UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08297
OPPENHEIMER MIDCAP FUND
-----------------------
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: OCTOBER 31
----------
Date of reporting period: NOVEMBER 1, 2004 - APRIL 30, 2005
---------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Health Care Providers & Services 9.1%
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IT Services 8.8
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Health Care Equipment & Supplies 8.0
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Specialty Retail 7.5
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Software 6.6
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Diversified Financial Services 5.9
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Hotels, Restaurants & Leisure 5.2
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Aerospace & Defense 3.7
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Commercial Services & Supplies 3.6
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Machinery 3.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Health Management Associates, Inc., Cl. A 2.9%
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Patterson Cos., Inc. 2.8
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Whole Foods Market, Inc. 2.7
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Getty Images, Inc. 2.7
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Legg Mason, Inc. 2.5
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O'Reilly Automotive, Inc. 2.5
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Fiserv, Inc. 2.4
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Coventry Health Care, Inc. 2.3
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Brunswick Corp. 2.3
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Bard (C.R.), Inc. 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on net assets.
For up-to-date Top 10 Fund Holdings, please visit www.oppenheimerfunds.com.
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8 | OPPENHEIMER MIDCAP FUND
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Consumer Discretionary 23.5%
Information Technology 22.3
Health Care 18.6
Industrials 16.5
Financials 10.9
Energy 5.5
Consumer Staples 2.7
Portfolio holdings and allocations are subject to change. Percentages are as of
April 30, 2005, and are based on total value of common stocks.
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9 | OPPENHEIMER MIDCAP FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific Fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Class B shares are subject to an
annual 0.75% asset-based sales charge. Because Class B shares convert to Class A
shares 72 months after purchase, the "since inception" return for Class B uses
Class A performance for the period after conversion.
CLASS C shares of the Fund were first publicly offered on 12/1/97. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
10 | OPPENHEIMER MIDCAP FUND
CLASS Y shares of the Fund were first publicly offered on 12/1/97. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
11 | OPPENHEIMER MIDCAP FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. These examples are intended to help you understand your
ongoing costs (in dollars) of investing in the Fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended April 30, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions described in
12 | OPPENHEIMER MIDCAP FUND
the Statement of Additional Information). Therefore, the "hypothetical" lines of
the table are useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
- ------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(11/1/04) (4/30/05) APRIL 30, 2005
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Class A Actual $1,000.00 $1,033.20 $ 6.78
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Class A Hypothetical 1,000.00 1,018.15 6.73
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Class B Actual 1,000.00 1,029.40 10.77
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Class B Hypothetical 1,000.00 1,014.23 10.69
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Class C Actual 1,000.00 1,029.40 10.62
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Class C Hypothetical 1,000.00 1,014.38 10.54
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Class N Actual 1,000.00 1,032.20 7.84
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Class N Hypothetical 1,000.00 1,017.11 7.78
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Class Y Actual 1,000.00 1,035.50 4.60
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Class Y Hypothetical 1,000.00 1,020.28 4.57
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended April 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------------------
Class A 1.34%
- ---------------------------------------------
Class B 2.13
- ---------------------------------------------
Class C 2.10
- ---------------------------------------------
Class N 1.55
- ---------------------------------------------
Class Y 0.91
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Transfer Agent that can be terminated at any time, without advance
notice. The "Financial Highlights" tables in the Fund's financial statements,
included in this report, also show the gross expense ratios, without such
waivers or reimbursements.
