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 811-08297
Oppenheimer MidCap Fund
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
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(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--89.5%
- ------------------------------------------------------
Consumer Discretionary--21.1%
- ------------------------------------------------------
Hotels, Restaurants & Leisure--1.7%
Outback
Steakhouse, Inc. 166,500 $ 5,950,710
- ------------------------------------------------------
Wendy's
International, Inc. 222,500 6,461,400
------------
12,412,110
- ------------------------------------------------------
Media--2.6%
Univision
Communications,
Inc., Cl. A 1 620,000 18,773,600
- ------------------------------------------------------
Multiline Retail--2.6%
Family Dollar
Stores, Inc. 550,000 18,804,500
- ------------------------------------------------------
Specialty Retail--9.8%
Abercrombie &
Fitch Co., Cl. A 1 224,000 7,365,120
- ------------------------------------------------------
Bed Bath &
Beyond, Inc. 1 1,320,000 52,153,200
- ------------------------------------------------------
CarMax, Inc. 1 360,000 7,614,000
- ------------------------------------------------------
Weight Watchers
International, Inc. 1 77,100 3,622,158
-------------
70,754,478
- ------------------------------------------------------
Textiles & Apparel--4.4%
Coach, Inc. 1 739,000 32,153,890
- ------------------------------------------------------
Consumer Staples--3.0%
- ------------------------------------------------------
Food & Drug Retailing--3.0%
Whole Foods
Market, Inc. 1 360,000 21,369,600
- ------------------------------------------------------
Financials--12.0%
- ------------------------------------------------------
Banks--2.1%
Commerce
Bancorp, Inc. 368,000 14,966,560
- ------------------------------------------------------
Diversified Financials--2.2%
Doral Financial Corp. 404,200 16,172,042
- ------------------------------------------------------
Insurance--7.7%
AMBAC Financial
Group, Inc. 131,600 7,678,860
- ------------------------------------------------------
MBIA, Inc. 358,700 16,033,890
- ------------------------------------------------------
Radian Group, Inc. 801,100 31,803,670
------------
55,516,420
Market Value
Shares See Note 1
- ------------------------------------------------------
Health Care--29.0%
- ------------------------------------------------------
Biotechnology--8.7%
Gilead Sciences, Inc. 1 914,300 $ 42,185,802
- ------------------------------------------------------
IDEC Pharmaceuticals
Corp. 1 301,000 9,857,750
- ------------------------------------------------------
Medimmune, Inc. 1 300,000 10,581,000
------------
62,624,552
- ------------------------------------------------------
Health Care Equipment & Supplies--15.0%
Biomet, Inc. 832,500 25,357,950
- ---------------------------------------- -------------
Stryker Corp. 525,000 35,180,250
- ------------------------------------------------------
Varian Medical
Systems, Inc. 1 898,000 48,366,280
------------
108,904,480
- ------------------------------------------------------
Health Care Providers & Services--5.3%
Lincare
Holdings, Inc. 1 1,268,400 38,521,308
- ------------------------------------------------------
Industrials--6.2%
- ------------------------------------------------------
Commercial Services & Supplies--4.1%
Apollo Group,
Inc., Cl. A 1 475,000 25,744,525
- ------------------------------------------------------
Career Education
Corp. 1 60,000 3,607,800
------------
29,352,325
- ------------------------------------------------------
Machinery--2.1%
SPX Corp. 1 450,000 15,210,000
- ------------------------------------------------------
Information Technology--18.2%
- ------------------------------------------------------
Communications Equipment--4.1%
UTStarcom, Inc. 1 1,362,900 29,671,696
- ------------------------------------------------------
Computers & Peripherals--0.4%
Network
Appliance, Inc. 1 250,000 3,320,000
- ------------------------------------------------------
Electronic Equipment & Instruments--1.1%
Garmin Ltd. 1 186,200 7,891,156
- ------------------------------------------------------
Internet Software & Services--1.0%
Expedia, Inc., Cl. A 1 125,000 7,223,750
- ------------------------------------------------------
Semiconductor Equipment & Products--5.0%
Marvell Technology
Group Ltd. 1 800,000 18,463,200
- ------------------------------------------------------
QLogic Corp. 1 400,000 17,596,000
------------
36,059,200
- ------------------------------------------------------
Software--6.6%
Mercury
Interactive Corp. 1 700,000 23,758,000
7 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- ------------------------------------------------------
Software Continued
Symantec Corp. 1 539,300 $ 23,702,235
------------
47,460,235
------------
Total Common Stocks
(Cost $594,974,075) 647,161,902
- ------------------------------------------------------
Preferred Stocks--0.1%
Axsun Technologies, Inc.,
Cv., Series C 1,2,3 771,208 363,933
- ------------------------------------------------------
Centerpoint Broadband
Technologies, Inc., Cv.,
Series D 1,2 556,586 --
