 08/31/2005 12,882 21,553 11/30/2005 13,614 22,173 02/28/2006 14,125 22,829 05/31/2006 13,194 22,750 08/31/2006 13,045 23,465 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 8/31/06 1-Year -4.56% 5-Year -1.31% 10-Year 2.69% 12 | OPPENHEIMER GROWTH FUND CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Growth Fund (Class B) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Growth Fund (Class B) S&P 500 Index 08/31/1996 10,000 10,000 11/30/1996 11,296 11,673 02/28/1997 11,697 12,252 05/31/1997 12,382 13,211 08/31/1997 13,393 14,062 11/30/1997 13,192 15,001 02/28/1998 14,001 16,539 05/31/1998 14,143 17,261 08/31/1998 11,743 15,204 11/30/1998 13,801 18,553 02/28/1999 14,548 19,807 05/31/1999 15,103 20,892 08/31/1999 16,237 21,257 11/30/1999 18,412 22,429 02/29/2000 24,582 22,129 05/31/2000 21,096 23,079 08/31/2000 26,924 24,723 11/30/2000 18,456 21,482 02/28/2001 16,169 20,316 05/31/2001 15,062 20,645 08/31/2001 13,393 18,697 11/30/2001 13,665 18,858 02/28/2002 13,005 18,384 05/31/2002 12,568 17,788 08/31/2002 11,072 15,334 11/30/2002 10,697 15,745 02/28/2003 9,864 14,216 05/31/2003 11,141 16,353 08/31/2003 11,704 17,183 11/30/2003 11,727 18,120 02/29/2004 12,336 19,689 05/31/2004 12,340 19,350 08/31/2004 11,361 19,149 11/30/2004 12,240 20,447 02/28/2005 12,079 21,061 05/31/2005 12,555 20,942 08/31/2005 13,050 21,553 11/30/2005 13,791 22,173 02/28/2006 14,308 22,829 05/31/2006 13,366 22,750 08/31/2006 13,214 23,465 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 8/31/06 1-Year -4.66% 5-Year -1.38% 10-Year 2.83% 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, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 13 | OPPENHEIMER GROWTH FUND FUND PERFORMANCE DISCUSSION -------------------------------------------------------------------------------- CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Growth Fund (Class C) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Growth Fund (Class C) S&P 500 Index 08/31/1996 10,000 10,000 11/30/1996 11,296 11,673 02/28/1997 11,697 12,252 05/31/1997 12,382 13,211 08/31/1997 13,393 14,062 11/30/1997 13,192 15,001 02/28/1998 14,001 16,539 05/31/1998 14,145 17,261 08/31/1998 11,742 15,204 11/30/1998 13,800 18,553 02/28/1999 14,547 19,807 05/31/1999 15,106 20,892 08/31/1999 16,236 21,257 11/30/1999 18,414 22,429 02/29/2000 24,588 22,129 05/31/2000 21,097 23,079 08/31/2000 26,930 24,723 11/30/2000 18,461 21,482 02/28/2001 16,173 20,316 05/31/2001 15,066 20,645 08/31/2001 13,395 18,697 11/30/2001 13,667 18,858 02/28/2002 13,008 18,384 05/31/2002 12,569 17,788 08/31/2002 11,065 15,334 11/30/2002 10,664 15,745 02/28/2003 9,815 14,216 05/31/2003 11,060 16,353 08/31/2003 11,600 17,183 11/30/2003 11,600 18,120 02/29/2004 12,173 19,689 05/31/2004 12,149 19,350 08/31/2004 11,161 19,149 11/30/2004 12,001 20,447 02/28/2005 11,819 21,061 05/31/2005 12,254 20,942 08/31/2005 12,712 21,553 11/30/2005 13,404 22,173 02/28/2006 13,877 22,829 05/31/2006 12,932 22,750 08/31/2006 12,760 23,465 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 8/31/06 1-Year -0.62% 5-Year -0.97% 10-Year 2.47% 14 | OPPENHEIMER GROWTH FUND CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Growth Fund (Class N) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Growth Fund (Class N) S&P 500 Index 03/01/2001 10,000 10,000 05/31/2001 9,246 10,162 08/31/2001 8,231 9,203 11/30/2001 8,406 9,283 02/28/2002 8,011 9,049 05/31/2002 7,752 8,756 08/31/2002 6,823 7,548 11/30/2002 6,670 7,750 02/28/2003 6,152 6,998 05/31/2003 6,940 8,050 08/31/2003 7,288 8,458 11/30/2003 7,296 8,919 02/29/2004 7,667 9,692 05/31/2004 7,661 9,524 08/31/2004 7,049 9,426 11/30/2004 7,587 10,065 02/28/2005 7,482 10,367 05/31/2005 7,769 10,308 08/31/2005 8,068 10,609 11/30/2005 8,518 10,914 02/28/2006 8,829 11,237 05/31/2006 8,239 11,198 08/31/2006 8,139 11,550 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 8/31/06 1-Year -0.12% 5-Year -0.22% Since Inception (3/1/01) -3.67% 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, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 15 | OPPENHEIMER GROWTH FUND FUND PERFORMANCE DISCUSSION -------------------------------------------------------------------------------- CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Growth Fund (Class Y) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Growth Fund (Class Y) S&P 500 Index 08/31/1996 10,000 10,000 11/30/1996 11,327 11,673 02/28/1997 11,758 12,252 05/31/1997 12,478 13,211 08/31/1997 13,536 14,062 11/30/1997 13,369 15,001 02/28/1998 14,225 16,539 05/31/1998 14,412 17,261 08/31/1998 11,996 15,204 11/30/1998 14,134 18,553 02/28/1999 14,938 19,807 05/31/1999 15,546 20,892 08/31/1999 16,764 21,257 11/30/1999 19,058 22,429 02/29/2000 25,507 22,129 05/31/2000 21,947 23,079 08/31/2000 28,090 24,723 11/30/2000 19,297 21,482 02/28/2001 16,948 20,316 05/31/2001 15,835 20,645 08/31/2001 14,109 18,697 11/30/2001 14,442 18,858 02/28/2002 13,779 18,384 05/31/2002 13,351 17,788 08/31/2002 11,781 15,334 11/30/2002 11,378 15,745 02/28/2003 10,503 14,216 05/31/2003 11,864 16,353 08/31/2003 12,471 17,183 11/30/2003 12,500 18,120 02/29/2004 13,157 19,689 05/31/2004 13,166 19,350 08/31/2004 12,126 19,149 11/30/2004 13,074 20,447 02/28/2005 12,909 21,061 05/31/2005 13,424 20,942 08/31/2005 13,959 21,553 11/30/2005 14,756 22,173 02/28/2006 15,315 22,829 05/31/2006 14,318 22,750 08/31/2006 14,163 23,465 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 8/31/06 1-Year 1.46% 5-Year 0.08% 10-Year 3.54% 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, 10-YEAR RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 16 | OPPENHEIMER GROWTH 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 3/15/73. Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 8/17/93. 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 10-year return for Class B uses Class A performance for the period after conversion, and the ending account value does not reflect the deduction of any sales charges. 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 11/1/95. 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 GROWTH FUND NOTES -------------------------------------------------------------------------------- CLASS Y shares of the Fund were first publicly offered on 6/1/94. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 18 | OPPENHEIMER GROWTH 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, 2006. 