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 811-07265
OPPENHEIMER ENTERPRISE 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: AUGUST
Date of reporting period: 08/31/2006
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Software 10.2%
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Communications Equipment 6.9
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Semiconductors & Semiconductor Equipment 6.6
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Internet Software & Services 5.6
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Health Care Equipment & Supplies 5.4
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Biotechnology 4.7
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Pharmaceuticals 4.6
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Health Care Providers & Services 4.3
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Energy Equipment & Services 4.2
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Capital Markets 4.2
Portfolio holdings and allocations are subject to change. Percentages are as of
August 31, 2006, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Novartis AG, ADR 3.3%
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Monsanto Co. 3.2
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Cisco Systems, Inc. 3.2
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Halliburton Co. 3.1
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Hess Corp. 2.8
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American Tower Corp. 2.7
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Cognizant Technology Solutions Corp. 2.6
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QUALCOMM, Inc. 2.6
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PepsiCo, Inc. 2.4
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Electronic Arts, Inc. 2.4
Portfolio holdings and allocations are subject to change. Percentages are as of
August 31, 2006, and are based on net assets. For more current Fund holdings,
please visit www.oppenheimerfunds.com.
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7 | OPPENHEIMER ENTERPRISE 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 35.9%
Software 10.3
Communications Equipment 6.9
Semiconductors & Semiconductor Equipment 6.7
Internet Software & Services 5.7
Computers & Peripherals 3.7
IT Services 2.6
Health Care 19.2
Consumer Discretionary 11.9
Industrials 8.8
Financials 8.7
Energy 7.1
Materials 3.2
Telecommunication Services 2.7
Consumer Staples 2.5
Portfolio holdings and allocations are subject to change. Percentages are as of
August 31, 2006, and are based on the total market value of common stocks.
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8 | OPPENHEIMER ENTERPRISE 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 AUGUST 31, 2006, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For the 12-month period ended
August 31, 2006, the Fund produced flat performance and trailed behind its
benchmark, the S&P 500 Index. In a market environment, described below, where
investors reduced their appetite for risk, our technology and biotechnology
holdings underperformed.
Shareholders should expect us to continue to adhere to our
research-driven, bottom-up long-term stock selection investment strategy. We
look for market leaders and emerging market leaders in high growth industries
across all market capitalizations. Our focus is on well-managed businesses with
strong financials and sustainable competitive advantages, which we have
determined are attractively valued. We invest with a minimum one-year time frame
and seek to identify a long-term investment thesis for each and every
investment. In situations where we believe our longer-term thesis has been
altered or compromised, we will exit or reduce our holding. If and when our
long-term, internally generated, price targets are reached, we will exit our
position. We believe that continuing to follow our investment process,
regardless of the market environment, is the best approach to serving our
shareholders over the long-term.
Although we conduct intensive research on all of the companies that we
select for the portfolio, unanticipated events arise, as occurred over the
period with a number of the Fund's holdings. Underperformance was derived from
holdings within the technology, healthcare and consumer discretionary sectors.
Within technology, detractors included Maxim Integrated Products, Inc., and
eBay, Inc. Maxim Integrated Products, Inc., a leading supplier of mixed-signal
(analog and digital) semiconductors, declined as a result a cyclical downturn in
its niche market. eBay, Inc., the leading electronic auction marketplace, also
detracted from Fund performance as it underperformed due to negative market
reaction to its expanded business model--an idea conceived by management to
enhance its long-term business prospects. This company's proven management team
is focused on the long-term, something we as long-term investors, are attracted
to.
Within biotechnology, Martek Biosciences Corp., a manufacturer and seller
of nutritional additives found in infant formula, detracted from the Fund's
results. Martek Biosciences Corp. came under pressure after a series of
management missteps and new lower cost competitive products came to market. Due
to the nature of these issues, we no longer had confidence in our long-term
investment thesis and sold our holdings. Lastly, specialty retailer, Urban
Outfitters, Inc., suffered as the company failed to correctly position its
apparel line for
9 | OPPENHEIMER ENTERPRISE FUND
FUND PERFORMANCE DISCUSSION
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the latest fashion trends. However, fashion misses are a reality of this
business, our confidence in management remains, and we have maintained our
position.
On the positive side of performance, the Fund received strong
contributions from stocks in such diverse industries as telecommunication
services, IT services, capital markets and medical equipment. Within the
telecommunication services area, American Tower Corp. posted our strongest
performance. American Tower Corp., which manages and operates communication
towers for cellular phone transmission, benefited from the tremendous growth
seen in the cellular phone industry. Cognizant Technology Solutions Corp., an
offshore outsourcing IT services provider, posted strong results as this market
continued to grow rapidly. Google, Inc., gained market share and participated
fully in the rapidly expanding market for internet search.
In the financials sector, Goldman Sachs Group, Inc. (The) benefited from a
high level of mergers and acquisition activity over the period. Lastly in
healthcare, Varian Medical Systems, Inc., a manufacturer and seller of x-ray and
oncology products, performed well over the reporting period. The company
continues to benefit from a successful product cycle as proven by its strong
product sales.
Lastly, as a result of our bottom-up stock selection investment process,
we brought the Fund's average market capitalization down to levels that are now
below both the Russell 3000 Growth Index and the Lipper Multi Cap Growth Fund
peer group average. 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 August 31, 2006. In the case of Class A,
Class B and Class C shares, performance is measured over a ten-fiscal-year
period; in the case of Class N shares, from the inception of the Class on March
1, 2001, and in the case of Class Y shares, from the inception of the Class on
April 1, 1999. 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.
The Fund has changed its secondary benchmark index from the Russell 2000
Index to the Russell 3000 Growth Index. The Fund believes that the Russell 3000
Growth Index, a multi-cap index, is a more appropriate benchmark reflecting the
types of multi-cap securities in which the Fund invests. The Fund will continue
to compare its performance to the Standard & Poor's (S&P) 500 Index.
The Fund's performance is compared to the performance of the S&P 500
Index, the Russell 3000 Growth Index, and its previous secondary benchmark, the
Russell 2000 Index. The S&P 500 Index is a broad-based index of equity
securities widely regarded as a general
10 | OPPENHEIMER ENTERPRISE FUND
measure of the performance of the U.S. equity securities market. The Russell
3000 Growth index is a multi-cap index of U.S. equity securities with
greater-than-average growth orientation. The Russell 2000 Index is a
capitalization-weighted index of 2,000 U.S. issuers whose common stocks are
traded on the New York and American Stock Exchanges and NASDAQ, and is widely
recognized as a measure of the performance of mid-capitalization stocks. 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 indices.