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13 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS April 30, 2005 / Unaudited
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VALUE
SHARES SEE NOTE 1
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COMMON STOCKS-99.2%
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CONSUMER DISCRETIONARY-23.3%
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AUTO COMPONENTS-1.2%
Gentex Corp. 364,500 $ 11,831,670
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AUTOMOBILES-0.6%
Harley-Davidson, Inc. 132,200 6,216,044
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HOTELS, RESTAURANTS & LEISURE-5.2%
Cheesecake Factory,
Inc. (The) 1 446,889 13,715,023
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P.F. Chang's China
Bistro, Inc. 1 237,200 13,169,344
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Shuffle Master, Inc. 1 477,450 12,026,966
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Starbucks Corp. 1 279,014 13,816,773
---------------
52,728,106
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HOUSEHOLD DURABLES-0.7%
Harman International
Industries, Inc. 94,500 7,425,810
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LEISURE EQUIPMENT & PRODUCTS-2.3%
Brunswick Corp. 547,200 22,982,400
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MEDIA 2.7%
Getty Images, Inc. 376,900 26,967,195
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SPECIALTY RETAIL-7.5%
Bed Bath &
Beyond, Inc. 1 424,600 15,799,366
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Chico's FAS, Inc. 1 670,400 17,182,352
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O'Reilly Automotive,
Inc. 1 487,200 25,003,104
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PETsMART, Inc. 191,900 5,114,135
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Urban Outfitters,
Inc. 1 284,100 12,585,630
---------------
75,684,587
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TEXTILES, APPAREL & LUXURY GOODS-3.1%
Coach, Inc. 1 819,366 21,959,009
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Polo Ralph Lauren
Corp. 274,800 9,645,480
---------------
31,604,489
VALUE
SHARES SEE NOTE 1
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CONSUMER STAPLES-2.7%
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FOOD & STAPLES RETAILING-2.7%
Whole Foods
Market, Inc. 276,400 $ 27,562,608
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ENERGY 5.5%
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ENERGY EQUIPMENT & SERVICES-2.5%
BJ Services Co. 188,300 9,179,625
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Smith International,
Inc. 278,400 16,197,312
---------------
25,376,937
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OIL & GAS-3.0%
Apache Corp. 308,700 17,376,723
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XTO Energy, Inc. 414,267 12,498,425
---------------
29,875,148
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FINANCIALS-10.8%
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COMMERCIAL BANKS-1.8%
Commerce
Bancorp, Inc. 678,100 18,980,019
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DIVERSIFIED FINANCIAL SERVICES-5.9%
Chicago Mercantile
Exchange (The) 84,400 16,501,888
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Investors Financial
Services Corp. 414,900 17,405,055
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Legg Mason, Inc. 361,500 25,615,890
--------------
59,522,833
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INSURANCE-3.1%
AMBAC Financial
Group, Inc. 275,500 18,417,175
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Brown & Brown, Inc. 293,700 12,849,375
---------------
31,266,550
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HEALTH CARE-18.5%
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BIOTECHNOLOGY-1.4%
Gilead Sciences, Inc. 392,200 14,550,620
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HEALTH CARE EQUIPMENT & SUPPLIES-8.0%
Bard (C.R.), Inc. 314,700 22,397,199
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Cooper Cos., Inc.
