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 811-3105
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Oppenheimer Capital Appreciation Fund
-------------------------------------
(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
--------------
Date of fiscal year end: August 31
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Date of reporting period: 02/29/2008
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ITEM 1. REPORTS TO STOCKHOLDERS.
FEBRUARY 29, 2008
- --------------------------------------------------------------------------------
Oppenheimer Management
Capital Commentaries
Appreciation Fund and
Semiannual
Report
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Manager
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
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Communications Equipment 9.3%
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Capital Markets 5.9
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Oil, Gas & Consumable Fuels 5.3
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Chemicals 5.2
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Aerospace & Defense 5.2
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Software 4.7
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Internet Software & Services 4.7
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Pharmaceuticals 4.6
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Computers & Peripherals 4.5
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Wireless Telecommunication Services 4.2
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- -----------------------------------------------------------------------------
Google, Inc., Cl. A 3.3%
- -----------------------------------------------------------------------------
Monsanto Co. 3.3
- -----------------------------------------------------------------------------
Cisco Systems, Inc. 3.2
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Research in Motion Ltd. 2.4
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Las Vegas Sands Corp. 2.2
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Nestle SA 2.1
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Apple, Inc. 2.1
- -----------------------------------------------------------------------------
Roche Holding AG 2.0
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Occidental Petroleum Corp. 2.0
- -----------------------------------------------------------------------------
CME Group, Inc. 2.0
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
10 | OPPENHEIMER CAPITAL APPRECIATION FUND
SECTOR ALLOCATION
[PIE CHART]
Information Technology 30.0%
Communications Equipment 9.4
Software 4.8
Internet Software & Services 4.8
Computers & Peripherals 4.5
IT Services 3.9
Semiconductors &
Semiconductor Equipment 2.6
Health Care 15.0
Financials 10.5
Energy 9.4
Industrials 9.3
Consumer Discretionary 8.9
Consumer Staples 7.4
Materials 5.3
Telecommunication Services 4.2
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on the total market value of common stocks.
11 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES
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Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the
periods shown. Cumulative total returns are not annualized. The Fund's
total returns shown do not reflect the deduction of income taxes on an
individual's investment. Taxes may reduce your actual investment returns on
income or gains paid by the Fund or any gains you may realize if you sell
your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES,
RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE
FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND
MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT
1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 1/22/81. Class A
returns include the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 11/1/95. Class B
returns include the applicable contingent deferred sales charge of 5%
(1-year) and 2% (5-year). Because Class B shares convert to Class A shares
72 months after purchase, the 10-year return for Class B uses Class A
performance for the period after conversion. Class B shares are subject to
an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 12/1/93. 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.
12 | OPPENHEIMER CAPITAL APPRECIATION FUND
CLASS Y shares of the Fund were first publicly offered on 11/3/97. Class Y
shares are offered only to certain institutional investors under special
agreements with the Distributor.
An explanation of the calculation of performance is in the Fund's
Statement of Additional Information.
13 | OPPENHEIMER CAPITAL APPRECIATION 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 applicable); 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
February 29, 2008.
ACTUAL EXPENSES. The first section of the table provides information about
actual account values and actual expenses. You may use the information in
this section 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 first section 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 second section of the
table provides 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 for each
class before expenses, which is not the actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example for the class of
shares you hold with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
front-end or contingent deferred sales charges (loads), or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
exceptions described in
14 | OPPENHEIMER CAPITAL APPRECIATION FUND
the Statement of Additional Information). Therefore, the "hypothetical"
section of the table is 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
ACTUAL SEPTEMBER 1, 2007 FEBRUARY 29, 2008 FEBRUARY 29, 2008
- ------------------------------------------------------------------------------------------------------
Class A $ 1,000.00 $ 921.10 $ 5.03
- ------------------------------------------------------------------------------------------------------
Class B 1,000.00 917.70 8.72
- ------------------------------------------------------------------------------------------------------
Class C 1,000.00 917.60 8.67
- ------------------------------------------------------------------------------------------------------
Class N 1,000.00 919.50 6.80
- ------------------------------------------------------------------------------------------------------
Class Y 1,000.00 922.80 3.30
HYPOTHETICAL
(5% return before expenses)
- ------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,019.64 5.29
- ------------------------------------------------------------------------------------------------------
Class B 1,000.00 1,015.81 9.16
- ------------------------------------------------------------------------------------------------------
Class C 1,000.00 1,015.86 9.11
- ------------------------------------------------------------------------------------------------------
Class N 1,000.00 1,017.80 7.15
- ------------------------------------------------------------------------------------------------------
Class Y 1,000.00 1,021.43 3.47
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended February 29, 2008 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------
Class A 1.05%
- ------------------------------
Class B 1.82
- ------------------------------
Class C 1.81
- ------------------------------
Class N 1.42
- ------------------------------
Class Y 0.69
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses 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.