11 | OPPENHEIMER ENTERPRISE FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Enterprise Fund (Class A)
S&P 500 Index
Russell 3000 Growth Index
Russell 2000 Index
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Enterprise Fund Russell 3000 Russell 2000
(Class A) S&P 500 Index Growth Index Index
08/31/1996 9,425 10,000 10,000 10,000
11/30/1996 9,163 11,673 11,473 10,652
02/28/1997 9,317 12,252 11,891 10,879
05/31/1997 9,173 13,211 12,834 11,551
08/31/1997 11,110 14,062 13,745 12,896
11/30/1997 11,463 15,001 14,390 13,146
02/28/1998 12,269 16,539 16,049 14,138
05/31/1998 12,868 17,261 16,361 14,006
08/31/1998 10,482 15,204 14,384 10,394
11/30/1998 12,925 18,553 18,002 12,276
02/28/1999 15,395 19,807 19,740 12,139
05/31/1999 17,229 20,892 20,315 13,629
08/31/1999 19,113 21,257 21,283 13,342
11/30/1999 26,601 22,429 23,685 14,199
02/29/2000 38,034 22,129 26,672 18,121
05/31/2000 23,013 23,079 25,317 14,980
08/31/2000 29,603 24,723 28,491 16,965
11/30/2000 17,226 21,482 20,914 14,116
02/28/2001 14,837 20,316 18,150 15,069
05/31/2001 13,902 20,645 18,025 15,833
08/31/2001 12,564 18,697 15,780 14,992
11/30/2001 11,553 18,858 16,341 14,797
02/28/2002 10,046 18,384 15,376 15,120
05/31/2002 9,288 17,788 14,331 15,753
08/31/2002 7,503 15,334 12,243 12,678
11/30/2002 7,713 15,745 12,661 13,229
02/28/2003 7,141 14,216 11,429 11,779
05/31/2003 8,724 16,353 13,190 14,464
08/31/2003 9,684 17,183 14,127 16,364
11/30/2003 9,692 18,120 14,954 18,029
02/29/2004 10,096 19,689 15,880 19,366
05/31/2004 10,096 19,350 15,673 18,845
08/31/2004 9,507 19,149 14,858 18,222
11/30/2004 10,719 20,447 15,888 21,141
02/28/2005 10,677 21,061 16,113 21,212
05/31/2005 11,140 20,942 16,206 20,696
08/31/2005 11,806 21,553 16,795 22,432
11/30/2005 12,260 22,173 17,411 22,862
02/28/2006 12,875 22,829 17,749 24,730
05/31/2006 12,134 22,750 17,365 24,470
08/31/2006 11,806 23,465 17,449 24,531
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
8/31/06
1-Year -5.75% 5-Year -2.40% 10-Year 1.67%
12 | OPPENHEIMER ENTERPRISE FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Enterprise Fund (Class B)
S&P 500 Index
Russell 3000 Growth Index
Russell 2000 Index
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Enterprise Fund Russell 3000 Russell 2000
(Class B) S&P 500 Index Growth Index Index
08/31/1996 10,000 10,000 10,000 10,000
11/30/1996 9,708 11,673 11,473 10,652
02/28/1997 9,845 12,252 11,891 10,879
05/31/1997 9,677 13,211 12,834 11,551
08/31/1997 11,703 14,062 13,745 12,896
11/30/1997 12,046 15,001 14,390 13,146
02/28/1998 12,869 16,539 16,049 14,138
05/31/1998 13,479 17,261 16,361 14,006
08/31/1998 10,950 15,204 14,384 10,394
11/30/1998 13,486 18,553 18,002 12,276
02/28/1999 16,036 19,807 19,740 12,139
05/31/1999 17,913 20,892 20,315 13,629
08/31/1999 19,836 21,257 21,283 13,342
11/30/1999 27,559 22,429 23,685 14,199
02/29/2000 39,331 22,129 26,672 18,121
05/31/2000 23,748 23,079 25,317 14,980
08/31/2000 30,493 24,723 28,491 16,965
11/30/2000 17,710 21,482 20,914 14,116
02/28/2001 15,230 20,316 18,150 15,069
05/31/2001 14,242 20,645 18,025 15,833
08/31/2001 12,846 18,697 15,780 14,992
11/30/2001 11,785 18,858 16,341 14,797
02/28/2002 10,235 18,384 15,376 15,120
05/31/2002 9,437 17,788 14,331 15,753
08/31/2002 7,617 15,334 12,243 12,678
11/30/2002 7,830 15,745 12,661 13,229
02/28/2003 7,249 14,216 11,429 11,779
05/31/2003 8,856 16,353 13,190 14,464
08/31/2003 9,831 17,183 14,127 16,364
11/30/2003 9,839 18,120 14,954 18,029
02/29/2004 10,250 19,689 15,880 19,366
05/31/2004 10,250 19,350 15,673 18,845
08/31/2004 9,651 19,149 14,858 18,222
11/30/2004 10,882 20,447 15,888 21,141
02/28/2005 10,839 21,061 16,113 21,212
05/31/2005 11,310 20,942 16,206 20,696
08/31/2005 11,985 21,553 16,795 22,432
11/30/2005 12,447 22,173 17,411 22,862
02/28/2006 13,071 22,829 17,749 24,730
05/31/2006 12,318 22,750 17,365 24,470
08/31/2006 11,985 23,465 17,449 24,531
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
8/31/06
1-Year -5.74% 5-Year -2.39% 10-Year 1.83%
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, 10-YEAR RETURNS FOR CLASS B SHARES USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER
INFORMATION.
