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 811-5225
Oppenheimer Small Cap Value Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: October 31
Date of reporting period: November 1, 2002 - October 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of
the Fund's performance during its fiscal year ended October 31, 2003, followed
by a graphical comparison of the Fund's performance to an appropriate
broad-based market index.
Management's Discussion of Fund Performance. Although the Fund's absolute
performance during its fiscal year was driven primarily by its
security-selection strategy, its performance during the first half of the
reporting period was negatively affected by its relatively small position in
smaller, lower-quality stocks. In response, during the first calendar quarter of
2003, the portfolio managers increased the Fund's exposure to companies with
market capitalizations toward the low end of the small-cap range. While this
shift toward a position more similar to that of its benchmark, the Russell 2000
Index, benefited the Fund's performance, in the later part of the period, it was
not enough to fully offset the Fund's earlier lagging relative returns.
During the period, the Fund employed a stock selection strategy that sought
to identify undervalued stocks of companies that the portfolio managers believe
offer superior growth potential. For the past 12- months, the Fund received
particularly strong returns from its investments in consumer discretionary
stocks. Many of the stocks in this group were the beneficiaries of sustained
strength in consumer spending as low mortgage rates and incentives from car
manufacturers encouraged spending. Within the consumer discretionary group, the
Fund focused on companies we believed would benefit from the consumer's
strength. For example, Casual Male Retail Group, Inc., owner of the nation's
largest retail chain specializing in apparel for large and tall men, is seeing
its sales rise. Hasbro, Inc. also enjoyed better earnings as it recovered from
an unfortunate foray into licensing and refocused on its core business of
children's toys and board games.
A number of financial services companies also contributed positively to the
Fund's performance. Real estate investment trusts ("REITs"), such as
nursing-home property owner Ventas, Inc. gained value as the economic outlook
improved and credit concerns eased. Affiliated Managers Group, Inc. an asset
management company with equity investments in a diverse group of mid-sized
investment management firms, benefited from an increase in equity valuations
during the stock market's rally.
The Fund's bottom-up security selection strategy produced strong performance
from individual stocks in other industry groups as well. In the energy area,
exploration and production equipment supplier Maverick Tube Corp. benefited from
falling natural gas supplies and the need to tap new sources. Among industrial
companies, Continental Airlines, Inc. and AMR Corp., parent of American
Airlines, bounced back strongly when signs of economic strength suggested that
demand for air travel would rise.
6 | OPPENHEIMER SMALL CAP VALUE FUND
Of course, the Fund also suffered its share of disappointments during the
reporting period. Defense electronics firm DRS Technologies, Inc. failed to
perform as the Fund expected when it made acquisitions that investors believed
would be dilutive to earnings over the near term. The Fund's returns were also
hindered by its relatively light exposure to smaller more speculative technology
companies.
Finally, the portfolio managers increased the number of individual holdings
in the Fund from 77 at the start of the reporting period to 102 at the end. This
increase was designed to provide diversification among smaller, less liquid
stocks as the Fund attempted to bring it's various stock weightings closer to
those of its benchmark.
Comparing the Fund's Performance to the Market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each Class of shares of the
Fund held until October 31, 2003. In the case of Class A, B and C shares,
performance is measured over a ten-year period. In the case of Class N shares,
performance is measured from inception of the Class on March 1, 2001. The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B, Class C
and Class N shares, and reinvestments of all dividends and capital gains
distributions.
The Fund's performance is compared to that of the Russell 2000 Index. The
Russell 2000 Index measures the performance of the 2,000 smallest securities in
the Russell 3000 Index with an average market weight of $580 million. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the graphs
shows the effect of taxes. The Fund's performance reflects the effects of Fund
business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index.
7 | OPPENHEIMER SMALL CAP VALUE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Small Cap Russell 2000
Value Fund (Class A) Index
10/31/1993 $ 9,425 $10,000
01/31/1994 9,867 10,315
04/30/1994 9,371 9,793
07/31/1994 9,134 9,508
10/31/1994 9,429 9,965
01/31/1995 9,264 9,695
04/30/1995 9,590 10,501
07/31/1995 10,301 11,883
10/31/1995 10,260 11,793
01/31/1996 10,802 12,599
04/30/1996 11,667 13,965
07/31/1996 10,985 12,704
10/31/1996 12,021 13,751
01/31/1997 13,145 14,987
04/30/1997 12,880 13,972
07/31/1997 15,553 16,945
10/31/1997 15,954 17,785
01/31/1998 15,803 17,695
04/30/1998 17,355 19,897
07/31/1998 14,839 17,338
10/31/1998 13,553 15,679
01/31/1999 13,880 17,754
04/30/1999 14,438 18,056
07/31/1999 15,182 18,623
10/31/1999 13,605 18,010
01/31/2000 13,864 20,905
04/30/2000 14,802 21,382
07/31/2000 16,064 21,187
10/31/2000 17,197 21,145
01/31/2001 17,677 21,677
04/30/2001 17,369 20,771
07/31/2001 18,001 20,824
10/31/2001 16,677 18,459
01/31/2002 18,938 20,896
04/30/2002 20,643 22,157
07/31/2002 16,804 17,084
10/31/2002 16,435 16,324
01/31/2003 16,058 16,326
04/30/2003 17,112 17,557
07/31/2003 19,692 21,032
10/31/2003 22,374 23,403
Average Annual Total Returns of Class A Shares of the Fund at 10/31/03*
1-Year 28.31% 5-Year 9.24% 10-Year 8.39%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Small Cap Russell 2000
Value Fund (Class B) Index
10/31/1993 $10,000 $10,000
01/31/1994 10,458 10,315
04/30/1994 9,924 9,793
07/31/1994 9,660 9,508
10/31/1994 9,961 9,965
01/31/1995 9,767 9,695
04/30/1995 10,095 10,501
07/31/1995 10,832 11,883
10/31/1995 10,775 11,793
01/31/1996 11,324 12,599
04/30/1996 12,219 13,965
07/31/1996 11,491 12,704
10/31/1996 12,560 13,751
01/31/1997 13,714 14,987
04/30/1997 13,418 13,972
07/31/1997 16,184 16,945
10/31/1997 16,586 17,785
01/31/1998 16,402 17,695
04/30/1998 17,992 19,897
07/31/1998 15,361 17,338
10/31/1998 14,021 15,679
01/31/1999 14,334 17,754
04/30/1999 14,893 18,056
07/31/1999 15,641 18,623
10/31/1999 14,003 18,010
01/31/2000 14,269 20,905
04/30/2000 15,235 21,382
07/31/2000 16,534 21,187
10/31/2000 17,699 21,145
01/31/2001 18,193 21,677
04/30/2001 17,877 20,771
07/31/2001 18,527 20,824
10/31/2001 17,165 18,459
01/31/2002 19,491 20,896
04/30/2002 21,246 22,157
07/31/2002 17,295 17,084
10/31/2002 16,916 16,324
01/31/2003 16,528 16,326
04/30/2003 17,613 17,557
07/31/2003 20,267 21,032
10/31/2003 23,028 23,403
Average Annual Total Returns of Class B Shares of the Fund at 10/31/03*
1-Year 30.11% 5-Year 9.60% 10-Year 8.70%
*See Notes on page 10 for further details.