15 | OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF INVESTMENTS February 29, 2008 / Unaudited
- --------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
COMMON STOCKS--98.9%
- ----------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.8%
- ----------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.2%
Las Vegas Sands Corp. 1 2,352,918 $ 195,998,069
- ----------------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.5%
Amazon.com, Inc. 1 726,710 46,850,994
- ----------------------------------------------------------------------------------------------
MEDIA--2.5%
Focus Media Holding Ltd., ADR 1 1,360,400 68,523,348
- ----------------------------------------------------------------------------------------------
Liberty Global, Inc.,
Series A 1 2,399,938 90,237,669
- ----------------------------------------------------------------------------------------------
XM Satellite Radio
Holdings, Inc., Cl. A 1 5,439,946 64,191,363
----------------
222,952,380
- ----------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.7%
J.C. Penney Co., Inc. (Holding Co.) 2 1,249,566 57,742,445
- ----------------------------------------------------------------------------------------------
SPECIALTY RETAIL--1.0%
Abercrombie & Fitch Co., Cl. A 1,130,452 87,643,944
- ----------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.9%
Polo Ralph Lauren
Corp., Cl. A 2,775,805 172,627,313
- ----------------------------------------------------------------------------------------------
CONSUMER STAPLES--7.3%
- ----------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.9%
Costco
Wholesale Corp. 2,739,450 169,626,744
- ----------------------------------------------------------------------------------------------
Sysco Corp. 3,068,219 86,094,225
----------------
255,720,969
- ----------------------------------------------------------------------------------------------
FOOD PRODUCTS--4.0%
Cadbury
Schweppes plc 15,153,102 168,342,213
- ----------------------------------------------------------------------------------------------
Nestle SA 391,945 187,326,740
----------------
355,668,953
- ----------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.4%
Reckitt Benckiser Group plc 716,372 38,860,540
- ----------------------------------------------------------------------------------------------
ENERGY--9.3%
- ----------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--4.0%
Schlumberger Ltd. 1,939,586 167,677,210
ENERGY EQUIPMENT & SERVICES Continued
Smith International, Inc. 1,585,646 $ 99,943,267
- ----------------------------------------------------------------------------------------------
Transocean, Inc. 620,400 87,172,404
----------------
354,792,881
- ----------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--5.3%
Occidental Petroleum Corp. 2,313,972 179,032,014
- ----------------------------------------------------------------------------------------------
Range Resources Corp. 2,018,143 123,469,989
- ----------------------------------------------------------------------------------------------
XTO Energy, Inc. 2,853,046 176,061,469
----------------
478,563,472
- ----------------------------------------------------------------------------------------------
FINANCIALS--10.4%
- ----------------------------------------------------------------------------------------------
CAPITAL MARKETS--5.9%
Charles Schwab Corp. (The) 4,139,802 81,181,517
- ----------------------------------------------------------------------------------------------
Credit Suisse Group 1,123,398 55,165,685
- ----------------------------------------------------------------------------------------------
Fortress Investment Group LLC, Cl. A 2,739,641 38,354,974
- ----------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 835,344 141,699,403
- ----------------------------------------------------------------------------------------------
Northern Trust Corp. 912,265 61,696,482
- ----------------------------------------------------------------------------------------------
Och-Ziff Capital Management Group, Cl. A 2,597,200 60,099,208
- ----------------------------------------------------------------------------------------------
T. Rowe Price Group, Inc. 774,550 39,138,012
- ----------------------------------------------------------------------------------------------
UBS AG 1,417,343 46,408,791
----------------
523,744,072
- ----------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.6%
American Express Co. 1,239,770 52,442,271
- ----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.0%
CME Group, Inc. 347,393 178,316,827
- ----------------------------------------------------------------------------------------------
INSURANCE--1.1%
Prudential Financial, Inc. 1,397,921 102,006,295
- ----------------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.8%
Jones Lang LaSalle, Inc. 995,270 76,028,675
16 | OPPENHEIMER CAPITAL APPRECIATION FUND
SHARES VALUE
- ----------------------------------------------------------------------------------------------
HEALTH CARE--14.9%
- ----------------------------------------------------------------------------------------------
BIOTECHNOLOGY--2.4%
Celgene Corp. 1 1,578,870 $ 89,000,902
