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
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: October 31
Date of reporting period: October 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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IT Services 9.5%
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Health Care Equipment & Supplies 8.4
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Software 8.3
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Specialty Retail 7.8
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Health Care Providers & Services 7.2
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Diversified Financial Services 6.6
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Air Freight & Logistics 4.9
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Oil & Gas 3.8
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Textiles, Apparel & Luxury Goods 3.6
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Commercial Services & Supplies 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Legg Mason, Inc. 3.2%
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Fastenal Co. 3.1
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Coventry Health Care, Inc. 2.9
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Expeditors International of Washington, Inc. 2.9
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Getty Images, Inc. 2.5
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Bard (C.R.), Inc. 2.5
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O'Reilly Automotive, Inc. 2.5
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Comverse Technology, Inc. 2.5
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Chicago Mercantile Exchange (The) 2.5
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Whole Foods Market, Inc. 2.4
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on net assets. For more current Fund holdings,
please visit www.oppenheimerfunds.com.
7 | OPPENHEIMER MIDCAP FUND
TOP HOLDINGS AND ALLOCATIONS
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SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Information Technology 25.2%
IT Services 9.6
Software 8.3
Semiconductors & Semiconductor Equipment 3.5
Communications Equipment 2.5
Electronic Equipment & Instruments 1.3
Consumer Discretionary 19.9
Industrials 18.4
Health Care 17.9
Financials 10.2
Energy 6.0
Consumer Staples 2.4
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2005, and are based on the total market value of common stocks.
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8 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2005, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund produced relatively strong
performance relative to its benchmark, the S&P Mid-Cap 400 Index during its
fiscal year. The Fund's competitive performance can be attributed to strong
stock selection, particularly in the specialty retail, healthcare and financial
sectors. On the negative side, the Fund's relative underweight in energy hurt
performance, as energy was the best performing sector in the Index over the
period. Outside of energy, the Fund's overweight in IT services combined with
several holdings within the electronic equipment and software sectors hampered
performance.
The Fund's investment strategy focuses on high-growth companies that are
industry leaders within their marketplace. We target those we believe possess
competitive advantages, stable earnings, sustainable growth rates and
experienced management teams with proven records.
Our investment strategy succeeded in identifying high performing companies
across many market sectors. During the period, specialty retail proved to be the
Fund's best performing area, benefiting from a strong economy and a voracious
consumer appetite. Top contributors to performance were Chico's FAS, Inc., Urban
Outfitters, Inc. and Coach, Inc. Women's clothing retailer, Chico's FAS, Inc.,
benefited from very strong same-store sales growth and a highly attentive
customer service philosophy. Urban Outfitters, Inc., a fashion retailer for
young women and men, benefited from strong management, low cost overseas
manufacturing and trendy fashion designs. Coach, Inc., a designer, manufacturer
and marketer of fine leather goods and accessories, continued to profit from its
handbag collection as well as its successful expansion into Japan. As of the end
of the period, we have trimmed our exposure to this sector given our concern
over the impact that rising energy prices will have on the consumer.
Stocks within the healthcare sector also performed well for the Fund.
During times of economic uncertainty, as was the case for part of the reporting
period, investors tend to flock to defensive investments such as healthcare
stocks. The Fund's strongest healthcare holding was Coventry Health Care, Inc.,
a firm that provides managed healthcare services. Coventry Health Care, Inc.
successfully completed its acquisition of First Health Group Corp., which
boosted profitability and produced greater margins.
The financials sector also helped performance. The Fund benefited from its
underweight in commercial banks, as the group was down overall. Among the best
performing stocks in this sector were the Chicago Mercantile Exchange Holdings,
Inc. and Legg
9 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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Mason, Inc. The Chicago Mercantile Exchange Holdings, Inc., the largest U.S.
futures exchange and diversified and innovative global financial services
marketplace, profited from its new products and trading platform. Legg Mason,
Inc., a financial services firm, sold its brokerage unit to Citi Corp. This
strategic realignment has allowed the firm to focus on its more lucrative asset
management business and as a result the company's stock has soared. Lastly,
within the consumer staples sector, Whole Foods Market, Inc. outperformed. A
strong management team that successfully executed on its corporate plan drove
the company's stock price higher during the period.
Despite strong performance from most of the Fund's holdings, there were
some detractors. One of the primary detractors from Fund performance was being
underweighted in energy versus the Index. Approximately half way through the
reporting period the S&P Mid-Cap 400 Index increased its exposure to the energy
sector. A reallocation of this kind is very uncommon and as a result the Fund,
which had been overweighted in energy versus the Index, became underweighted.
In addition to energy, holdings within the information technology sector
held performance back. Disappointments included information technology services
providers, such as Affiliated Computer Services, Inc. and Alliance Data Systems
Corp. Also hampering performance were the Fund's holdings in the electronic
equipment and instruments sector, specifically CDW Corp. and National
Instruments Corp. Lastly, in the consumer discretionary sector, Brunswick Corp.,
a global leader in the leisure products industry, suffered from weak sales due
to consumer concerns over rising energy prices.
Mid-cap stocks tend to be more sensitive to changes in earnings
expectations, and tend to have lower trading volumes than large-cap securities,
and therefore they may experience more abrupt and erratic price movements.
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, 2005. In the case of Class A, Class B, Class C and
Class Y shares, performance is measured from the inception of each Class on
December 1, 1997. 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. Past performance
cannot guarantee future results.
10 | OPPENHEIMER MIDCAP FUND
The Fund's performance is compared to that of the S&P Mid-Cap 400 Index.