8 | OPPENHEIMER SMALL CAP VALUE FUND
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Small Cap Russell 2000
Value Fund (Class C) Index
10/31/1993 $10,000 $10,000
01/31/1994 10,452 10,315
04/30/1994 9,918 9,793
07/31/1994 9,655 9,508
10/31/1994 9,949 9,965
01/31/1995 9,762 9,695
04/30/1995 10,089 10,501
07/31/1995 10,826 11,883
10/31/1995 10,769 11,793
01/31/1996 11,314 12,599
04/30/1996 12,210 13,965
07/31/1996 11,481 12,704
10/31/1996 12,551 13,751
01/31/1997 13,707 14,987
04/30/1997 13,410 13,972
07/31/1997 16,179 16,945
10/31/1997 16,574 17,785
01/31/1998 16,397 17,695
04/30/1998 17,990 19,897
07/31/1998 15,355 17,338
10/31/1998 14,013 15,679
01/31/1999 14,335 17,754
04/30/1999 14,886 18,056
07/31/1999 15,636 18,623
10/31/1999 13,991 18,010
01/31/2000 14,241 20,905
04/30/2000 15,188 21,382
07/31/2000 16,463 21,187
10/31/2000 17,599 21,145
01/31/2001 18,067 21,677
04/30/2001 17,720 20,771
07/31/2001 18,340 20,824
10/31/2001 16,964 18,459
01/31/2002 19,239 20,896
04/30/2002 20,940 22,157
07/31/2002 17,008 17,084
10/31/2002 16,615 16,324
01/31/2003 16,203 16,326
04/30/2003 17,236 17,557
07/31/2003 19,797 21,032
10/31/2003 22,448 23,403
Average Annual Total Returns of Class C Shares of the Fund at 10/31/03*
1-Year 34.11% 5-Year 9.88% 10-Year 8.42%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[LINE CHART]
Oppenheimer Small Cap Russell 2000
Value Fund (Class N) Index
03/01/2001 $10,000 $10,000
04/30/2001 10,383 10,255
07/31/2001 10,761 10,281
10/31/2001 9,964 9,114
01/31/2002 11,311 10,317
04/30/2002 12,326 10,940
07/31/2002 10,030 8,435
10/31/2002 9,804 8,060
01/31/2003 9,574 8,061
04/30/2003 10,199 8,668
07/31/2003 11,726 10,384
10/31/2003 13,315 11,555
Average Annual Total Returns of Class N Shares of the Fund at 10/31/03*
1-Year 34.81% Since Inception 11.33%
The performance information for the Russell 2000 Index in the graphs begins on
10/31/93 for Class A, Class B and Class C and 2/28/01 for Class N shares.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
9 | OPPENHEIMER SMALL CAP VALUE FUND
NOTES
- --------------------------------------------------------------------------------
In reviewing performance please remember that past performance cannot guarantee
future results. Investment return and principal value of an investment in the
Fund will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than the original cost. Because of ongoing market volatility, the
Fund's performance may be subject to substantial fluctuations, and current
performance may be more or less than the results shown. For updates on the
Fund's performance, visit our website at www.oppenheimerfunds.com.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677) or visit the
OppenheimerFunds website at www.oppenheimerfunds.com. Read the prospectus
carefully before you invest or send money.
Prior to 4/28/00, the Fund's sub-advisor was OpCap Advisors, Inc., its advisor
until 11/22/95.
Class A shares of the Fund were first publicly offered on 1/3/89. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%. Class A shares are subject to a maximum annual 0.25%
asset-based sales charge. There is a voluntary waiver of a portion of the Class
A asset-based sales charge as described in the Prospectus.