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 GROWTH 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 (3/1/06) (8/31/06) AUGUST 31, 2006 -------------------------------------------------------------------------------- Class A Actual $1,000.00 $ 923.50 $ 5.69 -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,019.31 5.97 -------------------------------------------------------------------------------- Class B Actual 1,000.00 919.50 10.07 -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,014.77 10.57 -------------------------------------------------------------------------------- Class C Actual 1,000.00 919.50 10.07 -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,014.77 10.57 -------------------------------------------------------------------------------- Class N Actual 1,000.00 921.90 7.49 -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.44 7.86 -------------------------------------------------------------------------------- Class Y Actual 1,000.00 924.80 4.67 -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,020.37 4.90 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, 2006 are as follows: CLASS EXPENSE RATIOS ------------------------------------ Class A 1.17% ------------------------------------ Class B 2.07 ------------------------------------ Class C 2.07 ------------------------------------ Class N 1.54 ------------------------------------ Class Y 0.96 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Manager and 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 GROWTH FUND STATEMENT OF INVESTMENTS August 31, 2006 -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- COMMON STOCKS--99.9% -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--15.6% -------------------------------------------------------------------------------- AUTO COMPONENTS--1.0% Autoliv, Inc. 215,400 $ 12,174,408 -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.4% Panera Bread Co., Cl. A 1 109,800 5,698,620 -------------------------------------------------------------------------------- Starbucks Corp. 1 386,300 11,979,163 --------------- 17,677,783 -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--1.0% Harman International Industries, Inc. 148,900 12,078,768 -------------------------------------------------------------------------------- MEDIA--1.3% Comcast Corp., Cl. A 1 436,200 15,267,000 -------------------------------------------------------------------------------- MULTILINE RETAIL--2.4% Kohl's Corp. 1 187,400 11,714,374 -------------------------------------------------------------------------------- Target Corp. 378,000 18,291,420 --------------- 30,005,794 -------------------------------------------------------------------------------- SPECIALTY RETAIL--5.8% Chico's FAS, Inc. 1 403,500 7,440,540 -------------------------------------------------------------------------------- Lowe's Cos., Inc. 586,700 15,876,102 -------------------------------------------------------------------------------- Staples, Inc. 1,529,500 34,505,520 -------------------------------------------------------------------------------- Urban Outfitters, Inc. 1 372,400 5,842,956 -------------------------------------------------------------------------------- Williams-Sonoma, Inc. 272,700 8,033,742 --------------- 71,698,860 -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--2.7% Nike, Inc., Cl. B 214,700 17,339,172 -------------------------------------------------------------------------------- Polo Ralph Lauren Corp. 267,100 15,756,229 --------------- 33,095,401 -------------------------------------------------------------------------------- CONSUMER STAPLES--6.8% -------------------------------------------------------------------------------- BEVERAGES--1.8% PepsiCo, Inc. 346,900 22,645,632 -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--1.0% Whole Foods Market, Inc. 234,400 12,568,528 -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--4.0% Colgate-Palmolive Co. 343,500 20,561,910 VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS Continued Procter & Gamble Co. (The) 455,950 $ 28,223,305 --------------- 48,785,215 -------------------------------------------------------------------------------- ENERGY--5.3% -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--4.0% Halliburton Co. 553,000 18,038,860 -------------------------------------------------------------------------------- National Oilwell Varco, Inc. 1 244,300 15,952,790 -------------------------------------------------------------------------------- Schlumberger Ltd. 240,100 14,718,130 --------------- 48,709,780 -------------------------------------------------------------------------------- OIL & GAS--1.3% Apache Corp. 160,800 10,497,024 -------------------------------------------------------------------------------- Hess Corp. 120,300 5,507,334 --------------- 16,004,358 -------------------------------------------------------------------------------- FINANCIALS--8.7% -------------------------------------------------------------------------------- CAPITAL MARKETS--3.7% Goldman Sachs Group, Inc. (The) 81,200 12,070,380 -------------------------------------------------------------------------------- Legg Mason, Inc. 223,800 20,423,988 -------------------------------------------------------------------------------- TD Ameritrade Holding Corp. 718,800 12,593,376 --------------- 45,087,744 -------------------------------------------------------------------------------- CONSUMER FINANCE--0.4% SLM Corp. 96,300 4,673,439 -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--1.0% Chicago Mercantile Exchange (The) 27,400 12,056,000 -------------------------------------------------------------------------------- INSURANCE--3.6% American International Group, Inc. 698,700 44,591,034 -------------------------------------------------------------------------------- HEALTH CARE--18.6% -------------------------------------------------------------------------------- BIOTECHNOLOGY--5.9% Celgene Corp. 1 314,800 12,809,212 -------------------------------------------------------------------------------- Genentech, Inc. 1 260,200 21,471,704 -------------------------------------------------------------------------------- Genzyme Corp. (General Division) 1 247,000 16,358,810 -------------------------------------------------------------------------------- Gilead Sciences, Inc. 1 245,300 15,552,020 21 | OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS Continued -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- BIOTECHNOLOGY Continued PDL BioPharma, Inc. 1 334,000 $ 6,579,800 --------------- 72,771,546 -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--7.2% Alcon, Inc. 175,000 20,613,250 -------------------------------------------------------------------------------- Bard (C.R.), Inc. 180,800 13,592,544 -------------------------------------------------------------------------------- Fisher Scientific International, Inc. 1 135,200 10,576,696 -------------------------------------------------------------------------------- Gen-Probe, Inc. 1 151,500 7,364,415 -------------------------------------------------------------------------------- Varian Medical Systems, Inc. 1 