- ------------------------------------------------------
fusionOne, Inc., 8%
Non-Cum. Cv.,
Series D 1,2,3 1,675,894 63,181
- ------------------------------------------------------
ITF Optical
Technologies, Inc.,
Cv., Series A 1,2,3 200,000 116,760
------------
Total Preferred Stocks
(Cost $29,100,099) 543,874
Principal Market Value
Amount See Note 1
- ------------------------------------------------------
Joint Repurchase Agreements--13.3% 4
Undivided interest of 11.64% in joint
repurchase agreement (Market Value
$827,630,000) with PaineWebber, Inc.,
1.31%, dated 4/30/03, to be repurchased
at $96,366,507 on 5/1/03, collateralized
by Federal Home Loan Mortgage Corp.,
5.50%, 4/1/33--5/1/33, with a value
of $844,859,664
(Cost $96,363,000) $96,363,000 $ 96,363,000
- ------------------------------------------------------
Total Investments,
at Value
(Cost $720,437,174) 102.9% 744,068,776
- ------------------------------------------------------
Liabilities
in Excess of
Other Assets (2.9) (20,677,626)
----------------------
Net Assets 100.0% $723,391,150
======================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended April 30, 2003.
The aggregate fair value of securities of affiliated companies held by the Fund
as of April 30, 2003 amounts to $543,874. Transactions during the period in
which the issuer was an affiliate are as follows:
Shares Gross Gross Shares Unrealized
October 31, 2002 Additions Reductions April 30, 2003 Depreciation
- ----------------------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C 771,208 -- -- 771,208 $8,636,064
fusionOne, Inc., 8% Non-Cum. Cv., Series D 1,675,894 -- -- 1,675,894 9,036,923
ITF Optical Technologies, Inc., Cv., Series A 200,000 -- -- 200,000 4,883,240
4. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2003
- -------------------------------------------------------------------------------
Assets
Investments, at value (including $96,363,000
in repurchase agreements)--
see accompanying statement:
Unaffiliated companies (cost $697,337,073) $ 743,524,902
Affiliated companies (cost $23,100,101) 543,874
---------------
744,068,776
- --------------------------------------------------------------------------------
Cash 497,785
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 599,019
Interest and dividends 5,695
Other 7,829
---------------
Total assets 745,179,104
- --------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased 19,829,193
Shares of beneficial interest redeemed 949,289
Shareholder reports 484,859
Transfer and shareholder servicing agent fees 200,173
Distribution and service plan fees 139,397
Trustees' compensation 137,988
Other 47,055
---------------
Total liabilities 21,787,954
- --------------------------------------------------------------------------------
Net Assets $ 723,391,150
===============
- --------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $1,941,983,592
- --------------------------------------------------------------------------------
Accumulated net investment loss (4,709,776)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (1,237,514,268)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 23,631,602
---------------
Net Assets $ 723,391,150
===============
9 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $342,327,016 and 29,715,999
shares of beneficial interest outstanding) $11.52
Maximum offering price per share (net asset
value plus sales charge of 5.75% of offering price) $12.22
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $275,545,400 and 24,883,938 shares
of beneficial interest outstanding) $11.07
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $82,405,478 and 7,444,604 shares of
beneficial interest outstanding) $11.07
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net
assets of $11,161,814 and 974,260 shares of
beneficial interest outstanding) $11.46
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $11,951,442
and 1,010,626 shares of beneficial interest outstanding) $11.83
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER MIDCAP FUND
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended April 30, 2003
- ------------------------------------------------------------------------------
Investment Income
Dividends $ 820,214
- ------------------------------------------------------------------------------
Interest 554,560
------------
Total investment income 1,374,774
- ------------------------------------------------------------------------------
Expenses
Management fees 2,488,059
- ------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 348,167
Class B 1,353,875
Class C 395,076
Class N 23,922
- ------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,119,328
Class B 1,066,497
Class C 304,224
Class N 24,662
Class Y 13,996
- ------------------------------------------------------------------------------
Shareholder reports 353,845
- ------------------------------------------------------------------------------
Trustees' compensation 7,266
- ------------------------------------------------------------------------------
Custodian fees and expenses 5,051
- ------------------------------------------------------------------------------
Other 73,624
------------