Class B shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charges of 5% (1-year) and 2% (5-year). Because Class B shares convert to
Class A shares 72 months after purchase, the "since inception" return for Class
B does not include any contingent deferred sales charges on redemption and uses
Class A performance for the period after conversion. Class B shares are subject
to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 9/1/93. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the one-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the one-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF INVESTMENTS October 31, 2003
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- ------------------------------------------------------
Common Stocks--99.1%
- ------------------------------------------------------
Consumer Discretionary--18.8%
- ------------------------------------------------------
Hotels, Restaurants & Leisure--8.0%
AFC Enterprises, Inc. 1 400,000 $ 6,700,000
- ------------------------------------------------------
Dave & Buster's, Inc. 1 557,800 7,335,070
- ------------------------------------------------------
Intrawest Corp. 450,000 7,564,500
- ------------------------------------------------------
Pinnacle
Entertainment, Inc. 1 150,000 1,312,500
- ------------------------------------------------------
Ruby Tuesday, Inc. 430,000 11,760,500
- ------------------------------------------------------
Scientific Games
Corp., Cl. A 1 900,000 11,970,000
------------
46,642,570
- ------------------------------------------------------
Household Durables--0.7%
WCI Communities,
Inc. 1 200,000 4,360,000
- ------------------------------------------------------
Leisure Equipment & Products--2.0%
Hasbro, Inc. 325,000 7,085,000
- ------------------------------------------------------
Mega Bloks, Inc. 1 250,000 4,760,821
------------
11,845,821
- ------------------------------------------------------
Media--2.3%
AMC Entertainment,
Inc. 1 200,000 2,720,000
- ------------------------------------------------------
Journal
Communications,
Inc. 1 195,300 3,474,387
- ------------------------------------------------------
Regal Entertainment
Group 200,000 4,100,000
- ------------------------------------------------------
UGC Europe, Inc. 1 13,800 924,600
- ------------------------------------------------------
UnitedGlobalCom,
Inc., Cl. A 1 329,400 2,332,152
------------
13,551,139
- ------------------------------------------------------
Specialty Retail--5.4%
Casual Male Retail
Group, Inc. 1 1,300,000 11,570,000
- ------------------------------------------------------
Gymboree Corp. 1 225,000 3,712,500
- ------------------------------------------------------
Hollywood
Entertainment
Corp. 1 450,000 6,840,000
- ------------------------------------------------------
OfficeMax, Inc. 1 970,000 9,292,600
------------
31,415,100
- ------------------------------------------------------
Textiles, Apparel & Luxury Goods--0.4%
Quicksilver, Inc. 1 150,000 2,575,500
Market Value
Shares See Note 1
- ------------------------------------------------------
Consumer Staples--2.6%
- ------------------------------------------------------
Food Products--1.8%
Bunge Ltd. 175,000 $ 4,742,500
- ------------------------------------------------------
Flowers Foods, Inc. 232,500 5,517,225
------------
10,259,725
- ------------------------------------------------------
Tobacco--0.8%
Universal Corp. 110,000 4,793,800
- ------------------------------------------------------
Energy--7.0%
- ------------------------------------------------------
Energy Equipment & Services--2.9%
Key Energy
Services, Inc. 1 550,000 4,801,500
- ------------------------------------------------------
Maverick Tube
Corp. 1 725,000 12,245,250
------------
17,046,750
- ------------------------------------------------------
Oil & Gas--4.1%
Energy Partners Ltd. 1 500,000 6,005,000
- ------------------------------------------------------
Frontier Oil Corp. 725,900 11,614,400
- ------------------------------------------------------
Spinnaker
Exploration Co. 1 240,000 6,141,600
------------
23,761,000
- ------------------------------------------------------
Financials--21.0%
- ------------------------------------------------------
Commercial Banks--6.1%
Cullen/Frost
Bankers, Inc. 155,000 6,007,800
- ------------------------------------------------------
Dime Community
Bancshares, Inc. 225,000 6,273,000
- ------------------------------------------------------
Independence
Community Bank
Corp. 115,000 4,226,250
- ------------------------------------------------------
Republic
Bancshares, Inc. 185,000 5,385,350
- ------------------------------------------------------
UMB Financial Corp. 110,000 5,502,200
- ------------------------------------------------------
Webster Financial
Corp. 190,400 8,510,880
------------
35,905,480
- ------------------------------------------------------
Consumer Finance--1.3%
Bank Mutual Corp. 642,005 7,594,919
- ------------------------------------------------------
Diversified Financial Services--1.9%
Affiliated Managers
Group, Inc. 1 87,000 6,307,500
- ------------------------------------------------------
First Marblehead
Corp. (The) 1 300 6,645
11 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF INVESTMENTS Continued
Market Value
Shares See Note 1
- ------------------------------------------------------
Diversified Financial Services Continued
Gabelli Asset
Management, Inc. 1 138,000 $ 4,858,980
------------
11,173,125
- ------------------------------------------------------
Insurance--8.6%
Penn-America
Group, Inc. 370,600 5,651,650
- ------------------------------------------------------
Platinum
Underwriters
Holdings Ltd. 811,300 23,316,762
- ------------------------------------------------------
Protective Life Corp. 285,000 9,253,950
- ------------------------------------------------------
Scottish Re
Group Ltd. 300,000 6,543,000
- ------------------------------------------------------
StanCorp Financial
Group, Inc. 90,000 5,674,500
------------
50,439,862
- ------------------------------------------------------
Real Estate--2.4%
Newcastle
Investment Corp. 600,000 14,040,000
- ------------------------------------------------------
Thrifts & Mortgage Finance--0.7%
Doral Financial Corp. 75,000 3,787,500
- ------------------------------------------------------
Health Care--6.8%
- ------------------------------------------------------
Health Care Equipment & Supplies--0.5%
Apogent
Technologies, Inc. 1 120,000 2,634,000
- ------------------------------------------------------
Health Care Providers & Services--6.3%
Andrx Corp. 1 233,300 4,642,670
- ------------------------------------------------------
Coventry Health
Care, Inc. 1 70,000 3,832,500
- ------------------------------------------------------
Omnicare, Inc. 200,000 7,668,000
- ------------------------------------------------------
PacifiCare Health
Systems, Inc. 1 55,000 3,272,500
- ------------------------------------------------------
Province
Healthcare Co. 1 800,000 10,272,000
- ------------------------------------------------------
Universal Health
Services, Inc., Cl. B 1 155,000 7,292,750
------------
36,980,420
- ------------------------------------------------------
Industrials--17.1%
- ------------------------------------------------------
Aerospace & Defense--3.6%
DRS Technologies,
Inc. 1 525,000 12,631,500
- ------------------------------------------------------
Orbital Sciences
Corp. 1 931,900 8,564,161
------------
21,195,661
Market Value
Shares See Note 1
- ------------------------------------------------------
Airlines--1.0%
AMR Corp. 1 260,000 $ 3,452,800
- ------------------------------------------------------
Continental Airlines,
Inc., Cl. B 1 115,000 2,196,500
------------
5,649,300
- ------------------------------------------------------
Commercial Services & Supplies--2.7%