667,400 35,572,420 --------------- 87,719,325 -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.5% Medco Health Solutions, Inc. 1 137,600 8,719,712 -------------------------------------------------------------------------------- UnitedHealth Group, Inc. 428,500 22,260,575 --------------- 30,980,287 -------------------------------------------------------------------------------- PHARMACEUTICALS--3.0% Novartis AG, ADR 425,800 24,321,696 -------------------------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 364,000 12,652,640 --------------- 36,974,336 -------------------------------------------------------------------------------- INDUSTRIALS--3.6% -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--0.8% General Dynamics Corp. 147,400 9,956,870 -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--0.8% UTi Worldwide, Inc. 421,900 9,724,795 -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--1.0% Rockwell Automation, Inc. 214,100 12,070,958 -------------------------------------------------------------------------------- MACHINERY--1.0% Oshkosh Truck Corp. 251,400 12,997,380 -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--37.7% -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--10.6% Cisco Systems, Inc. 1 2,445,200 53,769,948 -------------------------------------------------------------------------------- Corning, Inc. 1 1,613,000 35,873,120 VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT Continued F5 Networks, Inc. 1 218,100 $ 10,924,629 -------------------------------------------------------------------------------- Motorola, Inc. 805,000 18,820,900 -------------------------------------------------------------------------------- QUALCOMM, Inc. 271,000 10,208,570 --------------- 129,597,167 -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--7.9% Apple Computer, Inc. 1 634,900 43,077,965 -------------------------------------------------------------------------------- EMC Corp. 1 3,832,800 44,652,120 -------------------------------------------------------------------------------- Network Appliance, Inc. 1 252,400 8,642,176 --------------- 96,372,261 -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--7.3% Aquantive, Inc. 1 220,300 5,463,440 -------------------------------------------------------------------------------- eBay, Inc. 1 844,700 23,533,342 -------------------------------------------------------------------------------- Google, Inc., Cl. A 1 95,300 36,073,909 -------------------------------------------------------------------------------- Yahoo!, Inc. 1 872,700 25,151,214 --------------- 90,221,905 -------------------------------------------------------------------------------- IT SERVICES--1.4% Cognizant Technology Solutions Corp. 1 250,200 17,491,482 -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.0% ASML Holding NV 1 631,000 13,919,860 -------------------------------------------------------------------------------- Broadcom Corp., Cl. A 1 908,500 26,746,240 -------------------------------------------------------------------------------- International Rectifier Corp. 1 83,900 2,961,670 -------------------------------------------------------------------------------- Marvell Technology Group Ltd. 1 239,700 4,197,147 -------------------------------------------------------------------------------- Texas Instruments, Inc. 433,300 14,121,247 --------------- 61,946,164 -------------------------------------------------------------------------------- SOFTWARE--5.5% Adobe Systems, Inc. 1 369,500 11,986,580 -------------------------------------------------------------------------------- Autodesk, Inc. 1 390,700 13,580,732 -------------------------------------------------------------------------------- Electronic Arts, Inc. 1 476,800 24,302,496 -------------------------------------------------------------------------------- NAVTEQ Corp. 1 304,100 8,076,896 -------------------------------------------------------------------------------- Red Hat, Inc. 1 431,500 10,028,060 --------------- 67,974,764 22 | OPPENHEIMER GROWTH FUND VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- MATERIALS--2.8% -------------------------------------------------------------------------------- CHEMICALS--2.8% Monsanto Co. 731,200 $ 34,688,128 -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.8% -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.8% NeuStar, Inc., Cl. A 1 350,200 9,882,644 --------------- Total Common Stocks (Cost $1,118,615,377) 1,228,489,756 PRINCIPAL AMOUNT -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--0.1% -------------------------------------------------------------------------------- Undivided interest of 0.07% in joint repurchase agreement (Principal Amount/Value $1,235,729,000, with a maturity value of $1,235,908,181) with UBS Warburg LLC, 5.22%, dated 8/31/06, to be repurchased at $912,132 on 9/1/06, collateralized by Federal National Mortgage Assn., 6%-7%, 3/1/36-8/1/36, with a value of $1,262,388,232 (Cost $912,000) $ 912,000 $ 912,000 VALUE SEE NOTE 1 -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,119,527,377) 100.0% $1,229,401,756 -------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS 0.0 (423,264) --------------------------- NET ASSETS 100.0% $1,228,978,492 =========================== FOOTNOTE TO STATEMENT OF INVESTMENTS 1. Non-income producing security. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2006 -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- ASSETS ----------------------------------------------------------------------------------------------------------------------------- Investments, at value (cost $1,119,527,377)--see accompanying statement of investments $ 1,229,401,756 ----------------------------------------------------------------------------------------------------------------------------- Cash 654,083 ----------------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 3,639,833 Interest and dividends 494,009 Shares of beneficial interest sold 452,783 Other 78,995 ---------------- Total assets 1,234,721,459 ----------------------------------------------------------------------------------------------------------------------------- LIABILITIES ----------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 2,489,512 Investments purchased 1,881,836 Distribution and service plan fees 466,177 Trustees' compensation 344,911 Transfer and shareholder servicing agent fees 291,802 Shareholder communications 200,413 Other 68,316 ---------------- Total liabilities 5,742,967 ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 1,228,978,492 ================ ----------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ----------------------------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 43,281 ----------------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 1,662,962,229 ----------------------------------------------------------------------------------------------------------------------------- Accumulated net investment loss (339,260) ----------------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments (543,562,137) ----------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments 109,874,379 ---------------- NET ASSETS $ 1,228,978,492 ================
