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 811-10071
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Oppenheimer Emerging Growth Fund
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(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: October 31
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Date of reporting period: 10/31/2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK INDUSTRIES
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Software 11.1%
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Commercial Services & Supplies 8.1
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Internet Software & Services 7.5
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Health Care Equipment & Supplies 5.8
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Semiconductors & Semiconductor Equipment 5.4
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Hotels, Restaurants & Leisure 4.6
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Machinery 4.5
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Health Care Providers & Services 4.4
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Life Sciences Tools & Services 4.0
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Energy Equipment & Services 3.8
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
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Equinix, Inc. 1.6%
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Geo Group, Inc. (The) 1.5
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Quanta Services, Inc. 1.5
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ICON plc, Sponsored ADR 1.5
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IDEXX Laboratories, Inc. 1.5
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Carrizo Oil & Gas, Inc. 1.4
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FTI Consulting, Inc. 1.4
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Chattem, Inc. 1.4
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Advent Software, Inc. 1.3
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Core Laboratories NV 1.3
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on net assets. For up-to-date Top 10 Fund
Holdings, please visit www.oppenheimerfunds.com.
9 | OPPENHEIMER EMERGING GROWTH 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 32.2%
Software 11.6
Internet Software & Services 7.8
Semiconductors & Semiconductor Equipment 5.6
Electronic Equipment & Instruments 3.0
Communications Equipment 2.3
IT Services 1.7
Computers & Peripherals 0.2
Health Care 20.1
Industrials 18.5
Consumer Discretionary 12.3
Energy 6.7
Financials 3.2
Telecommunication Services 3.1
Consumer Staples 2.7
Materials 1.2
Portfolio holdings and allocations are subject to change. Percentages are as of
October 31, 2007, and are based on the total market value of common stocks.
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10 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED OCTOBER 31, 2007, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO APPROPRIATE BROAD-BASED
MARKET INDICES.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For the 12-month period ending
October 31, 2007, Oppenheimer Emerging Growth Fund produced total returns that
outperformed its benchmark, the Russell 2000 Index, and peer group, the Lipper
Small-Cap Growth category. A favorable market environment for higher-quality
small-cap growth stocks benefited the Fund's performance; however strong
security selection served as the primary driver for the Fund's significant
outperformance versus its benchmark.
In terms of market sectors, the best-performing sectors, on a relative
basis, were the information technology, consumer discretionary and health care
while the weakest performing sector was consumer staples. Given that the Fund's
sector weightings are a result of our disciplined stock selection process, we
made a few adjustments over the period. For example, we increased our position
within the information technology, industrials and energy sectors given the
compelling fundamental prospects we were uncovering in these areas. By contrast,
we decreased our exposure to financials, health care and consumer discretionary
stocks.
The Fund's best relative gains were achieved by holdings within the
information technology, consumer discretionary and health care sectors. Within
the information technology sector, top contributors included Concur
Technologies, Inc. and Nuance Communications, Inc. Concur Technologies, which
offers corporate expense management software that automates and streamlines the
process for submitting and approving employee travel and expense reports,
rapidly advanced as customers flocked to this new technology. Nuance
Communications, the leading developer of speech recognition, voice
authentication and text-to-speech products, significantly advanced on strong
product sales.
Within the consumer discretionary space, the best performing security was
Crocs, Inc., a designer, manufacturer and retailer of footwear. Driven by
immense global demand for its product, the company reported very strong earnings
growth, causing its stock to outperform. Also contributing to the Fund's
performance was Chipotle Mexican Grill, Inc., an operator of more than 600 quick
and casual Mexican eateries located in almost 30 states. Consumers have embraced
the company's fresh, quality-oriented menu, driving rapid sales and earnings
growth.
Top contributors within the health care sector included Meridian
Bioscience, Inc. and ICON plc. Meridian Bioscience, which manufactures and
distributes innovative diagnostic
11 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
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tests for infectious diseases to hospitals, outperformed due to strong product
demand. ICON, a global provider of outsourced development services to the
pharmaceutical and biotechnology industries, also excelled. The company's strong
revenue and earnings growth were driven by a trend among pharmaceutical and
biotechnology companies to outsource their clinical trials and development
projects to companies like ICON.
The Fund also benefited from the strong absolute performance generated by
individual stocks in other market sectors. One such contributor was BE
Aerospace, Inc., a top manufacturer of interior cabin products for commercial
aircraft. The company's stock advanced due to multiple upward revisions to
growth projections, driven by a substantial increase in product orders. Another
contributor was (The) Geo Group, Inc. one of the largest operators of
correctional facilities in the U.S. Overcapacity at state run prisons pushed
states to outsource the management of these facilities to private companies,
which benefited Geo Group.
On a relative basis, the Fund's weakest performing sector was consumer
staples. Within the consumer staples sector, disappointing stock selection
served as the primary source of underperformance. A significant detractor was
Herbalife Ltd., a company that sells weight-management, nutritional and personal
care products. The company underperformed as a result of regulatory issues with
one of its distributors and we exited our position.
Lastly, in terms of individual detractors, our position in traditional
women's clothing retailer, Coldwater Creek, Inc. hurt results. Coldwater Creek
came under pressure due to its inability to produce a compelling fashion line
versus its competitors. Given this, sales declined, causing the stock price to
drop, leading us to exit the stock.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until October 31, 2007. Performance is measured from the inception of
Class A, B, C and Y on November 1, 2000. In the case of Class N shares,
performance is measured from inception of the Class on March 1, 2001. The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B, Class C
and Class N shares, and reinvestments of all dividends and capital gains
distributions. Past performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Russell 2000
Index and the Russell 2000 Growth Index, unmanaged indices of small cap issuers
and small cap issuers with above-average growth characteristics, respectively.
Index performance reflects the reinvestment of income but does not consider the
effect of transaction costs, and
12 | OPPENHEIMER EMERGING GROWTH FUND
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.