Brink's Co. (The) 150,000 3,007,500
- ------------------------------------------------------
ChoicePoint, Inc. 1 120,000 4,204,800
- ------------------------------------------------------
Integrated Alarm
Services Group, Inc. 1 200,000 1,762,000
- ------------------------------------------------------
Kroll, Inc. 1 300,000 6,978,000
------------
15,952,300
- ------------------------------------------------------
Construction & Engineering--2.0%
URS Corp. 1 550,000 12,039,500
- ------------------------------------------------------
Electrical Equipment--1.0%
AMETEK, Inc. 120,000 5,646,000
- ------------------------------------------------------
Machinery--3.5%
Actuant Corp., Cl. A 1 85,700 2,762,968
- ------------------------------------------------------
Albany International
Corp., Cl. A 210,000 6,489,000
- ------------------------------------------------------
Harsco Corp. 135,000 5,171,850
- ------------------------------------------------------
Pentair, Inc. 150,000 6,150,000
------------
20,573,818
- ------------------------------------------------------
Road & Rail--3.3%
CNF Transportation,
Inc. 135,000 4,727,700
- ------------------------------------------------------
Overnite Corp. 1 210,000 4,653,600
- ------------------------------------------------------
Ryder Systems, Inc. 180,000 5,400,000
- ------------------------------------------------------
Swift Transportation
Co., Inc. 1 200,000 4,486,000
------------
19,267,300
- ------------------------------------------------------
Information Technology--12.5%
- ------------------------------------------------------
Communications Equipment--1.8%
3Com Corp. 1 1,000,000 7,200,000
- ------------------------------------------------------
REMEC, Inc. 1 300,000 3,309,000
------------
10,509,000
- ------------------------------------------------------
Computers & Peripherals--1.2%
Imation Corp. 90,000 3,064,500
- ------------------------------------------------------
Maxtor Corp. 1 300,000 4,101,000
------------
7,165,500
12 | OPPENHEIMER SMALL CAP VALUE FUND
Market Value
Shares See Note 1
- ------------------------------------------------------
Electronic Equipment & Instruments--1.5%
Flextronics
International Ltd. 1 400,000 $ 5,600,000
- ------------------------------------------------------
Planar Systems, Inc. 1 125,000 2,892,500
------------
8,492,500
- ------------------------------------------------------
Internet Software & Services--0.4%
Digitas, Inc. 1 300,000 2,610,000
- ------------------------------------------------------
IT Services--2.0%
BearingPoint, Inc. 1 315,000 2,961,000
- ------------------------------------------------------
Titan Corp. (The) 1 400,000 8,448,000
------------
11,409,000
- ------------------------------------------------------
Semiconductors & Semiconductor Equipment--1.5%
AMIS Holdings, Inc. 1 100,000 2,015,000
- ------------------------------------------------------
Mykrolis Corp. 1 200,000 2,950,000
- ------------------------------------------------------
Skyworks
Solutions, Inc. 1 425,000 3,646,500
------------
8,611,500
- ------------------------------------------------------
Software--4.1%
Activision, Inc. 1 450,000 6,790,500
- ------------------------------------------------------
Macromedia, Inc. 1 180,000 3,439,800
- ------------------------------------------------------
Quest Software, Inc. 1 100,000 1,490,000
- ------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 160,000 6,328,000
- ------------------------------------------------------
Verity, Inc. 1 440,000 6,182,000
------------
24,230,300
- ------------------------------------------------------
Materials--6.6%
- ------------------------------------------------------
Chemicals--3.0%
Airgas, Inc. 290,000 5,553,500
- ------------------------------------------------------
FMC Corp. 1 206,000 5,770,060
- ------------------------------------------------------
Lyondell
Chemical Co. 415,000 5,934,500
------------
17,258,060
- ------------------------------------------------------
Containers & Packaging--1.0%
Anchor Glass
Container Corp. 1 350,000 5,652,500
- ------------------------------------------------------
Metals & Mining--1.0%
GrafTech
International Ltd. 1 572,500 5,948,275
Market Value
Shares See Note 1
- ------------------------------------------------------
Paper & Forest Products--1.6%
Bowater, Inc. 110,000 $ 4,491,300
- ------------------------------------------------------
Sappi Ltd.,
Sponsored ADR 400,000 5,120,000
------------
9,611,300
- ------------------------------------------------------
Telecommunication Services--1.6%
- ------------------------------------------------------
Diversified Telecommunication Services--1.6%
IDT Corp., Cl. B 1 375,466 7,178,910
- ------------------------------------------------------
PTEK Holdings, Inc. 1 250,000 2,177,500
------------
9,356,410
- ------------------------------------------------------
Utilities--5.1%
- ------------------------------------------------------
Electric Utilities--1.7%
AES Corp. (The) 1 800,000 7,000,000
- ------------------------------------------------------
Reliant
Resources, Inc. 1 600,000 2,970,000
------------
9,970,000
- ------------------------------------------------------
Gas Utilities--1.3%
Kinder Morgan
Management LLC 67,226 2,551,227
- ------------------------------------------------------
Southern Union Co. 1 297,500 5,238,975
------------
7,790,202
- ------------------------------------------------------
Multi-Utilities & Unregulated Power--2.1%
Equitable
Resources, Inc. 195,000 8,034,000
- ------------------------------------------------------
Vectren Corp. 175,000 4,130,000
------------
12,164,000
------------
Total Common Stocks
(Cost $490,581,260) 579,909,137
13 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF INVESTMENTS Continued
Principal Market Value
Amount See Note 1
- ------------------------------------------------------
Joint Repurchase Agreements--2.8%
- ------------------------------------------------------
Undivided interest of 11.05% in joint repurchase
agreement (Principal Amount/Market Value
$149,808,000, with a maturity value of $149,820,109)
with Banc One Capital Markets, Inc., 0.97%, dated
10/31/03, to be repurchased at $16,556,338 on
11/3/03, collateralized by U.S. Treasury Bonds,
3.625%--9%, 3/31/04--8/15/23, with a
value of $152,949,680
(Cost $16,555,000) $16,555,000 $ 16,555,000
- ------------------------------------------------------
Total Investments,
at Value
(Cost $507,136,260) 101.9% 596,464,137
- ------------------------------------------------------
Liabilities
in Excess of
Other Assets (1.9) (11,358,121)
-------------------------
Net Assets 100.0% $585,106,016
=========================
Footnote to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2003
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------
Investments, at value (cost $507,136,260)--see
accompanying statement $596,464,137
- -----------------------------------------------------------------------------------
Cash 500,822
- -----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 2,802,513
Shares of beneficial interest sold 1,323,961
Interest and dividends 237,284
Other 36,280
-------------
Total assets 601,364,997
- -----------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 14,943,503
Shares of beneficial interest redeemed 857,949
Shareholder reports 142,332
Transfer and shareholder servicing agent fees 142,263
Distribution and service plan fees 119,168
Trustees' compensation 33,812
Other 19,954
-------------
Total liabilities 16,258,981
- -----------------------------------------------------------------------------------
Net Assets $585,106,016
=============
- -----------------------------------------------------------------------------------
Composition of Net Assets
- -----------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 229,960
- -----------------------------------------------------------------------------------