24 | OPPENHEIMER GROWTH FUND ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ----------------------------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $949,432,662 and 32,882,441 shares of beneficial interest outstanding) $ 28.87 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 30.63 ----------------------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $154,550,785 and 5,882,711 shares of beneficial interest outstanding) $ 26.27 ----------------------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $70,193,308 and 2,626,302 shares of beneficial interest outstanding) $ 26.73 ----------------------------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $13,455,119 and 470,741 shares of beneficial interest outstanding) $ 28.58 ----------------------------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $41,346,618 and 1,419,043 shares of beneficial interest outstanding) $ 29.14
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER GROWTH FUND STATEMENT OF OPERATIONS For the Year Ended August 31, 2006 -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME ----------------------------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $135,817) $ 9,052,800 ----------------------------------------------------------------------------------------------------------------------------- Interest 231,484 ----------------------------------------------------------------------------------------------------------------------------- Other income 127,726 ---------------- Total investment income 9,412,010 ----------------------------------------------------------------------------------------------------------------------------- EXPENSES ----------------------------------------------------------------------------------------------------------------------------- Management fees 9,002,178 ----------------------------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 2,386,409 Class B 1,821,333 Class C 747,764 Class N 69,738 ----------------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 2,446,822 Class B 648,074 Class C 279,777 Class N 53,763 Class Y 164,186 ----------------------------------------------------------------------------------------------------------------------------- Shareholder communications: Class A 343,738 Class B 137,728 Class C 35,223 Class N 3,722 ----------------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 13,902 ----------------------------------------------------------------------------------------------------------------------------- Other 62,185 ---------------- Total expenses 18,216,542 Less waivers and reimbursements of expenses (132,004) ---------------- Net expenses 18,084,538 ----------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT LOSS (8,672,528) ----------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ----------------------------------------------------------------------------------------------------------------------------- Net realized gain on investments 90,446,288 ----------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on investments (63,673,581) ----------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,100,179 ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER GROWTH FUND STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, 2006 2005 ----------------------------------------------------------------------------------------------------------------------------- OPERATIONS ----------------------------------------------------------------------------------------------------------------------------- Net investment loss $ (8,672,528) $ (773,436) ----------------------------------------------------------------------------------------------------------------------------- Net realized gain 90,446,288 38,192,502 ----------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (63,673,581) 156,753,095 ---------------------------------- Net increase in net assets resulting from operations 18,100,179 194,172,161 ----------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS ----------------------------------------------------------------------------------------------------------------------------- Net decrease in net assets resulting from beneficial interest transactions: Class A (89,018,731) (198,124,572) Class B (41,644,116) (45,151,513) Class C (3,340,059) (11,796,834) Class N (580,823) (871,228) Class Y (15,398,455) (16,915,611) ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS ----------------------------------------------------------------------------------------------------------------------------- Total decrease (131,882,005) (78,687,597) ----------------------------------------------------------------------------------------------------------------------------- Beginning of period 1,360,860,497 1,439,548,094 ---------------------------------- End of period (including accumulated net investment loss of $339,260 and $426,443, respectively) $ 1,228,978,492 $ 1,360,860,497 ==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 28.51 $ 24.82 $ 25.57 $ 24.19 $ 29.20 ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.14) 1 .03 1,2 (.14) (.15) (.13) Net realized and unrealized gain (loss) .50 3.66 (.61) 1.53 (4.74) ----------------------------------------------------------------------- Total from investment operations .36 3.69 (.75) 1.38 (4.87) ------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.14) ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.87 $ 28.51 $ 24.82 $ 25.57 $ 24.19 ======================================================================= ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 1.26% 14.87% (2.93)% 5.70% (16.77)% ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 949,432 $1,024,199 $1,074,312 $1,165,627 $1,173,027 ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,034,644 $1,061,402 $1,178,435 $1,095,830 $1,430,735 ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.48)% 0.11% 2 (0.59)% (0.69)% (0.54)% Total expenses 1.17% 1.19% 1.18% 1.22% 1.31% Expenses after payments and waivers and reduction to custodian expenses 1.16% 1.15% 1.18% 1.22% 1.31% ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 63% 72% 104% 82% 60%
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 $.15 and 0.58%, 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER GROWTH FUND