13 | OPPENHEIMER ENTERPRISE FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Enterprise Fund (Class C)
S&P 500 Index
Russell 3000 Growth Index
Russell 2000 Index
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Enterprise Fund Russell 3000 Russell 2000
(Class C) S&P 500 Index Growth Index Index
08/31/1996 10,000 10,000 10,000 10,000
11/30/1996 9,708 11,673 11,473 10,652
02/28/1997 9,845 12,252 11,891 10,879
05/31/1997 9,670 13,211 12,834 11,551
08/31/1997 11,697 14,062 13,745 12,896
11/30/1997 12,039 15,001 14,390 13,146
02/28/1998 12,870 16,539 16,049 14,138
05/31/1998 13,472 17,261 16,361 14,006
08/31/1998 10,951 15,204 14,384 10,394
11/30/1998 13,479 18,553 18,002 12,276
02/28/1999 16,045 19,807 19,740 12,139
05/31/1999 17,922 20,892 20,315 13,629
08/31/1999 19,845 21,257 21,283 13,342
11/30/1999 27,584 22,429 23,685 14,199
02/29/2000 39,365 22,129 26,672 18,121
05/31/2000 23,773 23,079 25,317 14,980
08/31/2000 30,526 24,723 28,491 16,965
11/30/2000 17,734 21,482 20,914 14,116
02/28/2001 15,246 20,316 18,150 15,069
05/31/2001 14,258 20,645 18,025 15,833
08/31/2001 12,862 18,697 15,780 14,992
11/30/2001 11,802 18,858 16,341 14,797
02/28/2002 10,243 18,384 15,376 15,120
05/31/2002 9,454 17,788 14,331 15,753
08/31/2002 7,623 15,334 12,243 12,678
11/30/2002 7,822 15,745 12,661 13,229
02/28/2003 7,224 14,216 11,429 11,779
05/31/2003 8,810 16,353 13,190 14,464
08/31/2003 9,762 17,183 14,127 16,364
11/30/2003 9,753 18,120 14,954 18,029
02/29/2004 10,143 19,689 15,880 19,366
05/31/2004 10,125 19,350 15,673 18,845
08/31/2004 9,508 19,149 14,858 18,222
11/30/2004 10,696 20,447 15,888 21,141
02/28/2005 10,632 21,061 16,113 21,212
05/31/2005 11,076 20,942 16,206 20,696
08/31/2005 11,720 21,553 16,795 22,432
11/30/2005 12,146 22,173 17,411 22,862
02/28/2006 12,735 22,829 17,749 24,730
05/31/2006 11,983 22,750 17,365 24,470
08/31/2006 11,629 23,465 17,449 24,531
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
8/31/06
1-Year -1.77% 5-Year -1.99% 10-Year 1.52%
14 | OPPENHEIMER ENTERPRISE FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Enterprise Fund (Class N)
S&P 500 Index
Russell 3000 Growth Index
Russell 2000 Index
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Enterprise Fund Russell 3000 Russell 2000
(Class N) S&P 500 Index Growth Index Index
03/01/2001 10,000 10,000 10,000 10,000
05/31/2001 9,295 10,162 9,931 10,507
08/31/2001 8,399 9,203 8,694 9,949
11/30/2001 7,711 9,283 9,003 9,819
02/28/2002 6,708 9,049 8,472 10,034
05/31/2002 6,195 8,756 7,896 10,454
08/31/2002 5,000 7,548 6,745 8,413
11/30/2002 5,141 7,750 6,975 8,779
02/28/2003 4,752 6,998 6,297 7,817
05/31/2003 5,800 8,050 7,267 9,599
08/31/2003 6,432 8,458 7,783 10,860
11/30/2003 6,437 8,919 8,239 11,965
02/29/2004 6,702 9,692 8,749 12,852
05/31/2004 6,697 9,524 8,635 12,506
08/31/2004 6,302 9,426 8,186 12,093
11/30/2004 7,097 10,065 8,753 14,030
02/28/2005 7,063 10,367 8,877 14,077
05/31/2005 7,368 10,308 8,929 13,734
08/31/2005 7,802 10,609 9,253 14,887
11/30/2005 8,100 10,914 9,593 15,172
02/28/2006 8,501 11,237 9,779 16,412
05/31/2006 8,010 11,198 9,567 16,239
08/31/2006 7,790 11,550 9,614 16,280
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
8/31/06
1-Year -1.14% 5-Year -1.49% Since Inception (3/1/01) -4.44%
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, 10-YEAR RETURNS FOR CLASS B SHARES USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER ENTERPRISE FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Enterprise Fund (Class Y)
S&P 500 Index
Russell 3000 Growth Index
Russell 2000
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer
Enterprise Fund Russell 3000 Russell 2000
(Class Y) S&P 500 Index Growth Index Index
04/01/1999 10,000 10,000 10,000 10,000
05/31/1999 10,115 10,142 9,787 11,055
08/31/1999 11,234 10,319 10,254 10,822
11/30/1999 15,649 10,889 11,411 11,517
02/29/2000 22,407 10,743 12,850 14,698
05/31/2000 13,570 11,204 12,197 12,151
08/31/2000 17,477 12,002 13,727 13,761
11/30/2000 10,165 10,429 10,076 11,450
02/28/2001 8,760 9,863 8,745 12,223
05/31/2001 8,222 10,022 8,684 12,842
08/31/2001 7,432 9,077 7,603 12,161
11/30/2001 6,839 9,155 7,873 12,002
02/28/2002 5,955 8,925 7,408 12,265
05/31/2002 5,511 8,636 6,905 12,778
08/31/2002 4,454 7,444 5,899 10,283
11/30/2002 4,578 7,644 6,100 10,730
02/28/2003 4,247 6,902 5,506 9,555
05/31/2003 5,190 7,939 6,355 11,732
08/31/2003 5,763 8,342 6,806 13,274
11/30/2003 5,777 8,797 7,205 14,624
02/29/2004 6,024 9,558 7,651 15,709
05/31/2004 6,034 9,394 7,551 15,286
08/31/2004 5,689 9,296 7,158 14,781
11/30/2004 6,415 9,927 7,655 17,148
02/28/2005 6,395 10,225 7,763 17,206
05/31/2005 6,681 10,167 7,808 16,787
08/31/2005 7,086 10,463 8,092 18,195
11/30/2005 7,368 10,764 8,389 18,544
02/28/2006 7,738 11,083 8,551 20,060
05/31/2006 7,303 11,044 8,366 19,848
08/31/2006 7,116 11,392 8,407 19,898
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 8/31/06
1-Year 0.42% 5-Year -0.87% Since Inception (4/1/99) -4.48%
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, 10-YEAR RETURNS FOR CLASS B SHARES USES
CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER
INFORMATION.
16 | OPPENHEIMER ENTERPRISE FUND
NOTES
- --------------------------------------------------------------------------------
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 11/7/95. Class A
returns include the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 11/7/95. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (5-year). Because Class B shares convert to Class A shares 72 months
after purchase, the 10-year return for Class B uses Class A performance for the
period after conversion. Class B shares are subject to an annual 0.75%
asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/7/95. 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 ENTERPRISE FUND
NOTES
- --------------------------------------------------------------------------------
CLASS Y shares of the Fund were first publicly offered on 4/1/99. Class Y shares
are offered only to certain institutional investors under special agreements
with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
18 | OPPENHEIMER ENTERPRISE FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
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 August 31, 2006.