Additional paid-in capital 465,984,228
- -----------------------------------------------------------------------------------
Accumulated net investment loss (32,137)
- -----------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions 29,595,576
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 89,328,389
-------------
Net Assets $585,106,016
=============
15 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Asset Value Per Share
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$330,214,799 and 12,649,189 shares of beneficial interest outstanding) $26.11
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $27.70
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $171,896,161 and 6,991,018 shares of beneficial interest
outstanding) $24.59
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $71,779,216 and 2,924,019 shares of beneficial interest
outstanding) $24.55
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $11,215,840 and 431,727 shares of beneficial interest
outstanding) $25.98
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2003
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Investment Income
- -----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $10,874) $ 6,220,653
- -----------------------------------------------------------------------------------
Interest 171,301
-------------
Total investment income 6,391,954
- -----------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------
Management fees 3,717,654
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 643,052
Class B 1,376,190
Class C 535,797
Class N 33,516
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 914,025
Class B 632,050
Class C 237,158
Class N 37,088
- -----------------------------------------------------------------------------------
Shareholder reports 319,882
- -----------------------------------------------------------------------------------
Trustees' compensation 27,477
- -----------------------------------------------------------------------------------
Custodian fees and expenses 7,624
- -----------------------------------------------------------------------------------
Other 179,739
-------------
Total expenses 8,661,252
Less reduction to custodian expenses (1,192)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class A (73,898)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class B (177,745)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class C (56,220)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class N (14,163)
-------------
Net expenses 8,338,034
- -----------------------------------------------------------------------------------
Net Investment Loss (1,946,080)
- -----------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -----------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 56,195,316
Foreign currency transactions (9,560)
-------------
Net realized gain 56,185,756
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 90,044,317
Translation of assets and liabilities denominated in foreign currencies (7,652)
-------------
Net change in unrealized appreciation 90,036,665
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $144,276,341
=============
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended October 31, 2003 2002
- -----------------------------------------------------------------------------------
Operations
- -----------------------------------------------------------------------------------
Net investment loss $ (1,946,080) $ (4,023,327)
- -----------------------------------------------------------------------------------
Net realized gain (loss) 56,185,756 (18,661,880)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 90,036,665 (9,851,435)
---------------------------
Net increase (decrease) in net assets
resulting from operations 144,276,341 (32,536,642)
- -----------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
- -----------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (680,554)
Class B -- (388,655)
Class C -- (109,996)
Class N -- (3,973)
- -----------------------------------------------------------------------------------
Beneficial Interest Transactions
- -----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 27,564,749 65,028,767
Class B (1,650,967) 46,660,317
Class C 7,875,626 25,340,589
Class N 4,208,196 4,695,770
- -----------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------
Total increase 182,273,945 108,005,623
- -----------------------------------------------------------------------------------
Beginning of period 402,832,071 294,826,448
---------------------------
End of period [including accumulated net investment
loss of $32,137 and $30,591, respectively] $585,106,016 $402,832,071
===========================
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Class A Year Ended October 31, 2003 2002 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $19.18 $19.53 $21.26 $16.82 $17.29
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) (.19) (.23) (.16) (.10)
Net realized and unrealized gain (loss) 6.97 (.09) (.47) 4.60 .18
----------------------------------------------------------
Total from investment operations 6.93 (.28) (.70) 4.44 .08
- ------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- (.07) (1.03) --1 (.54)
Distributions in excess of net realized gain -- -- -- -- (.01)
----------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.07) (1.03) -- (.55)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.11 $19.18 $19.53 $21.26 $16.82
==========================================================
- ------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 36.13% (1.45)% (3.02)% 26.40% 0.38%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $330,215 $222,029 $172,395 $157,759 $151,059
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $245,319 $231,657 $163,007 $147,952 $170,205
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.12)% (0.69)% (1.06)% (0.95)% (0.60)%
Total expenses 1.59% 1.68% 1.86% 1.90% 1.96%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.56% 1.66% N/A 4,5 N/A 4 N/A 4
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 163% 151% 162% 166% 87%
<FN>
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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
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%.
</FN>
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
Class B Year Ended October 31, 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $18.20 $18.65 $20.47 $16.28 $16.84
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.17) (.18) (.23) (.33) (.22)
Net realized and unrealized gain (loss) 6.56 (.20) (.56) 4.52 .21
-------------------------------------------------------
Total from investment operations 6.39 (.38) (.79) 4.19 (.01)
- ---------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- (.07) (1.03) -- 1 (.54)
Distributions in excess of net realized gain -- -- -- -- (.01)
-------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.07) (1.03) -- (.55)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.59 $18.20 $18.65 $20.47 $16.28
=======================================================
- ---------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 35.11% (2.06)% (3.60)% 25.74% (0.16)%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $171,896 $129,885 $95,418 $83,859 $82,949
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $137,734 $134,304 $88,235 $79,526 $94,863
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.85)% (1.34)% (1.65)% (1.48)% (1.10)%
Total expenses 2.42% 2.34% 2.45% 2.44% 2.45%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.29% 2.32% N/A 4,5 N/A 4 N/A 4
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 163% 151% 162% 166% 87%
<FN>
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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
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%.