The S&P Mid-Cap 400 Index is an unmanaged index of 400 domestic stocks chosen
for market size, market size/liquidity or market size and liquidity, and
industry group representation. Index performance reflects the reinvestment of
income but does not consider the effect of transaction costs, and none of the
data in the graphs shows the effect of taxes. The Fund's performance reflects
the effects of the Fund's 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 investments in
the index.
11 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class A)
S&P Mid-Cap 400 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer S&P Midcap
MidCap Fund (Class A) 400 Index
12/01/1997 9,425 10,000
01/31/1998 9,519 10,190
04/30/1998 12,271 11,743
07/31/1998 11,744 10,848
10/31/1998 10,207 10,515
01/31/1999 13,390 11,892
04/30/1999 14,636 12,498
07/31/1999 16,382 12,943
10/31/1999 18,760 12,731
01/31/2000 25,875 13,795
04/30/2000 27,564 15,438
07/31/2000 29,716 15,713
10/31/2000 28,697 16,760
01/31/2001 23,903 17,052
04/30/2001 16,901 16,525
07/31/2001 15,618 16,591
10/31/2001 13,608 14,674
01/31/2002 13,910 16,493
04/30/2002 13,419 17,611
07/31/2002 11,201 14,491
10/31/2002 10,786 13,972
01/31/2003 10,182 13,759
04/30/2003 10,871 14,528
07/31/2003 12,617 16,498
10/31/2003 13,183 18,266
01/31/2004 13,230 19,638
04/30/2004 13,608 19,532
07/31/2004 13,400 19,440
10/31/2004 14,193 20,283
01/31/2005 15,155 21,819
04/30/2005 14,664 21,434
07/31/2005 16,637 24,473
10/31/2005 16,571 23,863
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1 Year 10.04% 5 Year -11.46% Since Inception (12/1/97) 6.59%
12 | OPPENHEIMER MIDCAP FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class B)
S&P Mid-Cap 400 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer S&P Midcap
MidCap Fund (Class B) 400 Index
12/01/1997 10,000 10,000
01/31/1998 10,080 10,190
04/30/1998 12,980 11,743
07/31/1998 12,390 10,848
10/31/1998 10,770 10,515
01/31/1999 14,097 11,892
04/30/1999 15,379 12,498
07/31/1999 17,181 12,943
10/31/1999 19,644 12,731
01/31/2000 27,043 13,795
04/30/2000 28,766 15,438
07/31/2000 30,948 15,713
10/31/2000 29,827 16,760
01/31/2001 24,801 17,052
04/30/2001 17,502 16,525
07/31/2001 16,150 16,591
10/31/2001 14,037 14,674
01/31/2002 14,318 16,493
04/30/2002 13,787 17,611
07/31/2002 11,494 14,491
10/31/2002 11,034 13,972
01/31/2003 10,393 13,759
04/30/2003 11,084 14,528
07/31/2003 12,846 16,498
10/31/2003 13,387 18,266
01/31/2004 13,431 19,638
04/30/2004 13,815 19,532
07/31/2004 13,604 19,440
10/31/2004 14,409 20,283
01/31/2005 15,386 21,819
04/30/2005 14,888 21,434
07/31/2005 16,890 24,473
10/31/2005 16,823 23,863
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1 Year 10.89% 5 Year -11.44% Since Inception (12/1/97) 6.79%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. 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. SEE PAGE 17 FOR
FURTHER INFORMATION.
13 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class C)
S&P Mid-Cap 400 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer S&P Midcap
MidCap Fund (Class C) 400 Index
12/01/1997 10,000 10,000
01/31/1998 10,090 10,190
04/30/1998 12,980 11,743
07/31/1998 12,400 10,848
10/31/1998 10,760 10,515
01/31/1999 14,087 11,892
04/30/1999 15,369 12,498
07/31/1999 17,171 12,943
10/31/1999 19,624 12,731
01/31/2000 27,023 13,795
04/30/2000 28,746 15,438
07/31/2000 30,938 15,713
10/31/2000 29,817 16,760
01/31/2001 24,791 17,052
04/30/2001 17,492 16,525
07/31/2001 16,140 16,591
10/31/2001 14,037 14,674
01/31/2002 14,318 16,493
04/30/2002 13,787 17,611
07/31/2002 11,484 14,491
10/31/2002 11,034 13,972
01/31/2003 10,393 13,759
04/30/2003 11,084 14,528
07/31/2003 12,846 16,498
10/31/2003 13,387 18,266
01/31/2004 13,407 19,638
04/30/2004 13,767 19,532
07/31/2004 13,527 19,440
10/31/2004 14,308 20,283
01/31/2005 15,239 21,819
04/30/2005 14,728 21,434
07/31/2005 16,671 24,473
10/31/2005 16,580 23,863
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1 Year 14.89% 5 Year -11.07% Since Inception (12/1/97) 6.60%
14 | OPPENHEIMER MIDCAP FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class N)
S&P Mid-Cap 400 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer S&P Midcap
MidCap Fund (Class N) 400 Index
03/01/2001 10,000 10,000
04/30/2001 9,161 10,278
07/31/2001 8,465 10,319
10/31/2001 7,370 9,126
01/31/2002 7,528 10,258
04/30/2002 7,257 10,953
07/31/2002 6,054 9,013
10/31/2002 5,824 8,690
01/31/2003 5,496 8,557
04/30/2003 5,865 9,036
07/31/2003 6,801 10,261
10/31/2003 7,098 11,361
01/31/2004 7,119 12,214
04/30/2004 7,323 12,148
07/31/2004 7,201 12,090
10/31/2004 7,625 12,615
01/31/2005 8,137 13,570
04/30/2005 7,871 13,331
07/31/2005 8,925 15,221
10/31/2005 8,884 14,841
AVERAGE ANNUAL TOTAL RETURN OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/05
1 Year 15.51% Since Inception (3/1/01) -2.50%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. 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. SEE PAGE 17 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER MIDCAP FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer MidCap Fund (Class Y)
S&P Mid-Cap 400 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer S&P Midcap
MidCap Fund (Class Y) 400 Index
12/01/1997 10,000 10,000
01/31/1998 10,110 10,190
04/30/1998 13,040 11,743
07/31/1998 12,500 10,848
10/31/1998 10,880 10,515
01/31/1999 14,297 11,892
04/30/1999 15,639 12,498
07/31/1999 17,521 12,943
10/31/1999 20,095 12,731
01/31/2000 27,744 13,795
04/30/2000 29,596 15,438
07/31/2000 31,949 15,713
10/31/2000 30,898 16,760
01/31/2001 25,771 17,052
04/30/2001 18,232 16,525
07/31/2001 16,861 16,591
10/31/2001 14,708 14,674
01/31/2002 15,048 16,493
04/30/2002 14,538 17,611
07/31/2002 12,155 14,491
10/31/2002 11,724 13,972
01/31/2003 11,094 13,759
04/30/2003 11,844 14,528
07/31/2003 13,757 16,498
10/31/2003 14,368 18,266
01/31/2004 14,438 19,638
04/30/2004 14,868 19,532
07/31/2004 14,648 19,440
10/31/2004 15,529 20,283
01/31/2005 16,600 21,819
04/30/2005 16,080 21,434
07/31/2005 18,272 24,473
10/31/2005 18,212 23,863
AVERAGE ANNUAL TOTAL RETURN OF CLASS Y SHARES OF THE FUND AT 10/31/05
1 Year 17.28% 5 Year -10.03% Since Inception (12/1/97) 7.87%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE 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 THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. 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. SEE PAGE 17 FOR