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 ENTERPRISE 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
(3/1/06) (8/31/06) AUGUST 31, 2006
- ------------------------------------------------------------------------------------------
Class A Actual $1,000.00 $ 916.90 $ 6.89
- ------------------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,018.05 7.25
- ------------------------------------------------------------------------------------------
Class B Actual 1,000.00 913.00 10.62
- ------------------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,014.17 11.18
- ------------------------------------------------------------------------------------------
Class C Actual 1,000.00 913.20 10.52
- ------------------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,014.27 11.08
- ------------------------------------------------------------------------------------------
Class N Actual 1,000.00 916.40 7.66
- ------------------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,017.24 8.07
- ------------------------------------------------------------------------------------------
Class Y Actual 1,000.00 919.60 4.51
- ------------------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.52 4.75
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 August 31, 2006 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------
Class A 1.42%
- -----------------------------------
Class B 2.19
- -----------------------------------
Class C 2.17
- -----------------------------------
Class N 1.58
- -----------------------------------
Class Y 0.93
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 ENTERPRISE FUND
STATEMENT OF INVESTMENTS August 31, 2006
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.8%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.1%
Las Vegas Sands Corp. 1 21,500 $ 1,500,915
- --------------------------------------------------------------------------------
Life Time Fitness, Inc. 1 69,200 3,109,156
- --------------------------------------------------------------------------------
Scientific Games Corp.,
Cl. A 1 89,800 2,610,486
-------------
7,220,557
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.5%
Harman International
Industries, Inc. 42,500 3,447,600
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.9%
VistaPrint Ltd. 1 81,180 1,991,345
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--4.0%
Best Buy Co., Inc. 79,000 3,713,000
- --------------------------------------------------------------------------------
Staples, Inc. 157,900 3,562,224
- --------------------------------------------------------------------------------
Urban Outfitters, Inc. 1 121,300 1,903,197
-------------
9,178,421
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--2.3%
Polo Ralph Lauren
Corp. 91,100 5,373,989
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.4%
- --------------------------------------------------------------------------------
BEVERAGES--2.4%
PepsiCo, Inc. 86,200 5,627,136
- --------------------------------------------------------------------------------
ENERGY--7.1%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--4.2%
Halliburton Co. 221,100 7,212,282
- --------------------------------------------------------------------------------
Schlumberger Ltd. 41,500 2,543,950
-------------
9,756,232
- --------------------------------------------------------------------------------
OIL & GAS--2.9%
Hess Corp. 143,100 6,551,118
- --------------------------------------------------------------------------------
FINANCIALS--8.6%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--4.2%
Goldman Sachs Group,
Inc. (The) 37,600 5,589,240
- --------------------------------------------------------------------------------
Legg Mason, Inc. 43,700 3,988,062
-------------
9,577,302
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.0%
East West Bancorp, Inc. 57,000 $ 2,308,500
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.9%
Chicago Mercantile
Exchange (The) 10,000 4,400,000
- --------------------------------------------------------------------------------
INSURANCE--1.5%
Brown & Brown, Inc. 119,100 3,565,854
- --------------------------------------------------------------------------------
HEALTH CARE--19.0%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--4.7%
Celgene Corp. 1 100,000 4,069,000
- --------------------------------------------------------------------------------
Genentech, Inc. 1 23,800 1,963,976
- --------------------------------------------------------------------------------
Genzyme Corp.
(General Division) 1 38,500 2,549,855
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 35,100 2,225,340
-------------
10,808,171
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--5.4%
Bard (C.R.), Inc. 38,900 2,924,502
- --------------------------------------------------------------------------------
Gen-Probe, Inc. 1 34,800 1,691,628
- --------------------------------------------------------------------------------
Medtronic, Inc. 76,600 3,592,540
- --------------------------------------------------------------------------------
Varian Medical
Systems, Inc. 1 83,100 4,429,230
-------------
12,637,900
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.3%
Coventry Health Care,
Inc. 1 78,400 4,252,416
- --------------------------------------------------------------------------------
Healthways, Inc. 1 47,600 2,457,112
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 62,000 3,220,900
-------------
9,930,428
- --------------------------------------------------------------------------------
PHARMACEUTICALS--4.6%
Novartis AG, ADR 132,400 7,562,688
- --------------------------------------------------------------------------------
Teva Pharmaceutical
Industries Ltd.,
Sponsored ADR 86,200 2,996,312
-------------
10,559,000
- --------------------------------------------------------------------------------
INDUSTRIALS--8.7%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.0%
Rockwell Collins, Inc. 89,800 4,708,214
21 | OPPENHEIMER ENTERPRISE FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.3%
Corporate Executive
Board Co. 29,800 $ 2,611,672
- --------------------------------------------------------------------------------
Stericycle, Inc. 1 38,600 2,574,234
-------------
5,185,906
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.9%
Rockwell Automation,
Inc. 79,500 4,482,210
- --------------------------------------------------------------------------------
MACHINERY--1.3%
Oshkosh Truck Corp. 58,300 3,014,110
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.2%
Fastenal Co. 75,300 2,762,004
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--35.6%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--6.9%
Cisco Systems, Inc. 1 334,500 7,355,655
- --------------------------------------------------------------------------------
Comverse Technology,
Inc. 1 118,400 2,474,560
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 158,700 5,978,229
-------------
15,808,444
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--3.7%
Apple Computer, Inc. 1 59,000 4,003,150
- --------------------------------------------------------------------------------
EMC Corp. 1 388,100 4,521,365
-------------
8,524,515
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--5.6%
eBay, Inc. 1 133,300 3,713,738
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1 13,300 5,034,449
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 147,000 4,236,540
-------------
12,984,727
- --------------------------------------------------------------------------------
IT SERVICES--2.6%
Cognizant Technology
Solutions Corp. 1 86,200 6,026,242
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--6.6%
Broadcom Corp., Cl. A 1 186,600 5,493,504
- --------------------------------------------------------------------------------
FormFactor, Inc. 1 30,400 1,467,104
- --------------------------------------------------------------------------------
Linear Technology Corp. 134,000 4,557,340
- --------------------------------------------------------------------------------
Maxim Integrated
Products, Inc. 129,300 3,762,630
-------------
15,280,578
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE--10.2%
Amdocs Ltd. 1 131,200 $ 4,979,040
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 96,700 3,361,292
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 110,000 5,606,700
- --------------------------------------------------------------------------------
Red Hat, Inc. 1 107,800 2,505,272
- --------------------------------------------------------------------------------