- ----------------------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 2,604,448 123,242,479
----------------
212,243,381
- ----------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--2.3%
Bard (C.R.), Inc. 580,389 55,015,073
- ----------------------------------------------------------------------------------------------
Baxter International, Inc. 1,083,010 63,919,250
- ----------------------------------------------------------------------------------------------
St. Jude Medical, Inc. 1 1,115,960 47,963,961
- ----------------------------------------------------------------------------------------------
Stryker Corp. 596,400 38,831,604
----------------
205,729,888
- ----------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.3%
Express Scripts, Inc. 1 1,653,960 97,749,036
- ----------------------------------------------------------------------------------------------
Schein (Henry), Inc. 1 1,401,337 83,827,979
- ----------------------------------------------------------------------------------------------
WellPoint, Inc. 1 1,599,812 112,114,825
----------------
293,691,840
- ----------------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--2.3%
Covance, Inc. 1 757,012 63,899,383
- ----------------------------------------------------------------------------------------------
Thermo Fisher
Scientific, Inc. 1 2,492,417 139,400,883
----------------
203,300,266
- ----------------------------------------------------------------------------------------------
PHARMACEUTICALS--4.6%
Allergan, Inc. 1,303,014 77,177,519
- ----------------------------------------------------------------------------------------------
Merck & Co., Inc. 1,931,215 85,552,825
- ----------------------------------------------------------------------------------------------
Roche Holding AG 916,697 180,320,852
- ----------------------------------------------------------------------------------------------
Shire plc 3,707,288 72,425,966
----------------
415,477,162
- ----------------------------------------------------------------------------------------------
INDUSTRIALS--9.2%
- ----------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--5.2%
General Dynamics Corp. 1,550,188 126,882,888
- ----------------------------------------------------------------------------------------------
Lockheed Martin Corp. 881,058 90,925,186
- ----------------------------------------------------------------------------------------------
Precision Castparts Corp. 822,387 90,783,301
AEROSPACE & DEFENSE Continued
United Technologies Corp. 2,201,665 $ 155,239,399
----------------
463,830,774
- ----------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.2%
Expeditors International of Washington, Inc. 522,310 20,537,229
- ----------------------------------------------------------------------------------------------
AIRLINES--0.5%
Ryanair Holdings Ltd. plc, Sponsored ADR 1 1,426,900 40,780,802
- ----------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.4%
Corporate Executive Board Co. (The) 949,885 38,574,830
- ----------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.4%
ABB Ltd. 4,994,436 124,603,734
- ----------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.9%
McDermott International, Inc. 1 1,498,110 78,231,304
- ----------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.6%
Fastenal Co. 1,377,774 56,020,291
- ----------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--29.6%
- ----------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--9.3%
Cisco Systems, Inc. 1 11,716,183 285,523,380
- ----------------------------------------------------------------------------------------------
Corning, Inc. 6,682,710 155,239,353
- ----------------------------------------------------------------------------------------------
F5 Networks, Inc. 1 1,837,440 40,717,670
- ----------------------------------------------------------------------------------------------
QUALCOMM, Inc. 3,171,570 134,379,421
- ----------------------------------------------------------------------------------------------
Research in Motion Ltd. 1 2,073,969 215,277,982
----------------
831,137,806
- ----------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--4.5%
Apple, Inc. 1 1,494,670 186,863,643
- ----------------------------------------------------------------------------------------------
EMC Corp. 1 9,433,800 146,601,252
- ----------------------------------------------------------------------------------------------
Hewlett-Packard Co. 32,000 1,528,640
- ----------------------------------------------------------------------------------------------
Network Appliance, Inc. 1 2,934,480 63,443,458
----------------
398,436,993
- ----------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--4.7%
eBay, Inc. 1 4,701,230 123,924,423
- ----------------------------------------------------------------------------------------------
Google, Inc., Cl. A 1 634,026 298,740,371
----------------
422,664,794
17 | OPPENHEIMER CAPITAL APPRECIATION FUND
SHARES VALUE
- ----------------------------------------------------------------------------------------------
IT SERVICES--3.9%
Affiliated Computer Services, Inc., Cl. A 1 3,456,915 $ 175,438,436
- ----------------------------------------------------------------------------------------------
