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.
April 30, 2003
Oppenheimer
Quest Capital Value
Fund, Inc. SM
Management
Commentaries
and
Semiannual
Report
[GRAPHIC]
MANAGEMENT COMMENTARIES
Performance Update
Investment Strategy Discussion
Listing of Top Holdings
SEMIANNUAL REPORT AND FINANCIAL STATEMENTS
Listing of Investments
Financials
"A strong emphasis on companies positioned to benefit from pent-up demand and a
stronger economy helped Oppenheimer Quest Capital Value deliver a competitive
total return for the last six months." 1
[LOGO]
OppenheimerFunds(R)
The Right Way to invest
HIGHLIGHTS
Fund Objective
Oppenheimer Quest Capital Value Fund, Inc. SM seeks capital appreciation.
Fund Highlight
The Fund's Class A shares are ranked in the first quartile of all Multi-Cap
Value funds for the one year period ended April 30, 2003, according to Lipper,
Inc. 1
MANAGEMENT COMMENTARIES AND ADDITIONAL DISCLOSURES
1 Letter to Shareholders
2 An Interview
with Your Fund's
Manager
23 Directors and
Officers Listing
24 Privacy Policy Notice
SEMIANNUAL REPORT AND FINANCIAL STATEMENTS
7 Statement of Investments
9 Statement of Assets and Liabilities
11 Statement of Operations
12 Statements
of Changes
in Net Assets
13 Financial Highlights
17 Notes to Financial Statements
Cumulative Total Returns*
For the 6-Month Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- ----------------------------------
Class A 4.14% -1.85%
- ----------------------------------
Class B 3.76 -1.24
- ----------------------------------
Class C 3.76 2.76
- ----------------------------------
Class N 4.00 3.00
- ----------------------------------
Average Annual Total Returns*
For the 1-Year Period
Ended 4/30/03
Without With
Sales Chg. Sales Chg.
- ----------------------------------
Class A -12.01% -17.07%
- ----------------------------------
Class B -12.66 -17.03
- ----------------------------------
Class C -12.69 -13.56
- ----------------------------------
Class N -12.22 -13.09
1. Lipper, Inc. Lipper rankings are based on total returns, but do not consider
sales charges. The Fund's Class A shares ranked #109/490, #67/251 and #64/89 for
the one-, five- and 10-year periods ended 4/30/03. Lipper ranking are for the
Class A share class only; other classes may have different performance
characteristics. Rankings are relative peer group ratings and do not necessarily
mean that the fund had high total returns. Past performance is no guarantee of
future results.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the FDIC or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.
Past performance does not guarantee future results.
*See Notes on page 6 for further details.
Not part of the semiannual report to Fund shareholders
LETTER TO SHAREHOLDERS
Dear Shareholder,
It is nearly impossible to reflect on the past six months without thinking about
the war with Iraq. We experienced a range of emotions in the days leading up to
the war and especially as the media brought the war into our homes, as never
before.
At OppenheimerFunds, we face the difficult task of looking beyond the war to
see its long-term impact, together with other factors, on the global economy,
the financial markets and, in the end, your investment with us. It's a
responsibility that we take very seriously and becomes our primary focus during
uncertain times like these.
It is our strong belief that investors can be well served by this
professional insight and by the guidance provided by a financial advisor. In
partnership with OppenheimerFunds, your financial advisor can help you navigate
through this volatile and sometimes unpredictable environment. We encourage you
to continue to work closely with your advisor to develop and implement an
investment plan that fits your goals and risk tolerance.
On our end, we continue to be the home to some of the most experienced and
talented investment professionals in the industry. They remain focused on proven
methods that drive informed, intelligent investment decisions. It is an approach
we are proud of and one that has served investors well in a variety of market
conditions.
We've found that in good times and bad, the fundamental principles of
investing remain key for financial success. These principles--investing
according to your goals, diversifying your portfolio and benefiting from the
value of professional investment advice--are simple ideas that have proven
themselves over time, and, we believe, will prove themselves again.
