UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04797
Oppenheimer Quest Capital Value Fund, Inc.
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: October 31, 2002 - April 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited
Market Value
Shares See Note 1
- -------------------------------------------------------------------------
Common Stocks--93.2%
- -------------------------------------------------------------------------
Consumer Discretionary--15.6%
- -------------------------------------------------------------------------
Hotels, Restaurants & Leisure--1.6%
Darden
Restaurants, Inc. 108,100 $ 1,892,831
- -------------------------------------------------------------------------
Yum! Brands, Inc. 1 72,000 1,778,400
-------------------
3,671,231
- -------------------------------------------------------------------------
Media--10.2%
AOL Time
Warner, Inc. 1 195,096 2,668,913
- -------------------------------------------------------------------------
EchoStar
Communications
Corp., Cl. A 1 37,900 1,135,484
- -------------------------------------------------------------------------
General Motors
Corp., Cl. H 1 165,265 1,950,127
- -------------------------------------------------------------------------
Lamar Advertising
Co., Cl. A 1 261,100 9,378,712
- -------------------------------------------------------------------------
Liberty Media
Corp., Cl. A 1 217,000 2,387,000
- -------------------------------------------------------------------------
Omnicom
Group, Inc. 99,121 6,135,590
-------------------
23,655,826
- -------------------------------------------------------------------------
Multiline Retail--2.9%
Dollar General Corp. 297,000 4,318,380
- -------------------------------------------------------------------------
Target Corp. 68,300 2,283,952
-------------------
6,602,332
- -------------------------------------------------------------------------
Specialty Retail--0.9%
Office Depot, Inc. 1 173,000 2,190,180
- -------------------------------------------------------------------------
Energy--6.1%
- -------------------------------------------------------------------------
Energy Equipment & Services--3.0%
GlobalSantaFe Corp. 149,300 3,159,188
- -------------------------------------------------------------------------
National-Oilwell, Inc. 1 182,600 3,832,774
-------------------
6,991,962
- -------------------------------------------------------------------------
Oil & Gas--3.1%
Anadarko
Petroleum Corp. 158,800 7,050,720
- -------------------------------------------------------------------------
Financials--17.4%
- -------------------------------------------------------------------------
Banks--4.5%
Bank One Corp. 162,400 5,854,520
- -------------------------------------------------------------------------
M&T Bank Corp. 37,000 3,125,390
- -------------------------------------------------------------------------
Wells Fargo Co. 29,000 1,399,540
-------------------
10,379,450
Market Value
Shares See Note 1
- -------------------------------------------------------------------------
Diversified Financials--5.0%
Citigroup, Inc. 88,000 $ 3,454,000
- -------------------------------------------------------------------------
Freddie Mac 139,800 8,094,420
-------------------
11,548,420
- -------------------------------------------------------------------------
Insurance--7.9%
American International
Group, Inc. 62,000 3,592,900
- -------------------------------------------------------------------------
John Hancock
Financial Services, Inc. 82,000 2,379,640
- -------------------------------------------------------------------------
Nationwide Financial
Services, Inc., Cl. A 109,900 3,093,685
- -------------------------------------------------------------------------
Partnerre
Holdings Ltd. 63,100 3,375,850
- -------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd. 89,000 2,354,050
- -------------------------------------------------------------------------
XL Capital Ltd., Cl. A 42,200 3,473,060
-------------------
18,269,185
- -------------------------------------------------------------------------
Health Care--8.5%
- -------------------------------------------------------------------------
Biotechnology--1.0%
Invitrogen Corp. 1 71,000 2,321,700
- -------------------------------------------------------------------------
Health Care Equipment & Supplies--3.1%
Millipore Corp. 1 154,532 5,277,268
- -------------------------------------------------------------------------
Sybron Dental
Specialties, Inc. 1 95,500 1,943,425
-------------------
7,220,693
- -------------------------------------------------------------------------
Health Care Providers & Services--3.0%
IMS Health, Inc. 162,383 2,500,698
- -------------------------------------------------------------------------
Pharmaceutical Product
Development, Inc. 1 167,714 4,389,076
-------------------
6,889,774
- -------------------------------------------------------------------------
Pharmaceuticals--1.4%
Taro Pharmaceutical
Industries Ltd. 1 70,544 3,228,093