FURTHER INFORMATION.
16 | OPPENHEIMER MIDCAP FUND
NOTES
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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.
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.
17 | OPPENHEIMER MIDCAP FUND
NOTES
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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.
18 | 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 October 31, 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
19 | OPPENHEIMER MIDCAP FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
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
(5/1/05) (10/31/05) OCTOBER 31, 2005
- ------------------------------------------------------------------------------
Class A Actual $1,000.00 $ 1,130.00 $ 7.27
- ------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,018.40 6.89
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Class B Actual 1,000.00 1,125.80 11.42
- ------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,014.52 10.82
- ------------------------------------------------------------------------------
Class C Actual 1,000.00 1,125.80 11.20
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Class C Hypothetical 1,000.00 1,014.72 10.62
- ------------------------------------------------------------------------------
Class N Actual 1,000.00 1,128.80 8.35
- ------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.39 7.91
- ------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,132.60 4.74
- ------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.77 4.49
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 184/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended October 31, 2005 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 1.35%
- -----------------------------
Class B 2.12
- -----------------------------
Class C 2.08
- -----------------------------
Class N 1.55
- -----------------------------
Class Y 0.88
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.
- --------------------------------------------------------------------------------
20 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS October 31, 2005
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------
COMMON STOCKS--99.4%
- -----------------------------------------------------------------------
CONSUMER DISCRETIONARY--19.8%
- -----------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.5%
Cheesecake Factory,
Inc. (The) 1 227,189 $ 7,797,126
- -----------------------------------------------------------------------
P.F. Chang's
China Bistro, Inc. 1 104,100 4,761,534
- -----------------------------------------------------------------------
Starbucks Corp. 1 550,028 15,554,792
---------------
28,113,452
- -----------------------------------------------------------------------
HOUSEHOLD DURABLES--1.4%
Harman
International
Industries, Inc. 160,900 16,067,474
- -----------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--2.0%
Brunswick Corp. 585,500 22,325,115
- -----------------------------------------------------------------------
MEDIA--2.5%
Getty Images, Inc. 1 347,900 28,879,179
- -----------------------------------------------------------------------
SPECIALTY RETAIL--7.8%
Bed Bath &
Beyond, Inc. 1 392,800 15,916,256
- -----------------------------------------------------------------------
Chico's FAS, Inc. 1 533,100 21,078,774
- -----------------------------------------------------------------------
O'Reilly
Automotive, Inc. 1 1,010,800 28,504,560
- -----------------------------------------------------------------------
Tractor Supply Co. 1 143,900 6,979,150
- -----------------------------------------------------------------------
Urban Outfitters,
Inc. 1 567,100 16,065,943
---------------
88,544,683
- -----------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--3.6%
Coach, Inc. 1 758,466 24,407,436
- -----------------------------------------------------------------------
Polo Ralph
Lauren Corp. 338,600 16,659,120
---------------
41,066,556
- -----------------------------------------------------------------------
CONSUMER STAPLES--2.4%
- -----------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.4%
Whole Foods
Market, Inc. 186,200 26,837,006
- -----------------------------------------------------------------------
ENERGY--6.0%
- -----------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.2%
BJ Services Co. 264,400 9,187,900
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
Smith
International, Inc. 471,800 $ 15,286,320
---------------
24,474,220
- -----------------------------------------------------------------------
OIL & GAS--3.8%
Apache Corp. 289,300 18,466,019
- -----------------------------------------------------------------------
Murphy Oil Corp. 206,200 9,660,470
- -----------------------------------------------------------------------
XTO Energy, Inc. 360,566 15,670,198
---------------
43,796,687
- -----------------------------------------------------------------------
FINANCIALS--10.1%
- -----------------------------------------------------------------------
COMMERCIAL BANKS--1.9%
Commerce
Bancorp, Inc. 722,600 22,017,622
- -----------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.6%
Chicago Mercantile
Exchange (The) 77,200 28,189,580
- -----------------------------------------------------------------------
Investors Financial
Services Corp. 280,700 10,717,126
- -----------------------------------------------------------------------
Legg Mason, Inc. 339,300 36,410,283
---------------
75,316,989
- -----------------------------------------------------------------------
INSURANCE--1.6%
Brown & Brown, Inc. 333,600 18,124,488
- -----------------------------------------------------------------------
HEALTH CARE--17.8%
- -----------------------------------------------------------------------
BIOTECHNOLOGY--2.2%
Affymetrix, Inc. 1 151,300 6,873,559
- -----------------------------------------------------------------------
Gilead Sciences, Inc. 1 379,300 17,921,925
---------------
24,795,484
- -----------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--8.4%
Bard (C.R.), Inc. 458,100 28,576,278
- -----------------------------------------------------------------------
Cooper Cos., Inc.
