N-CSR/A 1 rs0835_6849vef.txt RS0835_6849VEF 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 811-04797 Oppenheimer Quest Capital Value Fund, Inc. (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. 498 Seventh Avenue, New York, New York 10018 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: October 31 Date of reporting period: October 31, 2002 - April 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited Market Value Shares See Note 1 ------------------------------------------------------------------------- Common Stocks--93.2% ------------------------------------------------------------------------- Consumer Discretionary--15.6% ------------------------------------------------------------------------- Hotels, Restaurants & Leisure--1.6% Darden Restaurants, Inc. 108,100 $ 1,892,831 ------------------------------------------------------------------------- Yum! Brands, Inc. 1 72,000 1,778,400 ------------------- 3,671,231 ------------------------------------------------------------------------- Media--10.2% AOL Time Warner, Inc. 1 195,096 2,668,913 ------------------------------------------------------------------------- EchoStar Communications Corp., Cl. A 1 37,900 1,135,484 ------------------------------------------------------------------------- General Motors Corp., Cl. H 1 165,265 1,950,127 ------------------------------------------------------------------------- Lamar Advertising Co., Cl. A 1 261,100 9,378,712 ------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1 217,000 2,387,000 ------------------------------------------------------------------------- Omnicom Group, Inc. 99,121 6,135,590 ------------------- 23,655,826 ------------------------------------------------------------------------- Multiline Retail--2.9% Dollar General Corp. 297,000 4,318,380 ------------------------------------------------------------------------- Target Corp. 68,300 2,283,952 ------------------- 6,602,332 ------------------------------------------------------------------------- Specialty Retail--0.9% Office Depot, Inc. 1 173,000 2,190,180 ------------------------------------------------------------------------- Energy--6.1% ------------------------------------------------------------------------- Energy Equipment & Services--3.0% GlobalSantaFe Corp. 149,300 3,159,188 ------------------------------------------------------------------------- National-Oilwell, Inc. 1 182,600 3,832,774 ------------------- 6,991,962 ------------------------------------------------------------------------- Oil & Gas--3.1% Anadarko Petroleum Corp. 158,800 7,050,720 ------------------------------------------------------------------------- Financials--17.4% ------------------------------------------------------------------------- Banks--4.5% Bank One Corp. 162,400 5,854,520 ------------------------------------------------------------------------- M&T Bank Corp. 37,000 3,125,390 ------------------------------------------------------------------------- Wells Fargo Co. 29,000 1,399,540 ------------------- 10,379,450 Market Value Shares See Note 1 ------------------------------------------------------------------------- Diversified Financials--5.0% Citigroup, Inc. 88,000 $ 3,454,000 ------------------------------------------------------------------------- Freddie Mac 139,800 8,094,420 ------------------- 11,548,420 ------------------------------------------------------------------------- Insurance--7.9% American International Group, Inc. 62,000 3,592,900 ------------------------------------------------------------------------- John Hancock Financial Services, Inc. 82,000 2,379,640 ------------------------------------------------------------------------- Nationwide Financial Services, Inc., Cl. A 109,900 3,093,685 ------------------------------------------------------------------------- Partnerre Holdings Ltd. 63,100 3,375,850 ------------------------------------------------------------------------- Platinum Underwriters Holdings Ltd. 89,000 2,354,050 ------------------------------------------------------------------------- XL Capital Ltd., Cl. A 42,200 3,473,060 ------------------- 18,269,185 ------------------------------------------------------------------------- Health Care--8.5% ------------------------------------------------------------------------- Biotechnology--1.0% Invitrogen Corp. 1 71,000 2,321,700 ------------------------------------------------------------------------- Health Care Equipment & Supplies--3.1% Millipore Corp. 1 154,532 5,277,268 ------------------------------------------------------------------------- Sybron Dental Specialties, Inc. 1 95,500 1,943,425 ------------------- 7,220,693 ------------------------------------------------------------------------- Health Care Providers & Services--3.0% IMS Health, Inc. 162,383 2,500,698 ------------------------------------------------------------------------- Pharmaceutical Product Development, Inc. 1 167,714 4,389,076 ------------------- 6,889,774 ------------------------------------------------------------------------- Pharmaceuticals--1.4% Taro Pharmaceutical Industries Ltd. 1 70,544 3,228,093 ------------------------------------------------------------------------- Industrials--26.0% ------------------------------------------------------------------------- Aerospace & Defense--5.7% Alliant Techsystems, Inc. 1 64,926 3,487,825 ------------------------------------------------------------------------- General Dynamics Corp. 65,900 4,090,413 ------------------------------------------------------------------------- L-3 Communications Holdings, Inc. 1 51,200 2,273,280 ------------------------------------------------------------------------- Rockwell Collins, Inc. 157,400 3,365,212 ------------------- 13,216,730 7 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. STATEMENT OF INVESTMENTS Unaudited / Continued Market Value Shares See Note 1 ------------------------------------------------------------------------- Commercial Services & Supplies--3.4% Aramark Corp., Cl. B 1 232,100 $ 5,329,016 ------------------------------------------------------------------------- Certegy, Inc. 1 104,000 2,598,960 ----------------- 7,927,976 ------------------------------------------------------------------------- Industrial Conglomerates--2.8% General Electric Co. 220,600 6,496,670 ------------------------------------------------------------------------- Machinery--10.4% Actuant Corp., Cl. A 1 59,200 2,196,320 ------------------------------------------------------------------------- Ingersoll-Rand Co., Cl. A 69,900 3,081,192 ------------------------------------------------------------------------- Navistar International Corp. 1 80,800 2,254,320 ------------------------------------------------------------------------- Oshkosh Truck Corp. 79,700 4,463,200 ------------------------------------------------------------------------- Paccar, Inc. 85,600 4,999,896 ------------------------------------------------------------------------- Parker-Hannifin Corp. 105,600 4,295,808 ------------------------------------------------------------------------- SPX Corp. 1 80,800 2,731,040 ----------------- 24,021,776 ------------------------------------------------------------------------- Road & Rail--3.7% Canadian National Railway Co. 172,700 8,398,401 ------------------------------------------------------------------------- Information Technology--12.2% ------------------------------------------------------------------------- Communications Equipment--1.1% Cisco Systems, Inc. 1 171,400 2,577,856 ------------------------------------------------------------------------- Computers & Peripherals--0.5% EMC Corp. 1 134,400 1,221,696 ------------------------------------------------------------------------- Electronic Equipment & Instruments--9.3% Arrow Electronics, Inc. 1 100,000 1,688,000 ------------------------------------------------------------------------- Diebold, Inc. 202,900 8,111,942 ------------------------------------------------------------------------- Flextronics International Ltd. 1 181,000 1,583,750 ------------------------------------------------------------------------- Mettler-Toledo International, Inc. 1 90,900 3,226,950 ------------------------------------------------------------------------- Roper Industries, Inc. 112,000 3,426,080 ------------------------------------------------------------------------- Waters Corp. 1 143,538 3,446,347 ----------------- 21,483,069 ------------------------------------------------------------------------- Software--1.3% Microsoft Corp. 116,000 2,966,120 Market Value Shares See Note 1 ------------------------------------------------------------------------- Materials--1.0% ------------------------------------------------------------------------- Metals & Mining--1.0% Alcan, Inc. 76,000 $ 2,229,840 ------------------------------------------------------------------------- Utilities--6.4% ------------------------------------------------------------------------- Electric Utilities--4.8% Cinergy Corp. 151,000 5,155,140 ------------------------------------------------------------------------- Exelon Corp. 49,200 2,609,568 ------------------------------------------------------------------------- FirstEnergy Corp. 101,700 3,430,341 ----------------- 11,195,049 ------------------------------------------------------------------------- Multi-Utilities--1.6% Vectren Corp. 156,500 3,638,625 ----------------- Total Common Stocks (Cost $201,561,614) 215,393,374 Principal Amount ------------------------------------------------------------------------- Short-Term Notes--4.0% Federal Home Loan Bank, 1.30%, 5/12/03 $ 3,000,000 2,998,946 ------------------------------------------------------------------------- Student Loan Marketing Assn., 1.25%, 5/1/03 6,234,000 6,234,000 ----------------- Total Short-Term Notes (Cost $9,232,946) 9,232,946 ------------------------------------------------------------------------- Total Investments, at Value (Cost $210,794,560) 97.2% 224,626,320 ------------------------------------------------------------------------- Other Assets Net of Liabilities 2.8 6,450,925 ------------------------------------------ Net Assets 100.0% 231,077,245 ========================================== Footnotes to Statement of Investments 1. Non-income producing security. See accompanying Notes to Financial Statements. 