CLASS B YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002 ---------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 26.18 $ 22.98 $ 23.90 $ 22.80 $ 27.60 ---------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.37) 1 (.19) 1,2 (.71) (.58) (.54) Net realized and unrealized gain (loss) .46 3.39 (.21) 1.68 (4.26) -------------------------------------------------------------- Total from investment operations .09 3.20 (.92) 1.10 (4.80) ---------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- ---------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 26.27 $ 26.18 $ 22.98 $ 23.90 $ 22.80 ============================================================== ---------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 0.34% 13.93% (3.85)% 4.83% (17.39)% ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ---------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $154,551 $193,897 $212,774 $270,715 $317,725 ---------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $182,464 $201,613 $254,295 $276,668 $415,965 ---------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (1.36)% (0.76)% 2 (1.51)% (1.52)% (1.30)% Total expenses 2.10% 2.15% 2.24% 2.29% 2.08% Expenses after payments and waivers and reduction to custodian expenses 2.07% 2.03% 2.11% 2.06% 2.08% ---------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 63% 72% 104% 82% 60%
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 $.14 and 0.58%, 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002 ----------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ----------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 26.63 $ 23.38 $ 24.30 $ 23.18 $ 28.06 ----------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.38) 1 (.19) 1,2 (.37) (.36) (.43) Net realized and unrealized gain (loss) .48 3.44 (.55) 1.48 (4.45) --------------------------------------------------------- Total from investment operations .10 3.25 (.92) 1.12 (4.88) ----------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- ----------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 26.73 $ 26.63 $ 23.38 $ 24.30 $ 23.18 ========================================================= ----------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 0.38% 13.90% (3.79)% 4.83% (17.39)% ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ----------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $70,193 $73,277 $75,459 $77,548 $75,229 ----------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $74,881 $73,785 $83,103 $72,165 $93,082 ----------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (1.36)% (0.76)% 2 (1.47)% (1.52)% (1.31)% Total expenses 2.09% 2.12% 2.16% 2.22% 2.08% Expenses after payments and waivers and reduction to custodian expenses 2.05% 2.01% 2.07% 2.06% 2.08% ----------------------------------------------------------------------------------------------------------- Portfolio turnover rate 63% 72% 104% 82% 60%
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 $.14 and 0.58%, 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER GROWTH FUND
CLASS N YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 28.33 $ 24.75 $ 25.59 $ 23.99 $ 29.13 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.25) 1 (.07) 1,2 (.27) (.04) (.13) 1 Net realized and unrealized gain (loss) .50 3.65 (.57) 1.64 (4.78) 1 ------------------------------------------------------------------------- Total from investment operations .25 3.58 (.84) 1.60 (4.91) --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.23) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 28.58 $ 28.33 $ 24.75 $ 25.59 $ 23.99 ========================================================================= --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 0.88% 14.47% (3.28)% 6.67% (17.00)% --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 13,455 $ 13,892 $ 12,998 $ 7,766 $ 2,243 --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 13,975 $ 13,546 $ 11,987 $ 5,016 $ 1,623 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment loss (0.85)% (0.25)% 2 (0.94)% (0.39)% (0.90)% Total expenses 1.58% 1.68% 1.70% 1.33% 1.57% Expenses after payments and waivers and reduction to custodian expenses 1.53% 1.51% 1.53% 1.23% 1.57% --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 63% 72% 104% 82% 60%
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 $.15 and 0.58%, 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 28.72 $ 24.95 $ 25.66 $ 24.24 $ 29.27 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.08) 1 .08 1,2 (.10) (.12) (.06) Net realized and unrealized gain (loss) .50 3.69 (.61) 1.54 (4.73) ------------------------------------------------------------------------- Total from investment operations .42 3.77 (.71) 1.42 (4.79) --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.24) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 29.14 $ 28.72 $ 24.95 $ 25.66 $ 24.24 ========================================================================= --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 1.46% 15.11% (2.77)% 5.86% (16.50)% --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 41,347 $ 55,595 $ 64,005 $ 66,121 $ 66,769 --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 54,038 $ 60,275 $ 68,569 $ 61,965 $ 81,127 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.26)% 0.31% 2 (0.40)% (0.55)% (0.25)% Total expenses 0.97% 1.03% 1.01% 1.17% 1.13% Expenses after payments and waivers and reduction to custodian expenses 0.96% 0.98% 1.01% 1.08% 1.02% --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 63% 72% 104% 82% 60%
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 $.15 and 0.58%, 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. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER GROWTH FUND NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Growth 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 may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. 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(R) 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, as 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 33 | OPPENHEIMER GROWTH FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued valued. 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 class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 34 | OPPENHEIMER GROWTH FUND -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------- $-- $-- $542,674,006 $108,149,943 1. As of August 31, 2006, the Fund had $539,505,177 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, 2006, details of the capital loss carryforwards were as follows: EXPIRING -------------------------- 2010 $ 216,605,741 2011 322,899,436 a ------------- Total $ 539,505,177 ============= a. Includes $117,296 of capital loss carryforwards acquired in the November 6, 2003 merger of Oppenheimer Select Managers Mercury Advisors Focus Growth Fund. Includes $719,068 of capital loss carryforwards acquired in the October 16, 2003 merger of Oppenheimer Select Managers Jennison Growth Fund. 2. The Fund had $3,168,829 of straddle losses which were deferred. 