- -------------------------------------------------------------------------
Industrials--26.0%
- -------------------------------------------------------------------------
Aerospace & Defense--5.7%
Alliant
Techsystems, Inc. 1 64,926 3,487,825
- -------------------------------------------------------------------------
General
Dynamics Corp. 65,900 4,090,413
- -------------------------------------------------------------------------
L-3 Communications
Holdings, Inc. 1 51,200 2,273,280
- -------------------------------------------------------------------------
Rockwell Collins, Inc. 157,400 3,365,212
-------------------
13,216,730
7 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- -------------------------------------------------------------------------
Commercial Services & Supplies--3.4%
Aramark Corp., Cl. B 1 232,100 $ 5,329,016
- -------------------------------------------------------------------------
Certegy, Inc. 1 104,000 2,598,960
-----------------
7,927,976
- -------------------------------------------------------------------------
Industrial Conglomerates--2.8%
General Electric Co. 220,600 6,496,670
- -------------------------------------------------------------------------
Machinery--10.4%
Actuant Corp., Cl. A 1 59,200 2,196,320
- -------------------------------------------------------------------------
Ingersoll-Rand
Co., Cl. A 69,900 3,081,192
- -------------------------------------------------------------------------
Navistar
International Corp. 1 80,800 2,254,320
- -------------------------------------------------------------------------
Oshkosh Truck Corp. 79,700 4,463,200
- -------------------------------------------------------------------------
Paccar, Inc. 85,600 4,999,896
- -------------------------------------------------------------------------
Parker-Hannifin Corp. 105,600 4,295,808
- -------------------------------------------------------------------------
SPX Corp. 1 80,800 2,731,040
-----------------
24,021,776
- -------------------------------------------------------------------------
Road & Rail--3.7%
Canadian National
Railway Co. 172,700 8,398,401
- -------------------------------------------------------------------------
Information Technology--12.2%
- -------------------------------------------------------------------------
Communications Equipment--1.1%
Cisco Systems, Inc. 1 171,400 2,577,856
- -------------------------------------------------------------------------
Computers & Peripherals--0.5%
EMC Corp. 1 134,400 1,221,696
- -------------------------------------------------------------------------
Electronic Equipment & Instruments--9.3%
Arrow
Electronics, Inc. 1 100,000 1,688,000
- -------------------------------------------------------------------------
Diebold, Inc. 202,900 8,111,942
- -------------------------------------------------------------------------
Flextronics
International Ltd. 1 181,000 1,583,750
- -------------------------------------------------------------------------
Mettler-Toledo
International, Inc. 1 90,900 3,226,950
- -------------------------------------------------------------------------
Roper Industries, Inc. 112,000 3,426,080
- -------------------------------------------------------------------------
Waters Corp. 1 143,538 3,446,347
-----------------
21,483,069
- -------------------------------------------------------------------------
Software--1.3%
Microsoft Corp. 116,000 2,966,120
Market Value
Shares See Note 1
- -------------------------------------------------------------------------
Materials--1.0%
- -------------------------------------------------------------------------
Metals & Mining--1.0%
Alcan, Inc. 76,000 $ 2,229,840
- -------------------------------------------------------------------------
Utilities--6.4%
- -------------------------------------------------------------------------
Electric Utilities--4.8%
Cinergy Corp. 151,000 5,155,140
- -------------------------------------------------------------------------
Exelon Corp. 49,200 2,609,568
- -------------------------------------------------------------------------
FirstEnergy Corp. 101,700 3,430,341
-----------------
11,195,049
- -------------------------------------------------------------------------
Multi-Utilities--1.6%
Vectren Corp. 156,500 3,638,625
-----------------
Total Common Stocks
(Cost $201,561,614) 215,393,374
Principal
Amount
- -------------------------------------------------------------------------
Short-Term Notes--4.0%
Federal Home
Loan Bank,
1.30%, 5/12/03 $ 3,000,000 2,998,946
- -------------------------------------------------------------------------
Student Loan
Marketing Assn.,
1.25%, 5/1/03 6,234,000 6,234,000
-----------------
Total Short-Term Notes
(Cost $9,232,946) 9,232,946
- -------------------------------------------------------------------------
Total Investments,
at Value
(Cost $210,794,560) 97.2% 224,626,320
- -------------------------------------------------------------------------
Other Assets
Net of Liabilities 2.8 6,450,925
------------------------------------------
Net Assets 100.0% 231,077,245
==========================================
Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES Unaudited
April 30, 2003
- ---------------------------------------------------------------------------
Assets
Investments, at value (cost $210,794,560)--
see accompanying statement $ 224,626,320
- ---------------------------------------------------------------------------
Cash 2,868,167
- ---------------------------------------------------------------------------
Receivables and other assets:
Shares of capital stock sold 4,113,291
Interest and dividends 94,695
Other 7,061
-------------
Total assets 231,709,534
- ---------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of capital stock redeemed 416,353
Transfer and shareholder servicing agent fees 61,240
Shareholder reports 59,110
Distribution and service plan fees 44,520
Directors' compensation 20,991
Other 30,075
-------------
Total liabilities 632,289
- ---------------------------------------------------------------------------
Net Assets $231,077,245
=============
- ---------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of capital stock $ 1,182
- ---------------------------------------------------------------------------
Additional paid-in capital 229,175,953
- ---------------------------------------------------------------------------
Accumulated net investment loss (768,151)
- ---------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (11,163,499)
- ---------------------------------------------------------------------------
Net unrealized appreciation on investments 13,831,760
-------------
Net Assets $231,077,245
=============
9 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- -----------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price
per share (based on net assets of
$162,901,535 and 8,204,285 shares of
capital stock outstanding) $19.86
Maximum offering price per share
(net asset value plus sales charge
of 5.75% of offering price) $21.07
- -----------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $44,743,968
and 2,383,802 shares of capital stock outstanding) $18.77
- -----------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred
sales charge) and offering price per share
(based on net assets of $19,496,008
and 1,037,492 shares of capital stock outstanding) $18.79
- -----------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $3,935,734
and 199,132 shares of capital stock outstanding) $19.76
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended April 30, 2003
- ----------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $11,401) $ 1,235,985
- ----------------------------------------------------------------------------
Interest 72,885
-------------
Total investment income 1,308,870
- ----------------------------------------------------------------------------
Expenses
Management fees 1,073,302
- ----------------------------------------------------------------------------
Distribution and service plan fees:
Class A 206,260
Class B 211,366
Class C 88,964
Class N 8,046
- ----------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 269,696
Class B 93,824
Class C 39,863
Class N 5,968
- ----------------------------------------------------------------------------
Shareholder reports 75,613
- ----------------------------------------------------------------------------
Directors' compensation 9,820
- ----------------------------------------------------------------------------
Custodian fees and expenses 2,194
- ----------------------------------------------------------------------------
Other 1,300
-------------
Total expenses 2,086,216
Less reduction to custodian expenses (286)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class B (22,561)
Less voluntary waiver of transfer and shareholder
servicing agent fees--Class C (8,462)
-------------
Net expenses 2,054,907
- ----------------------------------------------------------------------------
Net Investment Loss (746,037)
- ----------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized loss on investments (6,785,041)
- ----------------------------------------------------------------------------
Net change in unrealized appreciation on investments 16,089,311
-------------
Net realized and unrealized gain 9,304,270
- ----------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $8,558,233
=============
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
April 30, 2003 October 31,
(Unaudited) 2002
- ------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $ (746,037) $ (1,768,281)
- ------------------------------------------------------------------------------------------------------------
Net realized loss (6,785,041) (4,187,269)
- ------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 16,089,311 (14,161,865)
-------------------------------------
Net increase (decrease) in net assets resulting
from operations 8,558,233 (20,117,415)
- ------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Distributions from net realized gain:
Class A -- (3,391,280)
Class B -- (804,584)
Class C -- (259,169)
Class N -- (6,440)