We thank you for your continued confidence in OppenheimerFunds and encourage
you to visit our website, www.oppenheimerfunds.com, or speak with your advisor
for up to date information on your investments and the markets.
Sincerely,
/s/ John V. Murphy
John V. Murphy
May 21, 2003
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict performance of the securities markets or any particular
fund. Specific information that applies to your Fund is contained in the pages
that follow.
[PHOTO]
John V. Murphy
John V. Murphy
President
Oppenheimer
Quest Capital Value
Fund, Inc.
Not part of the semiannual report to Fund shareholders
1 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
AN INTERVIEW WITH YOUR FUND'S MANAGER
Q
How did Oppenheimer Quest Capital Value Fund, Inc. perform during the six months
that ended April 30, 2003?
A. We're pleased to report that the Fund held its own during this volatile
period, delivering a six-month total return slightly below that of the Standard
& Poor's 500 Index and the average for its peer group of multi-cap value
funds. 2
What drove the market's increased volatility?
The market's movements from month to month were exceptionally large by historic
standards. Last November, spurred by somewhat improved economic data, the market
staged a strong rally. Later, it gave back those gains and more as two
factors--war in Iraq and poor weather--hindered short-term business performance.
Once fighting in Iraq calmed down, the market engaged in another, albeit weaker,
recovery to end the period very close to where it began.
Given this backdrop, how did you position the Fund?
We focused on owning undervalued companies that have strategically positioned
themselves to take advantage of economic recovery--in short, companies with
strong operating leverage and pent-up demand. Through our bottom-up analysis, we
identified stocks that in our view, in light of their inherent strengths, had
been excessively discounted in 2002. We were careful to differentiate between
stocks that had declined due to general weakness in the economy and those that
had fallen due to company- or industry-specific issues.
Why was pent-up demand important to your selection?
Take the case of media companies, which sell advertising space or time. If a
commercial spot or advertising page is not sold before a program airs or a
magazine is printed, the opportunity to make money is generally lost. There is
little opportunity to
Portfolio Manager
Louis Goldstein
2. The Fund's performance (Class A shares @ NAV) is compared to the 4.48% return
of the S&P 500 Index, an unmanaged index of domestic equity securities, and the
6.92% average return of the 530 funds in the Lipper Multi-Cap Value category,
for the six-month period ended 4/30/03.
Not part of the semiannual report to Fund shareholders
2 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
recoup the income in future quarters, so there is no built-up demand to lift
sales and revenues down the road. With this in mind, we trimmed the Fund's
exposure to media companies last fall, in anticipation of war, which generally
suppresses advertising orders. The few media companies remaining in the
portfolio, including billboard company Lamar Advertising Co., performed poorly.
3 However, we believe Lamar's strong billboard business provides the company
with greater stability that will enable it to perform well once the sector turns
around.
Conversely, we expected declines in order flow for industrial companies to
reverse in later quarters, so we adjusted our exposure within the industrial
sector. We added to the Fund's underpriced industrial holdings, which we believe
are positioned to excel when pent-up demand is unleashed, such as heavy-truck
manufacturer Paccar, Inc. To do this, we eliminated positions in certain
holdings, including York International Corp., maker of heating and ventilation
equipment. The stock declined due to an unsuccessful attempt to improve company
operations, which left York poorly positioned to benefit from any increase in
future orders.
Another area where changing demand led to shifting investments was health
care. For one, the need for analytical instrumentation used in laboratories and
clinics is waning. On the other hand, the competition among pharmaceuticals
companies is heating up, boosting orders for items consumed in the research
process--so-called life-science consumables--as well as demand for generic
drugs. With that in mind, we sold a position in analytical instrumentation maker
Thermo Electron Corp., while re-investing in a manufacturer of life-science
consumables, and adding a position in Taro Pharmaceutical Industries Ltd., maker
of Lotrimin, as well as generic ointments and creams. Taro was one of the
strongest contributors to performance during these past six months.
[SIDEBAR]
We were careful to differentiate between demand that is pent-up and that which
is lost and likely to never be recovered.