</FN>
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER SMALL CAP VALUE FUND
Class C Year Ended October 31, 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------
Per Share Operating Data
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $18.17 $18.62 $20.44 $16.25 $16.81
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.13) (.10) (.19) (.33) (.25)
Net realized and unrealized gain (loss) 6.51 (.28) (.60) 4.52 .24
------------------------------------------------------
Total from investment operations 6.38 (.38) (.79) 4.19 (.01)
- --------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- (.07) (1.03) -- 1 (.54)
Distributions in excess of net realized gain -- -- -- -- (.01)
------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.07) (1.03) -- (.55)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.55 $18.17 $18.62 $20.44 $16.25
======================================================
- --------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 35.11% (2.06)% (3.61)% 25.79% (0.16)%
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $71,779 $46,360 $26,604 $22,173 $20,959
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $53,649 $45,455 $24,134 $20,521 $24,964
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.85)% (1.33)% (1.64)% (1.49)% (1.10)%
Total expenses 2.40% 2.33% 2.45% 2.44% 2.45%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.30% 2.31% N/A 4,5 N/A 4 N/A 4
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 163% 151% 162% 166% 87%
<FN>
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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
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%.
</FN>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS CONTINUED
- --------------------------------------------------------------------------------
Class N Year Ended October 31, 2003 2002 2001 1
- -----------------------------------------------------------------------------------------
Per Share Operating Data
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period $19.13 $19.51 $19.58
- -----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.11) (.27) (.04)
Net realized and unrealized gain (loss) 6.96 (.04) (.03)
-----------------------------
Total from investment operations 6.85 (.31) (.07)
- -----------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain -- (.07) --
Distributions in excess of net realized gain -- -- --
-----------------------------
Total dividends and/or distributions to shareholders -- (.07) --
- -----------------------------------------------------------------------------------------
Net asset value, end of period $25.98 $19.13 $19.51
-----------------------------
-----------------------------
- -----------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 35.81% (1.61)% (0.36)%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $11,216 $4,558 $409
- -----------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,722 $2,882 $106
- -----------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.36)% (0.78)% (1.14)%
Total expenses 2.01% 1.82% 2.01%
Expenses after expense reimbursement or fee waiver and
reduction to custodian expenses 1.80% 1.80% N/A 4,5
- -----------------------------------------------------------------------------------------
Portfolio turnover rate 163% 151% 162%
<FN>
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. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
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%.
</FN>
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Small Cap Value Fund (the Fund), a series of Oppenheimer Quest For
Value Funds, is an open-end management investment company registered under the
Investment Company Act of 1940, as amended. 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 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. Securities traded on NASDAQ are valued based on the closing price
provided by NASDAQ prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the last sale price on the prior
trading day, if it is within the spread of the closing bid and asked prices, and
if not, at the closing bid price. Securities (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
using consistently applied procedures under the supervision of the Board of
Trustees. Short-term "money market type" debt securities with remaining
maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
23 | OPPENHEIMER SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. Secured by U.S. government securities, these balances
are invested in one or more repurchase agreements. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
Net Unrealized
Appreciation
Based on Cost of
Securities and
Undistributed Undistributed Accumulated Other Investments
Net Investment Long-Term Loss for Federal Income
Income Gain Carryforward 1 Tax Purposes
-------------------------------------------------------------------
$8,773,939 $21,607,844 $-- $88,542,182
1. During the fiscal year October 31, 2003, the Fund utilized $18,203,203 of
capital loss carryforward to offset capital gains realized in that fiscal year.
During the fiscal year October 31, 2002, the Fund did not utilize any capital
loss carryforwards.
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. Accordingly, the
following amounts have been reclassified for October 31, 2003. Net assets of the
Fund were unaffected by the reclassifications.
24 | OPPENHEIMER SMALL CAP VALUE FUND
From From Net
Ordinary Capital Tax Return Investment
Loss Gain 2 of Capital Loss
---------------------------------------------------
$1,944,534 $7,357,484 $-- $--
2. $5,412,950, including $3,849,747 of long-term capital gain, was distributed
in connection with Fund share redemptions.
The tax character of distributions paid during the years ended October 31, 2003
and October 31, 2002 was as follows:
Year Ended Year Ended
October 31, 2003 October 31, 2002
--------------------------------------------------------
Distributions paid from:
Long-term capital gain $-- $1,183,178
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2003 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities
and other investments $507,922,467
============
Gross unrealized appreciation $ 93,898,135
Gross unrealized depreciation (5,355,953)
------------
Net unrealized appreciation $ 88,542,182
============
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended October
31, 2003, the Fund's projected benefit obligations were increased by $2,290 and
payments of $745 were made to retired trustees, resulting in an accumulated
liability of $32,138 as of October 31, 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, deferred amounts are treated as though equal dollar amounts had
been invested in shares of the Fund or are invested in other Oppenheimer funds
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. Amounts will be deferred
until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
25 | OPPENHEIMER SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
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.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
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 $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------
Class A
Sold 5,916,521 $125,928,724 7,897,143 $ 173,016,763
Dividends and/or
distributions reinvested -- -- 31,174 657,161
Redeemed (4,844,173) (98,363,975) (5,179,234) (108,645,157)
---------------------------------------------------------
Net increase 1,072,348 $ 27,564,749 2,749,083 $ 65,028,767
=========================================================
- -------------------------------------------------------------------------------------
Class B
Sold 2,100,067 $ 42,422,540 5,081,569 $ 107,197,590
Dividends and/or
distributions reinvested -- -- 17,890 359,961
Redeemed (2,247,539) (44,073,507) (3,076,759) (60,897,234)
---------------------------------------------------------
Net increase (decrease) (147,472) $ (1,650,967) 2,022,700 $ 46,660,317
=========================================================
- -------------------------------------------------------------------------------------
Class C
Sold 1,493,876 $ 29,360,313 2,319,208 $ 48,865,275
Dividends and/or
distributions reinvested -- -- 5,008 100,623
Redeemed (1,121,795) (21,484,687) (1,201,029) (23,625,309)
---------------------------------------------------------
Net increase 372,081 $ 7,875,626 1,123,187 $ 25,340,589
=========================================================
26 | OPPENHEIMER SMALL CAP VALUE FUND
Year Ended October 31, 2003 Year Ended October 31, 2002
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------
Class N
Sold 288,753 $ 6,214,235 268,260 $ 5,721,300
Dividends and/or
distributions reinvested -- -- 188 3,969
Redeemed (95,267) (2,006,039) (51,183) (1,029,499)
---------------------------------------------------------
Net increase 193,486 $ 4,208,196 217,265 $ 4,695,770
=========================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2003, were
$758,684,041 and $704,929,326, 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 0.85%
of the first $400 million of average annual net assets of the Fund, 0.75% of the
next $400 million and 0.60% of average annual net assets in excess of $800
million.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2003, the Fund paid
$1,506,125 to OFS for services to the Fund.