3. During the fiscal year ended August 31, 2006, the Fund utilized $91,288,851 of capital loss carryforward to offset capital gains realized in that fiscal year. b b. Includes $1,579,207 of capital loss carryforwards acquired in the September 18, 2003 merger of Oppenheimer Trinity Large Cap Growth Fund. Includes $339,688 of capital loss carryforwards acquired in the October 12, 2001 merger of Oppenheimer Trinity Growth Fund. 4. During the fiscal year ended August 31, 2005, the Fund utilized $37,586,833 of capital loss carryforward to offset capital gains realized in that fiscal year. c c. Includes $213,059 of capital loss carryforwards acquired in the November 6, 2003 merger of Oppenheimer Select Managers Mercury Advisors Focus Growth Fund. Includes $719,068 of capital loss carryforwards acquired in the October 16, 2003 merger of Oppenheimer Select Managers Jennison Growth Fund. Includes $1,579,207 of capital loss carryforwards acquired in the September 18, 2003 merger of Oppenheimer Trinity Large Cap Growth Fund. Includes $339,688 of capital loss carryforwards acquired in the October 12, 2001 merger of Oppenheimer Trinity Growth Fund. 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 35 | OPPENHEIMER GROWTH FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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, 2006. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO INCREASE TO ACCUMULATED ACCUMULATED NET REDUCTION TO NET INVESTMENT REALIZED LOSS PAID-IN CAPITAL LOSS ON INVESTMENTS -------------------------------------------------- $6,840,815 $8,759,711 $1,918,896 No distributions were paid during the years ended August 31, 2006 and August 31, 2005. 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, 2006 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 $ 1,121,251,813 =============== Gross unrealized appreciation $ 167,675,092 Gross unrealized depreciation (59,525,149) --------------- Net unrealized appreciation $ 108,149,943 =============== -------------------------------------------------------------------------------- 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, 2006, the Fund's projected benefit obligations were decreased by $73,863 and payments of $29,561 were made to retired trustees, resulting in an accumulated liability of $264,705 as of August 31, 2006. 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. 36 | OPPENHEIMER GROWTH FUND -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 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, to the extent they are not offset by positive cash balances maintained by the Fund, 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. -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. -------------------------------------------------------------------------------- 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: 37 | OPPENHEIMER GROWTH FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued YEAR ENDED AUGUST 31, 2006 YEAR ENDED AUGUST 31, 2005 SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------------------------- CLASS A Sold 4,547,599 $ 136,452,263 4,089,498 $ 108,776,676 Redeemed (7,584,067) (225,470,994) (11,458,722) (306,901,248) -------------------------------------------------------------- Net decrease (3,036,468) $ (89,018,731) (7,369,224) $(198,124,572) ============================================================== -------------------------------------------------------------------------------- CLASS B Sold 1,085,763 $ 29,715,242 1,297,985 $ 31,811,883 Redeemed (2,610,358) (71,359,358) (3,148,523) (76,963,396) -------------------------------------------------------------- Net decrease (1,524,595) $ (41,644,116) (1,850,538) $ (45,151,513) ============================================================== -------------------------------------------------------------------------------- CLASS C Sold 611,494 $ 17,072,329 597,903 $ 14,961,859 Redeemed (737,072) (20,412,388) (1,074,017) (26,758,693) -------------------------------------------------------------- Net decrease (125,578) $ (3,340,059) (476,114) $ (11,796,834) ============================================================== -------------------------------------------------------------------------------- CLASS N Sold 205,132 $ 6,057,194 230,886 $ 6,155,768 Redeemed (224,725) (6,638,017) (265,824) (7,026,996) -------------------------------------------------------------- Net decrease (19,593) $ (580,823) (34,938) $ (871,228) ============================================================== -------------------------------------------------------------------------------- CLASS Y Sold 693,778 $ 21,228,053 621,642 $ 16,805,961 Redeemed (1,210,614) (36,626,508) (1,250,827) (33,721,572) -------------------------------------------------------------- Net decrease (516,836) $ (15,398,455) (629,185) $ (16,915,611) ============================================================== -------------------------------------------------------------------------------- 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, 2006, were as follows: PURCHASES SALES ---------------------------------------------------------------- Investment securities $ 844,361,137 $ 996,279,293 -------------------------------------------------------------------------------- 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 average annual rate as shown in the following table: 38 | OPPENHEIMER GROWTH FUND FEE SCHEDULE --------------------------------------------- Up to $200 million of net assets 0.75% Next $200 million of net assets 0.72 Next $200 million of net assets 0.69 Next $200 million of net assets 0.66 Next $700 million of net assets 0.60 Next $1 billion of net assets 0.58 Next $2 billion of net assets 0.56 Over $4.5 billion of net assets 0.54 -------------------------------------------------------------------------------- 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, 2006, the Fund paid $3,561,966 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 periodically 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 periodically for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. 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% on Class B and Class C shares and 0.25% 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, 2006 for Class B, Class C and Class N shares were $10,671,568, $2,768,916 and $917,564, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. 