8 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. STATEMENT OF ASSETS AND LIABILITIES Unaudited April 30, 2003 --------------------------------------------------------------------------- Assets Investments, at value (cost $210,794,560)-- see accompanying statement $ 224,626,320 --------------------------------------------------------------------------- Cash 2,868,167 --------------------------------------------------------------------------- Receivables and other assets: Shares of capital stock sold 4,113,291 Interest and dividends 94,695 Other 7,061 ------------- Total assets 231,709,534 --------------------------------------------------------------------------- Liabilities Payables and other liabilities: Shares of capital stock redeemed 416,353 Transfer and shareholder servicing agent fees 61,240 Shareholder reports 59,110 Distribution and service plan fees 44,520 Directors' compensation 20,991 Other 30,075 ------------- Total liabilities 632,289 --------------------------------------------------------------------------- Net Assets $231,077,245 ============= --------------------------------------------------------------------------- Composition of Net Assets Par value of shares of capital stock $ 1,182 --------------------------------------------------------------------------- Additional paid-in capital 229,175,953 --------------------------------------------------------------------------- Accumulated net investment loss (768,151) --------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (11,163,499) --------------------------------------------------------------------------- Net unrealized appreciation on investments 13,831,760 ------------- Net Assets $231,077,245 ============= 9 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued ----------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $162,901,535 and 8,204,285 shares of capital stock outstanding) $19.86 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $21.07 ----------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $44,743,968 and 2,383,802 shares of capital stock outstanding) $18.77 ----------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $19,496,008 and 1,037,492 shares of capital stock outstanding) $18.79 ----------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $3,935,734 and 199,132 shares of capital stock outstanding) $19.76 See accompanying Notes to Financial Statements. 10 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. STATEMENT OF OPERATIONS Unaudited For the Six Months Ended April 30, 2003 ---------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $11,401) $ 1,235,985 ---------------------------------------------------------------------------- Interest 72,885 ------------- Total investment income 1,308,870 ---------------------------------------------------------------------------- Expenses Management fees 1,073,302 ---------------------------------------------------------------------------- Distribution and service plan fees: Class A 206,260 Class B 211,366 Class C 88,964 Class N 8,046 ---------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 269,696 Class B 93,824 Class C 39,863 Class N 5,968 ---------------------------------------------------------------------------- Shareholder reports 75,613 ---------------------------------------------------------------------------- Directors' compensation 9,820 ---------------------------------------------------------------------------- Custodian fees and expenses 2,194 ---------------------------------------------------------------------------- Other 1,300 ------------- Total expenses 2,086,216 Less reduction to custodian expenses (286) Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (22,561) Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (8,462) ------------- Net expenses 2,054,907 ---------------------------------------------------------------------------- Net Investment Loss (746,037) ---------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) Net realized loss on investments (6,785,041) ---------------------------------------------------------------------------- Net change in unrealized appreciation on investments 16,089,311 ------------- Net realized and unrealized gain 9,304,270 ---------------------------------------------------------------------------- Net Increase in Net Assets Resulting from Operations $8,558,233 ============= See accompanying Notes to Financial Statements. 