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.
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
Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
- ----------------------------------------------------------------------------------------------------------
October 31, 2003 $862,941 $249,984 $81,212 $826,834 $147,073 $41,153
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.
27 | OPPENHEIMER SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
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
Year Ended Distributor Distributor Distributor Distributor
- --------------------------------------------------------------------------------
October 31, 2003 $6,212 $375,487 $11,524 $14,320
- --------------------------------------------------------------------------------
Distribution and Service Plan for Class A Shares. 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 0.15%
of average annual net assets representing Class A shares purchased before
September 1, 1993 and 0.10% of average annual net assets representing Class A
shares purchased on or before December 31, 2002. Beginning January 1, 2003, the
Board of Trustees set the annual rate at 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 year ended October 31, 2003, expense under the Class A plan totaled
$643,052, all of which were paid by the Distributor to recipients, which
included $6,009 retained by the Distributor and $45,646 which was 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 year ended October 31, 2003,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Uncompensated
Uncompensated Expenses as %
Total Expenses Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- -------------------------------------------------------------------------------
Class B Plan $1,376,190 $1,024,680 $2,446,864 1.42%
Class C Plan 535,797 167,123 950,703 1.32
Class N Plan 33,516 27,632 149,486 1.33
- --------------------------------------------------------------------------------
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
28 | OPPENHEIMER SMALL CAP VALUE FUND
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gain or loss. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2003, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. Borrowing and Lending Arrangements
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 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 year
ended or at October 31, 2003.
29 | OPPENHEIMER SMALL CAP VALUE FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Quest For Value Funds:
We have audited the accompanying statement of assets and liabilities including
the statement of investments of Oppenheimer Small Cap Value Fund (one of the
portfolios constituting the Oppenheimer Quest For Value Funds) as of October 31,
2003, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the four years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended October 31, 1999, were
audited by other auditors whose report dated November 19, 1999, expressed an
unqualified opinion on this information.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2003, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Small Cap Value Fund as of October 31, 2003, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2003
30 | OPPENHEIMER SMALL CAP VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends, if any, paid by the Fund during the fiscal year ended October 31,
2003 which are not designated as capital gain distributions should be multiplied
by 39.67% to arrive at the amount eligible for the corporate dividend-received
deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal year
ended October 31, 2003 which are not designated as capital gain distributions
are eligible for lower individual income tax rates to the extent that the Fund
has received qualified dividend income as stipulated by recent tax legislation.
$5,226,347 of the Fund's fiscal year taxable income may be eligible for the
lower individual income tax rates. In early 2004, shareholders of record will
receive information regarding the percentage of distributions that are eligible
for lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
Portfolio Proxy Voting
Policies and Procedures Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.225.5677, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund will be
required to file new Form N-PX, with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. The first such
filing is due no later than August 31, 2004, for the twelve months ended June
30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without
charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii)
on the SEC's website at www.sec.gov.
31 | OPPENHEIMER SMALL CAP VALUE FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other Trusteeships/Directorships Held
Fund, Length of Service, Age by Trustee; Number of Portfolios in Fund Complex Currently Overseen by Trustee
INDEPENDENT The address of each Trustee in the chart below is 6803 S. Tucson Way,
TRUSTEES Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until his
or her resignation, retirement, death or removal.
Thomas W. Courtney, Principal of Courtney Associates, Inc. (venture capital firm); former General
Chairman of the Partner of Trivest Venture Fund (private venture capital fund); former President
Board of Trustees, of Investment Counseling Federated Investors, Inc.; Trustee of the following
Trustee (since 1989) open-end investment companies: Cash Assets Trust, PIMCO ADVISORS VIT, Tax Free
Age: 70 Trust of Arizona and Hawaiian Tax Free Trust. Oversees 10 portfolios in the
OppenheimerFunds complex.
Paul Y. Clinton, Principal of Clinton Management Associates, a financial and venture capital
Trustee (since 1989) consulting firm; Trustee of the following open-end investment companies: Trustee
Age: 71 of Capital Cash Management Trust, Prime Cash Fund, PIMCO ADVISORS VIT and
Narragansett Insured Tax-Free Income Fund. Formerly: Director, External Affairs,
Kravco Corporation, a national real estate owner and property management
corporation; President of Essex Management Corporation, a management consulting
company; a general partner of Capital Growth Fund, a venture capital
partnership; a general partner of Essex Limited Partnership, an investment
partnership; President of Geneve Corp., a venture capital fund; Chairman of
Woodland Capital Corp., a small business investment company; and Vice President
of W.R. Grace & Co. Oversees 10 portfolios in the OppenheimerFunds complex.
Robert G. Galli, A trustee or director of other Oppenheimer funds. Oversees 35 portfolios in the
Trustee (since 1998) OppenheimerFunds complex.