39 | OPPENHEIMER GROWTH FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued 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 following table 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, 2006 $ 472,656 $ 9,932 $ 513,802 $ 14,545 $ 5,157 -------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. Effective January 1, 2005, the Manager had voluntarily agreed to reduce its advisory fee rate for any quarter during the calendar year ending December 31, 2005, by 0.05% of the Fund's average daily net assets if the Fund's trailing one-year total return performance, measured at the end of the prior calendar quarter, was in the fourth or fifth quintile of the Fund's Lipper peer group. However, if the Fund's total return performance at the end of a subsequent calendar quarter had improved to the third or higher quintile of Fund's Lipper peer group, the advisory fee reduction would be terminated for the remainder of the calendar year. This advisory fee reduction was removed, based on the Fund's actual total return performance, effective October 1, 2005. During the year ended August 31, 2006, the Manager waived $55,879. 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, 2006, OFS waived $44,515, $21,982, $5,811 and $3,817 for Class B, Class C, Class N and Class Y shares, respectively. This undertaking may be amended or withdrawn at any time. -------------------------------------------------------------------------------- 5. RECENT ACCOUNTING PRONOUNCEMENT In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Fund's tax returns to determine whether it is "more-likely-than-not" that tax positions taken in the Fund's tax return will be ultimately sustained. A tax liability and expense must be recorded in respect of any tax position that, in Management's judgment, will not be fully realized. FIN 48 is effective for fiscal years beginning after December 15, 2006. As of August 31, 2006, the Manager is evaluating the implications of FIN 48. Its impact in the Fund's financial statements has not yet been determined. 40 | OPPENHEIMER GROWTH FUND -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint was filed as a putative class action against the Manager and the Transfer Agent and other defendants (including 51 of the Oppenheimer funds including the Fund) in the U.S. District Court for the Southern District of New York on January 10, 2005 and was amended on March 4, 2005. The complaint alleged, among other things, that the Manager charged excessive fees for distribution and other costs, and that by permitting and/or participating in those actions, the Directors/Trustees and the Officers of the funds breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law. The plaintiffs sought unspecified damages, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. In response to the defendants' motions to dismiss the suit, seven of the eight counts in the complaint, including the claims against certain of the Oppenheimer funds, as nominal defendants, and against certain present and former Directors, Trustees and Officers of the funds, and the Distributor, as defendants, were dismissed with prejudice, by court order dated March 10, 2006, and the remaining count against the Manager and the Transfer Agent was dismissed with prejudice by court order dated April 5, 2006. The plaintiffs filed an appeal of those dismissals on May 11, 2006. The Manager believes that the allegations contained in the complaint are without merit and that there are substantial grounds to sustain the district court's rulings. The Manager also believes that it is premature to render any opinion as to the likelihood of an outcome unfavorable to it, the funds, the Directors/Trustees or the Officers on the appeal of the decisions of the district court, and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 41 | OPPENHEIMER GROWTH FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER GROWTH FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Growth Fund, including the statement of investments, as of August 31, 2006, 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, 2006, 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 Growth Fund as of August 31, 2006, 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 16, 2006 42 | OPPENHEIMER GROWTH FUND FEDERAL INCOME TAX INFORMATION Unaudited -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- In early 2007, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2006. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. 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. 43 | OPPENHEIMER GROWTH 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. 44 | OPPENHEIMER GROWTH FUND TRUSTEES AND OFFICERS Unaudited --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF FUND, LENGTH OF SERVICE, AGE PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN INDEPENDENT TRUSTEES THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. 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); Attorney at Hogan & Chairman of the Board Hartson (law firm) (since June 1993); Director of Covanta Holding Corp. (waste-to-energy company) of Trustees (since 2003), (since 2002); Director of Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Inc. Trustee (since 1993) (1993-December 2002); Director of ConAgra Foods (1993-2001); Director of Texas Instruments (1993- Age: 75 2001); Director of FMC Corporation (1993-2001). Oversees 43 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005); Trustee (since 2005) Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President Age: 65 of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 43 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 53 portfolios in the OppenheimerFunds Trustee (since 1993) complex. Age: 73 PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since 1979) Trustee (since 1999) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI Age: 68 Lumonics Inc. (precision medical equipment supplier) (since 2001); Senior Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Foreign Associate of Third World Academy of Sciences; Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke University (1983-1991). Oversees 43 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice Trustee (since 2004) President and General Auditor of American Express Company (financial services company) (July Age: 63 1998-February 2003). Oversees 43 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002); Trustee (since 2002) Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January Age: 54 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, the Investment Committee of the Episcopal Church of America, the Investment Committee and Board of Human Rights Watch and the Investment Committee of Historic Hudson Valley. Oversees 43 portfolios in the OppenheimerFunds complex.