Cognizant Technology Solutions Corp. 1 3,177,473 95,991,459
- ----------------------------------------------------------------------------------------------
MasterCard, Inc., Cl. A 387,260 73,579,400
----------------
345,009,295
- ----------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.5%
ASML Holding NV 1 3,136,190 75,519,455
- ----------------------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 4,806,715 90,894,981
- ----------------------------------------------------------------------------------------------
Microchip Technology, Inc. 1,969,500 60,621,210
----------------
227,035,646
- ----------------------------------------------------------------------------------------------
SOFTWARE--4.7%
Adobe Systems, Inc. 1 3,287,510 110,624,712
- ----------------------------------------------------------------------------------------------
Amdocs Ltd. 1 37,910 1,175,210
- ----------------------------------------------------------------------------------------------
Autodesk, Inc. 1 2,920,463 90,797,195
- ----------------------------------------------------------------------------------------------
Microsoft Corp. 4,421,426 120,351,216
- ----------------------------------------------------------------------------------------------
Nuance Communications, Inc. 1 2,264,790 37,255,796
- ----------------------------------------------------------------------------------------------
Salesforce.com, Inc. 1 1,072,904 64,073,827
----------------
424,277,956
- ----------------------------------------------------------------------------------------------
MATERIALS--5.2%
- ----------------------------------------------------------------------------------------------
CHEMICALS--5.2%
Monsanto Co. 2,564,813 296,697,568
- ----------------------------------------------------------------------------------------------
Praxair, Inc. 2,102,105 168,756,989
----------------
465,454,557
TELECOMMUNICATION SERVICES--4.2%
- ----------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.2%
America Movil SAB de CV, ADR, Series L 2,198,076 132,895,675
- ----------------------------------------------------------------------------------------------
Crown Castle International Corp. 1 3,780,609 136,442,179
- ----------------------------------------------------------------------------------------------
NII Holdings, Inc. 1 2,527,013 100,398,225
----------------
369,736,079
----------------
Total Common Stocks
(Cost $ 7,511,197,450) 8,836,734,727
OTHER SECURITIES--0.0%
- ----------------------------------------------------------------------------------------------
Seagate Technology International, Inc. 1,3,4 (Cost $ --) 1,000,000 100,000
- ----------------------------------------------------------------------------------------------
INVESTMENT COMPANY--1.2%
- ----------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E,3.99% 5,6
(Cost $110,307,661) 110,307,661 110,307,661
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $ 7,621,505,111) 100.1% 8,947,142,388
- ----------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (6,712,690)
--------------------------------
NET ASSETS 100.0% $8,940,429,698
================================
18 | OPPENHEIMER CAPITAL APPRECIATION FUND
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written call options.
3. Illiquid security. The aggregate value of illiquid securities as of February
29, 2008 was $100,000, which represents less than 0.005% of the Fund's net
assets. See Note 7 of accompanying Notes.
4. Escrow shares received as the result of issuer reorganization.
5. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended February 29, 2008, 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 adviser. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
AUGUST 31, 2007 ADDITIONS REDUCTIONS FEBRUARY 29, 2008
- -------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E 105,210,056 908,642,073 903,544,468 110,307,661
DIVIDEND
VALUE INCOME
- -------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E $110,307,661 $3,113,744
6. Rate shown is the 7-day yield as of February 29, 2008.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACTS AS OF FEBRUARY 29, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
CONTRACT
AMOUNT EXPIRATION UNREALIZED UNREALIZED
CONTRACT DESCRIPTION BUY/SELL (000S) DATE VALUE APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------
British Pound Sterling (GBP) Buy 2,175GBP 3/3/08 $ 4,320,416 $ 7,596 $ --
British Pound Sterling (GBP) Sell 2,726GBP 3/3/08 5,415,079 -- 9,520
Swiss Franc (CHF) Buy 19,235CHF 3/3/08 18,466,775 289,514 --
Swiss Franc (CHF) Sell 21,502CHF 3/3/08 20,643,457 -- 440,709
---------------------------
Total unrealized appreciation and depreciation $ 297,110 $ 450,229
===========================
- --------------------------------------------------------------------------------
WRITTEN OPTION AS OF FEBRUARY 29, 2008 IS AS FOLLOWS:
- --------------------------------------------------------------------------------
NUMBER OF EXERCISE EXPIRATION
DESCRIPTION TYPE CONTRACTS PRICE DATE PREMIUM VALUE
- ----------------------------------------------------------------------------------------------------------------------------
J.C. Penney Co., Inc.