(The) 278,900 18,839,695
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Gen-Probe, Inc. 1 250,100 12,552,519
14 | OPPENHEIMER MIDCAP FUND
VALUE
SHARES SEE NOTE 1
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HEALTH CARE EQUIPMENT & SUPPLIES Continued
Stryker Corp. 108,000 $ 5,243,400
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Thermo Electron
Corp. 1 469,100 11,718,118
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Varian Medical
Systems, Inc. 1 291,652 9,840,338
---------------
80,591,269
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HEALTH CARE PROVIDERS & SERVICES-9.1%
Coventry Health
Care, Inc. 1 337,250 23,078,018
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Health Management
Associates, Inc., Cl. A 1,178,000 29,131,940
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Lincare Holdings,
Inc. 1 259,200 11,062,656
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Patterson Cos., Inc. 1 560,500 28,333,275
---------------
91,605,889
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INDUSTRIALS-16.3%
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AEROSPACE & DEFENSE-3.7%
L-3 Communications
Holdings, Inc. 262,600 18,636,722
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Rockwell Collins, Inc. 400,800 18,388,704
---------------
37,025,426
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AIR FREIGHT & LOGISTICS-2.1%
Expeditors
International of
Washington, Inc. 437,800 21,500,358
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COMMERCIAL SERVICES & SUPPLIES-3.6%
Corporate Executive
Board Co. 319,600 21,007,308
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Stericycle, Inc. 1 323,000 15,720,410
---------------
36,727,718
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MACHINERY-3.2%
Actuant Corp., Cl. A 1 138,600 5,902,974
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Donaldson Co., Inc. 472,700 14,062,825
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Oshkosh Truck Corp. 164,400 12,354,660
---------------
32,320,459
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ROAD & RAIL-1.6%
C.H. Robinson
Worldwide, Inc. 304,600 $ 15,717,360
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS-2.1%
Fastenal Co. 405,400 21,713,224
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INFORMATION TECHNOLOGY-22.1%
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COMMUNICATIONS EQUIPMENT-2.0%
Comverse
Technology, Inc. 1 867,500 19,770,325
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ITF Optical
Technologies, Inc. 1,2 384,000 173,606
---------------
19,943,931
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ELECTRONIC EQUIPMENT & INSTRUMENTS-2.2%
CDW Corp. 287,700 15,734,313
- --------------------------------------------------------------------------------
National Instruments
Corp. 319,300 6,877,722
---------------
22,612,035
- -------------------------------------------------------------------------------
IT SERVICES-8.8%
Affiliated Computer
Services, Inc., Cl. A 1 404,600 19,287,282
- --------------------------------------------------------------------------------
Alliance Data
Systems Corp. 1 421,400 17,024,560
- --------------------------------------------------------------------------------
Cognizant
Technology
Solutions Corp. 1 210,700 8,851,507
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 572,100 24,199,830
- --------------------------------------------------------------------------------
Global Payments,
Inc. 170,600 11,048,056
- --------------------------------------------------------------------------------
SRA International,
Inc., Cl. A 1 124,000 8,103,400
---------------
88,514,635
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS-0.6%
Zebra Technologies
Corp., Cl. A 1 123,850 5,915,076
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT-1.9%
Linear Technology
Corp. 546,800 19,542,632
- --------------------------------------------------------------------------------
SOFTWARE-6.6%
Adobe Systems, Inc. 323,300 19,226,651
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 644,300 17,209,253
- --------------------------------------------------------------------------------
Autodesk, Inc. 240,600 7,658,298
15 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
Electronic Arts, Inc. 1 224,700 $ 11,996,733
- --------------------------------------------------------------------------------
FactSet Research
Systems, Inc. 209,150 5,806,004
- --------------------------------------------------------------------------------
Kronos, Inc. 1 124,900 4,877,346
---------------
66,774,285
---------------
Total Common Stocks
(Cost $844,696,412) 1,003,079,313
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Centerpoint Broadband
Technologies, Inc., Cv.,
Series D 1,2
(Cost $5,999,997) 556,586 --
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.1%
- --------------------------------------------------------------------------------
Undivided interest of 0.87% in joint repurchase
agreement (Principal Amount/Value
$1,318,039,000, with a maturity value of
$1,318,355,329) with UBS Warburg LLC, 2.88%,
dated 4/29/05, to be repurchased at $11,522,765
on 5/2/05, collateralized by Federal National
Mortgage Assn., 5%--6%, 3/1/34--8/1/34, with
a value of $1,345,611,059
(Cost $11,520,000) $ 11,520,000 $ 11,520,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $862,216,409) 100.3% 1,014,599,313
- --------------------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS (0.3) (3,335,396)
------------------------------
NET ASSETS 100.0% $1,011,263,917
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of April 30, 2005 was $173,606, which represents 0.02%
of the Fund's net assets, all of which is considered restricted. See Note 5 of
Notes to Financial Statements.