13 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class A)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging Russell 2000
Growth Fund (Class A) Russell 2000 Index Growth Index
11/01/2000 $ 9,425 $10,000 $10,000
01/31/2001 $ 9,863 $10,251 $ 9,388
04/30/2001 $ 8,350 $ 9,823 $ 8,266
07/31/2001 $ 8,983 $ 9,848 $ 7,947
10/31/2001 $ 7,990 $ 8,730 $ 6,850
01/31/2002 $ 8,860 $ 9,883 $ 7,603
04/30/2002 $ 7,716 $10,479 $ 7,562
07/31/2002 $ 5,683 $ 8,080 $ 5,515
10/31/2002 $ 5,522 $ 7,720 $ 5,373
01/31/2003 $ 5,711 $ 7,721 $ 5,349
04/30/2003 $ 6,439 $ 8,303 $ 5,785
07/31/2003 $ 8,435 $ 9,946 $ 7,057
10/31/2003 $ 9,740 $11,068 $ 7,874
01/31/2004 $10,231 $12,201 $ 8,596
04/30/2004 $ 8,889 $11,792 $ 8,190
07/31/2004 $ 8,359 $11,643 $ 7,856
10/31/2004 $ 9,049 $12,366 $ 8,309
01/31/2005 $ 9,532 $13,259 $ 8,915
04/30/2005 $ 8,624 $12,348 $ 8,144
07/31/2005 $10,061 $14,529 $ 9,630
10/31/2005 $ 9,872 $13,860 $ 9,216
01/31/2006 $11,640 $15,764 $10,661
04/30/2006 $12,160 $16,480 $11,087
07/31/2006 $10,487 $15,145 $ 9,777
10/31/2006 $11,082 $16,629 $10,788
01/31/2007 $11,574 $17,410 $11,225
04/30/2007 $11,954 $17,771 $11,589
07/31/2007 $12,403 $16,981 $11,423
10/31/2007 $14,531 $18,171 $12,593
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 23.58% 5-Year 19.92% Since Inception (11/1/00) 5.48%
14 | OPPENHEIMER EMERGING GROWTH FUND
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class B)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging Russell 2000
Growth Fund (Class B) Russell 2000 Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 $10,439 $10,251 $ 9,388
04/30/2001 $ 8,815 $ 9,823 $ 8,266
07/31/2001 $ 9,466 $ 9,848 $ 7,947
10/31/2001 $ 8,403 $ 8,730 $ 6,850
01/31/2002 $ 9,296 $ 9,883 $ 7,603
04/30/2002 $ 8,083 $10,479 $ 7,562
07/31/2002 $ 5,937 $ 8,080 $ 5,515
10/31/2002 $ 5,756 $ 7,720 $ 5,373
01/31/2003 $ 5,937 $ 7,721 $ 5,349
04/30/2003 $ 6,689 $ 8,303 $ 5,785
07/31/2003 $ 8,744 $ 9,946 $ 7,057
10/31/2003 $10,078 $11,068 $ 7,874
01/31/2004 $10,559 $12,201 $ 8,596
04/30/2004 $ 9,156 $11,792 $ 8,190
07/31/2004 $ 8,594 $11,643 $ 7,856
10/31/2004 $ 9,286 $12,366 $ 8,309
01/31/2005 $ 9,757 $13,259 $ 8,915
04/30/2005 $ 8,805 $12,348 $ 8,144
07/31/2005 $10,259 $14,529 $ 9,630
10/31/2005 $10,048 $13,860 $ 9,216
01/31/2006 $11,823 $15,764 $10,661
04/30/2006 $12,324 $16,480 $11,087
07/31/2006 $10,610 $15,145 $ 9,777
10/31/2006 $11,191 $16,629 $10,788
01/31/2007 $11,687 $17,410 $11,225
04/30/2007 $12,070 $17,771 $11,589
07/31/2007 $12,524 $16,981 $11,423
10/31/2007 $14,672 $18,171 $12,593
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 25.12% 5-Year 20.21% Since Inception (11/1/00) 5.63%
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.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
"SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD
AFTER CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 19 FOR
FURTHER INFORMATION.
15 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
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CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class C)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging Russell 2000
Growth Fund (Class C) Russell 2000 Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 $10,448 $10,251 $ 9,388
04/30/2001 $ 8,823 $ 9,823 $ 8,266
07/31/2001 $ 9,475 $ 9,848 $ 7,947
10/31/2001 $ 8,412 $ 8,730 $ 6,850
01/31/2002 $ 9,295 $ 9,883 $ 7,603
04/30/2002 $ 8,091 $10,479 $ 7,562
07/31/2002 $ 5,946 $ 8,080 $ 5,515
10/31/2002 $ 5,765 $ 7,720 $ 5,373
01/31/2003 $ 5,946 $ 7,721 $ 5,349
04/30/2003 $ 6,698 $ 8,303 $ 5,785
07/31/2003 $ 8,753 $ 9,946 $ 7,057
10/31/2003 $10,087 $11,068 $ 7,874
01/31/2004 $10,578 $12,201 $ 8,596
04/30/2004 $ 9,164 $11,792 $ 8,190
07/31/2004 $ 8,603 $11,643 $ 7,856
10/31/2004 $ 9,295 $12,366 $ 8,309
01/31/2005 $ 9,776 $13,259 $ 8,915
04/30/2005 $ 8,823 $12,348 $ 8,144
07/31/2005 $10,267 $14,529 $ 9,630
10/31/2005 $10,067 $13,860 $ 9,216
01/31/2006 $11,841 $15,764 $10,661
04/30/2006 $12,353 $16,480 $11,087
07/31/2006 $10,628 $15,145 $ 9,777
10/31/2006 $11,210 $16,629 $10,788
01/31/2007 $11,691 $17,410 $11,225
04/30/2007 $12,041 $17,771 $11,589
07/31/2007 $12,466 $16,981 $11,423
10/31/2007 $14,590 $18,171 $12,593
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 29.16% 5-Year 20.41% Since Inception (11/1/00) 5.54%
16 | OPPENHEIMER EMERGING GROWTH FUND
CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class N)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging Russell 2000
Growth Fund (Class N) Russell 2000 Index Growth Index
03/01/2001 $10,000 $10,000 $10,000
04/30/2001 $10,652 $10,255 $10,204
07/31/2001 $11,449 $10,281 $ 9,810
10/31/2001 $10,181 $ 9,114 $ 8,455
01/31/2002 $11,268 $10,317 $ 9,385
04/30/2002 $ 9,807 $10,940 $ 9,334
07/31/2002 $ 7,222 $ 8,435 $ 6,807
10/31/2002 $ 7,017 $ 8,060 $ 6,632
01/31/2003 $ 7,246 $ 8,061 $ 6,602
04/30/2003 $ 8,164 $ 8,668 $ 7,141
07/31/2003 $10,676 $10,384 $ 8,711
10/31/2003 $12,331 $11,555 $ 9,719
01/31/2004 $12,935 $12,738 $10,611
04/30/2004 $11,232 $12,310 $10,109
07/31/2004 $10,556 $12,155 $ 9,697
10/31/2004 $11,413 $12,910 $10,256
01/31/2005 $12,017 $13,842 $11,004
04/30/2005 $10,870 $12,891 $10,053
07/31/2005 $12,669 $15,168 $11,887
10/31/2005 $12,428 $14,470 $11,376
01/31/2006 $14,638 $16,457 $13,159
04/30/2006 $15,290 $17,205 $13,686
07/31/2006 $13,176 $15,811 $12,069
10/31/2006 $13,913 $17,360 $13,317
01/31/2007 $14,530 $18,176 $13,856
04/30/2007 $14,989 $18,552 $14,306
07/31/2007 $15,538 $17,728 $14,100
10/31/2007 $18,194 $18,970 $15,545
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
10/31/07
1-Year 29.77% 5-Year 20.99% Since Inception (3/1/01) 9.39%
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.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
"SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD
AFTER CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 19 FOR
FURTHER INFORMATION.
17 | OPPENHEIMER EMERGING GROWTH FUND
FUND PERFORMANCE DISCUSSION
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CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Emerging Growth Fund (Class Y)
Russell 2000 Index
Russell 2000 Growth Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Emerging Russell 2000
Growth Fund (Class Y) Russell 2000 Index Growth Index
11/01/2000 $10,000 $10,000 $10,000
01/31/2001 $10,468 $10,251 $ 9,388
04/30/2001 $ 8,862 $ 9,823 $ 8,266
07/31/2001 $ 9,545 $ 9,848 $ 7,947
10/31/2001 $ 8,501 $ 8,730 $ 6,850
01/31/2002 $ 9,424 $ 9,883 $ 7,603
04/30/2002 $ 8,220 $10,479 $ 7,562
07/31/2002 $ 6,062 $ 8,080 $ 5,515
10/31/2002 $ 5,901 $ 7,720 $ 5,373
01/31/2003 $ 6,112 $ 7,721 $ 5,349
04/30/2003 $ 6,905 $ 8,303 $ 5,785
07/31/2003 $ 9,053 $ 9,946 $ 7,057
10/31/2003 $10,468 $11,068 $ 7,874
01/31/2004 $11,010 $12,201 $ 8,596
04/30/2004 $ 9,575 $11,792 $ 8,190
07/31/2004 $ 9,023 $11,643 $ 7,856
10/31/2004 $ 9,786 $12,366 $ 8,309
01/31/2005 $10,318 $13,259 $ 8,915
04/30/2005 $ 9,354 $12,348 $ 8,144
07/31/2005 $10,920 $14,529 $ 9,630
10/31/2005 $10,739 $13,860 $ 9,216
01/31/2006 $12,676 $15,764 $10,661
04/30/2006 $13,258 $16,480 $11,087
07/31/2006 $11,452 $15,145 $ 9,777
10/31/2006 $12,124 $16,629 $10,788
01/31/2007 $12,688 $17,410 $11,225
04/30/2007 $13,111 $17,771 $11,589
07/31/2007 $13,629 $16,981 $11,423
10/31/2007 $16,000 $18,171 $12,593
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 10/31/07
1-Year 31.96% 5-Year 22.08% Since Inception (11/1/00) 6.94%
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.
BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, THE
"SINCE INCEPTION" RETURN FOR CLASS B USES CLASS A PERFORMANCE FOR THE PERIOD
AFTER CONVERSION. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 19 FOR
FURTHER INFORMATION.
18 | OPPENHEIMER EMERGING GROWTH FUND
NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
CLASS A shares of the Fund were first publicly offered on 11/1/00. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 11/1/00. Unless
otherwise noted, 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 "since inception" 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 11/1/00. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
19 | OPPENHEIMER EMERGING GROWTH FUND
NOTES
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CLASS Y shares of the Fund were first publicly offered on 11/1/00. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
20 | OPPENHEIMER EMERGING GROWTH 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 October 31, 2007.
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), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to exceptions
21 | OPPENHEIMER EMERGING GROWTH FUND
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
5/1/07 10/31/07 OCTOBER 31, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,215.50 $ 8.35
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,017.69 7.61
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,212.20 12.78
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,013.71 11.64
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,211.60 12.55
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,013.91 11.43
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,213.80 9.69
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,016.48 8.83
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,220.30 4.93
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.77 4.49
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended October 31, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 1.49%
- -----------------------------
Class B 2.28
- -----------------------------
Class C 2.24
- -----------------------------
Class N 1.73
- -----------------------------
Class Y 0.88
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements by the Fund's Manager and 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 and reduction
to custodian expenses, if applicable.
- --------------------------------------------------------------------------------
22 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS October 31, 2007
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--96.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.8%
- --------------------------------------------------------------------------------
DISTRIBUTORS--1.0%
LKQ Corp. 1 38,000 $ 1,465,280
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--3.0%
Capella Education Co. 1 13,800 855,600
- --------------------------------------------------------------------------------
New Oriental Education & Technology Group,
Inc., Sponsored ADR 1 19,900 1,781,448
- --------------------------------------------------------------------------------
Noah Education Holdings Ltd., ADR 1 31,920 573,602
- --------------------------------------------------------------------------------
Strayer Education, Inc. 6,000 1,118,760
----------------
4,329,410
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--4.6%
Bally Technologies, Inc. 1 27,300 1,101,009
- --------------------------------------------------------------------------------
Chipotle Mexican Grill, Inc., Cl. A 1 10,800 1,501,200
- --------------------------------------------------------------------------------
Gaylord Entertainment Co., Cl. A 1 13,600 740,928
- --------------------------------------------------------------------------------
Life Time Fitness, Inc. 1 17,580 1,066,051
- --------------------------------------------------------------------------------
Orient-Express Hotel Ltd. 12,300 797,040
- --------------------------------------------------------------------------------
WMS Industries, Inc. 1 41,300 1,431,871
----------------
6,638,099
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.5%
Smith & Wesson Holding Corp. 1 55,370 669,423
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.7%
Guess?, Inc. 24,620 1,265,222
- --------------------------------------------------------------------------------
Zumiez, Inc. 1 30,130 1,261,242
----------------
2,526,464
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.0%
Crocs, Inc. 1 20,500 1,532,375
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.6%
- --------------------------------------------------------------------------------
BEVERAGES--1.2%
Central European Distribution Corp. 1 33,300 1,770,894
SHARES VALUE
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.4%
Chattem, Inc. 1 26,520 $ 1,970,436
- --------------------------------------------------------------------------------
ENERGY--6.4%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.8%
Core Laboratories NV 1 13,100 1,911,814
- --------------------------------------------------------------------------------
Geokinetics, Inc. 1 16,700 350,700
- --------------------------------------------------------------------------------
NATCO Group, Inc., Cl. A 1 16,400 874,284
- --------------------------------------------------------------------------------
Oceaneering International, Inc. 1 24,630 1,903,160
- --------------------------------------------------------------------------------
W-H Energy Services, Inc. 1 8,300 477,748
----------------
5,517,706
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--2.6%
Arena Resources, Inc. 1 49,800 1,818,198
- --------------------------------------------------------------------------------
Carrizo Oil & Gas, Inc. 1 40,000 2,055,600
----------------
3,873,798
- --------------------------------------------------------------------------------
FINANCIALS--3.0%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--2.0%
Cohen & Steers, Inc. 28,370 1,066,712
- --------------------------------------------------------------------------------
GFI Group, Inc. 1 21,770 1,879,186
----------------
2,945,898
- --------------------------------------------------------------------------------
INSURANCE--0.3%
Security Capital Assurance Ltd. 35,500 465,760
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--0.7%
Digital Realty Trust, Inc. 22,900 1,007,371
- --------------------------------------------------------------------------------
HEALTH CARE--19.3%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--2.8%
Alexion Pharmaceuticals, Inc. 1 14,200 1,086,300
- --------------------------------------------------------------------------------
BioMarin Pharmaceutical, Inc. 1 53,900 1,494,647
- --------------------------------------------------------------------------------
Cepheid, Inc. 1 18,700 483,956
- --------------------------------------------------------------------------------
Genomic Health, Inc. 1 39,400 1,009,822
----------------
4,074,725
23 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--5.8%
IDEXX Laboratories, Inc. 1 17,400 $ 2,118,972
- --------------------------------------------------------------------------------
Immucor, Inc. 1 44,190 1,425,128
- --------------------------------------------------------------------------------
Inverness Medical Innovations, Inc. 1 18,690 1,123,082
- --------------------------------------------------------------------------------
Meridian Bioscience, Inc. 32,035 1,060,038
- --------------------------------------------------------------------------------
NuVasive, Inc. 1 42,300 1,810,017
- --------------------------------------------------------------------------------
TomoTherapy, Inc. 1 43,900 960,093
----------------
8,497,330
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.4%
athenahealth, Inc. 1 15,800 604,034
- --------------------------------------------------------------------------------
Bio-Reference Laboratories, Inc. 1 43,200 1,385,856
- --------------------------------------------------------------------------------
Genoptix, Inc. 1 22,700 560,690
- --------------------------------------------------------------------------------
HMS Holdings Corp. 1 50,700 1,443,429
- --------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. 1 20,100 1,316,550
- --------------------------------------------------------------------------------
VCA Antech, Inc. 1 24,700 1,137,435
----------------
6,447,994
- --------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY--1.6%
Allscripts Healthcare Solutions, Inc. 1 26,580 736,266
- --------------------------------------------------------------------------------
Omnicell, Inc. 1 58,720 1,550,208
----------------
2,286,474
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--4.0%
AMAG Pharmaceuticals, Inc. 1 17,570 1,148,200
- --------------------------------------------------------------------------------
Covance, Inc. 1 12,400 1,023,000
- --------------------------------------------------------------------------------
ICON plc, Sponsored ADR 1 36,760 2,132,080
- --------------------------------------------------------------------------------
Illumina, Inc. 1 26,230 1,472,815
----------------
5,776,095
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.7%
MGI Pharma, Inc. 1 31,400 1,023,012
- --------------------------------------------------------------------------------
INDUSTRIALS--17.7%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.1%
BE Aerospace, Inc. 1 33,020 1,641,424
SHARES VALUE
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--8.1%
Corrections Corp. of America 1 41,000 $ 1,159,890
- --------------------------------------------------------------------------------
FTI Consulting, Inc. 1 37,300 2,025,390
- --------------------------------------------------------------------------------
Fuel-Tech, Inc. NV 1 31,300 925,541
- --------------------------------------------------------------------------------
Geo Group, Inc. (The) 1 68,880 2,178,674
- --------------------------------------------------------------------------------