3. The Fund's holdings and allocations are subject to change.
Not part of the semiannual report to Fund shareholders
3 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
AN INTERVIEW WITH YOUR FUND'S MANAGER
What were the other contributors to performance?
General Electric Co. bounced back once investors accepted that, after losing its
highly regarded chairman two years ago, the company will make missteps, but
still be profitable.
Offsetting these gains were declines in our holdings of Freddie Mac, Rockwell
Collins, Inc., and Roper Industries, Inc., among others. Mortgage lender Freddie
Mac suffered from concerns about a positive earnings restatement and negative
comments about derivatives, of which it is a major issuer. Rockwell Collins, an
aerospace company, paid the price for declines in its commercial aviation and
communications businesses. Finally, Roper Industries, which provides
instrumentation to the energy industry, was hurt by a delayed order from a major
customer in Russia.
What is your outlook for the market?
With war worries on the decline and the weather much improved, we expect capital
spending to strengthen, supporting a brisk climb toward economic recovery in
2003. Whether or not this improvement brings about broad gains for the stock
market, we believe it could drive advances for our holdings, which are
undervalued and, in many cases, stand to benefit from constrained demand. We
will continue to look for more such companies, as their ability to help
long-term gains has made Oppenheimer Quest Capital Value Fund, Inc. a part of
The Right Way to Invest.
Average Annual
Total Returns with
Sales Charge
For the Periods Ended 3/31/03 4
Class A
1-Year 5-Year 10-Year
- ---------------------------
- -26.11% -0.36% 7.03%
Class B Since
1-Year 5-Year Inception
- ---------------------------
- -26.07% 0.00% 4.35%
Class C Since
1-Year 5-Year Inception
- ---------------------------
- -22.94% 0.21% 4.33%
Class N Since
1-Year 5-Year Inception
- ---------------------------
- -22.52% N/A -9.99%
4. See Notes on page 6 for further details.
Not part of the semiannual report to Fund shareholders
4 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
Top Ten Common Stock Holdings 6
- --------------------------------------------------------------------------------
Lamar Advertising Co., Cl. A 4.1%
- --------------------------------------------------------------------------------
Canadian National Railway Co. 3.6
- --------------------------------------------------------------------------------
Diebold, Inc. 3.5
- --------------------------------------------------------------------------------
Freddie Mac 3.5
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 3.1
- --------------------------------------------------------------------------------
General Electric Co. 2.8
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 2.7
- --------------------------------------------------------------------------------
Bank One Corp. 2.5
- --------------------------------------------------------------------------------
Aramark Corp., Cl. B 2.3
- --------------------------------------------------------------------------------
Millipore Corp. 2.3
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
Top Five Common Stock Industries 6
- --------------------------------------------------------------------------------
Machinery 10.4%
- --------------------------------------------------------------------------------
Media 10.2
- --------------------------------------------------------------------------------
Electronic Equipment & Instruments 9.3
- --------------------------------------------------------------------------------
Insurance 7.9
- --------------------------------------------------------------------------------
Aerospace & Defense 5.7
Sector Allocation 5
[PIE CHART]
o Industrials 27.9%
Machinery 11.2
Aerospace &
Defense 6.1
Road & Rail 3.9
Commercial
Services &
Supplies 3.7
Industrial
Conglom-
erates 3.0
o Financials 18.7
o Consumer
Discretionary 16.8
o Information Technology 13.1
o Health Care 9.1
o Utilities 6.9
o Energy 6.5
o Materials 1.0
5. Portfolio's holdings and allocations are subject to change. Percentages are
as of April 30, 2003, and are based on total market value of common stock
holdings.
6. Portfolio's holdings and allocations are subject to change. Percentages are
as of April 30, 2003, and are based on net assets.