(Holding Co.) Call 9,000 $52.50 3/24/08 $1,862,817 $270,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 29, 2008
- ----------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $ 7,511,197,450) $ 8,836,834,727
Affiliated companies (cost $ 110,307,661) 110,307,661
-----------------
8,947,142,388
- ----------------------------------------------------------------------------------------------------------
Cash 1,271,067
- ----------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts 297,110
- ----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 97,666,493
Dividends 5,525,984
Shares of beneficial interest sold 1,035,914
Other 686,696
-----------------
Total assets 9,053,625,652
- ----------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $1,862,817) -- see accompanying
statement of investments 270,000
- ----------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 450,229
- ----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 92,091,471
Shares of beneficial interest redeemed 13,170,813
Distribution and service plan fees 3,142,646
Trustees' compensation 1,807,528
Transfer and shareholder servicing agent fees 1,697,442
Shareholder communications 420,595
Other 145,230
---------------
Total liabilities 113,195,954
- ----------------------------------------------------------------------------------------------------------
NET ASSETS $ 8,940,429,698
=================
- ----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 198,502
- ----------------------------------------------------------------------------------------------------------
Additional paid-in capital 7,811,801,322
- ----------------------------------------------------------------------------------------------------------
Accumulated net investment loss (17,635,951)
- ----------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (181,256,157)
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 1,327,321,982
-----------------
NET ASSETS $ 8,940,429,698
=================
20 | OPPENHEIMER CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $6,094,339,998 and 133,329,462 shares of beneficial interest outstanding) $ 45.71
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $ 48.50
- --------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $736,315,644
and 17,827,811 shares of beneficial interest outstanding) $ 41.30
- --------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $725,439,168 and
17,709,481 shares of beneficial interest outstanding) $ 40.96
- --------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value,redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $ 276,049,992 and
6,157,632 shares of beneficial interest outstanding) $ 44.83
- --------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value,redemption price and offering price per share (based on net
assets of $1,108,284,896 and 23,477,250 shares of beneficial interest outstanding) $ 47.21
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 29, 2008
- -------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies $ 32,939,306
Affiliated companies 3,113,744
- -------------------------------------------------------------------------------------------
Interest 120,299
- -------------------------------------------------------------------------------------------
Other income 173,999
-----------------
Total investment income 36,347,348
- -------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------
Management fees 25,709,398
- -------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 7,653,367
Class B 3,907,662
Class C 3,764,385
Class N 691,916
- -------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 6,737,299
Class B 846,022
Class C 807,154
Class N 467,970
Class Y 612,504
- -------------------------------------------------------------------------------------------
Shareholder communications:
Class A 385,731
Class B 114,007
Class C 54,151
Class N 8,655
Class Y 1,055
- -------------------------------------------------------------------------------------------
Trustees' compensation 114,552
- -------------------------------------------------------------------------------------------
Custodian fees and expenses 48,340
- -------------------------------------------------------------------------------------------
Other 684,552
-----------------
Total expenses 52,608,720
Less reduction to custodian expenses (8,980)
Less waivers and reimbursements of expenses (72,467)
-----------------
Net expenses 52,527,273
- -------------------------------------------------------------------------------------------
Net Investment Loss (16,179,925)
22 | OPPENHEIMER CAPITAL APPRECIATION FUND
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies $ (123,756,038)
Foreign currency transactions 22,871,902
-----------------
Net realized loss (100,884,136)
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (794,651,665)
Translation of assets and liabilities denominated in foreign currencies 61,486,803
Option contracts written 1,592,817
-----------------
Net change in unrealized appreciation (731,572,045)
- -------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (848,636,106)
=================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER CAPITAL APPRECIATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
FEBRUARY 29, 2008 ENDED
(UNAUDITED) AUGUST 31, 2007
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (16,179,925) $ (30,228,971)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (100,884,136) 631,672,721