IHS, Inc., Cl. A 1 16,000 1,008,800
- --------------------------------------------------------------------------------
Layne Christensen Co. 1 19,800 1,127,412
- --------------------------------------------------------------------------------
Ritchie Bros. Auctioneers, Inc. 20,200 1,511,566
- --------------------------------------------------------------------------------
Stericycle, Inc. 1 30,000 1,749,900
----------------
11,687,173
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--2.2%
EMCOR Group, Inc. 1 30,900 1,063,887
- --------------------------------------------------------------------------------
Quanta Services, Inc. 1 65,800 2,171,400
----------------
3,235,287
- --------------------------------------------------------------------------------
MACHINERY--4.5%
Bucyrus International, Inc., Cl. A 17,800 1,468,500
- --------------------------------------------------------------------------------
Chart Industries, Inc. 1 28,000 918,400
- --------------------------------------------------------------------------------
Kaydon Corp. 22,200 1,194,138
- --------------------------------------------------------------------------------
Middleby Corp. (The) 1 27,300 1,779,141
- --------------------------------------------------------------------------------
RBC Bearings, Inc. 1 30,100 1,209,719
----------------
6,569,898
- --------------------------------------------------------------------------------
MARINE--1.0%
Genco Shipping & Trading Ltd. 20,200 1,452,178
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.8%
TransDigm Group, Inc. 1 26,100 1,188,072
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--31.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.2%
Acme Packet, Inc. 1 47,700 684,972
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 35,380 1,274,741
- --------------------------------------------------------------------------------
Foundry Networks, Inc. 1 57,800 1,221,892
----------------
3,181,605
24 | OPPENHEIMER EMERGING GROWTH FUND
SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.2%
Netezza Corp. 1 22,465 $ 308,894
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.9%
Anixter International, Inc. 1 11,700 840,645
- --------------------------------------------------------------------------------
FARO Technologies, Inc. 1 25,400 730,504
- --------------------------------------------------------------------------------
FLIR Systems, Inc. 1 24,990 1,734,056
- --------------------------------------------------------------------------------
Itron, Inc. 1 8,700 935,163
----------------
4,240,368
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--7.5%
Ariba, Inc. 1 91,000 1,177,540
- --------------------------------------------------------------------------------
comScore, Inc. 1 19,200 703,872
- --------------------------------------------------------------------------------
DealerTrack Holdings, Inc. 1 28,930 1,420,174
- --------------------------------------------------------------------------------
Equinix, Inc. 1 20,200 2,356,532
- --------------------------------------------------------------------------------
j2 Global Communications, Inc. 1 32,600 1,098,294
- --------------------------------------------------------------------------------
Omniture, Inc. 1 36,600 1,250,256
- --------------------------------------------------------------------------------
SINA Corp. 1 21,800 1,249,794
- --------------------------------------------------------------------------------
VistaPrint Ltd. 1 34,910 1,660,669
----------------
10,917,131
- --------------------------------------------------------------------------------
IT SERVICES--1.7%
Heartland Payment Systems, Inc. 24,400 732,000
- --------------------------------------------------------------------------------
VeriFone Holdings, Inc. 1 33,920 1,676,666
----------------
2,408,666
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.4%
ANADIGICS, Inc. 1 101,700 1,500,075
- --------------------------------------------------------------------------------
Atheros Communications, Inc. 1 31,600 1,109,160
- --------------------------------------------------------------------------------
Cavium Networks, Inc. 1 8,000 232,640
- --------------------------------------------------------------------------------
Microsemi Corp. 1 63,200 1,681,752
- --------------------------------------------------------------------------------
Netlogic Microsystems, Inc. 1 37,800 1,254,960
- --------------------------------------------------------------------------------
Tessera Technologies, Inc. 1 29,620 1,131,188
SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued
Varian Semiconductor Equipment
Associates, Inc. 1 18,900 $ 869,778
----------------
7,779,553
- --------------------------------------------------------------------------------
SOFTWARE--11.1%
Advent Software, Inc. 1 35,300 1,953,149
- --------------------------------------------------------------------------------
Ansoft Corp. 1 45,700 1,374,656
- --------------------------------------------------------------------------------
Ansys, Inc. 1 35,793 1,389,126
- --------------------------------------------------------------------------------
Blackboard, Inc. 1 31,100 1,551,890
- --------------------------------------------------------------------------------
Concur Technologies, Inc. 1 41,700 1,502,868
- --------------------------------------------------------------------------------
FactSet Research Systems, Inc. 16,400 1,156,528
- --------------------------------------------------------------------------------
Magma Design Automation, Inc. 1 127,800 1,902,942
- --------------------------------------------------------------------------------
Nuance Communications, Inc. 1 81,770 1,807,935
- --------------------------------------------------------------------------------
Synchronoss Technologies, Inc. 1 36,920 1,476,800
- --------------------------------------------------------------------------------
Taleo Corp., Cl. A 1 33,600 939,120
- --------------------------------------------------------------------------------
Ultimate Software Group, Inc. (The) 1 33,200 1,145,732
----------------
16,200,746
- --------------------------------------------------------------------------------
MATERIALS--1.2%
- --------------------------------------------------------------------------------
METALS & MINING--1.2%
Century Aluminum Co. 1 13,000 756,470
- --------------------------------------------------------------------------------
Schnitzer Steel Industries, Inc. 14,700 971,228
----------------
1,727,698
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.0%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.0%
Cbeyond, Inc. 1 34,482 1,348,936
- --------------------------------------------------------------------------------
Cogent Communications Group, Inc. 1 54,600 1,511,328
----------------
2,860,264
25 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
SBA Communications Corp. 1 40,500 $ 1,441,800
----------------
Total Common Stocks
(Cost $108,236,889) 139,659,301
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--4.7%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.20% 2,3
(Cost $6,861,094) 6,861,094 6,861,094
VALUE
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $115,097,983) 100.7% $ 146,520,395
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (1,052,464)
---------------------------
NET ASSETS 100.0% $ 145,467,931
===========================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Rate shown is the 7-day yield as of October 31, 2007.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended October 31, 2007, by virtue of the Fund owning at
least 5% of the voting securities of the issuer or as a result of the Fund and
the issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
OCTOBER 31, 2006 ADDITIONS REDUCTIONS OCTOBER 31, 2007
- ------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E -- 85,227,193 78,366,099 6,861,094
DIVIDEND
VALUE INCOME
- ------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 6,861,094 $ 148,595
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES October 31, 2007
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $108,236,889) $ 139,659,301
Affiliated companies (cost $6,861,094) 6,861,094
--------------
146,520,395
- --------------------------------------------------------------------------------------------------
Cash 19,622
- --------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 1,882,491
Shares of beneficial interest sold 543,675
Dividends 24,926
Other 8,181
--------------
Total assets 148,999,290
- --------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 3,168,344
Shares of beneficial interest redeemed 227,140
Shareholder communications 40,772
Transfer and shareholder servicing agent fees 30,735
Distribution and service plan fees 28,026
Trustees' compensation 16,567
Other 19,775
--------------
Total liabilities 3,531,359
- --------------------------------------------------------------------------------------------------
NET ASSETS $ 145,467,931
==============
- --------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 10,200
- --------------------------------------------------------------------------------------------------
Additional paid-in capital 97,067,061
- --------------------------------------------------------------------------------------------------
Accumulated net investment loss (16,322)
- --------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 16,984,580
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 31,422,412
--------------
NET ASSETS $ 145,467,931
==============
27 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $84,493,666 and 5,806,162 shares of beneficial interest outstanding) $ 14.55
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $ 15.44
- --------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $24,800,328 and 1,809,552 shares of beneficial interest outstanding) $ 13.71
- --------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $23,293,508 and 1,695,603 shares of beneficial interest outstanding) $ 13.74