Affiliated company. Represents ownership of at least 5% of the voting securities
of the issuer, and is or was an affiliate, as defined in the Investment Company
Act of 1940, at or during the period ended April 30, 2005. There were no
affiliate securities held by the Fund as of April 30, 2005. Transactions during
the period in which the the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
OCTOBER 31, 2004 ADDITIONS REDUCTIONS APRIL 30, 2005
- --------------------------------------------------------------------------------------------------------------------
Axsun Technologies, Inc., Cv., Series C 771,208 -- 771,208 --
VALUE DIVIDEND REALIZED
SEE NOTE 1 INCOME LOSS
- --------------------------------------------------------------------------------------------------------------------
Axsun Technologies, Inc., Cv., Series C $ -- $ -- $ 8,537,273
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
April 30, 2005
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $862,216,409)--see
accompanying statement of investments $ 1,014,599,313
- --------------------------------------------------------------------------------
Cash 615,126
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,134,457
Interest and dividends 133,038
Other 15,141
------------------
Total assets 1,016,497,075
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,496,596
Shares of beneficial interest redeemed 1,807,221
Transfer and shareholder servicing agent fees 317,756
Shareholder communications 211,507
Distribution and service plan fees 204,047
Trustees' compensation 171,170
Other 24,861
------------------
Total liabilities 5,233,158
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NET ASSETS $ 1,011,263,917
==================
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $ 1,959,517,391
- --------------------------------------------------------------------------------
Accumulated net investment loss (6,645,822)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (1,093,990,556)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 152,382,904
------------------
NET ASSETS $ 1,011,263,917
==================
17 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $529,912,124 and
34,096,600 shares of beneficial interest outstanding) $15.54
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $16.49
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $303,469,326 and 20,629,746 shares
of beneficial interest outstanding) $14.71
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $120,675,549 and 8,204,823 shares
of beneficial interest outstanding) $14.71
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $28,127,952 and 1,828,669 shares
of beneficial interest outstanding) $15.38
- ---------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $29,078,966 and 1,810,173 shares of beneficial interest outstanding) $16.06
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER MIDCAP FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended April 30, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends $ 2,063,611
- --------------------------------------------------------------------------------
Interest 108,958
---------------
Total investment income 2,172,569
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 3,531,470
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 662,843
Class B 1,608,245
Class C 600,312
Class N 65,510
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,107,053
Class B 784,757
Class C 268,798
Class N 63,672
Class Y 31,707
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 112,505
Class B 116,654
Class C 28,544
Class N 1,278
- --------------------------------------------------------------------------------
Trustees' compensation 22,167
- --------------------------------------------------------------------------------
Custodian fees and expenses 5,025
- --------------------------------------------------------------------------------
Other 97,577
---------------
Total expenses 9,108,117
Less reduction to custodian expenses (631)
Less waivers and reimbursements of expenses (454,459)
---------------
Net expenses 8,653,027
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (6,480,458)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies 40,476,657
Affiliated companies (8,537,273)
---------------
Net realized gain 31,939,384
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 4,971,280
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 30,430,206
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER MIDCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCTOBER 31,
(UNAUDITED) 2004
- ---------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $ (6,480,458) $ (12,888,844)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain 31,939,384 93,338,556
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 4,971,280 (17,276,110)
-----------------------------------
Net increase in net assets resulting from operations 30,430,206 63,173,602
- ---------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 9,221,869 41,101,126
Class B (18,657,768) (36,309,315)
Class C 7,717,201 (222,383)
Class N 5,089,094 4,493,365
Class Y 4,564,792 5,221,032
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Total increase 38,365,394 77,457,427
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 972,898,523 895,441,096
-----------------------------------
End of period (including accumulated net investment loss
of $6,645,822 and $165,364, respectively) $ 1,011,263,917 $ 972,898,523
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCT. 31,
CLASS A (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.04 $ 13.97 $ 11.43 $ 14.42 $ 30.41 $ 19.88
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.07) 1 (.17) (.12) (.13) (.02) .04
Net realized and unrealized gain (loss) .57 1.24 2.66 (2.86) (15.97) 10.49
-------------------------------------------------------------------------------------
Total from investment operations .50 1.07 2.54 (2.99) (15.99) 10.53
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.54 $ 15.04 $ 13.97 $ 11.43 $ 14.42 $ 30.41
=====================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.32% 7.66% 22.22% (20.74)% (52.58)% 52.97%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 529,912 $ 504,292 $ 430,514 $ 351,983 $ 532,338 $ 1,055,967
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 546,813 $ 457,926 $ 366,050 $ 460,797 $ 718,814 $ 728,168
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.92)% (1.05)% (1.01)% (1.06)% (0.09)% 0.28%
Total expenses 1.40% 1.42% 1.61% 1.68% 1.33% 1.16%
Expenses after payments and waivers and
reduction to custodian expenses 1.34% 1.33% 1.32% 1.47% 1.32% N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 114% 76% 51% 84% 23%
1. Per share amounts calculated based on the average shares outstanding during
the period.