11 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended Ended April 30, 2003 October 31, (Unaudited) 2002 ------------------------------------------------------------------------------------------------------------ Operations Net investment loss $ (746,037) $ (1,768,281) ------------------------------------------------------------------------------------------------------------ Net realized loss (6,785,041) (4,187,269) ------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) 16,089,311 (14,161,865) ------------------------------------- Net increase (decrease) in net assets resulting from operations 8,558,233 (20,117,415) ------------------------------------------------------------------------------------------------------------ Dividends and/or Distributions to Shareholders Distributions from net realized gain: Class A -- (3,391,280) Class B -- (804,584) Class C -- (259,169) Class N -- (6,440) ------------------------------------------------------------------------------------------------------------ Capital Stock Transactions Net increase in net assets resulting from capital stock transactions: Class A 6,554,568 12,204,180 Class B 1,193,183 13,511,982 Class C 1,858,162 8,834,017 Class N 780,749 3,077,772 ------------------------------------------------------------------------------------------------------------ Net Assets Total increase 18,944,895 13,049,063 ------------------------------------------------------------------------------------------------------------ Beginning of period 212,132,350 199,083,287 ------------------------------------- End of period [including accumulated net investment loss of $768,151 and $22,114, respectively] $231,077,245 $212,132,350 =====================================
See accompanying Notes to Financial Statements. 12 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. FINANCIAL HIGHLIGHTS
Six Months Year Ended Ended April 30, 2003 Oct. 31, Class A (Unaudited) 2002 2001 2000 1999 1998 --------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $ 19.07 $ 20.91 $ 33.65 $ 33.66 $ 32.11 $ 41.63 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.05) (.13) (.11) (.25) (.06) .05 Net realized and unrealized gain (loss) .84 (1.25) (2.59) 6.08 2.70 4.28 -------------------------------------------------------------------------------- Total from investment operations .79 (1.38) (2.70) 5.83 2.64 4.33 --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- (.04) (.13) Dividends in excess of net investment income -- -- -- -- -- 1 -- Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.46) (10.04) (5.84) (1.09) (13.85) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $19.86 $19.07 $20.91 $33.65 $33.66 $32.11 ================================================================================ --------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 2 4.14% (6.90)% (9.91)% 20.63% 8.47% 13.28% --------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $162,902 $150,161 $154,346 $177,876 $224,995 $262,669 --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $152,701 $164,479 $161,187 $181,216 $256,450 $280,821 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.49)% (0.61)% (0.44)% (0.73)% (0.17)% 0.13% Expenses, gross 1.71% 1.71% 1.67% 1.73% 1.71% 1.67% 4 Expenses, net 1.71% 5 1.71% 5,6 1.67% 5 1.73% 5 1.58% 5,7 1.29% 7 --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share. 2. 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. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. 7. Net of voluntary waiver of management fees and distribution and service plan fees. See accompanying Notes to Financial Statements. 13 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. FINANCIAL HIGHLIGHTS Continued
Six Months Year Ended Ended April 30, 2003 Oct. 31, Class B (Unaudited) 2002 2001 2000 1999 1998 --------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $ 18.09 $ 19.99 $ 32.77 $ 33.07 $ 31.71 $ 41.41 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.10) (.19) .05 (.34) (.19) (.06) Net realized and unrealized gain (loss) .78 (1.25) (2.79) 5.88 2.60 4.15 -------------------------------------------------------------------------------- Total from investment operations .68 (1.44) (2.74) 5.54 2.41 4.09 --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- (.07) Dividends in excess of net investment income -- -- -- -- -- 1 -- Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.46) (10.04) (5.84) (1.05) (13.79) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $18.77 $18.09 $19.99 $32.77 $33.07 $31.71 ================================================================================ --------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 2 3.76% (7.53)% (10.48)% 20.02% 7.83% 12.54% --------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $44,744 $42,010 $34,278 $17,429 $15,634 $9,562 --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $42,639 $42,900 $27,144 $15,719 $14,112 $4,586 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (1.21)% (1.30)% (1.13)% (1.26)% (0.80)% (0.57)% Expenses, gross 2.52% 2.41% 2.26% 2.27% 2.27% 2.24% 4 Expenses, net 2.41% 5,6 2.41% 5,7 2.26% 5 2.27% 5 2.19% 5,8 2.01% 8 --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share. 2. 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. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. 5. Reduction to custodian expenses less than 0.01%. 6. Net of voluntary waiver of transfer agent fees. 7. Voluntary waiver of transfer agent fees less than 0.01%. 8. Net of voluntary waiver of management fees. See accompanying Notes to Financial Statements. 14 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