Not part of the semiannual report to Fund shareholders
5 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
NOTES
In reviewing performance and rankings, please remember that past performance
cannot guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
fluctuations, and current performance may be more or less than the results
shown. For updates on the Fund's performance, visit our website at
www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
OppenheimerFunds, Inc. became the Fund's advisor on 2/28/97. The Fund's
Subadvisor is OpCap Advisors (the Fund's advisor until 2/28/97). The Fund
commenced operations on 2/13/87 as a closed-end investment company, formerly
named Quest for Value Dual Purpose Fund, Inc., with a dual purpose structure and
two classes of shares, Income shares and Capital shares. Under the prior
dual-purpose structure, Capital shares were entitled to all gains and losses on
all Fund assets and no expenses were allocated to such shares; the Income shares
bore all of the Fund's operating expenses. On 1/31/97, the Fund redeemed its
Income shares, which are no longer outstanding, and its dual-purpose structure
terminated. On 3/3/97, the Fund converted from a closed-end fund to an open-end
fund, and its outstanding Capital shares were designated as Class A shares now
bearing their allocable share of the Fund's expenses.
Class A (formerly Capital) shares of the Fund were first publicly offered on
2/13/87. Unless otherwise noted, Class A shares total returns reflect the
historical performance of the Class A shares of the Fund (formerly Capital
shares) as adjusted for the fees and expenses of Class A shares in effect as of
3/3/97 (without giving effect to any fee waivers). Unless otherwise noted,
average annual total returns for Class A shares includes the current 5.75%
maximum initial sales charge. Class A shares are subject to a maximum annual
0.25% asset-based sales charge. There is a voluntary waiver of a portion of the
Class A asset-based sales charge as described in the Prospectus.
Class B shares of the Fund were first publicly offered on 3/3/97. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B uses Class A performance for the period after conversion. Class B shares are
subject to a maximum annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 3/3/97. Unless
otherwise noted, 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.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
Not part of the semiannual report to Fund shareholders
6 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
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.
OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.SM
- --------------------------------------------------------------------------------
Directors and Officers Thomas W. Courtney, Chairman
John V. Murphy, President
Paul Y. Clinton, Director
Robert G. Galli, Director
Lacy B. Herrmann, Director
Brian Wruble, Director
Robert G. Zack, Secretary
Brian W. Wixted, Treasurer
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Investment Advisor OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
Sub-Advisors OpCap Advisors
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Distributor OppenheimerFunds Distributor, Inc.
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Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
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Independent Auditors KPMG LLP
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Legal Counsel Mayer Brown Rowe & Maw
The financial statements included herein
have been taken from the records of the Fund
without examination of those records by the
independent auditors.
(C)Copyright 2003 OppenheimerFunds, Inc. All rights reserved.
Not part of the semiannual report to Fund shareholders
23 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
PRIVACY POLICY NOTICE
As an Oppenheimer fund shareholder, you are entitled to know how we protect your
personal information and how we limit its disclosure.
Information Sources
We obtain nonpublic personal information about our shareholders from the
following sources:
o Applications or other forms
o When you create a user ID and password for online account access
o When you enroll in eDocs Direct, our electronic document delivery service
o Your transactions with us, our affiliates or others
o A software program on our website, often referred to as a "cookie," which
indicates which parts of our site you've visited
If you visit www.oppenheimerfunds.com and do not log on to the secure account
information areas, we do not obtain any personal information about you. When you
do log on to a secure area, we do obtain your user ID and password to identify
you.
We also use this information to provide you with products and services you have
requested, to inform you about products and services that you may be interested
in and to assist you in other ways.
Protection of Information
We do not disclose any nonpublic personal information (such as names on a
customer list) about current or former customers to anyone, except as permitted
by law.
Disclosure of Information
We send your financial advisor (as designated by you) copies of confirmations,
account statements and other documents reporting activity in your fund accounts.
We may also use details about you and your investments to help us, our financial
service affiliates or firms that jointly market their financial products and
services with ours, to better serve your investment needs or suggest financial
services or educational material that may be of interest to you.
Right of Refusal
We will not disclose your personal information to unaffiliated third parties
(except as permitted by law), unless we first offer you a reasonable opportunity
to refuse or "opt out" of such disclosure.