SAP AG, Sponsored
ADR 100,200 4,783,548
- --------------------------------------------------------------------------------
Ultimate Software
Group, Inc. (The) 1 105,300 2,379,780
-------------
23,615,632
- --------------------------------------------------------------------------------
MATERIALS--3.2%
- --------------------------------------------------------------------------------
CHEMICALS--3.2%
Monsanto Co. 156,800 7,438,592
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.7%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--2.7%
American Tower Corp. 1 172,400 6,182,264
-------------
Total Common Stocks
(Cost $209,139,456) 228,946,991
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.0%
- --------------------------------------------------------------------------------
Undivided interest of 0.19% in joint repurchase
agreement (Principal Amount/Value $1,235,729,000,
with a maturity value of $1,235,908,181) with
UBS Warburg LLC, 5.22%, dated 8/31/06, to
be repurchased at $2,316,336 on 9/1/06,
collateralized by Federal National
Mortgage Assn., 6%-7%,
3/1/36-8/1/36, with a
value of $1,262,388,232
(Cost $2,316,000) $2,316,000 2,316,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $211,455,456) 100.1% 231,262,991
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (0.1) (163,095)
-----------------------------
NET ASSETS 100.0% $231,099,896
=============================
22 | OPPENHEIMER ENTERPRISE FUND
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
Represents ownership of at least 5% of the voting securities of the issuer, and
was an affiliate, as defined in the Investment Company Act of 1940, during the
period ended August 31, 2006. There were no affiliate securities held by the
Fund as of August 31, 2006. Transactions during the period in which the issuer
was an affiliate are as follows:
SHARES GROSS GROSS SHARES
AUGUST 31, 2005 ADDITIONS REDUCTIONS AUGUST 31, 2006
- ----------------------------------------------------------------------------------------------------------
Multiplex, Inc., Cv., Series C 543,478 -- 543,478 --
DIVIDEND REALIZED
INCOME LOSS
- ----------------------------------------------------------------------------------------------------------
Multiplex, Inc., Cv., Series C $-- $3,979,166
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER ENTERPRISE FUND
STATEMENT OF ASSETS AND LIABILITIES August 31, 2006
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------
Investments, at value (cost $211,455,456)--see accompanying statement of investments $ 231,262,991
- ------------------------------------------------------------------------------------------------------
Cash 316,244
- ------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 112,577
Shares of beneficial interest sold 69,515
Other 14,388
--------------
Total assets 231,775,715
- ------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 385,123
Distribution and service plan fees 87,838
Transfer and shareholder servicing agent fees 64,588
Shareholder communications 62,333
Trustees' compensation 55,853
Other 20,084
--------------
Total liabilities 675,819
- ------------------------------------------------------------------------------------------------------
NET ASSETS $ 231,099,896
==============
- ------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------
Paid-in capital $ 556,035,450
- ------------------------------------------------------------------------------------------------------
Accumulated net investment loss (55,045)
- ------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (344,688,044)
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 19,807,535
--------------
NET ASSETS $ 231,099,896
==============
24 | OPPENHEIMER ENTERPRISE FUND
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $117,760,109 and 8,400,998 shares of beneficial interest outstanding) $14.02
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $14.88
- -----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $37,548,391 and 2,931,349 shares of beneficial interest outstanding) $12.81
- -----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $13,508,268 and 1,052,743 shares of beneficial interest outstanding) $12.83
- -----------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $50,676,296 and 3,667,783 shares of beneficial interest outstanding) $13.82
- -----------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $11,606,832 and 805,677 shares of beneficial interest outstanding) $14.41
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER ENTERPRISE FUND
STATEMENT OF OPERATIONS For the Year Ended August 31, 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $22,649) $ 1,101,779
- --------------------------------------------------------------------------------
Interest 270,934
- --------------------------------------------------------------------------------
Other income 27,114
-------------
Total investment income 1,399,827
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 1,548,025
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 301,713
Class B 375,710
Class C 140,546
Class N 81,170
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 618,149
Class B 131,742
Class C 68,819
Class N 140,962
Class Y 33,605
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 97,388
Class B 38,954
Class C 9,521
Class N 812
- --------------------------------------------------------------------------------
Custodian fees and expenses 954
- --------------------------------------------------------------------------------
Other 24,077
-------------
Total expenses 3,612,147
Less waivers and reimbursements of expenses (295,879)
-------------
Net expenses 3,316,268
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,916,441)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies 10,531,281
Affiliated companies (3,979,166)
-------------
Net realized gain 6,552,115
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (8,348,287)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (3,712,613)
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER ENTERPRISE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, 2006 2005
- -------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------
Net investment loss $ (1,916,441) $ (864,954)
- -------------------------------------------------------------------------------------------------
Net realized gain 6,552,115 15,884,237
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (8,348,287) 23,895,338
------------------------------
Net increase (decrease) in net assets resulting from operations (3,712,613) 38,914,621
- -------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class A (2,792,580) (5,010,689)
Class B 2,738,515 (19,223,491)
Class C 68,566 (1,976,711)
Class N 52,081,123 150,576
Class Y (2,775,589) (3,205,423)
- -------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------
Total increase 45,607,422 9,648,883
- -------------------------------------------------------------------------------------------------
Beginning of period 185,492,474 175,843,591
------------------------------
End of period (including accumulated net investment loss
of $55,045 and $71,013, respectively) $231,099,896 $185,492,474
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER ENTERPRISE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.02 $ 11.29 $ 11.50 $ 8.91 $ 14.92
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.11) 1 (.04) 1,2 (.12) 1 (.06) (.09)
Net realized and unrealized gain (loss) .11 2.77 (.09) 1 2.65 (5.92)
----------------------------------------------------------------------
Total from investment operations .00 2.73 (.21) 2.59 (6.01)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.02 $ 14.02 $ 11.29 $ 11.50 $ 8.91
======================================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 0.00% 24.18% (1.83)% 29.07% (40.28)%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $117,760 $121,097 $101,934 $120,101 $103,105
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $125,511 $113,233 $111,924 $100,922 $166,632
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.75)% (0.29)% 2 (1.07)% (0.93)% (1.09)%
Total expenses 1.57% 1.61% 1.66% 1.83% 1.95%
Expenses after payments and waivers
and reduction to custodian expenses 1.42% 1.42% 1.44% 1.29% 1.60%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 59% 123% 103% 150%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment loss per share and the net investment loss ratio include $.08
and 0.64%, respectively, resulting from a special dividend from Microsoft Corp.
in November 2004.