Six Months Year Ended Ended April 30, 2003 Oct. 31, Class C (Unaudited) 2002 2001 2000 1999 1998 --------------------------------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $ 18.11 $ 20.01 $ 32.80 $ 33.09 $ 31.73 $ 41.42 --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.09) (.13) .11 (.38) (.17) (.13) Net realized and unrealized gain (loss) .77 (1.31) (2.86) 5.93 2.58 4.21 -------------------------------------------------------------------------------- Total from investment operations .68 (1.44) (2.75) 5.55 2.41 4.08 --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- (.05) Dividends in excess of net investment income -- -- -- -- -- 1 -- Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72) -------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders -- (.46) (10.04) (5.84) (1.05) (13.77) --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $18.79 $18.11 $20.01 $32.80 $33.09 $31.73 -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 2 3.76% (7.52)% (10.50)% 20.05% 7.82% 12.49% --------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $19,496 $16,979 $10,272 $5,053 $4,632 $2,972 --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $17,954 $15,323 $ 7,898 $4,969 $4,117 $1,582 --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (1.23)% (1.30)% (1.13)% (1.25)% (0.80)% (0.58)% Expenses, gross 2.53% 2.41% 2.26% 2.27% 2.26% 2.23% 4 Expenses, net 2.43% 5,6 2.41% 5,7 2.26% 5 2.27% 5 2.18% 5,8 2.01% 8 --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share. 2. 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. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. 5. Reduction to custodian expenses less than 0.01%. 6. Net of voluntary waiver of transfer agent fees. 7. Voluntary waiver of transfer agent fees less than 0.01%. 8. Net of voluntary waiver of management fees. See accompanying Notes to Financial Statements. 15 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. FINANCIAL HIGHLIGHTS Continued
Six Months Year Ended Ended April 30, 2003 Oct. 31, Class N (Unaudited) 2002 2001 1 ------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $ 19.00 $ 20.88 $ 23.25 ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.08) (.17) (.03) Net realized and unrealized gain (loss) .84 (1.25) (2.34) ---------------------------------- Total from investment operations .76 (1.42) (2.37) ------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- Dividends in excess of net investment income -- -- -- Distributions from net realized gain -- (.46) -- ---------------------------------- Total dividends and/or distributions to shareholders -- (.46) -- ------------------------------------------------------------------------------------------- Net asset value, end of period $19.76 $19.00 $20.88 ---------------------------------- ------------------------------------------------------------------------------------------- Total Return, at Net Asset Value 2 4.00% (7.10)% (10.19)% ------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $3,936 $2,983 $187 ------------------------------------------------------------------------------------------- Average net assets (in thousands) $3,251 $1,475 $ 38 ------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (0.77)% (0.88)% (0.96)% Expenses, gross 1.95% 1.87% 1.75% Expenses, net 1.95% 4 1.87% 4,5 1.75% 4 ------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 75% 80%
1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. See accompanying Notes to Financial Statements. 16 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS Unaudited -------------------------------------------------------------------------------- 1. Significant Accounting Policies Oppenheimer Quest Capital Value Fund, Inc. (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 Manager has entered into a sub-advisory agreement with OpCap Advisors. The Fund offers Class A, Class B, Class C and Class N 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. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------------------------------- Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. 17 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued As of April 30, 2003, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $10,729,797. This estimated capital loss carryforward represents the carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules for the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended April 30, 2003, the Fund did not use carryforward to offset capital gains realized. During the year ended October 31, 2002, the Fund did not use carryforward to offset capital gains realized. As of October 31, 2002, the Fund had available for federal income tax purposes an unused capital loss carryforward as follows: Expiring ---------------------- 2010 $3,944,756 -------------------------------------------------------------------------------- Directors' Compensation. The Fund has adopted an unfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the six months ended April 30, 2003, the Fund's projected benefit obligations were decreased by $104 and payments of $563 were made to retired directors, resulting in an accumulated liability of $21,449 as of April 30, 2003. The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is invested by the Fund in the fund(s) selected by the director. Deferral of directors' 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. -------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. -------------------------------------------------------------------------------- Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. 