(The) 289,600 19,936,064
- -----------------------------------------------------------------------
Gen-Probe, Inc. 1 367,300 15,000,532
- -----------------------------------------------------------------------
ResMed, Inc. 1 236,200 9,006,306
- -----------------------------------------------------------------------
Varian Medical
Systems, Inc. 1 511,952 23,324,533
---------------
95,843,713
21 | OPPENHEIMER MIDCAP FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--7.2%
Coventry Health
Care, Inc. 1 608,325 $ 32,843,467
- -----------------------------------------------------------------------
Health Management
Associates, Inc., Cl. A 1,193,700 25,557,117
- -----------------------------------------------------------------------
Patterson Cos., Inc. 1 560,500 23,193,490
---------------
81,594,074
- -----------------------------------------------------------------------
INDUSTRIALS--18.3%
- -----------------------------------------------------------------------
AEROSPACE & DEFENSE--3.2%
L-3 Communications
Holdings, Inc. 228,700 17,797,434
- -----------------------------------------------------------------------
Rockwell Collins, Inc. 406,100 18,607,502
---------------
36,404,936
- -----------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--4.9%
C.H. Robinson
Worldwide, Inc. 664,600 23,433,796
- -----------------------------------------------------------------------
Expeditors
International of
Washington, Inc. 534,700 32,440,249
---------------
55,874,045
- -----------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--3.6%
Corporate Executive
Board Co. 268,400 22,180,576
- -----------------------------------------------------------------------
Stericycle, Inc. 1 327,300 18,839,388
---------------
41,019,964
- -----------------------------------------------------------------------
MACHINERY--3.5%
Donaldson Co., Inc. 498,500 15,578,125
- -----------------------------------------------------------------------
Oshkosh Truck Corp. 556,000 24,219,360
---------------
39,797,485
- -----------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--3.1%
Fastenal Co. 500,100 35,072,013
- -----------------------------------------------------------------------
INFORMATION TECHNOLOGY--25.0%
- -----------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.5%
Comverse
Technology, Inc. 1 1,124,300 28,219,930
- -----------------------------------------------------------------------
ITF Optical
Technologies, Inc. 1,2 384,000 125,000
---------------
28,344,930
VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3%
CDW Corp. 259,900 $ 14,645,365
- -----------------------------------------------------------------------
IT SERVICES--9.5%
Alliance Data
Systems Corp. 1 527,800 18,768,568
- -----------------------------------------------------------------------
Cognizant
Technology
Solutions Corp. 1 504,800 22,201,104
- -----------------------------------------------------------------------
Fiserv, Inc. 1 611,600 26,714,688
- -----------------------------------------------------------------------
Global Payments,
Inc. 479,400 20,542,290
- -----------------------------------------------------------------------
NAVTEQ Corp. 1 231,000 9,036,720
- -----------------------------------------------------------------------
SRA International,
Inc., Cl. A 1 348,300 11,431,206
---------------
108,694,576
- -----------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.4%
Linear Technology
Corp. 640,000 21,254,400
- -----------------------------------------------------------------------
Microchip
Technology, Inc. 589,500 17,785,215
---------------
39,039,615
- -----------------------------------------------------------------------
SOFTWARE--8.3%
Activision, Inc. 1 1,038,933 16,383,973
- -----------------------------------------------------------------------
Adobe Systems, Inc. 655,200 21,130,200
- -----------------------------------------------------------------------
Amdocs Ltd. 1 652,900 17,282,263
- -----------------------------------------------------------------------
Autodesk, Inc. 422,800 19,080,964
- -----------------------------------------------------------------------
Electronic Arts, Inc. 1 212,500 12,087,000
- -----------------------------------------------------------------------
FactSet Research
Systems, Inc. 230,550 8,085,389
---------------
94,049,789
---------------
Total Common Stocks
(Cost $865,752,558) 1,130,739,460
- -----------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- -----------------------------------------------------------------------
Centerpoint
Broadband
Technologies, Inc.,
Cv., Series D 1,2
(Cost $5,999,997) 556,586 --
22 | OPPENHEIMER MIDCAP FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.6%
- -----------------------------------------------------------------------
Undivided interest of 1.05% in joint
repurchase agreement (Principal
Amount/Value $647,082,000, with a
maturity value of $647,153,179) with
UBS Warburg LLC, 3.96%, dated
10/31/05, to be repurchased at
$6,821,750 on 11/1/05, collateralized
by Federal National Mortgage Assn.,
5%, 10/1/35, with a value of
$661,717,556 (Cost $6,821,000) $ 6,821,000 $ 6,821,000
VALUE
SEE NOTE 1
- -----------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $878,573,555) 100.0% $ 1,137,560,460
- -----------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS 0.0 17,552
--------------------------------
NET ASSETS 100.0% $ 1,137,578,012
================================
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 October 31, 2005 was $125,000, which represents
0.01% 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 October 31, 2005. There were no
affiliate securities held by the Fund as of October 31, 2005. Transactions
during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
OCT. 31, 2004 ADDITIONS REDUCTIONS OCT. 31, 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.