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCT. 31,
CLASS B (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.79 $ 19.62
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.13) 1 (.30) (.23) (.30) (.15) (.07)
Net realized and unrealized gain (loss) .55 1.22 2.58 (2.70) (15.62) 10.24
-------------------------------------------------------------------------------------
Total from investment operations .42 .92 2.35 (3.00) (15.77) 10.17
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.71 $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.79
=====================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.94% 6.88% 21.33% (21.40)% (52.94)% 51.83%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 303,469 $ 312,315 $ 327,880 $ 291,397 $ 438,962 $ 874,830
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 324,990 $ 316,748 $ 291,209 $ 385,917 $ 592,096 $ 594,390
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.71)% (1.83)% (1.75)% (1.85)% (0.84)% (0.48)%
Total expenses 2.26% 2.30% 2.51% 2.48% 2.08% 1.91%
Expenses after payments and waivers and
reduction to custodian expenses 2.13% 2.12% 2.06% 2.27% 2.07% N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 114% 76% 51% 84% 23%
1. Per share amounts calculated based on the average shares outstanding during
the period.
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER MIDCAP FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCT. 31,
CLASS C (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.78 $ 19.60
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.13) 1 (.25) (.20) (.30) (.15) (.07)
Net realized and unrealized gain (loss) .55 1.17 2.55 (2.70) (15.61) 10.25
-------------------------------------------------------------------------------------
Total from investment operations .42 .92 2.35 (3.00) (15.76) 10.18
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.71 $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.78
=====================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.94% 6.88% 21.33% (21.40)% (52.92)% 51.94%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 120,676 $ 110,018 $ 103,271 $ 83,351 $ 128,230 $ 247,566
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 121,394 $ 105,285 $ 87,528 $ 112,436 $ 170,129 $ 161,221
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.68)% (1.81)% (1.77)% (1.84)% (0.85)% (0.48)%
Total expenses 2.20% 2.26% 2.49% 2.47% 2.08% 1.91%
Expenses after payments and waivers and
reduction to custodian expenses 2.10% 2.10% 2.08% 2.26% 2.07% N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 114% 76% 51% 84% 23%
1. Per share amounts calculated based on the average shares outstanding during
the period.
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCT. 31,
CLASS N (UNAUDITED) 2004 2003 2002 2001 1
- -------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.90 $ 13.87 $ 11.38 $ 14.40 $ 19.54
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) 2 (.18) (.17) (.14) (.05)
Net realized and unrealized gain (loss) .57 1.21 2.66 (2.88) (5.09)
----------------------------------------------------------------------
Total from investment operations .48 1.03 2.49 (3.02) (5.14)
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.38 $ 14.90 $ 13.87 $ 11.38 $ 14.40
======================================================================
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 3.22% 7.43% 21.88% (20.97)% (26.31)%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 28,128 $ 22,488 $ 16,606 $ 8,846 $ 2,268
- -------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 26,512 $ 18,969 $ 11,846 $ 6,576 $ 1,250
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.14)% (1.28)% (1.34)% (1.28)% (0.94)%
Total expenses 1.69% 1.80% 1.86% 1.87% 1.73%
Expenses after payments and waivers and
reduction to custodian expenses 1.55% 1.57% 1.64% 1.66% 1.72%
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 114% 76% 51% 84%
1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. 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.
4. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER MIDCAP FUND
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2005 OCT. 31,
CLASS Y (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.51 $ 14.35 $ 11.71 $ 14.69 $ 30.86 $ 20.07
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.04) 1 (.13) (.19) (.08) (.08) (.02)
Net realized and unrealized gain (loss) .59 1.29 2.83 (2.90) (16.09) 10.81
-------------------------------------------------------------------------------------
Total from investment operations .55 1.16 2.64 (2.98) (16.17) 10.79
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.06 $ 15.51 $ 14.35 $11.71 $ 14.69 $ 30.86
=====================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.55% 8.08% 22.55% (20.29)% (52.40)% 53.76%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 29,079 $ 23,785 $ 17,171 $ 7,419 $ 4,759 $ 115
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 28,496 $ 19,540 $ 11,928 $ 6,449 $ 2,720 $ 33
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.50)% (0.69)% (0.80)% (0.39)% (0.12)% 0.60%
Total expenses 0.91% 0.98% 1.11% 0.83% 1.07% 0.74%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4 N/A 4,5 N/A 4 1.02% N/A 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 114% 76% 51% 84% 23%
1. Per share amounts calculated based on the average shares outstanding during
the period.
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. 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.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager
26 | OPPENHEIMER MIDCAP FUND
identifies as a significant event occurring before the fund's assets are valued
but after the close of their respective exchanges will be fair valued. 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).
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
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.
- --------------------------------------------------------------------------------
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. 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.
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.
27 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of April 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $1,093,809,366. This
estimated capital loss carryforward represents carryforward as of the end of the
last fiscal year, increased for losses deferred under tax accounting rules to
the current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. As of April 30,
2005, it is estimated that the Fund will utilize $31,939,384 of capital loss
carryforward to offset realized capital gains. During the year ended October 31,
2004, the Fund utilized $93,361,075 of capital loss carryforward to offset
capital gains realized in that fiscal year.
As of October 31, 2004, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
-----------------------------
2008 $ 54,968,709
2009 765,251,646
2010 237,892,098
2011 67,636,297
---------------
Total $ 1,125,748,750
===============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the six months ended
April 30, 2005, the Fund's projected benefit obligations were increased by
$2,678 and payments of $4,153 were made to retired trustees, resulting in an
accumulated liability of $156,801 as of April 30, 2005.
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.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
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.