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (731,572,045) 677,385,449
---------------------------------------
Net increase (decrease) in net assets resulting from operations (848,636,106) 1,278,829,199
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (141,765,290) --
Class B (19,310,647) --
Class C (18,512,370) --
Class N (5,741,019) --
Class Y (23,667,836) --
---------------------------------------
(208,997,162) --
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A 1,381,024,842 (711,314,069)
Class B 104,842,574 (254,371,683)
Class C 127,482,764 (63,359,072)
Class N 69,134,815 (50,155,981)
Class Y 169,590,582 270,627,361
---------------------------------------
1,852,075,577 (808,573,444)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
Total increase 794,442,309 470,255,755
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 8,145,987,389 7,675,731,634
---------------------------------------
End of period (including accumulated net investment loss of
$17,635,951 and $1,456,026, respectively) $ 8,940,429,698 $ 8,145,987,389
=======================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 50.67 $ 43.08 $ 41.45 $ 37.57 $ 35.39 $ 30.72
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income
(loss) (.06) 1 (.13) 1 (.12) 1 .26 1,2 .01 (.05)
Net realized and
unrealized gain (loss) (3.81) 7.72 2.00 3.62 2.17 4.72
---------------------------------------------------------------------------------------------------
Total from investment
operations (3.87) 7.59 1.88 3.88 2.18 4.67
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions
to shareholders:
Dividends from net
investment income -- -- (.25) -- -- --
Distributions from net
realized gain (1.09) -- -- -- -- --
---------------------------------------------------------------------------------------------------
Total dividends and/or
distributions to
shareholders (1.09) -- (.25) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 45.71 $ 50.67 $ 43.08 $ 41.45 $ 37.57 $ 35.39
===================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 3 (7.89)% 17.62% 4.53% 10.33% 6.16% 15.20%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 6,094,340 $ 5,437,581 $ 5,278,253 $ 5,633,688 $ 5,218,310 $ 4,288,332
Average net assets
(in thousands) $ 6,261,143 $ 5,386,165 $ 5,569,912 $ 5,597,821 $ 4,971,315 $ 3,655,594
Ratios to average net
assets: 4
Net investment income
(loss) (0.26)% (0.27)% (0.28)% 0.64% 2 0.09% (0.11)%
Total expenses 1.05% 5,6,7 1.05% 5,6,7 1.07% 6 1.06% 6 1.09% 6,8 1.17% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 51% 83% 38% 45% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.05%
Year Ended August 31, 2007 1.05%
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 46.05 $ 39.47 $ 38.08 $ 34.82 $ 33.09 $ 28.95
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment loss (.23) 1 (.46) 1 (.45) 1 (.08) 1,2 (.36 (.31)
Net realized and
unrealized gain (loss) (3.43) 7.04 1.84 3.34 2.09 4.45
---------------------------------------------------------------------------------------------------
Total from investment
operations (3.66) 6.58 1.39 3.26 1.73 4.14
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income -- -- -- -- -- --
Distributions from net
realized gain (1.09) -- -- -- -- --
---------------------------------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders (1.09) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 41.30 $ 46.05 $ 39.47 $ 38.08 $ 34.82 $ 33.09
===================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 3 (8.23)% 16.67% 3.65% 9.36% 5.23% 14.30%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 736,316 $ 723,519 $ 851,836 $1,041,045 $ 1,104,348 $ 1,114,052
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 786,605 $ 806,550 $ 964,658 $1,099,380 $ 1,169,402 $ 1,001,311
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 4
Net investment loss (1.02)% (1.06)% (1.13)% (0.21)% 2 (0.81)% (0.89)%
Total expenses 1.82% 5 1.86% 5 1.93% 1.93% 1.99% 2.10%
Expenses after payments,
waivers and/or
reimbursements and
reduction to custodian
expenses 1.82% 1.86% 1.92% 1.93% 1.97% 1.96%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 51% 83% 38% 45% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.82%
Year Ended August 31, 2007 1.86%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER CAPITAL APPRECIATION FUND
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $ 45.68 $ 39.14 $ 37.73 $ 34.47 $ 32.72 $ 28.63
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment loss (.23) 1 (.44) 1 (.41) 1 (.05) 1,2 (.16) (.23)
Net realized and
unrealized gain (loss) (3.40) 6.98 1.82 3.31 1.91 4.32
-----------------------------------------------------------------------------------------------------
Total from investment
operations (3.63) 6.54 1.41 3.26 1.75 4.09
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income -- -- -- -- -- --
Distributions from net
realized gain (1.09) -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders (1.09) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 40.96 $ 45.68 $ 39.14 $ 37.73 $ 34.47 $ 32.72
=====================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 3 (8.24)% 16.71% 3.74% 9.46% 5.35% 14.28%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
period (in thousands) $ 725,439 $ 687,083 $ 646,333 $ 691,467 $ 638,676 $ 540,118