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.
28 | OPPENHEIMER ENTERPRISE FUND
CLASS B YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.91 $ 10.48 $ 10.76 $ 8.40 $ 14.17
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.20) 1 (.11) 1,2 (.20) 1 (.20) (.41)
Net realized and unrealized gain (loss) .10 2.54 (.08) 1 2.56 (5.36)
-----------------------------------------------------------------
Total from investment operations (.10) 2.43 (.28) 2.36 (5.77)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.81 $ 12.91 $ 10.48 $ 10.76 $ 8.40
=================================================================
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.78)% 23.19% (2.60)% 28.10% (40.72)%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $37,549 $35,359 $45,904 $62,170 $52,633
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $37,728 $41,821 $54,878 $52,441 $86,628
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.52)% (0.96)% 2 (1.86)% (1.69)% (1.85)%
Total expenses 2.21% 2.27% 2.53% 2.79% 2.71%
Expenses after payments and waivers
and reduction to custodian expenses 2.20% 2.18% 2.23% 2.05% 2.36%
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 59% 123% 103% 150%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment loss per share and the net investment loss ratio include $.08
and 0.64%, respectively, resulting from a special dividend from Microsoft Corp.
in November 2004.
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.
29 | OPPENHEIMER ENTERPRISE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.93 $ 10.49 $ 10.77 $ 8.41 $ 14.19
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.20) 1 (.12) 1,2 (.20) 1 (.17) (.37)
Net realized and unrealized gain (loss) .10 2.56 (.08) 1 2.53 (5.41)
-----------------------------------------------------------------
Total from investment operations (.10) 2.44 (.28) 2.36 (5.78)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.83 $ 12.93 $ 10.49 $ 10.77 $ 8.41
=================================================================
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.77)% 23.26% (2.60)% 28.06% (40.73)%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $13,508 $13,600 $12,790 $14,594 $11,578
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $14,091 $13,458 $13,979 $12,521 $18,550
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (1.49)% (1.03)% 2 (1.83)% (1.70)% (1.85)%
Total expenses 2.31% 2.41% 2.59% 2.80% 2.71%
Expenses after payments and waivers
and reduction to custodian expenses 2.17% 2.18% 2.20% 2.06% 2.36%
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 59% 123% 103% 150%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment loss per share and the net investment loss ratio include $.08
and 0.64%, respectively, resulting from a special dividend from Microsoft Corp.
in November 2004.
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.
30 | OPPENHEIMER ENTERPRISE FUND
CLASS N YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 13.84 $ 11.18 $ 11.41 $ 8.87 $ 14.90
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.13) 1 (.08) 1,2 (.15) 1 (.13) (.28)
Net realized and unrealized gain (loss) .11 2.74 (.08) 1 2.67 (5.75)
-----------------------------------------------------------------
Total from investment operations (.02) 2.66 (.23) 2.54 (6.03)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.82 $ 13.84 $ 11.18 $ 11.41 $ 8.87
=================================================================
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.15)% 23.79% (2.02)% 28.64% (40.47)%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $50,676 $ 1,196 $ 839 $ 685 $ 456
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,452 $ 1,058 $ 781 $ 537 $ 249
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.92)% (0.66)% 2 (1.32)% (1.24)% (1.44)%
Total expenses 2.11% 2.00% 2.10% 2.09% 2.25%
Expenses after payments and waivers
and reduction to custodian expenses 1.58% 1.68% 1.70% 1.60% 1.90%
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 59% 123% 103% 150%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment loss per share and the net investment loss ratio include $.08
and 0.64%, respectively, resulting from a special dividend from Microsoft Corp.
in November 2004.
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.
31 | OPPENHEIMER ENTERPRISE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.35 $ 11.52 $ 11.67 $ 9.02 $ 15.05
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) 1 .01 1,2 (.07) 1 (.10) (.10)
Net realized and unrealized gain (loss) .11 2.82 (.08) 1 2.75 (5.93)
----------------------------------------------------------------
Total from investment operations .06 2.83 (.15) 2.65 (6.03)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.41 $ 14.35 $ 11.52 $ 11.67 $ 9.02
================================================================
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 0.42% 24.57% (1.29)% 29.38% (40.07)%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $11,607 $14,240 $14,376 $22,461 $16,020
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $13,236 $14,157 $19,642 $16,675 $19,590
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.35)% 0.10% 2 (0.62)% (0.67)% (0.70)%
Total expenses 1.01% 1.05% 0.98% 1.72% 2.16%
Expenses after payments and waivers
and reduction to custodian expenses 1.01% 1.05% 0.98% 1.03% 1.19%
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 59% 123% 103% 150%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment loss per share and the net investment loss ratio include $.08
and 0.64%, respectively, resulting from a special dividend from Microsoft Corp.
in November 2004.
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 ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Enterprise 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(R) 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, as 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 such principal exchange at its
33 | OPPENHEIMER ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars 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. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class.
34 | OPPENHEIMER ENTERPRISE FUND
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
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED SECURITIES AND OTHER
NET INVESTMENT LONG-TERM LOSS INVESTMENTS FOR FEDERAL
INCOME GAIN CARRYFORWARD 1,2,3 INCOME TAX PURPOSES
----------------------------------------------------------------------------
$-- $-- $344,610,823 $19,730,316
1. As of August 31, 2006, the Fund had $344,610,823 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of August 31, 2006, details
of the capital loss carryforwards were as follows:
EXPIRING
--------------------------------
2009 $ 7,968,404
2010 257,289,240
2011 79,353,179
------------
Total $344,610,823
============
2. During the fiscal year ended August 31, 2006, the Fund utilized $6,552,115 of
capital loss carryforward to offset capital gains realized in that fiscal year.
3. During the fiscal year ended August 31, 2005, the Fund utilized $15,837,193
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 August 31, 2006. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO
REDUCTION TO ACCUMULATED NET
REDUCTION TO ACCUMULATED NET REALIZED LOSS
PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS
-------------------------------------------------------------
$1,933,723 $1,932,409 $1,314
No distributions were paid during the years ended August 31, 2006 and August 31,
2005.