23 | OPPENHEIMER MIDCAP FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $878,573,555)--see accompanying
statement of investments $ 1,137,560,460
- --------------------------------------------------------------------------------
Cash 619,923
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 2,059,389
Interest and dividends 192,207
Receivable from transfer agent 37,637
Other 8,968
----------------
Total assets 1,140,478,584
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,692,603
Shareholder communications 497,243
Transfer and shareholder servicing agent fees 298,083
Distribution and service plan fees 226,272
Trustees' compensation 158,124
Other 28,247
----------------
Total liabilities 2,900,572
- --------------------------------------------------------------------------------
NET ASSETS $ 1,137,578,012
================
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Paid-in capital $ 1,943,533,594
- --------------------------------------------------------------------------------
Accumulated net investment loss (153,273)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (1,064,789,214)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments 258,986,905
----------------
NET ASSETS $ 1,137,578,012
================
24 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $618,270,019 and 35,209,752 shares of beneficial
interest outstanding) $17.56
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $18.63
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $310,352,184 and 18,744,588 shares of beneficial
interest outstanding) $16.56
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $137,308,502 and 8,293,413 shares of beneficial interest
outstanding) $16.56
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $34,878,502 and 2,008,920 shares of beneficial interest
outstanding) $17.36
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $36,768,805 and 2,020,997 shares of
beneficial interest outstanding) $18.19
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER MIDCAP FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends $ 4,143,005
- --------------------------------------------------------------------------------
Interest 245,822
- --------------------------------------------------------------------------------
Other income 121,431
----------------
Total investment income 4,510,258
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 7,301,284
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,396,051
Class B 3,193,935
Class C 1,266,195
Class N 146,798
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,218,325
Class B 1,512,223
Class C 534,887
Class N 135,824
Class Y 64,944
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 405,764
Class B 324,396
Class C 86,701
Class N 6,715
- --------------------------------------------------------------------------------
Trustees' compensation 23,782
- --------------------------------------------------------------------------------
Custodian fees and expenses 16,427
- --------------------------------------------------------------------------------
Administration service fees 1,500
- --------------------------------------------------------------------------------
Other 46,645
----------------
Total expenses 18,682,396
Less reduction to custodian expenses (712)
Less waivers and reimbursements of expenses (738,066)
----------------
Net expenses 17,943,618
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (13,433,360)
26 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies $ 70,199,319
Affiliated companies (8,537,273)
----------------
Net realized gain 61,662,046
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 111,575,281
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 159,803,967
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER MIDCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2005 2004
- ---------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------
Net investment loss $ (13,433,360) $ (12,888,844)
- ---------------------------------------------------------------------------------------------------
Net realized gain 61,662,046 93,338,556
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 111,575,281 (17,276,110)
-----------------------------------
Net increase in net assets resulting from operations 159,803,967 63,173,602
- ---------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 28,238,994 41,101,126
Class B (48,950,188) (36,309,315)
Class C 9,175,002 (222,383)
Class N 8,099,224 4,493,365
Class Y 8,312,490 5,221,032
- ---------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------
Total increase 164,679,489 77,457,427
- ---------------------------------------------------------------------------------------------------
Beginning of period 972,898,523 895,441,096
-----------------------------------
End of period (including accumulated net investment loss
of $153,273 and $165,364, respectively) $ 1,137,578,012 $ 972,898,523
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.04 $ 13.97 $ 11.43 $ 14.42 $ 30.41
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.15) 1 (.17) (.12) (.13) (.02)
Net realized and unrealized gain (loss) 2.67 1.24 2.66 (2.86) (15.97)
-----------------------------------------------------------------------------
Total from investment operations 2.52 1.07 2.54 (2.99) (15.99)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.56 $ 15.04 $ 13.97 $ 11.43 $ 14.42
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 16.76% 7.66% 22.22% (20.74)% (52.58)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 618,270 $ 504,292 $ 430,514 $ 351,983 $ 532,338
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 570,513 $ 457,926 $ 366,050 $ 460,797 $ 718,814
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.94)% (1.05)% (1.01)% (1.06)% (0.09)%
Total expenses 1.39% 1.42% 1.61% 1.68% 1.33%
Expenses after payments and waivers and
reduction to custodian expenses 1.35% 1.33% 1.32% 1.47% 1.32%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 114% 76% 51% 84%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.79
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.27) 1 (.30) (.23) (.30) (.15)
Net realized and unrealized gain (loss) 2.54 1.22 2.58 (2.70) (15.62)
-----------------------------------------------------------------------------
Total from investment operations 2.27 .92 2.35 (3.00) (15.77)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.56 $ 14.29 $ 13.37 $ 11.02 $ 14.02
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.89% 6.88% 21.33% (21.40)% (52.94)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 310,352 $ 312,315 $ 327,880 $ 291,397 $ 438,962