- --------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $9,137,982 and 641,071 shares of beneficial interest outstanding) $ 14.25
- --------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $3,742,447 and 247,574 shares of beneficial interest outstanding) $ 15.12
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENT OF OPERATIONS For the Year Ended October 31, 2007
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $680) $ 125,938
Affiliated companies 148,595
- -----------------------------------------------------------------------------------
Interest 6,832
- -----------------------------------------------------------------------------------
Other income 9,836
-------------
Total investment income 291,201
- -----------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------
Management fees 1,095,087
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 168,575
Class B 216,437
Class C 186,105
Class N 39,439
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 247,237
Class B 92,348
Class C 77,521
Class N 35,980
Class Y 33
- -----------------------------------------------------------------------------------
Shareholder communications:
Class A 43,399
Class B 19,648
Class C 11,327
Class N 2,502
Class Y 24
- -----------------------------------------------------------------------------------
Trustees' compensation 7,040
- -----------------------------------------------------------------------------------
Custodian fees and expenses 843
- -----------------------------------------------------------------------------------
Other 37,702
-------------
Total expenses 2,281,247
Less reduction to custodian expenses (348)
Less waivers and reimbursements of expenses (89,553)
-------------
Net expenses 2,191,346
- -----------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,900,145)
- -----------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- -----------------------------------------------------------------------------------
Net realized gain on:
Investments from unaffiliated companies 21,747,871
Foreign currency transactions 141,843
-------------
Net realized gain 21,889,714
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 13,486,438
- -----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 33,476,007
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2007 2006
- -----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (1,900,145) $ (1,967,505)
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain 21,889,714 9,315,800
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 13,486,438 3,701,405
-----------------------------
Net increase in net assets resulting from operations 33,476,007 11,049,700
- -----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (3,790,910) --
Class B (1,248,420) --
Class C (1,030,400) --
Class N (437,120) --
Class Y (158,535) --
-----------------------------
(6,665,385) --
- -----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A (2,162,353) 6,867,762
Class B (2,215,861) (381,192)
Class C 560,714 1,443,314
Class N (329,152) 2,121,521
Class Y (36,998) 464,687
-----------------------------
(4,183,650) 10,516,092
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Total increase 22,626,972 21,565,792
- -----------------------------------------------------------------------------------------------------------------------
Beginning of period 122,840,959 101,275,167
-----------------------------
End of period (including accumulated net investment loss
of $16,322 and $11,945, respectively) $145,467,931 $122,840,959
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.72 $ 10.44 $ 9.57 $ 10.30 $ 5.84
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.16) 1 (.16) 1 (.14) 1 (.15) 1 (.08)
Net realized and unrealized gain (loss) 3.63 1.44 1.01 (.58) 4.54
--------------------------------------------------------------------
Total from investment operations 3.47 1.28 .87 (.73) 4.46
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.55 $ 11.72 $ 10.44 $ 9.57 $ 10.30
====================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 31.11% 12.26% 9.09% (7.09)% 76.37%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 84,494 $ 70,971 $ 57,563 $ 59,819 $ 59,396
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 70,134 $ 70,613 $ 58,690 $ 62,749 $ 28,386
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.30)% (1.34)% (1.43)% (1.57)% (1.48)%
Total expenses 1.59% 4 1.58% 1.65% 1.68% 1.77%
Expenses after payments, waivers and/or reimbursements and
reduction to custodian expenses 1.54% 1.56% 1.63% 1.67% 1.72%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 232% 213% 207% 212% 204%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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 less than one full year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 1.59%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS B YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.16 $ 10.02 $ 9.26 $ 10.05 $ 5.74
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.24) 1 (.24) 1 (.22) 1 (.23) 1 (.09)
Net realized and unrealized gain (loss) 3.43 1.38 .98 (.56) 4.40
--------------------------------------------------------------------
Total from investment operations 3.19 1.14 .76 (.79) 4.31
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.71 $ 11.16 $ 10.02 $ 9.26 $ 10.05
====================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 30.12% 11.38% 8.21% (7.86)% 75.09%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 24,800 $ 22,473 $ 20,653 $ 21,669 $ 20,520
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 21,737 $ 23,201 $ 21,439 $ 22,359 $ 10,544
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.09)% (2.14)% (2.22)% (2.44)% (2.20)%
Total expenses 2.45% 4 2.46% 2.62% 2.67% 2.83%
Expenses after payments, waivers and/or reimbursements and
reduction to custodian expenses 2.34% 2.37% 2.44% 2.55% 2.44%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 232% 213% 207% 212% 204%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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 less than one full year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 2.45%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER EMERGING GROWTH FUND
CLASS C YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.18 $ 10.04 $ 9.27 $ 10.06 $ 5.75
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.24) 1 (.24) 1 (.22) 1 (.23) 1 (.11)
Net realized and unrealized gain (loss) 3.44 1.38 .99 (.56) 4.42
----------------------------------------------------------------
Total from investment operations 3.20 1.14 .77 (.79) 4.31
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.74 $ 11.18 $ 10.04 $ 9.27 $ 10.06
================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 30.16% 11.36% 8.31% (7.85)% 74.96%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 23,294 $ 18,640 $ 15,679 $ 15,814 $ 13,887
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 18,644 $ 18,933 $ 15,550 $ 16,085 $ 6,649
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (2.07)% (2.11)% (2.20)% (2.39)% (2.22)%
Total expenses 2.41% 4 2.39% 2.50% 2.55% 2.65%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 2.31% 2.33% 2.40% 2.50% 2.47%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 232% 213% 207% 212% 204%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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 less than one full year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 2.41%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS N YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.52 $ 10.29 $ 9.45 $ 10.21 $ 5.81
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.19) 1 (.18) 1 (.17) 1 (.18) 1 (.10)
Net realized and unrealized gain (loss) 3.56 1.41 1.01 (.58) 4.50
----------------------------------------------------------------
Total from investment operations 3.37 1.23 .84 (.76) 4.40
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.25 $ 11.52 $ 10.29 $ 9.45 $ 10.21
================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 30.77% 11.95% 8.89% (7.44)% 75.73%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 9,138 $ 7,743 $ 5,067 $ 4,570 $ 2,425
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,901 $ 6,521 $ 5,046 $ 3,375 $ 1,125
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.55)% (1.58)% (1.68)% (1.88)% (1.76)%
Total expenses 1.92% 4 2.00% 2.20% 2.17% 2.14%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.79% 1.80% 1.87% 2.00% 2.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 232% 213% 207% 212% 204%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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 less than one full year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Expenses including indirect expenses from affiliated fund were as follows:
Year Ended October 31, 2007 1.92%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER EMERGING GROWTH FUND
CLASS Y YEAR ENDED OCTOBER 31, 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.08 $ 10.70 $ 9.75 $ 10.43 $ 5.88
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.09) 1 (.09) 1 (.08) 1 (.10) 1 (.09)
Net realized and unrealized gain (loss) 3.77 1.47 1.03 (.58) 4.64
----------------------------------------------------------------
Total from investment operations 3.68 1.38 .95 (.68) 4.55
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.12 $ 12.08 $ 10.70 $ 9.75 $ 10.43
================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 31.96% 12.90% 9.74% (6.52)% 77.38%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 3,742 $ 3,014 $ 2,313 $ 2,819 $ 2,913
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 3,323 $ 2,968 $ 2,540 $ 3,182 $ 1,449
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.68)% (0.79)% (0.77)% (0.98)% (0.92)%
Total expenses 0.94% 4 1.01% 0.98% 1.08% 1.15%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 0.91% 1.01% 0.97% 1.08% 1.15%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 232% 213% 207% 212% 204%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the 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 less than one full year.