18 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. The tax character of distributions paid during the six months ended April 30, 2003 and the year ended October 31, 2002 was as follows: Six Months Ended Year Ended April 30, 2003 October 31, 2002 ------------------------------------------------------ Distributions paid from: Ordinary income $-- $ -- Long-term capital gain -- 4,461,473 Return of capital -- -- --------------------------- Total $-- $4,461,473 =========================== -------------------------------------------------------------------------------- Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. -------------------------------------------------------------------------------- Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. -------------------------------------------------------------------------------- 2. Shares of Capital Stock The Fund has authorized one billion shares of $.0001 par value capital stock in the aggregate to be apportioned among each class of shares. Transactions in shares of capital stock were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002 Shares Amount Shares Amount ----------------------------------------------------------------------------------------------------------- Class A Sold 1,256,844 $ 24,095,391 2,235,230 $ 47,891,615 Dividends and/or distributions reinvested -- -- 104,423 2,298,369 Redeemed (928,607) (17,540,823) (1,845,506) (37,985,804) ------------------------------------------------------------------- Net increase 328,237 $ 6,554,568 494,147 $12,204,180 =================================================================== ----------------------------------------------------------------------------------------------------------- Class B Sold 434,345 $ 7,926,848 1,385,300 $ 28,277,580 Dividends and/or distributions reinvested -- -- 34,608 726,779 Redeemed (373,219) (6,733,665) (812,006) (15,492,377) ------------------------------------------------------------------- Net increase 61,126 $ 1,193,183 607,902 $13,511,982 ===================================================================
19 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
------------------------------------------------------------------------------------------------------------ 2. Shares of Capital Stock Continued Six Months Ended April 30, 2003 Year Ended October 31, 2002 Shares Amount Shares Amount ------------------------------------------------------------------------------------------------------------ Class C Sold 294,771 $ 5,367,553 691,805 $14,002,918 Dividends and/or distributions reinvested -- -- 10,995 231,241 Redeemed (194,839) (3,509,391) (278,450) (5,400,142) -------------------------------------------------------------------- Net increase 99,932 $ 1,858,162 424,350 $8,834,017 ==================================================================== ------------------------------------------------------------------------------------------------------------ Class N Sold 75,950 $ 1,437,839 163,175 $ 3,353,343 Dividends and/or distributions reinvested -- -- 292 6,420 Redeemed (33,792) (657,090) (15,463) (281,991) -------------------------------------------------------------------- Net increase 42,158 $ 780,749 148,004 $3,077,772 ====================================================================
-------------------------------------------------------------------------------- 3. Purchases and Sales of Securities The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended April 30, 2003, were $79,150,688 and $67,197,034, respectively. -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 1.00% of the first $400 million of average annual net assets of the Fund, 0.90% of the next $400 million, and 0.85% of average annual net assets in excess of $800 million. -------------------------------------------------------------------------------- Sub-Advisor Fees. The Manager retains OpCap Advisors (the Sub-Advisor) to provide the day-to-day portfolio management of the Fund. For the six months ended April 30, 2003, the Manager paid $427,225 to the Sub-Advisor for its services to the Fund. -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes, up to an annual rate of 0.35% of average net assets per class. This undertaking may be amended or withdrawn at any time. -------------------------------------------------------------------------------- Distribution and Service Plan (12b-1) Fees. Under its General Distributor's Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund. 20 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions Front-End Front-End on Class A on Class B on Class C on Class N Sales Charges Sales Charges Shares Shares Shares Shares on Class A Retained by Advanced by Advanced by Advanced by Advanced by Six Months Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1 --------------------------------------------------------------------------------------------------------------------------- April 30, 2003 $174,860 $55,463 $3,816 $161,693 $32,484 $11,527
1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale.