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 319,953 $ 316,748 $ 291,209 $ 385,917 $ 592,096
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.71)% (1.83)% (1.75)% (1.85)% (0.84)%
Total expenses 2.26% 2.30% 2.51% 2.48% 2.08%
Expenses after payments and waivers and
reduction to custodian expenses 2.14% 2.12% 2.06% 2.27% 2.07%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 114% 76% 51% 84%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER MIDCAP FUND
CLASS C YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.29 $ 13.37 $ 11.02 $ 14.02 $ 29.78
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.26) 1 (.25) (.20) (.30) (.15)
Net realized and unrealized gain (loss) 2.53 1.17 2.55 (2.70) (15.61)
-----------------------------------------------------------------------------
Total from investment operations 2.27 .92 2.35 (3.00) (15.76)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.56 $ 14.29 $ 13.37 $ 11.02 $ 14.02
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 15.89% 6.88% 21.33% (21.40)% (52.92)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 137,308 $ 110,018 $ 103,271 $ 83,351 $ 128,230
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 126,925 $ 105,285 $ 87,528 $ 112,436 $ 170,129
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.68)% (1.81)% (1.77)% (1.84)% (0.85)%
Total expenses 2.17% 2.26% 2.49% 2.47% 2.08%
Expenses after payments and waivers and
reduction to custodian expenses 2.10% 2.10% 2.08% 2.26% 2.07%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 114% 76% 51% 84%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER MIDCAP FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2005 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 (.19) 2 (.18) (.17) (.14) (.05)
Net realized and unrealized gain (loss) 2.65 1.21 2.66 (2.88) (5.09)
-----------------------------------------------------------------------------
Total from investment operations 2.46 1.03 2.49 (3.02) (5.14)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.36 $ 14.90 $ 13.87 $ 11.38 $ 14.40
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 16.51% 7.43% 21.88% (20.97)% (26.31)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 34,879 $ 22,488 $ 16,606 $ 8,846 $ 2,268
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 29,445 $ 18,969 $ 11,846 $ 6,576 $ 1,250
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.15)% (1.28)% (1.34)% (1.28)% (0.94)%
Total expenses 1.67% 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 39% 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.
32 | OPPENHEIMER MIDCAP FUND
CLASS Y YEAR ENDED OCTOBER 31, 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.51 $ 14.35 $ 11.71 $ 14.69 $ 30.86
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.08) 1 (.13) (.19) (.08) (.08)
Net realized and unrealized gain (loss) 2.76 1.29 2.83 (2.90) (16.09)
-----------------------------------------------------------------------------
Total from investment operations 2.68 1.16 2.64 (2.98) (16.17)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 18.19 $ 15.51 $ 14.35 $ 11.71 $ 14.69
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 17.28% 8.08% 22.55% (20.29)% (52.40)%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 36,769 $ 23,785 $ 17,171 $ 7,419 $ 4,759
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 31,030 $ 19,540 $ 11,928 $ 6,449 $ 2,720
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.49)% (0.69)% (0.80)% (0.39)% (0.12)%
Total expenses 0.89% 0.98% 1.11% 0.83% 1.07%
Expenses after payments and waivers and
reduction to custodian expenses 0.89% 0.98% 1.11% 0.83% 1.02%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 39% 114% 76% 51% 84%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic 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 traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, in the country that is identified by the portfolio
pricing service, prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the official closing price on the
principal exchange. 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
34 | OPPENHEIMER MIDCAP FUND
such principal exchange at its trading session ending at, or most recently prior
to, the time when the Fund's assets are valued. 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 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).
- --------------------------------------------------------------------------------
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.
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 1,2,3 TAX PURPOSES
--------------------------------------------------------------------------
$-- $-- $1,064,638,023 $258,835,713
1. As of October 31, 2005, the Fund had $1,064,638,023 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2005,
details of the capital loss carryforwards were as follows:
35 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
EXPIRING
--------------------------
2009 $ 759,109,628
2010 237,892,098
2011 67,636,297
--------------
TOTAL $1,064,638,023
==============
2. During the fiscal year ended October 31, 2005, the Fund utilized $61,371,387
of capital loss carryforward to offset capital gains realized in that fiscal
year.
3. During the fiscal year ended October 31, 2004, the Fund utilized
$93,361,075 of capital loss carryforward to offset capital gains realized in
that fiscal year.
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, 2005. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO INCREASE TO
ACCUMULATED ACCUMULATED NET
REDUCTION TO NET INVESTMENT REALIZED LOSS
PAID-IN CAPITAL LOSS ON INVESTMENTS
------------------------------------------------------
$12,924,131 $13,445,451 $521,320
No distributions were paid during the years ended October 31, 2005 and October
31, 2004.
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, 2005 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 $ 878,724,748
==============
Gross unrealized appreciation $ 280,919,532
Gross unrealized depreciation (22,083,819)
--------------
Net unrealized appreciation $ 258,835,713
==============
- --------------------------------------------------------------------------------
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, 2005, the Fund's projected benefit obligations were decreased by $8,812 and
payments of $4,152 were made to retired trustees, resulting in an accumulated
liability of $145,312 as of October 31, 2005.
36 | OPPENHEIMER MIDCAP FUND
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.
- --------------------------------------------------------------------------------
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.