Returns do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Year Ended October 31, 2007 0.94%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Emerging Growth Fund (the Fund) is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, 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 Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
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.
36 | OPPENHEIMER EMERGING GROWTH FUND
Futures contracts traded on a commodities or futures exchange will be valued at
the final settlement price or official closing price on the principal exchange
as reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are valued. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement
37 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
of Investments, if applicable. As a shareholder, the Fund is subject to its
proportional share of IMMF's Class E expenses, including its management fee. The
Manager will waive fees and/or reimburse Fund expenses in an amount equal to the
indirect management fees incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2 TAX PURPOSES
-----------------------------------------------------------------------
$ 10,587,456 $ 6,716,628 $ -- $ 31,102,908
1. During the fiscal year ended October 31, 2007, the Fund did not utilize any
capital loss carryforward.
2. During the fiscal year ended October 31, 2006, the Fund utilized $217,219 of
capital loss carryforward to offset capital gains realized in that fiscal year.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2007. Net assets of the
Fund were unaffected by the reclassifications.
38 | OPPENHEIMER EMERGING GROWTH FUND
REDUCTION TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
INCREASE TO NET INVESTMENT REALIZED GAIN
PAID-IN CAPITAL LOSS ON INVESTMENTS 3
--------------------------------------------------------------
$ 2,386,968 $ 1,895,768 $ 4,282,736
3. $2,386,968, including $1,339,857 of long-term capital gain, was distributed
in connection with Fund share redemptions.
The tax character of distributions paid during the years ended October 31, 2007
and October 31, 2006 was as follows:
YEAR ENDED YEAR ENDED
OCTOBER 31, 2007 OCTOBER 31, 2006
--------------------------------------------------------------
Distributions paid from:
Long-term capital gain $ 6,665,385 $ --
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2007 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 $ 115,417,487
==============
Gross unrealized appreciation $ 32,771,998
Gross unrealized depreciation (1,669,090)
--------------
Net unrealized appreciation $ 31,102,908
==============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the year ended October 31, 2007, the
Fund's projected benefit obligations were increased by $4,162 and payments of
$3,437 were made to retired trustees, resulting in an accumulated liability of
$9,477 as of October 31, 2007.
The Board of Trustees has adopted a compensation deferral 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
39 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, 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.
40 | OPPENHEIMER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
YEAR ENDED OCTOBER 31, 2007 YEAR ENDED OCTOBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------
CLASS A
Sold 1,870,818 $ 23,882,474 3,039,298 $ 36,021,329
Dividends and/or distributions
reinvested 317,067 3,643,094 -- --
Redeemed (2,437,225) (29,687,921) 1 (2,496,601) (29,153,567) 2
---------------------------------------------------------------
Net increase (decrease) (249,340) $ (2,162,353) 542,697 $ 6,867,762
===============================================================
- --------------------------------------------------------------------------------------------------
CLASS B
Sold 335,907 $ 4,013,659 547,365 $ 6,216,597
Dividends and/or distributions
reinvested 109,935 1,197,189 -- --
Redeemed (650,344) (7,426,709) 1 (594,424) (6,597,789) 2
---------------------------------------------------------------
Net decrease (204,502) $ (2,215,861) (47,059) $ (381,192)
===============================================================
- --------------------------------------------------------------------------------------------------
CLASS C
Sold 520,202 $ 6,249,584 797,419 $ 9,028,627
Dividends and/or distributions
reinvested 87,900 959,869 -- --
Redeemed (579,608) (6,648,739) 1 (692,303) (7,585,313) 2
---------------------------------------------------------------
Net increase 28,494 $ 560,714 105,116 $ 1,443,314
===============================================================
- --------------------------------------------------------------------------------------------------
CLASS N
Sold 294,135 $ 3,568,322 418,716 $ 4,825,668
Dividends and/or distributions
reinvested 36,477 411,465 -- --
Redeemed (361,625) (4,308,939) 1 (239,109) (2,704,147) 2
---------------------------------------------------------------
Net increase (decrease) (31,013) $ (329,152) 179,607 $ 2,121,521
===============================================================
- --------------------------------------------------------------------------------------------------
CLASS Y
Sold 95,007 $ 1,189,686 120,353 $ 1,494,694
Dividends and/or distributions
reinvested 13,351 158,471 -- --
Redeemed (110,332) (1,385,155) 1 (86,928) (1,030,007) 2
---------------------------------------------------------------
Net increase (decrease) (1,974) $ (36,998) 33,425 $ 464,687
===============================================================
1. Net of redemption fees of $676, $210, $180, $76 and $32 for Class A, Class B,
Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $4,743, $1,595, $1,288, $417 and $197 for Class A,
Class B, Class C, Class N and Class Y, respectively.
41 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the year ended October
31, 2007, were as follows:
PURCHASES SALES
---------------------------------------------------------
Investment securities $ 276,527,239 $ 293,415,697
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------
Up to $200 million 0.90%
Next $200 million 0.85
Next $200 million 0.80
Over $600 million 0.75
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2007, the Fund paid
$401,618 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
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
42 | OPPENHEIMER EMERGING GROWTH FUND
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 determines its uncompensated expenses under the
plan at calendar quarter ends. The Distributor's aggregate uncompensated
expenses under the plan at September 30, 2007 for Class C and Class N shares
were $306,007 and $88,314, 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
- ----------------------------------------------------------------------------------------------
October 31, 2007 $ 67,535 $ 447 $ 48,035 $ 2,550 $ 169
- ----------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. Effective September 1, 2007, the Manager
has voluntarily agreed to waive a portion of the advisory fee so that the annual
advisory fee rate will decline as follows: 0.75% of the first $200 million of
average annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of
the next $200 million, 0.66% of the Next $200 million, 0.60% of the next $700
million and 0.58% of average annual net assets over $1.5 billion. During the
year ended October 31, 2007 the Manager waived $32,653. This voluntary waiver
may be withdrawn by the Manager at any time.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class.
During the year ended October 31, 2007, OFS waived $15,132, $17,282, $13,121 and
$8,555 for Class A, Class B, Class C and Class N, respectively. This undertaking
may be amended or withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended October 31, 2007, the Manager waived $2,810 for IMMF
management fees.
43 | OPPENHEIMER EMERGING GROWTH FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of October 31, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. 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
October 31, 2007, the Manager has evaluated the implications of FIN 48 and does
not currently anticipate a material impact to the Fund's financial statements.
The Manager will continue to monitor the Fund's tax positions prospectively for
potential future impacts.
In September 2006, ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of October 31, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
44 | OPPENHEIMER EMERGING GROWTH FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER EMERGING GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Emerging Growth Fund, including the statement of investments, as of
October 31, 2007, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2007, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Emerging Growth Fund as of October 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
December 13, 2007
45 | OPPENHEIMER EMERGING GROWTH FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2008, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2007. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Capital gain distributions of $0.6448 per share were paid to Class A,
Class B, Class C, Class N and Class Y shareholders, respectively, on December
12, 2006. Whether received in stock or in cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of the capital assets
held for more than one year (long-term capital gains).