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 757,207 $ 678,427 $ 684,056 $ 681,646 $ 623,172 $ 463,768
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 4
Net investment loss (1.01)% (1.02)% (1.05)% (0.14)% 2 (0.69)% (0.89)%
Total expenses 1.81% 5,6,7 1.81% 5,6,7 1.84% 6 1.84% 6 1.87% 6,8 1.96% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 51% 83% 38% 45% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.81%
Year Ended August 31, 2007 1.81%
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 49.80 $ 42.49 $ 40.91 $ 37.21 $ 35.17 $ 30.60
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income
(loss) (.16) 1 (.28) 1 (.27) 1 .11 1,2 (.08) (.10)
Net realized and
unrealized
gain (loss) (3.72) 7.59 1.98 3.59 2.12 4.67
---------------------------------------------------------------------------------------------------
Total from investment
operations (3.88) 7.31 1.71 3.70 2.04 4.57
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income -- -- (.13) -- -- --
Distributions from net
realized gain (1.09) -- -- -- -- --
---------------------------------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders (1.09) -- (.13) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 44.83 $ 49.80 $ 42.49 $ 40.91 $ 37.21 $ 35.17
===================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 3 (8.05) 17.20% 4.16% 9.94% 5.80% 14.94%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 276,050 $ 241,593 $ 250,167 $ 245,932 $ 190,696 $ 111,374
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 278,640 $ 257,444 $ 253,590 $ 221,007 $ 154,605 $ 86,761
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 4
Net investment income
(loss) (0.63)% (0.60)% (0.63)% 0.27% 2 (0.25)% (0.35)%
Total expenses 1.42% 5 1.39% 5 1.42% 1.42% 1.46% 1.46%
Expenses after payments,
waivers and/or
reimbursements and
reduction
to custodian expenses 1.42% 1.39% 1.42% 1.42% 1.44% 1.42%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 51% 83% 38% 45% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.42%
Year Ended August 31, 2007 1.39%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER CAPITAL APPRECIATION FUND
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS Y (UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 52.20 $ 44.21 $ 42.52 $ 38.40 $ 36.04 $ 31.16
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .03 1 .07 1 .05 1 .45 1,2 .09 .01
Net realized and
unrealized
gain (loss) (3.93) 7.92 2.05 3.67 2.27 4.87
--------------------------------------------------------------------------------------------------
Total from investment
operations (3.90) 7.99 2.10 4.12 2.36 4.88
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income -- -- (.41) -- -- --
Distributions from net
realized gain (1.09) -- -- -- -- --
--------------------------------------------------------------------------------------------------
Total dividends and/or
distributions
to shareholders (1.09) -- (.41) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 47.21 $ 52.20 $ 44.21 $ 42.52 $ 38.40 $ 36.04
==================================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 3 (7.72)% 18.07% 4.93% 10.73% 6.55% 15.66%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 1,108,285 $ 1,056,211 $ 649,143 $1,186,649 $ 1,391,718 $ 1,152,318
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $ 1,135,458 $ 865,096 $ 766,929 $1,210,587 $ 1,327,404 $ 930,500
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 4
Net investment income 0.10% 0.13% 0.11% 1.10% 2 0.47% 0.29%
Total expenses 0.69% 5,6,7 0.66% 5,6,7 0.70% 6,8 0.69% 6 0.71% 6 0.78% 6,8
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 51% 83% 38% 45% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.18 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 0.69%
Year Ended August 31, 2007 0.66%
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Capital Appreciation Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund's investment objective is to seek capital appreciation. The
Fund's investment adviser 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 72
months after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange 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 whose principal exchange is NASDAQ(R) are valued based on the closing
price reported 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, collateralized
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair value. Securities
whose values have been materially affected
30 | OPPENHEIMER CAPITAL APPRECIATION FUND
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. Shares of a
registered investment company that are not traded on an exchange are valued at
the acquired investment company's net asset value per share. "Money market-type"
debt instruments with remaining maturities of sixty days or less are valued at
cost adjusted by the amortization of discount or premium to maturity (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
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations 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 appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies 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") to seek current income while preserving
liquidity. 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 adviser of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. 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.