45 | OPPENHEIMER GROWTH FUND TRUSTEES AND OFFICERS Unaudited / Continued -------------------------------------------------------------------------------- KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) (February 1972-October Trustee (since 1985) 2005); Former Director of Prime Retail, Inc. (real estate investment trust), Dominion Energy Inc. Age: 79 (electric power and oil & gas producer), Lumberman's 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 43 portfolios in the OppenheimerFunds complex. RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consulting and executive Trustee (since 1989) recruiting) (since 1993); Life Trustee of International House (non-profit educational Age: 74 organization); Founder, Chairman and Chief Executive Officer of Russell Reynolds Associates, Inc. (1969-1993); Banker at J.P. Morgan & Co. (1958-1966); 1st Lt. Strategic Air Command, U.S. Air Force (1954-1958). Oversees 43 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since Trustee (since 2005) 1996); Director of Lakes Environmental Association (since 1996); Member of the Investment Age: 65 Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 43 portfolios in the OppenheimerFunds complex. PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since Trustee (since 2005) 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing Age: 58 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 43 portfolios in the OppenheimerFunds complex. BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of Trustee (since 2005) Special Value Opportunities Fund, LLC (registered investment company) (since September 2004); Age: 63 Member of Zurich Financial Investment Advisory Board (insurance) (since October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990-September 2001) (economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002) (executive search firm). Oversees 53 portfolios in the OppenheimerFunds complex. ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW AND OFFICER YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE 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.
46 | OPPENHEIMER GROWTH FUND JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since September Trustee, President and 2000) of the Manager; President and a director or trustee of other Oppenheimer funds; President Principal Executive Officer and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and (since 2001) of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July Age: 57 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 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 91 portfolios in the OppenheimerFunds complex. ------------------------------------------------------------------------------------------------------------------------------------ OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. POIESZ, ZACK, OF THE FUND GILLESPIE AND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. DAVID POIESZ, Senior Vice President of the Manager since June 2004; senior portfolio manager at Merrill Lynch. Vice President and Portfolio (October 2002-May 2004); founding partner of RiverRock Capital LLC, a hedge fund product; (April Manager (since 2004) 1999-July 2001); portfolio manager at Jennison Associates (November 1992-March 1999). An officer Age: 48 of 5 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice Vice President and Chief President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Compliance Officer Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal (since 2004) Audit of the Manager (1997-February 2004). An officer of 91 portfolios in the OppenheimerFunds Age: 56 complex. BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the Treasurer and Principal following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Financial and Accounting Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Officer (since 1999) Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), Age: 47 OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds
47 | OPPENHEIMER GROWTH FUND TRUSTEES AND OFFICERS Unaudited / Continued -------------------------------------------------------------------------------- BRIAN W. WIXTED, Continued 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 91 portfolios in the OppenheimerFunds complex. BRIAN S. PETERSEN, Assistant Vice President of the Manager (since August 2002); Manager/Financial Product Accounting Assistant Treasurer of the Manager (November 1998-July 2002). An officer of 91 portfolios in the OppenheimerFunds (since 2004) complex. Age: 36 BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting and Assistant Treasurer Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of Berger (since 2005) Financial Group LLC (May 2001-March 2003); Director of Mutual Fund Operations at American Data Age: 36 Services, Inc. (September 2000-May 2001). An officer of 91 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Secretary (since 2001) Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel Age: 58 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 91 portfolios in the OppenheimerFunds complex.
48 | OPPENHEIMER GROWTH FUND LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President (April Assistant Secretary 2001-April 2004), Associate General Counsel (December 2000-April 2004), Corporate Vice President (since 2004) (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000) of UBS Financial Age: 38 Services Inc. (formerly, PaineWebber Incorporated). An officer of 91 portfolios in the OppenheimerFunds complex. KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October 2003) Assistant Secretary of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the (since 2001) Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003); Age: 40 Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since December 2001); Assistant Counsel of the Manager (August 1994-October 2003). An officer of 91 portfolios in the OppenheimerFunds complex. PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004); First Vice Assistant Secretary President (2000-September 2004), Director (2000-September 2004) and Vice President (1998-2000) of (since 2004) Merrill Lynch Investment Management. An officer of 91 portfolios in the OppenheimerFunds complex. Age: 42
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. 49 | OPPENHEIMER GROWTH 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 2006 and $45,000 in fiscal 2005. (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 $75,000 in fiscal 2006 and $132,059 in fiscal 2005 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 include: 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 no such fees in fiscal 2006 and $5,000 in fiscal 2005 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 include: filing form 5500. (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 $8,000 in fiscal 2006 and no such fees in 2005 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 fees would include the cost to the principal accountant of attending audit committee meetings and consultations regarding the registrant's retirement plan with respect to its trustees. (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 $83,000 in fiscal 2006 and $137,059 in fiscal 2005 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 08/31/2006, 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 Growth Fund By: /S/ John V. Murphy --------------------------- John V. Murphy Principal Executive Officer Date: 10/16/2006 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: 10/16/2006 By: /S/ Brian W. Wixted --------------------------- Brian W. Wixted Principal Financial Officer Date: 10/16/2006