- ------------------------------------------------------------------------------------------------------------
Capital Stock Transactions
Net increase in net assets resulting from capital stock transactions:
Class A 6,554,568 12,204,180
Class B 1,193,183 13,511,982
Class C 1,858,162 8,834,017
Class N 780,749 3,077,772
- ------------------------------------------------------------------------------------------------------------
Net Assets
Total increase 18,944,895 13,049,063
- ------------------------------------------------------------------------------------------------------------
Beginning of period 212,132,350 199,083,287
-------------------------------------
End of period [including accumulated net investment
loss of $768,151 and $22,114, respectively] $231,077,245 $212,132,350
=====================================
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class A (Unaudited) 2002 2001 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 19.07 $ 20.91 $ 33.65 $ 33.66 $ 32.11 $ 41.63
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.13) (.11) (.25) (.06) .05
Net realized and unrealized gain (loss) .84 (1.25) (2.59) 6.08 2.70 4.28
--------------------------------------------------------------------------------
Total from investment operations .79 (1.38) (2.70) 5.83 2.64 4.33
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- (.04) (.13)
Dividends in excess of net
investment income -- -- -- -- -- 1 --
Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.46) (10.04) (5.84) (1.09) (13.85)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.86 $19.07 $20.91 $33.65 $33.66 $32.11
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 4.14% (6.90)% (9.91)% 20.63% 8.47% 13.28%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $162,902 $150,161 $154,346 $177,876 $224,995 $262,669
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $152,701 $164,479 $161,187 $181,216 $256,450 $280,821
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.49)% (0.61)% (0.44)% (0.73)% (0.17)% 0.13%
Expenses, gross 1.71% 1.71% 1.67% 1.73% 1.71% 1.67% 4
Expenses, net 1.71% 5 1.71% 5,6 1.67% 5 1.73% 5 1.58% 5,7 1.29% 7
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
7. Net of voluntary waiver of management fees and distribution and service plan
fees.
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class B (Unaudited) 2002 2001 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 18.09 $ 19.99 $ 32.77 $ 33.07 $ 31.71 $ 41.41
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.10) (.19) .05 (.34) (.19) (.06)
Net realized and unrealized gain (loss) .78 (1.25) (2.79) 5.88 2.60 4.15
--------------------------------------------------------------------------------
Total from investment operations .68 (1.44) (2.74) 5.54 2.41 4.09
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- -- (.07)
Dividends in excess of net
investment income -- -- -- -- -- 1 --
Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.46) (10.04) (5.84) (1.05) (13.79)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.77 $18.09 $19.99 $32.77 $33.07 $31.71
================================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 3.76% (7.53)% (10.48)% 20.02% 7.83% 12.54%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $44,744 $42,010 $34,278 $17,429 $15,634 $9,562
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $42,639 $42,900 $27,144 $15,719 $14,112 $4,586
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.21)% (1.30)% (1.13)% (1.26)% (0.80)% (0.57)%
Expenses, gross 2.52% 2.41% 2.26% 2.27% 2.27% 2.24% 4
Expenses, net 2.41% 5,6 2.41% 5,7 2.26% 5 2.27% 5 2.19% 5,8 2.01% 8
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
7. Voluntary waiver of transfer agent fees less than 0.01%.
8. Net of voluntary waiver of management fees.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class C (Unaudited) 2002 2001 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 18.11 $ 20.01 $ 32.80 $ 33.09 $ 31.73 $ 41.42
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.09) (.13) .11 (.38) (.17) (.13)
Net realized and unrealized gain (loss) .77 (1.31) (2.86) 5.93 2.58 4.21
--------------------------------------------------------------------------------
Total from investment operations .68 (1.44) (2.75) 5.55 2.41 4.08
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- -- (.05)
Dividends in excess of net
investment income -- -- -- -- -- 1 --
Distributions from net realized gain -- (.46) (10.04) (5.84) (1.05) (13.72)
--------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.46) (10.04) (5.84) (1.05) (13.77)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.79 $18.11 $20.01 $32.80 $33.09 $31.73
--------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 3.76% (7.52)% (10.50)% 20.05% 7.82% 12.49%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $19,496 $16,979 $10,272 $5,053 $4,632 $2,972
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $17,954 $15,323 $ 7,898 $4,969 $4,117 $1,582
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.23)% (1.30)% (1.13)% (1.25)% (0.80)% (0.58)%