Class A Class B Class C Class N Contingent Contingent Contingent Contingent Deferred Deferred Deferred Deferred Sales Charges Sales Charges Sales Charges Sales Charges Retained by Retained by Retained by Retained by Six Months Ended Distributor Distributor Distributor Distributor ----------------------------------------------------------------------------------------------------- April 30, 2003 $713 $63,678 $5,925 $1,797
-------------------------------------------------------------------------------- Class A Distribution and Service Plan Fees. The Fund has adopted a Distribution and Service Plan for Class A shares. Under the plan the Fund paid an asset-based sales charge to the Distributor at an annual rate equal to 0.10% of average annual net assets of Class A shares of the Fund. (The Board of Directors can set this rate up to 0.25%.) Effective January 1, 2003, the Board of Directors has voluntarily reduced the asset-based sales charge in Class A shares to zero. The Fund also pays a service fee to the Distributor of 0.25% of the average annual net assets of Class A shares. For the six months ended April 30, 2003, payments under the Class A plan totaled $206,260, all of which were paid by the Distributor to recipients, and included $5,568 paid to an affiliate of the Manager. -------------------------------------------------------------------------------- Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and the Fund pays the Distributor an annual asset-based sales charge of 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. Distribution fees paid to the Distributor for the six months ended April 30, 2003, were as follows:
Distributor's Distributor's Aggregate Aggregate Unreimbursed Unreimbursed Expenses as % Total Payments Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class --------------------------------------------------------------------------------------------------- Class B Plan $211,366 $172,560 $1,365,177 3.05% Class C Plan 88,964 38,010 299,915 1.54 Class N Plan 8,046 7,460 85,010 2.16
21 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 5. Borrowing and Lending Arrangements Bank Borrowings. The Fund had the ability to borrow from banks for temporary or emergency purposes. Asset coverage for borrowings must be at least 300%. The Fund and other Oppenheimer funds participated in a $400 million unsecured line of credit from a bank, for liquidity purposes. Under that line of credit, each fund was charged interest on its borrowings at a rate equal to the Federal Funds rate plus 0.45%. The Fund paid a commitment fee on its pro rata share of the average unutilized amount of the credit facility at a rate of 0.08% per annum. The credit facility was terminated on November 12, 2002, when the Fund entered into the interfund borrowing and lending arrangements described below. The Fund had no outstanding borrowings under the credit facility through November 12, 2002. -------------------------------------------------------------------------------- Interfund Borrowing and Lending Arrangements. Commencing November 12, 2002, the Fund entered into an "interfund borrowing and lending arrangement" with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund's Board of Directors, based upon a recommendation by the investment manager. The Fund's borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day's notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all. The Fund had no interfund borrowings or loans outstanding during the six months ended or at April 30, 2003. 22 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC. ITEM 2. CODE OF ETHICS - NOT REQUIRED ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT - NOT REQUIRED ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED ITEM 5. RESERVED ITEM 6. RESERVED ITEM 7. NOT APPLICABLE ITEM 8. RESERVED ITEM 9. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of April 30, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to be appropriately designed to ensure that information required to be disclosed by 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. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation as indicated, including no significant deficiencies or material weaknesses that required corrective action. ITEM 10. EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)