35 | OPPENHEIMER ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 August 31, 2006 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 $211,532,675
=============
Gross unrealized appreciation $ 31,014,330
Gross unrealized depreciation (11,284,014)
-------------
Net unrealized appreciation $ 19,730,316
=============
Certain foreign countries impose a tax on capital gains which is accrued by the
Fund based on unrealized appreciation, if any, on affected securities. The tax
is paid when the gain is realized.
- --------------------------------------------------------------------------------
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 August
31, 2006, the Fund's projected benefit obligations were decreased by $13,550 and
payments of $4,846 were made to retired trustees, resulting in an accumulated
liability of $42,833 as of August 31, 2006.
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
36 | OPPENHEIMER ENTERPRISE FUND
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
YEAR ENDED AUGUST 31, 2006 YEAR ENDED AUGUST 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS A
Sold 2,537,637 $ 37,289,319 2,612,694 $ 33,590,367
Redeemed (2,773,873) (40,081,899) (3,001,115) (38,601,056)
-------------------------------------------------------------
Net decrease (236,236) $ (2,792,580) (388,421) $ (5,010,689)
=============================================================
- -----------------------------------------------------------------------------------------
CLASS B
Sold 1,077,578 $ 14,568,412 461,518 $ 5,482,893
Redeemed (884,788) (11,829,897) (2,102,913) (24,706,384)
-------------------------------------------------------------
Net increase (decrease) 192,790 $ 2,738,515 (1,641,395) $(19,223,491)
=============================================================
37 | OPPENHEIMER ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED AUGUST 31, 2006 YEAR ENDED AUGUST 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS C
Sold 352,895 $ 4,780,311 206,244 $ 2,454,142
Redeemed (352,054) (4,711,745) (373,116) (4,430,853)
-------------------------------------------------------------
Net increase (decrease) 841 $ 68,566 (166,872) $ (1,976,711)
=============================================================
- -----------------------------------------------------------------------------------------
CLASS N
Sold 3,787,502 $ 54,986,681 35,566 $ 453,829
Redeemed (206,135) (2,905,558) (24,213) (303,253)
-------------------------------------------------------------
Net increase 3,581,367 $ 52,081,123 11,353 $ 150,576
=============================================================
- -----------------------------------------------------------------------------------------
CLASS Y
Sold 338,211 $ 5,025,402 384,526 $ 5,169,594
Redeemed (524,763) (7,800,991) (640,386) (8,375,017)
-------------------------------------------------------------
Net decrease (186,552) $ (2,775,589) (255,860) $ (3,205,423)
=============================================================
- --------------------------------------------------------------------------------
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 August 31, 2006, were as
follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $132,352,327 $87,069,222
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
----------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $700 million of net assets 0.60
Over $1.5 billion of net assets 0.58
- --------------------------------------------------------------------------------
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 August 31, 2006, the Fund paid
$688,050 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.
38 | OPPENHEIMER ENTERPRISE FUND
- --------------------------------------------------------------------------------
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
periodically 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 periodically 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
periods. 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 August 31, 2006 for Class B, Class C
and Class N shares were $907,276, $408,988 and $46,897, respectively. Fees
incurred by the Fund under the plans are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table 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
- -------------------------------------------------------------------------------------------------
August 31, 2006 $83,794 $764 $76,491 $8,378 $16,250
39 | OPPENHEIMER ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 August 31, 2006, OFS
waived $184,577, $3,253, $20,151, $87,159 and $739 for Class A, Class B, Class
C, Class N and Class Y shares, respectively. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
August 31, 2006, the Manager is evaluating the implications of FIN 48. Its
impact in the Fund's financial statements has not yet been determined.
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss.
40 | OPPENHEIMER ENTERPRISE FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
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THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER ENTERPRISE FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Enterprise Fund, including the statement of investments, as of
August 31, 2006, 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 August 31, 2006, 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 Enterprise Fund as of August 31, 2006, 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
October 16, 2006
41 | OPPENHEIMER ENTERPRISE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2007, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2006. 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.
42 | OPPENHEIMER ENTERPRISE 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 30, no later than August 31 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.
43 | OPPENHEIMER ENTERPRISE FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
FUND, LENGTH OF SERVICE, AGE HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER
RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January 2005);
Chairman of the Board Attorney at Hogan & Hartson (law firm) (since June 1993); Director of Covanta
of Trustees (since 2003), Holding Corp. (waste-to-energy company) (since 2002); Director of
Trustee (since 1995) Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Inc. (1993-
Age: 75 December 2002); Director of ConAgra Foods (1993-2001); Director of Texas
Instruments (1993-2001); Director of FMC Corporation (1993-2001). Oversees 43
portfolios in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research founda-
Trustee (since 2005) tion) (since 2005); Director of ICI Education Foundation (education foundation)
Age: 65 (October 1991-August 2006); President of the Investment Company Institute
(trade association) (October 1991-June 2004); Director of ICI Mutual Insurance
Company (insurance company) (October 1991-June 2004). Oversees 43 portfo-
lios in the OppenheimerFunds complex.
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 53 portfolios in the
Trustee (since 1995) OppenheimerFunds complex.
Age: 73
PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs (since 2002) and
Trustee (since 1999) Member (since 1979) of the National Academy of Sciences; Council on Foreign
Age: 68 Relations (since 2002); Director of GSI Lumonics Inc. (precision medical equip-
ment supplier) (since 2001); Senior Advisor of The Andrew W. Mellon
Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member
of the American Philosophical Society (since 1996); Trustee of Woodward
Academy (since 1983); Foreign Associate of Third World Academy of Sciences;
Director of the Institute for Advanced Study (1991-2004); Director of Bankers
Trust New York Corporation (1994-1999); Provost at Duke University (1983-
1991). Oversees 43 portfolios in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October
Trustee (since 2004) 1998); and Senior Vice President and General Auditor of American Express
Age: 63 Company (financial services company) (July 1998-February 2003). Oversees 43
portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial adviser)
Trustee (since 2002) (since 2002); Managing Director of Carmona Motley, Inc. (privately-held finan-
Age: 54 cial adviser) (since January 2002); Managing Director of Carmona Motley
Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001);
Member of the Finance and Budget Committee of the Council on Foreign
Relations, the Investment Committee of the Episcopal Church of America, the
Investment Committee and Board of Human Rights Watch and the Investment
Committee of Historic Hudson Valley. Oversees 43 portfolios in the
OppenheimerFunds complex.