Age: 70
Lacy B. Herrmann, Chairman and Chief Executive Officer of Aquila Management Corporation, the
Trustee (since 1989) sponsoring organization and manager, administrator and/or sub-adviser to the
Age: 74 following open-end investment companies, and Chairman of the Board of Trustees
and President of each: Churchill Cash Reserves Trust, Aquila-Cascadia Equity
Fund, Cash Assets Trust, Prime Cash Fund, Narragansett Insured Tax-Free Income
Fund, Tax-Free Fund For Utah, Churchill Tax-Free Fund of Kentucky, Tax-Free Fund
of Colorado, Tax-Free Trust of Oregon, Tax-Free Trust of Arizona, Hawaiian
Tax-Free Trust, and Aquila Rocky Mountain Equity Fund and PIMCO ADVISORS VIT;
Vice President, Director, Secretary, and formerly Treasurer of Aquila
Distributors, Inc., distributor of the above funds; President and Chairman of
the Board of Trustees of Capital Cash Management Trust ("CCMT"), and an Officer
and Trustee/Director of its predecessors; President and Director of STCM
Management Company, Inc., sponsor and adviser to CCMT; Chairman, President and a
Director of InCap Management Corporation, formerly sub-adviser and administrator
of Prime Cash Fund and Short Term Asset Reserves; Trustee Emeritus of Brown
University. Oversees 10 portfolios in the OppenheimerFunds complex.
32 | OPPENHEIMER SMALL CAP VALUE FUND
Brian Wruble, Special Limited Partner (since January 1999) of Odyssey Investment Partners, LLC
Trustee (since 2001) (private equity investment); General Partner (since September 1996) of Odyssey
Age: 60 Partners, L.P. (hedge fund in distribution since 1/1/97); Board of Governing
Trustees (since August 1990) of The Jackson Laboratory (non-profit); Trustee
(since May 1992) of Institute for Advanced Study (educational institute);
formerly Trustee (May 2000 - 2002) of Research Foundation of AIMR (investment
research, non-profit); Governor, Jerome Levy Economics Institute of Bard College
(economics research) (August 1990-September 2001); Director of Ray & Berendtson,
Inc. (executive search firm) (May 2000-April 2002). Oversees 10 portfolios in
the OppenheimerFunds complex.
- ----------------------------------------------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below is as follows: for Messrs.
Murphy, Leavy, Damian and Zack, Two World Financial Center, 225 Liberty St., New
York, NY 10281-1008, for Mr. Wixted, 6803 S. Tucson Way, Centennial, CO
80112-3924. Each Officer serves for an annual term or until his or her earlier
resignation, death or removal.
John V. Murphy, Chairman, Chief Executive Officer and director (since June 2001) and President
President (since 2001) (since September 2000) of the Manager; President and a director or trustee of
Age: 54 other Oppenheimer funds; President and a director (since July 2001) of
Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of
Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc.
(a subsidiary of the Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and a director (since July 2001)
of OppenheimerFunds Legacy Program (a charitable trust program established by
the Manager); a director of the investment advisory subsidiaries of the Manager:
OFI Institutional Asset Management, Inc. and Centennial Asset Management
Corporation (since November 2001), HarbourView Asset Management Corporation and
OFI Private Investments, Inc. (since July 2001); President (since November 1,
2001) and a director (since July 2001) of Oppenheimer Real Asset Management,
Inc.; a director (since November 2001) of Trinity Investment Management Corp.
and Tremont Advisers, Inc. (Investment advisory affiliates of the Manager);
Executive Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a director (since June 1995)
of DLB Acquisition Corporation (a holding company that owns the shares of David
L. Babson & Company, Inc.); formerly, Chief Operating Officer (September
2000-June 2001) of the Manager; President and trustee (November 1999-November
2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end
investment companies); a director (September 1999-August 2000) of C.M. Life
Insurance Company; President, Chief Executive Officer and director (September
1999-August 2000) of MML Bay State Life Insurance Company; a director (June
1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 72 portfolios as
Trustee/Officer and 10 portfolios as Officer in the OppenheimerFunds complex.
33 | OPPENHEIMER SMALL CAP VALUE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
Christopher Leavy, Senior Vice President (since September 2000) of the Manager; an officer of 7
Vice President and portfolios in the OppenheimerFunds complex; prior to joining the Manager in
Portfolio Manager September 2000, he was a portfolio manager of Morgan Stanley Dean Witter
(since 2001) Investment Management (1997 - September 2000).
Age: 32
John Damian Vice President (since September 2001) of the Manager; an officer of 1 portfolio
Vice President and in the OppenheimerFunds complex; formerly Senior Analyst/Director for Citigroup
Portfolio Manager Asset Management (November 1999 - September 2001); Senior Research Analyst for
(since 2001) Pzena Investment Management (October 1997 - November 1999).
Age: 35
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
Treasurer (since 1999) (since March 1999) of HarbourView Asset Management Corporation, Shareholder
Age: 44 Services, Inc., Oppenheimer Real Asset Management Corporation, Shareholder
Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private
Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and
OppenheimerFunds plc (since May 2000) and OFI Institutional Asset Management,
Inc. (since November 2000) (offshore fund management subsidiaries of the
Manager); Treasurer and Chief Financial Officer (since May 2000) of Oppenheimer
Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer
(since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy
Program (since April 2000); formerly Principal and Chief Operating Officer
(March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An
officer of 82 portfolios in the OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since February 2002)
Secretary (since 2001) of the Manager; General Counsel and a director (since November 2001) of
Age: 55 OppenheimerFunds Distributor, Inc.; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset Management Corporation; Vice
President and a director (since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel and a director (since
November 2001) of Shareholder Services, Inc., Shareholder Financial Services,
Inc., OFI Private Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel (since November 2001) of
Centennial Asset Management Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director
(since November 2001) of OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy Program; Secretary (since
November 2001) of Oppenheimer Acquisition Corp.; formerly Acting General Counsel
(November 2001-February 2002) and Associate General Counsel (May 1981-October
2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May
1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001); OppenheimerFunds International Ltd. and OppenheimerFunds
plc (October 1997-November 2001). An officer of 82 portfolios in the
OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information
about the Fund's Trustees and is available without charge upon request.
34 | OPPENHEIMER SMALL CAP VALUE FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that the Fund does not have an
audit committee financial expert serving on its Audit Committee. In this regard,
no member of the Audit Committee was identified as having all of the technical
attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as
an "audit committee financial expert," whether through the type of specialized
education or experience described in that Instruction. The Board has concluded
that while the members of the Audit Committee collectively have the necessary
attributes and experience required to serve effectively as an Audit Committee,
no single member possesses all of the required technical attributes through the
particular methods of education or experience set forth in the Instructions to
be designated as an audit committee financial expert.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. NOT APPLICABLE
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 October 31, 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.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)