Security
In the coming months, an Internet browser that supports 128-bit encryption will
be required to view the secure pages of www.oppenheimerfunds.com. These areas
include:
o Account access
o Create a user ID and profile
o User profile
o eDocs Direct, our electronic document delivery service
Not part of the semiannual report to Fund shareholders
24 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
To find out if your Internet browser supports 128-bit encryption, or for
instructions on how to upgrade your browser, visit the Help section of
www.oppenheimerfunds.com.
Emails and Encryption
As a security measure, we do not include personal or account information in
nonsecure emails, and we advise you not to send such information to us in
nonsecure emails. Instead, you may take advantage of the secure features of our
website to encrypt your email correspondence. To do this, you will need to use
an Internet browser that supports 128-bit encryption. If you are not sure if
your Internet browser supports 128-bit encryption, or need instructions on how
to upgrade your browser, visit the Help section of www.oppenheimerfunds.com for
assistance.
o All transactions, including redemptions, exchanges and purchases are secured
by Secure Socket Layers (SSL) and encryption. SSL is used to establish a
secure connection between your PC and OppenheimerFunds' server. It transmits
information in an encrypted and scrambled format.
o Encryption is achieved through an electronic scrambling technology that uses
a "key" to code and then decode the data. Encryption acts like the cable
converter box you may have on your television set. It scrambles data with
secret code so that no one can make sense of it while it is being
transmitted. When the data reaches its destination, the same software
unscrambles the data.
o You can exit the secure area by either closing your browser, or for added
security, you can use the Log Out of Account Area button before you close
your browser.
Other Security Measures
We maintain physical, electronic and procedural safeguards to protect your
personal account information. Our employees and agents have access to that
information only so that they may offer you products or provide services to you,
for example, when responding to your account questions.
How You Can Help
You can also do your part to keep your account information private, and to
prevent unauthorized transactions. If you obtain a user ID and password for your
account, do not allow it to be used by anyone else. Also, take special
precautions when accessing your account on a computer used by others.
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This joint notice describes the privacy policies of Oppenheimer funds,
OppenheimerFunds Distributor, Inc., the trustee of OppenheimerFunds Individual
Retirement Accounts (IRAs) and the custodian of the OppenheimerFunds 403(b)(7)
tax-sheltered custodial accounts. It applies to all Oppenheimer fund accounts
you presently have, or may open in the future, using your Social Security
number--whether or not you remain a shareholder of our funds. If you have any
questions about these privacy policies, write to us at P.O. Box 5270, Denver, CO
80217-5270, email us by clicking on the Contact Us section of our website at
www.oppenheimerfunds.com or call us at 1.800.CALL OPP (1.800.225.5677).
Not part of the semiannual report to Fund shareholders
25 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
INFORMATION AND SERVICES
[GRAPHIC] eDocsDirect
Get This Report Online!
You can quickly view, download and print this report at
your convenience. It's EASY, FAST, CONVENIENT, and FREE!
With OppenheimerFunds eDocs Direct, you'll receive email notification when
shareholder reports, prospectuses or prospectus supplements for your fund(s)
become available online, instead of receiving them through the mail. You'll cut
down on paper mail and help reduce fund expenses!
Sign up for eDocs Direct today at
www.oppenheimerfunds.com
Internet
24-hr access to account information and transactions 1
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
PhoneLink 1 and General Information
24-hr automated information and automated transactions
Representatives also available Mon-Fri 8am-9pm ET
Sat (January-April) 10am-4pm ET
1.800.CALL OPP (1.800.225.5677)
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Written Correspondence and Transaction Requests
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
For Overnight Delivery
OppenheimerFunds Services
10200 East Girard Avenue, Building D
Denver, CO 80231
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Ticker Symbols
Class A: QCVAX Class B: QCVBX Class C: QCVCX Class N: QCVNX
1. At times the website or PhoneLink may be inaccessible or their transaction
features may be unavailable.
Not part of the semiannual report to Fund shareholders
[LOGO]
OppenheimerFunds(R)
Distributor, Inc.
RS0835.001.0403 June 27, 2003
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)