Total expenses 7,577,592
Less reduction to custodian expenses (120)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class A (665,872)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (758,160)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (210,195)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class N (6,768)
------------
Net expenses 5,936,477
- ------------------------------------------------------------------------------
Net Investment Loss (4,561,703)
- ------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (85,769,503)
Closing and expiration of option contracts written 191,097
------------
Net realized loss (85,578,406)
- ------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 93,448,645
------------
Net realized and unrealized gain 7,870,239
- ------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 3,308,536
============
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER MIDCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
April 30, 2003 October 31,
(Unaudited) 2002
- --------------------------------------------------------------------------------
Operations
Net investment loss $(4,561,703) $ (14,191,329)
- --------------------------------------------------------------------------------
Net realized loss (85,578,406) (235,256,189)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation 93,448,645 31,615,304
----------------------------
Net increase (decrease) in net assets
resulting from operations 3,308,536 (217,832,214)
- --------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets
resulting from beneficial interest
transactions:
Class A (11,714,381) (79,503,847)
Class B (16,352,042) (59,860,957)
Class C (1,203,299) (19,236,764)
Class N 2,178,678 8,462,388
Class Y 4,178,724 4,409,028
- --------------------------------------------------------------------------------
Net Assets
Total decrease (19,603,784) (363,562,366)
- --------------------------------------------------------------------------------
Beginning of period 742,994,934 1,106,557,300
----------------------------
End of period [including accumulated net
investment loss of $4,709,776 and
$148,073, respectively] $723,391,150 $742,994,934
============================
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.43 $ 14.42 $ 30.41 $ 19.88 $ 10.83 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.13) (.02) .04 (.04) (.02)
Net realized and unrealized gain (loss) .13 (2.86) (15.97) 10.49 9.11 .85
---------------------------------------------------------------------------
Total from investment operations .09 (2.99) (15.99) 10.53 9.07 .83
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.52 $11.43 $14.42 $30.41 $19.88 $10.83
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.79% (20.74)% (52.58)% 52.97% 83.79% 8.30%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $342,327 $351,983 $532,338 $1,055,967 $167,879 $14,607
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $334,180 $460,797 $718,814 $ 728,168 $ 60,644 $ 7,185
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.93)% (1.06)% (0.09)% 0.28% (0.49)% (0.33)%
Expenses, gross 1.73% 1.68% 1.33% 1.16% 1.40% 1.59% 4
Expenses, net 1.33% 5,6 1.47% 5,6 1.32% 5,6 1.16% 5 1.40% 5 1.59%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
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. 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.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class B (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.02 $ 14.02 $ 29.79 $ 19.62 $ 10.77 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.11) (.30) (.15) (.07) (.07) (.05)
Net realized and unrealized gain (loss) .16 (2.70) (15.62) 10.24 8.94 .82
---------------------------------------------------------------------------
Total from investment operations .05 (3.00) (15.77) 10.17 8.87 .77
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.07 $11.02 $14.02 $29.79 $19.62 $10.77
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.45% (21.40)% (52.94)% 51.83% 82.40% 7.70%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $275,545 $291,397 $438,962 $874,830 $118,611 $7,654
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $272,931 $385,917 $592,096 $594,390 $ 40,455 $3,521
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.67)% (1.85)% (0.84)% (0.48)% (1.25)% (1.06)%
Expenses, gross 2.63% 2.48% 2.08% 1.91% 2.16% 2.35% 4
Expenses, net 2.07% 5,6 2.27% 5,6 2.07% 5,6 1.91% 5 2.16% 5 2.35%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
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. 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.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER MIDCAP FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class C (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.02 $ 14.02 $ 29.78 $ 19.60 $ 10.76 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) (.30) (.15) (.07) (.06) (.05)
Net realized and unrealized gain (loss) .14 (2.70) (15.61) 10.25 8.92 .81
-------------------------------------------------------------------------------
Total from investment operations .05 (3.00) (15.76) 10.18 8.86 .76
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Distributions in excess of net