Dividends, if any, paid by the Fund during the fiscal year ended October
31, 2007 which are not designated as capital gain distributions should be
multiplied by 0.94% to arrive at the amount eligible for the corporate
dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended October 31, 2007 which are not designated as capital gain
distributions are eligible for lower individual income tax rates to the extent
that the Fund has received qualified dividend income as stipulated by recent tax
legislation. $109,638 of the Fund's fiscal year taxable income may be eligible
for the lower individual income tax rates. In early 2008, shareholders of record
will receive information regarding the percentage of distributions that are
eligible for lower individual income tax rates.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
46 | OPPENHEIMER EMERGING GROWTH FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
47 | OPPENHEIMER EMERGING GROWTH FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
investment advisory agreement (the "Agreement"). The Investment Company Act of
1940, as amended, requires that the Board request and evaluate, and that the
Manager provide, such information as may be reasonably necessary to evaluate the
terms of the Agreement. The Board employs an independent consultant to prepare a
report that provides information, including comparative information, that the
Board requests for that purpose. In addition, the Board receives information
throughout the year regarding Fund services, fees, expenses and performance.
The Manager and the independent consultant provided information to the
Board on the following factors: (i) the nature, quality and extent of the
Manager's services, (ii) the investment performance of the Fund and the Manager,
(iii) the fees and expenses of the Fund, including comparative expense
information, (iv) the profitability of the Manager and its affiliates, including
an analysis of the cost of providing services by the Manager and its affiliates,
(v) the extent to which economies of scale are realized as the Fund grows and
whether fee levels reflect these economies of scale for Fund investors and (vi)
other benefits to the Manager from its relationship with the Fund. The Board was
aware that there are alternatives to retaining the Manager.
NATURE AND EXTENT OF SERVICES. The Board considered information about the
nature and extent of the services provided to the Fund and information regarding
the Manager's key personnel who provide such services. The Manager's duties
include providing the Fund with the services of the portfolio manager and the
Manager's investment team, who provide research, analysis and other advisory
services in regard to the Fund's investments; securities trading services;
oversight of third party service providers; monitoring compliance with
applicable Fund policies and procedures and adherence to the Fund's investment
restrictions. The Manager is responsible for providing certain administrative
services to the Fund as well. Those services include providing and supervising
all administrative and clerical personnel who are necessary in order to provide
effective corporate administration for the Fund; compiling and maintaining
records with respect to the Fund's operations; preparing and filing reports
required by the Securities and Exchange Commission; preparing periodic reports
regarding the operations of the Fund for its shareholders; preparing proxy
materials for shareholder meetings; and preparing the registration statements
required by Federal and state securities laws for the sale of the Fund's shares.
The Manager also provides the Fund with office space, facilities and equipment.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board took account of the fact that the Manager has had over forty
years of experience as an
48 | OPPENHEIMER EMERGING GROWTH FUND
investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services, and information the
Board has received regarding the experience and professional qualifications of
the Manager's personnel and the size and functions of its staff. In its
evaluation of the quality of the portfolio management services provided, the
Board considered the experience of Ronald J. Zibelli, Jr., the portfolio manager
for the Fund, and the Manager's Growth investment team and analysts. The Board
members also considered their experiences with the Manager and its officers and
other personnel through their service on the Boards of the Fund and other funds
advised by the Manager. The Board considered information regarding the quality
of services provided by affiliates of the Manager, which its members have become
knowledgeable about in connection with the renewal of the Fund's service
agreements. In light of the foregoing, the Board concluded that the Fund
benefits from the services provided under the Agreement and from the Manager's
experience, reputation, personnel, operations, and resources.
INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the
Manager provided information on the investment performance of the Fund and the
Manager at each regular quarterly Board meeting, including comparative
performance information. The Board also reviewed information, prepared by the
Manager and by the independent consultant, comparing the Fund's historical
performance to relevant market indices and to the performance of other retail
front-end load and no-load small-cap growth funds advised by the Manager and by
other investment advisers. The Board noted that the Fund's one-year, three-year,
five-year and ten-year performance were lower than its peer group median. The
Board also considered that the Manager had recently changed the Fund's portfolio
manager.
MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the
Manager and its affiliates and the other expenses borne by the Fund. The Board
also considered the comparability of the fees charged and the services provided
to the Fund to the fees and services for other clients or accounts advised by
the Manager. The independent consultant provided comparative data in regard to
the fees and expenses of the Fund, other small-cap growth funds and other funds
with comparable asset levels and distribution features. The Board noted that the
Fund's contractual management fees were at its peer group median although its
actual management fees and total expenses were higher than its peer group
median. Based on this evaluation, the Board requested, and the Manager agreed to
voluntarily waive a portion of the management fees after September 1, 2007 so
that the management fee will decline as follows: 0.75% of the first $200 million
of average annual net assets, 0.72% of the next $200 million of average annual
net assets, 0.69% of
49 | OPPENHEIMER EMERGING GROWTH FUND
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
the next $200 million of average annual net assets, 0.66% of the next $200
million of average annual net assets, 0.60% of the next $700 million of average
annual net assets, 0.58% of average annual net assets in excess of $1.5 billion.
The voluntary waiver and/or expense reimbursement may be amended or withdrawn at
any time without prior notice to shareholders.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund, the extent to
which those economies of scale benefit the Fund's shareholders and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board also noted the Fund's breakpoints, which are intended
to share economies of scale that may exist as the Fund grows with its
shareholders.
BENEFITS TO THE MANAGER. The Board considered information regarding the
Manager's costs in serving as the Fund's investment adviser, including the costs
associated with the personnel and systems necessary to manage the Fund, and
information regarding the Manager's profitability from its relationship with the
Fund. The Board considered that the Manager must be able to pay and retain
experienced professional personnel at competitive rates to provide services to
the Fund and that maintaining the financial viability of the Manager is
important in order for the Manager to continue to provide significant services
to the Fund and its shareholders. In addition to considering the profits
realized by the Manager, the Board considered information regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates for services
provided and research provided to the Manager in connection with permissible
brokerage arrangements (soft dollar arrangements).
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and the independent Trustees. Fund counsel is independent of the
Manager within the meaning and intent of the Securities and Exchange Commission
Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the Agreement for
another year. In arriving at this decision, the Board did not single out any
factor or factors as being more important than others, but considered all of the
factors together. The Board judged the terms and conditions of the Agreement,
including the management fee, in light of all of the surrounding circumstances.
50 | OPPENHEIMER EMERGING GROWTH 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, COLORADO
TRUSTEES 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge fund) (since September 1995); Director of Special
Chairman of the Board of Value Opportunities Fund, LLC (registered investment company) (since September 2004); Member of
Trustees (since 2007), Trustee Zurich Financial Services Investment Advisory Board (insurance) (since October 2004); Chairman
(since 2005) (since August 2007) and Trustee (since August 1991) of the Board of Governing Trustees of The
Age: 64 Jackson Laboratory (non-profit); 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 63 portfolios in the OppenheimerFunds
complex.
DAVID K. DOWNES, President, Chief Executive Officer and Board Member of CRAFund Advisors, Inc. (investment
Trustee (since 2007) management company) (since January 2004); President of The Community Reinvestment Act Qualified
Age: 67 Investment Fund (investment management company) (since January 2004); Independent Chairman of
the Board of Trustees of Quaker Investment Trust (registered investment company) (since January
2004); Director of Internet Capital Group (information technology company) (since October 2003);
Chief Operating Officer and Chief Financial Officer of Lincoln National Investment Companies, Inc.