37 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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:
YEAR ENDED OCTOBER 31, 2005 YEAR ENDED OCTOBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------
CLASS A
Sold 11,360,512 $ 187,484,134 12,246,136 $ 177,432,418
Redeemed (9,680,275) (159,245,140) (9,541,964) (136,331,292)
------------------------------------------------------------
Net increase 1,680,237 $ 28,238,994 2,704,172 $ 41,101,126
============================================================
- --------------------------------------------------------------------------------------
CLASS B
Sold 2,895,842 $ 44,967,755 3,400,008 $ 46,414,529
Redeemed (6,005,026) (93,917,943) (6,061,337) (82,723,844)
------------------------------------------------------------
Net decrease (3,109,184) $ (48,950,188) (2,661,329) $ (36,309,315)
============================================================
- --------------------------------------------------------------------------------------
CLASS C
Sold 2,529,971 $ 39,392,766 2,068,251 $ 28,190,122
Redeemed (1,937,019) (30,217,764) (2,092,647) (28,412,505)
------------------------------------------------------------
Net increase (decrease) 592,952 $ 9,175,002 (24,396) $ (222,383)
============================================================
- --------------------------------------------------------------------------------------
CLASS N
Sold 1,165,948 $ 18,962,715 849,973 $ 12,080,873
Redeemed (666,117) (10,863,491) (538,064) (7,587,508)
------------------------------------------------------------
Net increase 499,831 $ 8,099,224 311,909 $ 4,493,365
============================================================
- --------------------------------------------------------------------------------------
CLASS Y
Sold 908,834 $ 15,524,588 908,690 $ 13,499,650
Redeemed (421,042) (7,212,098) (571,650) (8,278,618)
------------------------------------------------------------
Net increase 487,792 $ 8,312,490 337,040 $ 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 year ended October 31, 2005, were as
follows:
PURCHASES SALES
- ----------------------------------------------------------
Investment securities $418,968,604 $415,035,791
- --------------------------------------------------------------------------------
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.
38 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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 year ended October 31, 2005, the Fund paid
$3,710,067 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 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 October 31, 2005 for Class B, Class C
and Class N shares were $16,443,602, $4,410,856 and $487,197, 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,
39 | OPPENHEIMER MIDCAP FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ---------------------------------------------------------------------------------------------
October 31, 2005 $500,715 $16,155 $726,957 $23,685 $13,596
- --------------------------------------------------------------------------------
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 year ended October 31, 2005, OFS
waived $221,529, $392,386, $90,649 and $33,502 for Class A, Class B, Class C and
Class N shares, respectively. This undertaking may be amended or withdrawn at
any time.
- --------------------------------------------------------------------------------
5. ILLIQUID OR RESTRICTED SECURITIES
As of October 31, 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:
VALUATION AS OF
ACQUISITION OCTOBER 31, UNREALIZED
SECURITY DATES COST 2005 DEPRECIATION
- ----------------------------------------------------------------------------------------------------
Centerpoint Broadband Technologies,
Inc., Cv., Series D 10/23/00 $ 5,999,997 $ -- $ 5,999,997
ITF Optical Technologies, Inc. 4/7/00 5,000,000 125,000 4,875,000
-----------------------------------------------
$ 10,999,997 $125,000 $ 10,874,997
===============================================
40 | OPPENHEIMER MIDCAP FUND
- --------------------------------------------------------------------------------
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.
41 | OPPENHEIMER MIDCAP FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MIDCAP FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer MidCap Fund, including the statement of investments, as of October
31, 2005, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the five-year
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.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). 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, 2005, by correspondence with
the custodian. 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 MidCap Fund as of October 31, 2005, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
years in the five-year period then ended, in conformity with U.S. generally
accepted accounting principles.
KPMG LLP
Denver, Colorado
December 20, 2005
42 | OPPENHEIMER MIDCAP FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2006, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2005. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
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.
43 | OPPENHEIMER MIDCAP FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS 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
1.800.525.7048, (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 the 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.
44 | OPPENHEIMER MIDCAP FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF
THE FUND, LENGTH OF SERVICE, PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
AGE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924.
TRUSTEES 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) (since 1982); General Partner of
Chairman of the Trivest Venture Fund (private venture capital fund); President of Investment Counseling Federated
Board of Trustees, Trustee Investors, Inc. (1973-1982); Trustee of the following open-end investment companies: Cash Assets
(since 1997) Trust, PIMCO Advisors VIT, Tax Free Trust of Arizona (since 1984) and four funds for the Hawaiian
Age: 72 Tax Free Trust. Oversees 10 portfolios in the OppenheimerFunds complex.
PAUL Y. CLINTON, Principal of Clinton Management Associates (financial and venture capital consulting firm) (since
Trustee (since 1997) 1996); Trustee of PIMCO Advisors VIT (open-end investment company); Trustee of Capital Cash
Age: 74 Management Trust (money market fund) (1979-December 2004); Trustee of Narragansett Insured Tax-Free
Income Fund (tax-exempt bond fund) (1996-December 2004); Trustee of Prime Cash Fund (1996-December
2004); and Director of OCC Cash Reserves, Inc. (open-end investment company) (1989-December 2002).
Oversees 10 portfolios in the OppenheimerFunds complex.
ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in the OppenheimerFunds
Trustee (since 1998) complex.
Age: 72
LACY B. HERRMANN, Founder and Chairman Emeritus of Aquila Management Corporation (open-end investment company) (since
Trustee (since 1997) December 2004); Chairman and Chief Executive Officer of Aquila Management Corporation (since August
Age: 76 1984); Chairman of the Board and President of Aquila Management Corporation (August 1984-December
1984); Vice President, Director and Secretary of Aquila Distributors, Inc. (distributor of Aquila
Management Corporation); Treasurer of Aquila Distributors, Inc.; President and Chairman of the Board
of Trustees of Capital Cash Management Trust ("CCMT"); President and Director of STCM Management
Company, Inc. (sponsor and adviser to CCMT); Chairman, President and Director of InCap Management
Corporation (nature of business); Sub-Advisor and Administrator of Prime Cash Fund & Short Term
Asset Reserves (nature of business); Director of OCC Cash Reserves, Inc. (open-end investment
company) (until June 2003); Trustee of OCC Accumulation Trust (open-end investment company);
Chairman of the Board of Trustees and President of Hawaiian Tax-Free Trust (open-end investment
company) (February 1985-December 2003); Trustee Emeritus of Brown University (since June 1983) .