realized gain -- -- -- -- (.02) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.07 $11.02 $14.02 $29.78 $19.60 $10.76
===============================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.45% (21.40)% (52.92)% 51.94% 82.38% 7.60%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $82,405 $ 83,351 $128,230 $247,566 $26,482 $2,587
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $79,665 $112,436 $170,129 $161,221 $ 9,066 $1,271
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.68)% (1.84)% (0.85)% (0.48)% (1.26)% (1.07)%
Expenses, gross 2.61% 2.47% 2.08% 1.91% 2.16% 2.35% 4
Expenses, net 2.08% 5,6 2.26% 5,6 2.07% 5,6 1.91% 5 2.16% 5 2.35%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
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. 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.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER MIDCAP FUND
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 $ 11.38 $ 14.40 $ 19.54
- --------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) (.14) (.05)
Net realized and unrealized gain (loss) .17 (2.88) (5.09)
----------------------------------------
Total from investment operations .08 (3.02) (5.14)
- --------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- --
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $11.46 $11.38 $14.40
========================================
- --------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 0.70% (20.97)% (26.31)%
- --------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,162 $8,846 $2,268
- --------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,661 $6,576 $1,250
- --------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.32)% (1.28)% (0.94)%
Expenses, gross 1.85% 1.87% 1.73%
Expenses, net 1.71% 4,5 1.66% 4,5 1.72% 4,5
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84%
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. Net of voluntary waiver of transfer agent fees.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER MIDCAP FUND
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class Y (Unaudited) 2002 2001 2000 1999 1998 1
- -------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 11.71 $ 14.69 $ 30.86 $ 20.07 $ 10.88 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.12) (.08) (.08) (.02) (.01) .01
Net realized and unrealized gain (loss) .24 (2.90) (16.09) 10.81 9.22 .87
----------------------------------------------------------------------------
Total from investment operations .12 (2.98) (16.17) 10.79 9.21 .88
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions in excess of net realized gain -- -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.83 $11.71 $14.69 $30.86 $20.07 $10.88
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 1.03% (20.29)% (52.40)% 53.76% 84.69% 8.80%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,951 $7,419 $4,759 $115 $2 $1
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,115 $6,449 $2,720 $ 33 $2 $1
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.75)% (0.39)% (0.12)% 0.60% (0.06)% 0.05%
Expenses, gross 1.15% 0.83% 1.07% 0.74% 1.03% 1.09% 4
Expenses, net 1.15% 5 0.83% 5 1.02% 5,6 0.74% 5 1.03% 5 1.09%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 51% 84% 23% 61% 117%
1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
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. 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.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint
repurchase agreement accounts. These balances are invested in one or more
repurchase agreements, secured by U.S. government securities. Securities
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each agreement requires that the market value of
the collateral be sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the agreement, retention
of the collateral may be subject to legal proceedings.
18 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by capital loss carryforwards, if any, to shareholders.
Therefore, no federal income or excise tax provision is required.
As of April 30, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $1,236,791,274. 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
unused capital loss carryforwards as follows:
Expiring
----------------------
2006 $ 2,792,572
2007 3,516,822
2008 142,020,390
2009 764,990,986
2010 237,892,098
--------------
Total $1,151,212,868
==============
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended April 30, 2003, the Fund's projected benefit obligations were decreased
by $4,304 and payments of $3,871 were made to retired trustees, resulting in an
accumulated liability of $139,896 as of April 30, 2003.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the
Fund. Under the plan, the compensation deferred is invested by the Fund in the
fund(s) selected by the trustee. Deferral of trustees' fees under the plan will
not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share.
19 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. 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.
No distributions were paid during the six months ended April 30, 2003 and
the year ended October 31, 2002.