(subsidiary of Lincoln National Corporation, a publicly traded company) and Delaware Investments
U.S., Inc. (investment management subsidiary of Lincoln National Corporation) (1993-2003);
President, Chief Executive Officer and Trustee of Delaware Investment Family of Funds (1993-2003);
President and Board Member of Lincoln National Convertible Securities Funds, Inc. and the Lincoln
National Income Funds, TDC (1993-2003); Chairman and Chief Executive Officer of Retirement
Financial Services, Inc. (registered transfer agent and investment adviser and subsidiary of
Delaware Investments U.S., Inc.) (1993-2003); President and Chief Executive Officer of Delaware
Service Company, Inc. (1995-2003); Chief Administrative Officer, Chief Financial Officer, Vice
Chairman and Director of Equitable Capital Management Corporation (investment subsidiary of
Equitable Life Assurance Society) (1985-1992); Corporate Controller of Merrill Lynch & Company
(financial services holding company) (1977-1985); held the following positions at the Colonial
Penn Group, Inc. (insurance company): Corporate Budget Director (1974-1977), Assistant Treasurer
(1972-1974) and Director of Corporate Taxes (1969-1972); held the following positions at Price
Waterhouse & Company (financial services firm): Tax Manager (1967-1969), Tax Senior (1965-1967)
and Staff Accountant (1963-1965); United States Marine Corps (1957-1959). Oversees 63 portfolios
in the OppenheimerFunds complex.
MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research foundation) (since 2005);
Trustee (since 2005) Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President
Age: 66 of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI
Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 53 portfolios in
the OppenheimerFunds complex.
51 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Oversees 63 portfolios in the OppenheimerFunds
Trustee (since 2000) complex.
Age: 74
PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since 1979)
Trustee (since 2000) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI
Age: 69 Lumonics Inc. (precision medical equipment 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 53 portfolios in the OppenheimerFunds complex.
MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice
Trustee (since 2004) President and General Auditor of American Express Company (financial services company) (July
Age: 65 1998-February 2003). Oversees 53 portfolios in the OppenheimerFunds complex.
JOEL W. MOTLEY, Managing Director of Public Capital Advisors, LLC (privately held financial advisor) (since
Trustee (since 2002) January 2006); Director of Columbia Equity Financial Corp. (privately held financial advisor)
Age: 55 (since 2002); Managing Director of Carmona Motley, Inc. (privately held financial advisor) (since
January 2002); Managing Director of Carmona Motley Hoffman Inc. (privately held financial advisor)
(January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign
Relations, Member of the Investment Committee of the Episcopal Church of America, Member of the
Investment Committee and Board of Human Rights Watch and the Investment Committee of Historic
Hudson Valley. Oversees 53 portfolios in the OppenheimerFunds complex.
RUSSELL S. REYNOLDS, JR., Chairman of RSR Partners (formerly "The Directorship Search Group, Inc.") (corporate governance
Trustee (since 2000) consulting and executive recruiting) (since 1993); Life Trustee of International House (non-profit
Age: 76 educational organization); Former Trustee of The Historical Society of the Town of Greenwich;
Former Director of Greenwich Hospital Association. Oversees 53 portfolios in the OppenheimerFunds
complex.
JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996);
Trustee (since 2005) Director of Lakes Environmental Association (environmental protection organization) (since 1996);
Age: 66 Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994);
Director of Fortis/Hartford mutual funds (1994-December 2001); Director of C-TASC (a privately
held bio-statistics company) (since May 2007). Oversees 53 portfolios in the OppenheimerFunds
complex.
PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since
Trustee (since 2005) 1994); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999);
Age: 59 Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Vice President,
Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and production)
(1996-2006); 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 53 portfolios in
the OppenheimerFunds complex.
52 | OPPENHEIMER EMERGING GROWTH FUND
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK,
AND OFFICER NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS
RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN ANNUAL 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.
JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of the Manager (since June 2001); President of the
Trustee, President and Manager (September 2000-March 2007); President and director or trustee of other Oppenheimer funds;
Principal Executive Officer President and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding
(since 2001) company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager)
Age: 58 (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager)
(November 2001-December 2006); Chairman and Director of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July
2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program
established by the Manager) (since July 2001); Director of the following investment advisory
subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since
July 2001); President (since November 2001) and Director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company
(OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding
company parent of Babson Capital Management LLC) (since June 1995); Chairman (since October 2007)
and Member of the Investment Company Institute's Board of Governors (since October 2003). Oversees
102 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. ZIBELLI, ZACK,
OF THE FUND 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.
RONALD J. ZIBELLI, JR., Vice President of the Manager (since May 2006). Prior to joining the Manager, he spent six years
Vice President and at Merrill Lynch, during which time he was a Managing Director and Small Cap Growth Team Leader,
Portfolio responsible for managing 11 portfolios. Prior to joining Merrill Lynch Investment Managers, Mr.
Manager (since 2007) Zibelli spent 12 years with Chase Manhattan Bank, including two years as Senior Portfolio Manager
Age: 48 (U.S. Small Cap Equity) at Chase Asset Management. An officer of other funds in the
OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief
Vice President and Chief Compliance Officer of the Manager, OppenheimerFunds Distributor, Inc., Centennial Asset Management
Compliance Officer and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor,
(since 2004) Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983).
Age: 57 Former Vice President and Director of Internal Audit of the Manager (1997-February 2004). An
officer of 102 portfolios in the OppenheimerFunds complex.
53 | OPPENHEIMER EMERGING GROWTH FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following:
Treasurer and Principal HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Financial & Accounting Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc.
Officer (since 2000) (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
Age: 48 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). An officer of 102
portfolios in the OppenheimerFunds complex.
BRIAN PETERSEN, Vice President of the Manager (since February 2007); Assistant Vice President of the Manager
Assistant Treasurer (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November
(since 2004) 1998-July 2002). An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 37
BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting and
Assistant Treasurer Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of Berger
(since 2005) Financial Group LLC (May 2001-March 2003). An officer of 102 portfolios in the OppenheimerFunds
Age: 37 complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary (since 2001) Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of
Age: 59 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 International Distributor
Limited (since December 2003); Senior Vice President (May 1985-December 2003). An officer of 102
portfolios in the OppenheimerFunds complex.
LISA I. BLOOMBERG, Vice President and Associate Counsel of the Manager (since May 2004); First Vice President (April
Assistant Secretary 2001-April 2004), Associate General Counsel (December 2000-April 2004). An officer of 102
(since 2004) portfolios in the OppenheimerFunds complex.
Age: 39
PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel of the Manager (since September 2004); First Vice
Assistant Secretary President (2000-September 2004), Director (2000-September 2004) and Vice President (1998-2000) of
(since 2004) Merrill Lynch Investment Management. An officer of 102 portfolios in the OppenheimerFunds complex.
Age: 43
54 | OPPENHEIMER EMERGING GROWTH FUND
KATHLEEN T. IVES, Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October 2003)
Assistant Secretary of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the
(since 2001) Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003);
Age: 42 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 102
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.
55 | OPPENHEIMER EMERGING GROWTH 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 David Downes, a
member of the Board's Audit Committee, is an audit committee financial expert
and that Mr. Downes is "independent" for purposes of this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The principal accountant for the audit of the registrant's annual financial
statements billed $20,000 in fiscal 2007 and $18,000 in fiscal 2006.
(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 $256,236 in fiscal 2007 and $216,204 in fiscal 2006 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 to the registrant during the last two fiscal
years to the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the registrant.
(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 no such fees during the last two fiscal years to the
registrant's investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services to the
registrant.
(e) (1) During its regularly scheduled periodic meetings, the registrant's
audit committee will pre-approve all audit, audit-related, tax and
other services to be provided by the principal accountants of the
registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next regularly
scheduled meeting.
Under applicable laws, pre-approval of non-audit services maybe waived
provided that: 1) the aggregate amount of all such services provided
constitutes no more than five percent of the total amount of fees paid
by the registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized by the
registrant at the time of engagement as non-audit services and 3) such
services are promptly brought to the attention of the audit committee
of the registrant and approved prior to the completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $256,236 in fiscal 2007 and $216,204 in
fiscal 2006 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) No such services were rendered.
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 10/31/2007, 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 Emerging Growth Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 12/11/2007
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: 12/11/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 12/11/2007