Expenses, gross 2.53% 2.41% 2.26% 2.27% 2.26% 2.23% 4
Expenses, net 2.43% 5,6 2.41% 5,7 2.26% 5 2.27% 5 2.18% 5,8 2.01% 8
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 75% 80% 77% 79% 30%
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
5. Reduction to custodian expenses less than 0.01%.
6. Net of voluntary waiver of transfer agent fees.
7. Voluntary waiver of transfer agent fees less than 0.01%.
8. Net of voluntary waiver of management fees.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
April 30, 2003 Oct. 31,
Class N (Unaudited) 2002 2001 1
- -------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 19.00 $ 20.88 $ 23.25
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.08) (.17) (.03)
Net realized and unrealized gain (loss) .84 (1.25) (2.34)
----------------------------------
Total from investment operations .76 (1.42) (2.37)
- -------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
Dividends in excess of net investment income -- -- --
Distributions from net realized gain -- (.46) --
----------------------------------
Total dividends and/or
distributions to shareholders -- (.46) --
- -------------------------------------------------------------------------------------------
Net asset value, end of period $19.76 $19.00 $20.88
----------------------------------
- -------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 4.00% (7.10)% (10.19)%
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,936 $2,983 $187
- -------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,251 $1,475 $ 38
- -------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.77)% (0.88)% (0.96)%
Expenses, gross 1.95% 1.87% 1.75%
Expenses, net 1.95% 4 1.87% 4,5 1.75% 4
- -------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 75% 80%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Quest Capital Value Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund's investment objective is to seek capital
appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Manager has entered into a sub-advisory agreement with OpCap
Advisors.
The Fund offers Class A, Class B, Class C and Class N shares. Class A shares
are sold at their offering price, which is normally net asset value plus a
front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. All classes of
shares have identical rights and voting privileges. Earnings, net assets and
net asset value per share may differ by minor amounts due to each class having
its own expenses directly attributable to that class. Classes A, B, C and N
have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Directors, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Directors. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by capital loss carryforwards, if any, to shareholders.
Therefore, no federal income or excise tax provision is required.
17 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
As of April 30, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $10,729,797. This estimated
capital loss carryforward represents the carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules for the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended April 30, 2003, the Fund did not use carryforward to offset
capital gains realized. During the year ended October 31, 2002, the Fund did
not use carryforward to offset capital gains realized.
As of October 31, 2002, the Fund had available for federal income tax purposes
an unused capital loss carryforward as follows:
Expiring
----------------------
2010 $3,944,756
- --------------------------------------------------------------------------------
Directors' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the six months
ended April 30, 2003, the Fund's projected benefit obligations were decreased
by $104 and payments of $563 were made to retired directors, resulting in an
accumulated liability of $21,449 as of April 30, 2003.
The Board of Directors has adopted a deferred compensation plan for
independent directors that enables directors to elect to defer receipt of all
or a portion of the annual compensation they are entitled to receive from the
Fund. Under the plan, the compensation deferred is invested by the Fund in the
fund(s) selected by the director. Deferral of directors' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also, due to
timing of dividends and distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or net realized
gain was recorded by the Fund.
18 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
The tax character of distributions paid during the six months ended April 30,
2003 and the year ended October 31, 2002 was as follows:
Six Months Ended Year Ended
April 30, 2003 October 31, 2002
------------------------------------------------------
Distributions paid from:
Ordinary income $-- $ --
Long-term capital gain -- 4,461,473
Return of capital -- --
---------------------------
Total $-- $4,461,473
===========================
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
- --------------------------------------------------------------------------------
2. Shares of Capital Stock
The Fund has authorized one billion shares of $.0001 par value capital stock in
the aggregate to be apportioned among each class of shares. Transactions in
shares of capital stock were as follows:
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------
Class A
Sold 1,256,844 $ 24,095,391 2,235,230 $ 47,891,615
Dividends and/or
distributions reinvested -- -- 104,423 2,298,369
Redeemed (928,607) (17,540,823) (1,845,506) (37,985,804)
-------------------------------------------------------------------
Net increase 328,237 $ 6,554,568 494,147 $12,204,180
===================================================================
- -----------------------------------------------------------------------------------------------------------
Class B
Sold 434,345 $ 7,926,848 1,385,300 $ 28,277,580
Dividends and/or
distributions reinvested -- -- 34,608 726,779
Redeemed (373,219) (6,733,665) (812,006) (15,492,377)
-------------------------------------------------------------------
Net increase 61,126 $ 1,193,183 607,902 $13,511,982