- --------------------------------------------------------------------------------
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 Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class A
Sold 4,114,279 $ 45,766,376 10,246,014 $ 140,041,291
Redeemed (5,206,092) (57,480,757) (16,353,774) (219,545,138)
---------------------------------------------------------------
Net decrease (1,091,813) $(11,714,381) (6,107,760) $ (79,503,847)
===============================================================
- --------------------------------------------------------------------------------
Class B
Sold 1,990,184 $ 21,198,964 5,434,402 $ 72,796,103
Redeemed (3,542,899) (37,551,006) (10,300,242) (132,657,060)
---------------------------------------------------------------
Net decrease (1,552,715) $(16,352,042) (4,865,840) $ (59,860,957)
===============================================================
20 | OPPENHEIMER MIDCAP FUND
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class C
Sold 1,044,223 $ 11,096,891 2,545,426 $ 33,944,222
Redeemed (1,163,927) (12,300,190) (4,128,477) (53,180,986)
---------------------------------------------------------------
Net decrease (119,704) $ (1,203,299) (1,583,051) $(19,236,764)
===============================================================
- --------------------------------------------------------------------------------
Class N
Sold 315,808 $ 3,475,070 900,502 $ 11,916,305
Redeemed (118,536) (1,296,392) (281,019) (3,453,917)
---------------------------------------------------------------
Net increase 197,272 $ 2,178,678 619,483 $ 8,462,388
===============================================================
- --------------------------------------------------------------------------------
Class Y
Sold 479,549 $ 5,330,470 505,761 $ 7,112,046
Redeemed (102,216) (1,151,746) (196,412) (2,703,018)
---------------------------------------------------------------
Net increase 377,333 $ 4,178,724 309,349 $ 4,409,028
===============================================================
- --------------------------------------------------------------------------------
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
$223,348,398 and $235,990,244, 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 provides for an annual fee of
0.75% of the first $200 million of average annual net assets of the Fund; 0.72%
of the next $200 million; 0.69% of the next $200 million; 0.66% of the next
$200 million; 0.60% of the next $700 million; 0.58% of the next $1 billion and
0.56% of average annual net assets in excess of $2.5 billion.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
21 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
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 $542,027 $164,525 $53,999 $703,547 $85,401 $22,453
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 $4,962 $509,161 $10,477 $6,903
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
A Shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the six months ended April 30, 2003, payments
under the Class A Plan totaled $348,167, all of which were paid by the
Distributor to recipients, and included $32,564 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.
22 | OPPENHEIMER MIDCAP FUND
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 $1,353,875 $1,061,684 $18,995,716 6.89%
Class C Plan 395,076 93,886 3,186,207 3.87
Class N Plan 23,922 20,255 233,329 2.09
- --------------------------------------------------------------------------------
5. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a premium whether or not the
option is exercised. The Fund also has the additional risk of not being able to
enter into a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended April 30, 2003 was as follows:
Call Options
-------------------------
Number of Amount of
Contracts Premiums
----------------------------------------------------------------
Options outstanding as of October 31, 2002 -- $ --
Options written 1,300 191,097
Options closed or expired (1,300) (191,097)
----------------------
Options outstanding as of April 30, 2003 -- $ --
======================
23 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
6. Illiquid or Restricted Securities
As of April 30, 2003, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of April 30, 2003 was
$543,874, which represents 0.08% of the Fund's net assets, all of which is
considered restricted. Information concerning restricted securities is as
follows:
Acquisition Valuation as of Unrealized
Security Dates Cost April 30, 2003 Depreciation
- -------------------------------------------------------------------------------------------------------
Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C 12/13/00 $8,999,997 $363,933 $8,636,064
- -------------------------------------------------------------------------------------------------------
Centerpoint Broadband Technologies,
Inc., Cv., Series D 10/23/00 5,999,997 -- 5,999,997
- -------------------------------------------------------------------------------------------------------
fusionOne, Inc., 8% Non-Cum.
Cv., Series D 9/6/00 9,100,104 63,181 9,036,923
- -------------------------------------------------------------------------------------------------------
ITF Optical Technologies, Inc.,
Cv., Series A 4/7/00 5,000,000 116,760 4,883,240
- --------------------------------------------------------------------------------
7. 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.
24 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
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 Trustees, 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.
25 | OPPENHEIMER MIDCAP FUND
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)