44 | OPPENHEIMER ENTERPRISE FUND
KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company)
Trustee (since 1995) (February 1972-October 2005); Former Director of Prime Retail, Inc. (real estate
Age: 79 investment trust), Dominion Energy Inc. (electric power and oil & gas producer),
Lumberman's Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company; Former
President and Chief Executive Officer of The Conference Board, Inc. (interna-
tional economic and business research). Oversees 43 portfolios in the
OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance consult-
Trustee (since 1995) ing and executive recruiting) (since 1993); Life Trustee of International House
Age: 74 (non-profit educational organization); Founder, Chairman and Chief Executive
Officer of Russell Reynolds Associates, Inc. (1969-1993); Banker at J.P. Morgan &
Co. (1958-1966); 1st Lt. Strategic Air Command, U.S. Air Force (1954-1958).
Oversees 43 portfolios in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and
Trustee (since 2005) Cathco (since 1996); Director of Lakes Environmental Association (since 1996);
Age: 65 Member of the Investment Committee of the Associated Jewish Charities of
Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-
December 2001). Oversees 43 portfolios in the OppenheimerFunds complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production
Trustee (since 2005) company) (since 1994); Vice President, Secretary and Treasurer of Wold Trona
Age: 58 Company, Inc. (soda ash processing and production) (since 1996); Vice President
of Wold Talc Company, Inc. (talc mining) (since 1999); Managing Member of
Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of
the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and
Director of PacifiCorp. (electric utility) (1995-1999). Oversees 43 portfolios in the
OppenheimerFunds complex.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995);
Trustee (since 2005) Director of Special Value Opportunities Fund, LLC (registered investment com-
Age: 63 pany) (since September 2004); Member of Zurich Financial Investment Advisory
Board (insurance) (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. (May 2000-April 2002) (executive search
firm). Oversees 53 portfolios in the OppenheimerFunds complex.
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
AND OFFICER FLOOR, NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEF-
INITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR
AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR.
MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC.
AND ITS AFFILIATES.
45 | OPPENHEIMER ENTERPRISE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President
Trustee, President and (since September 2000) of the Manager; President and a director or trustee of
Principal Executive Officer other Oppenheimer funds; President and Director of Oppenheimer Acquisition
(since 2001) Corp. ("OAC") (the Manager's parent holding company) and of Oppenheimer
Age: 57 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 sub-
sidiaries 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 par-
ent 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 91 portfolios in the OppenheimerFunds complex.
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OTHER OFFICERS THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW ARE AS FOLLOWS: FOR MESSRS.
OF THE FUND GILSTON, ZACK, GILLESPIE AND MS. BLOOMBERG , TWO WORLD FINANCIAL CENTER, 225
LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY, WIXTED,
PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-
3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
ALAN GILSTON,
Vice President and Portfolio Vice President of the Manager since September 1997. An officer of 1 portfolio in
Manager (since 2004) the OppenheimerFunds complex.
Age: 48
MARK S. VANDEHEY,
Vice President and Chief Senior Vice President and Chief Compliance Officer of the Manager (since
Compliance Officer March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial
(since 2004) Asset Management Corporation and Shareholder Services, Inc. (since June 1983).
Age: 56 Former Vice President and Director of Internal Audit of the Manager (1997-
February 2004). An officer of 91 portfolios in the OppenheimerFunds complex.
46 | OPPENHEIMER ENTERPRISE FUND
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999);
Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation,
Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Officer (since 1999) Real Asset Management Corporation, and Oppenheimer Partnership Holdings,
Age: 47 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 91
portfolios in the OppenheimerFunds complex.
BRIAN S. PETERSEN, Assistant Vice President of the Manager (since August 2002); Manager/Financial
Assistant Treasurer Product Accounting of the Manager (November 1998-July 2002). An officer of
(since 2004) 91 portfolios in the OppenheimerFunds complex.
Age: 36
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial
Assistant Treasurer Reporting and Compliance of First Data Corporation (April 2003-July 2004);
(since 2005) Manager of Compliance of Berger Financial Group LLC (May 2001-March 2003);
Age: 36 Director of Mutual Fund Operations at American Data Services, Inc. (September
2000-May 2001). An officer of 91 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Secretary (since 2001) March 2002) of the Manager; General Counsel and Director of the Distributor
Age: 58 (since December 2001); General Counsel of Centennial 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 91 portfolios in the OppenheimerFunds complex.
47 | OPPENHEIMER ENTERPRISE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
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LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First
Assistant Secretary Vice President (April 2001-April 2004), Associate General Counsel (December
(since 2004) 2000-April 2004), Corporate Vice President (May 1999-April 2001) and Assistant
Age: 38 General Counsel (May 1999-December 2000) of UBS Financial Services Inc. (for-
merly, PaineWebber Incorporated). An officer of 91 portfolios in the
OppenheimerFunds complex.
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since
Assistant Secretary October 2003) of the Manager; Vice President (since 1999) and Assistant Secretary
(since 2001) (since October 2003) of the Distributor; Assistant Secretary of Centennial Asset
Age: 40 Management Corporation (since October 2003); Vice President and Assistant
Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of
OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since
December 2001); Assistant Counsel of the Manager (August 1994-October 2003).
An officer of 91 portfolios in the OppenheimerFunds complex.
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since
Assistant Secretary September 2004); First Vice President (2000-September 2004), Director (2000-
(since 2004) September 2004) and Vice President (1998-2000) of Merrill Lynch Investment
Age: 42 Management. An officer of 91 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.
48 | OPPENHEIMER ENTERPRISE 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 $13,000 in fiscal 2006 and $13,000 in fiscal 2005.
(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 $75,000 in fiscal 2006 and $132,059 in fiscal 2005 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 include: internal control reviews.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees to the registrant during the last two fiscal
years.
The principal accountant for the audit of the registrant's annual financial
statements billed no such fees in fiscal 2006 and $5,000 in fiscal 2005 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 include: filing form 5500.
(d) All Other 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 $8,000 in fiscal 2006 and no such fees in 2005 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 fees would include the cost to the principal accountant of attending audit
committee meetings and consultations regarding the registrant's retirement plan
with respect to its trustees.
(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 $83,000 in fiscal 2006 and $137,059 in fiscal
2005 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.
(h) 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 GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance 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 08/31/2006, 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 Enterprise Fund
By: /S/ John V. Murphy
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John V. Murphy
Principal Executive Officer
Date: 10/16/2006
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: 10/16/2006
By: /S/ Brian W. Wixted
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Brian W. Wixted
Principal Financial Officer
Date: 10/16/2006