===================================================================
19 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- ------------------------------------------------------------------------------------------------------------
2. Shares of Capital Stock Continued
Six Months Ended April 30, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
Class C
Sold 294,771 $ 5,367,553 691,805 $14,002,918
Dividends and/or
distributions reinvested -- -- 10,995 231,241
Redeemed (194,839) (3,509,391) (278,450) (5,400,142)
--------------------------------------------------------------------
Net increase 99,932 $ 1,858,162 424,350 $8,834,017
====================================================================
- ------------------------------------------------------------------------------------------------------------
Class N
Sold 75,950 $ 1,437,839 163,175 $ 3,353,343
Dividends and/or
distributions reinvested -- -- 292 6,420
Redeemed (33,792) (657,090) (15,463) (281,991)
--------------------------------------------------------------------
Net increase 42,158 $ 780,749 148,004 $3,077,772
====================================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2003, were
$79,150,688 and $67,197,034, respectively.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
1.00% of the first $400 million of average annual net assets of the Fund, 0.90%
of the next $400 million, and 0.85% of average annual net assets in excess of
$800 million.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager retains OpCap Advisors (the Sub-Advisor) to
provide the day-to-day portfolio management of the Fund. For the six months
ended April 30, 2003, the Manager paid $427,225 to the Sub-Advisor for its
services to the Fund.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a $19.75 per account fee.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees for all classes, up to an annual rate of 0.35% of average net assets per
class. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
20 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- ---------------------------------------------------------------------------------------------------------------------------
April 30, 2003 $174,860 $55,463 $3,816 $161,693 $32,484 $11,527
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Six Months Ended Distributor Distributor Distributor Distributor
- -----------------------------------------------------------------------------------------------------
April 30, 2003 $713 $63,678 $5,925 $1,797
- --------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. The Fund has adopted a Distribution
and Service Plan for Class A shares. Under the plan the Fund paid an
asset-based sales charge to the Distributor at an annual rate equal to 0.10% of
average annual net assets of Class A shares of the Fund. (The Board of
Directors can set this rate up to 0.25%.) Effective January 1, 2003, the Board
of Directors has voluntarily reduced the asset-based sales charge in Class A
shares to zero. The Fund also pays a service fee to the Distributor of 0.25% of
the average annual net assets of Class A shares. For the six months ended April
30, 2003, payments under the Class A plan totaled $206,260, all of which were
paid by the Distributor to recipients, and included $5,568 paid to an affiliate
of the Manager.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.
Distribution fees paid to the Distributor for the six months ended April 30,
2003, were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ---------------------------------------------------------------------------------------------------
Class B Plan $211,366 $172,560 $1,365,177 3.05%
Class C Plan 88,964 38,010 299,915 1.54
Class N Plan 8,046 7,460 85,010 2.16
21 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
5. Borrowing and Lending Arrangements
Bank Borrowings. The Fund had the ability to borrow from banks for temporary or
emergency purposes. Asset coverage for borrowings must be at least 300%. The
Fund and other Oppenheimer funds participated in a $400 million unsecured line
of credit from a bank, for liquidity purposes. Under that line of credit, each
fund was charged interest on its borrowings at a rate equal to the Federal
Funds rate plus 0.45%. The Fund paid a commitment fee on its pro rata share of
the average unutilized amount of the credit facility at a rate of 0.08% per
annum. The credit facility was terminated on November 12, 2002, when the Fund
entered into the interfund borrowing and lending arrangements described below.
The Fund had no outstanding borrowings under the credit facility through
November 12, 2002.
- --------------------------------------------------------------------------------
Interfund Borrowing and Lending Arrangements. Commencing November 12, 2002, the
Fund entered into an "interfund borrowing and lending arrangement" with other
funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity
purposes. The arrangement was initiated pursuant to exemptive relief granted by
the Securities and Exchange Commission to allow these affiliated funds to lend
money to, and borrow money from, each other, in an attempt to reduce borrowing
costs below those of bank loan facilities. Under the arrangement the Fund may
lend money to other Oppenheimer funds and may borrow from other Oppenheimer
funds at a rate set by the Fund's Board of Directors, based upon a
recommendation by the investment manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the six
months ended or at April 30, 2003.
22 | OPPENHEIMER QUEST CAPITAL VALUE FUND, INC.
ITEM 2. CODE OF ETHICS - NOT REQUIRED
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT - NOT REQUIRED
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. RESERVED
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of April 30, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
registrant in the reports that it files under the Securities Exchange
Act of 1934 (a) is accumulated and communicated to registrant's
management, including its principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the
U.S. Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)