28 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
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 U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED APRIL 30, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
CLASS A
Sold 5,991,464 $ 96,105,407 12,246,136 $ 177,432,418
Redeemed (5,424,379) (86,883,538) (9,541,964) (136,331,292)
-----------------------------------------------------------------
Net increase 567,085 $ 9,221,869 2,704,172 $ 41,101,126
=================================================================
- ---------------------------------------------------------------------------------------------------
CLASS B
Sold 1,791,347 $ 27,214,865 3,400,008 $ 46,414,529
Redeemed (3,015,373) (45,872,633) (6,061,337) (82,723,844)
-----------------------------------------------------------------
Net decrease (1,224,026) $ (18,657,768) (2,661,329) $ (36,309,315)
=================================================================
- ---------------------------------------------------------------------------------------------------
CLASS C
Sold 1,494,953 $ 22,749,161 2,068,251 $ 28,190,122
Redeemed (990,591) (15,031,960) (2,092,647) (28,412,505)
-----------------------------------------------------------------
Net increase (decrease) 504,362 $ 7,717,201 (24,396) $ (222,383)
=================================================================
29 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED APRIL 30, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
CLASS N
Sold 686,204 $ 10,901,911 849,973 $ 12,080,873
Redeemed (366,624) (5,812,817) (538,064) (7,587,508)
-----------------------------------------------------------------
Net increase 319,580 $ 5,089,094 311,909 $ 4,493,365
=================================================================
- ---------------------------------------------------------------------------------------------------
CLASS Y
Sold 467,172 $ 7,712,507 908,690 $ 13,499,650
Redeemed (190,204) (3,147,715) (571,650) (8,278,618)
-----------------------------------------------------------------
Net increase 276,968 $ 4,564,792 337,040 $ 5,221,032
=================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended April 30, 2005, were
$209,871,868 and $197,272,540, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets of
the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66%
of the next $200 million, 0.60% of the next $700 million, 0.58% of the next $1
billion, and 0.56% of average annual net assets in excess of $2.5 billion.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
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 six months ended April 30, 2005, the Fund paid
$1,726,148 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to
30 | OPPENHEIMER MIDCAP FUND
accounts that hold Class A shares. Reimbursement is made quarterly at an annual
rate of up to 0.25% of the average annual net assets of Class A shares of the
Fund. The Distributor currently uses all of those fees to pay dealers, brokers,
banks and other financial institutions quarterly for providing personal services
and maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. Fees incurred by the
Fund under the Plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
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 to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 0.25% per year under each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor's aggregate
uncompensated expenses under the plan at April 30, 2005 for Class B, Class C and
Class N shares were $16,298,528, $3,918,277 and $452,062, respectively. Fees
incurred by the Fund under the plans are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- --------------------------------------------------------------------------------------------------------------
April 30, 2005 $278,247 $16,209 $409,703 $9,536 $4,721
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended April 30, 2005,
OFS waived $157,997, $220,699, $58,105 and $17,658 for Class A, Class B, Class C
and Class N shares, respectively. This undertaking may be amended or withdrawn
at any time.
31 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. ILLIQUID OR RESTRICTED SECURITIES
As of April 30, 2005, investments in securities included issues that are
illiquid or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund will not invest more than 10% of
its net assets (determined at the time of purchase and reviewed periodically) in
illiquid or restricted securities. Certain restricted securities, eligible for
resale to qualified institutional investors, are not subject to that limitation.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST APRIL 30, 2005 DEPRECIATION
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Centerpoint Broadband
Technologies, Inc., Cv., Series D 10/23/00 $ 5,999,997 $ -- $ 5,999,997
ITF Optical Technologies, Inc. 4/7/00 5,000,000 173,606 4,826,394
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6. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 2005,
consolidates into a single action and amends six individual previously-filed
putative derivative and class action complaints. Like those prior complaints,
the complaint alleges that the Manager charged excessive fees for distribution
and other costs, improperly used assets of the funds in the form of directed
brokerage commissions and 12b-1 fees to pay brokers to promote sales of the
funds, and failed to properly disclose the use of assets of the funds to make
those payments in violation of the Investment Company Act of 1940 and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in those
actions, the Directors/Trustees and the Officers breached their fiduciary duties
to shareholders of the funds under the Investment Company Act of 1940 and at
common law. The complaint seeks unspecified compensatory and punitive damages,
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The defendants believe that it is premature to
render any opinion as to the likelihood of an outcome unfavorable to them and
that no estimate can yet be made with any degree of certainty as to the amount
or range of any potential loss.