Oversees 10 portfolios in the OppenheimerFunds complex.
BRIAN WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of Special
Trustee (since 2001) Value Opportunities Fund, LLC (registered investment company) (since September 2004); Director of
Age: 62 Zurich Financial Investment Advisory Board (affiliate of the Manager's parent company) (since
October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August
1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May
1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment)
(January 1999-September 2004); Trustee of Research Foundation of AIMR (2000-2002) (investment
research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August
1990-September 2001) (economics research); Director of Ray & Berendtson, Inc.
45 | OPPENHEIMER MIDCAP FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN WRUBLE, (May 2000-April 2002) (executive search firm). Oversees 48 portfolios in the OppenheimerFunds
Continued complex.
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS. O'HARE, MURPHY, AND ZACK,
OF THE FUND TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NEW YORK 10281-1008, AND FOR
MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER
SERVES FOR AN ANNUAL TERM OR UNTIL HIS EARLIER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
JOHN O'HARE, Vice President of the Manager since September 2003. Formerly Executive Vice President and Portfolio
Vice President Manager (June 2000 - August 2003) and Portfolio Manager and Senior Vice President (August 1997 -
(since 2003) June 2000) at Geneva Capital Management, Ltd. (an investment advisor). Mr. O'Hare holds a BBA in
Age: 46 Finance and Economics from the University of Wisconsin and is a Chartered Financial Analyst. An
officer of 2 portfolios in the OppenheimerFunds complex.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President (since September
President (since 2001) 2000) of the Manager; President and director or trustee of other Oppenheimer funds; President and
Age: 56 Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and of
Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July
2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November
2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services,
Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of
OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July
2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional
Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management
Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management
Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001)
and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President
of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997);
Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC)
(since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3,
2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of
MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November
1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000);
President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September
1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned
subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 77 portfolios in the
OppenheimerFunds complex as a director or trustee and officer and an additional 10 portfolios as an
officer.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice President
Vice President and of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder
Chief Compliance Officer Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit of the
(since 2004) Manager (1997- February 2004). An officer of 87 portfolios in the OppenheimerFunds complex.
Age: 55
46 | OPPENHEIMER MIDCAP FUND
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following:
Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Age: 46 Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings,
Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset
Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust
program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI
Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the
following: OAC (since March 1999),Centennial Asset Management Corporation (March 1999-October 2003)
and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of
Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87
portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager;
Secretary (since 2001) General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial
Age: 57 Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of
HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC
(since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001)
of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of
Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset
Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of
Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior
Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company
(since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior
Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November
2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May
1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General
Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder
Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November
1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An
officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST, BY CALLING 1.800.525.7048.
47 | OPPENHEIMER MIDCAP FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the registrant has determined that the registrant 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.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $17,000 in fiscal 2005 and $15,000 in fiscal 2004.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $156,805 in fiscal 2005 and $39,500 in fiscal 2004 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services: internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years.
The principal accountant for the audit of the registrant's annual financial
statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
Such services: Computations of capital gain tax liability, preparation of tax
returns, preparation of Form 5500 and tax consultations on pass through of
foreign withholding taxes and mortgage dollar roll transactions.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2005 and $103 in fiscal 2004.
Such services: the cost to the principal accountant of attending audit committee
meetings.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and other
services to be provided by the principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its Chairman
for any subsequent new engagements that arise between regularly scheduled
meeting dates provided that any fees such pre-approved are presented to
the audit committee at its next regularly scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid by
the registrant to it principal accountant during the fiscal year in which
services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee of
the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $161,805 in fiscal 2005 and $45,603 in fiscal
2004 to the registrant and the registrant's investment adviser or any
entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant related to
non-audit fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934.
The registrant's audit committee of the board of trustees has considered
whether the provision of non-audit services that were rendered to the
registrant's investment adviser, and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES 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 FUND'S AUDIT COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Audit Committee (the "Committee") will evaluate potential Board
candidates to assess their qualifications. The Committee shall have the
authority, upon approval of the Board, to retain an executive search firm
to assist in this effort. The Committee may consider recommendations by
business and personal contacts of current Board members and by executive
search firms which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider the
advice and recommendation of the Funds' investment manager and its
affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met
by a trustee nominee. In evaluating trustee nominees, the Committee
considers, among other things, an individual's background, skills, and
experience; whether the individual is an "interested person" as defined in
the Investment Company Act of 1940; and whether the individual would be
deemed an "audit committee financial expert" within the meaning of
applicable SEC rules. The Committee also considers whether the
individual's background, skills, and experience will complement the
background, skills, and experience of other nominees and will contribute
to the Board. There are no differences in the manner in which the
Committee
evaluates nominees for trustees based on whether the nominee is
recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates
to present to the Board and, in such cases where required, to
shareholders. Recommendations for trustee nominees should, at a minimum,
be accompanied by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person"
as defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in
a proxy statement concerning the person if he or she was nominated;
and
o the name and address of the person submitting the recommendation
and, if that person is a shareholder, the period for which that
person held Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under
the Investment Company Act of 1940. In addition, certain other
relationships with Massachusetts Mutual Life Insurance Company or its
subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving
as a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the 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 October 31, 2005, the registrant's principal executive
officer and principal financial officer found the registrant's disclosure
controls and procedures to provide reasonable assurances that information
required to be disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Exhibit attached hereto.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
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: December 20, 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: December 20, 2005
By: /s/ Brian W. Wixted
-------------------
Brian W. Wixted
Principal Financial Officer
Date: December 20, 2005