32 | OPPENHEIMER MIDCAP FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
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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
1.800.525.7048, (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 is required to
file 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 Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
33 | OPPENHEIMER MIDCAP FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
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Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the advisory
agreement. The Investment Company Act of 1940, as amended, requires that the
Board request and evaluate, and that the Manager provide, such information as
may be reasonably necessary to evaluate the terms of the advisory agreement. The
Board employs an independent consultant to prepare a report that provides
information, including comparative information, that the Board requests for this
purpose. In addition, the Board receives information throughout the year
regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services; oversight of third party service providers and the services of the
portfolio manager and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board noted that the relatively low
redemption rate for funds advised by the Manager provided an indication of
shareholder satisfaction with the overall level of services provided by the
Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services provided, the Board considered the
experience of John O'Hare and the Manager's Growth Equity investment team and
analysts. Mr. O'Hare has had over 17 years of experience managing equity
investments and has been primarily responsible for the day-to-day management of
the Fund's portfolio since October 29, 2003. Mr. O'Hare, a Chartered Financial
Analyst, has been a Vice President of the Manager since September 2003 and was
Executive Vice President and Portfolio Manager from June
34 | OPPENHEIMER MIDCAP FUND
2000 through August 2003 and Portfolio Manager and Senior Vice President from
August 1997 through June 2000 at Geneva Capital Management, Ltd.. He is an
officer of two portfolios in the OppenheimerFunds complex.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other mid-cap growth funds (including
both funds advised by the Manager and funds advised by other investment
advisers). The Board also receives and reviews comparative performance
information regarding the Fund and other funds at each Board meeting. The Board
noted that the Fund's one-year performance was slightly better than its peer
group average. However its three- and five-year performance was disappointing.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other mid-cap growth funds and other funds with comparable assets levels
and distribution features. The Board noted that the Fund's contractual and
actual management fees and its total expenses are all lower than its peer group
average. In addition, the Board evaluated the comparability of the fees charged
and the services provided to the Fund to the fees charged and services provided
to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates and research
provided to the Manager in connection with permissible brokerage arrangements
(soft dollar arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board noted that the fund has recently experienced moderate
asset growth and that, based on current asset levels, the Fund is not yet
approaching its last management fee breakpoint.
35 | OPPENHEIMER MIDCAP FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
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CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund. Fund counsel is independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules. The Board was aware that
there are alternatives to retaining the Manager.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
36 | OPPENHEIMER MIDCAP
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
Not applicable
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the
Committee in nominating candidates for election as independent Trustees of the
Registrant. The Registrant's Board has adopted a written charter for the
Committee. A current copy of the Audit Committee charter is available to
shareholders on the OppenheimerFunds website at WWW.OPPENHEIMERFUNDS.COM.
Under the current policy, if the Board determines that a vacancy
exists or is likely to exist on the Board, the Audit Committee of the Board will
consider candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors.
The Committee may, upon Board approval, retain an executive search firm to
assist in screening potential candidates. Upon Board approval, the Audit
Committee may also use the services of legal, financial, or other external
counsel that it deems necessary or desirable in the screening process.
Shareholders wishing to submit a nominee for election to the Board may do so by
mailing their submission to the offices of OppenheimerFunds, Inc., 6803 South
Tucson Way, Centennial, CO 80112, to the attention of the Board of Trustees of
the named Registrant, c/o the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for
trustees includes a number of factors. In screening candidates for board
membership, whether the candidate is suggested by Board members, shareholders or
others, the Committee considers the candidate's professional experience,
soundness of judgment, integrity, ability to make independent, analytical
inquiries, collegiality, willingness and ability to devote the time required to
perform Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
ITEM 11. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(c)) as of April 30, 2005,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances 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 changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
(C) EXHIBITS ATTACHED HERETO. (ATTACH PORTFOLIO PROXY VOTING POLICIES AND
PROCEDURES AS REQUIRED BY ITEM 7)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer MidCap Fund
By: /S/ JOHN V. MURPHY
----------------------------
John V. Murphy
Principal Executive Officer
Date: June 15, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /S/ JOHN V. MURPHY
----------------------------
John V. Murphy
Principal Executive Officer
Date: June 15, 2005
By: /S/ BRIAN W. WIXTED
----------------------------
Brian W. Wixted
Chief Financial Officer
Date: June 15, 2005