31 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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 Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
generally remain open for the three preceding fiscal reporting period ends.
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.
As of February 29, 2008, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $100,954,653 expiring by
2016. This estimated capital loss carryforward represents carryforward as of the
end of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year. During the
six months ended February 29, 2008, it is estimated that the Fund will not
utilize any capital loss carryforward to offset realized capital gains. During
the fiscal year ended August 31, 2007, the Fund utilized $424,180,295 of capital
loss carry-forward to offset capital gains realized in that fiscal year.
As of August 31, 2007, the Fund had available for federal income tax
purposes post-October foreign currency losses of $70,517.
The approximate 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 February 29, 2008 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.
32 | OPPENHEIMER CAPITAL APPRECIATION FUND
Federal tax cost of securities $ 7,710,937,176
Federal tax cost of other investments (1,862,817)
----------------
Total federal tax cost $ 7,709,074,359
================
Gross unrealized appreciation $ 1,633,398,364
Gross unrealized depreciation (395,600,335)
----------------
Net unrealized appreciation $ 1,237,798,029
================
- --------------------------------------------------------------------------------
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 six months ended February 29, 2008,
the Fund's projected benefit obligations, payments to retired trustees and
accumulated liability were as follows:
Projected Benefit Obligations Increased $ 314,173
Payments Made to Retired Trustees 133,067
Accumulated Liability as of February 29, 2008 1,115,668
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 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 and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.
- --------------------------------------------------------------------------------
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 is recognized on an
33 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
accrual basis. Discount and premium, which are included in interest income on
the Statement of Operations, are amortized or accreted daily.
- --------------------------------------------------------------------------------
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 accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
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:
SIX MONTHS ENDED FEBRUARY 29, 2008 YEAR ENDED AUGUST 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS A
Sold 15,231,156 $ 783,031,739 21,222,885 $ 1,010,056,897
Dividends and/or
distributions reinvested 2,473,136 128,083,725 -- --
Acquisition -- Note 9 24,242,071 1,276,608,520 -- --
Redeemed (15,937,607) (806,699,142) (36,425,258) (1,721,370,966)
------------------------------------------------------------------------
Net increase (decrease) 26,008,756 $1,381,024,842 (15,202,373) $ (711,314,069)
========================================================================
34 | OPPENHEIMER CAPITAL APPRECIATION FUND
SIX MONTHS ENDED FEBRUARY 29, 2008 YEAR ENDED AUGUST 31, 2007
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS B
Sold 1,313,407 $ 60,031,634 1,959,540 $ 84,668,049
Dividends and/or
distributions reinvested 395,530 18,542,453 -- --
Acquisition -- Note 9 4,230,388 202,686,406 -- --
Redeemed (3,821,877) (176,417,919) (7,830,689) (339,039,732)
------------------------------------------------------------------------
Net increase (decrease) 2,117,448 $ 104,842,574 (5,871,149) $ (254,371,683)
========================================================================
- -----------------------------------------------------------------------------------------------------
CLASS C
Sold 1,637,564 $ 74,449,589 2,511,786 $ 108,170,132
Dividends and/or
distributions reinvested 347,077 16,139,070 -- --
Acquisition -- Note 9 2,494,432 118,555,942 -- --
Redeemed (1,809,675) (81,661,837) (3,986,345) (171,529,204)
------------------------------------------------------------------------
Net increase (decrease) 2,669,398 $ 127,482,764 (1,474,559) $ (63,359,072)
========================================================================
- -----------------------------------------------------------------------------------------------------
CLASS N
Sold 856,057 $ 42,501,540 1,577,607 $ 73,777,815
Dividends and/or
distributions reinvested 102,322 5,201,995 -- --
Acquisition -- Note 9 1,495,894 77,172,752 -- --
Redeemed (1,147,729) (55,741,472) (2,614,445) (123,933,796)
------------------------------------------------------------------------
Net increase (decrease) 1,306,544 $ 69,134,815 (1,036,838) $ (50,155,981)
========================================================================
- -----------------------------------------------------------------------------------------------------
CLASS Y
Sold 4,444,499 $ 233,524,371 7,490,658 $ 366,439,984
Dividends and/or
distributions reinvested 397,723 21,254,348 -- --
Acquisition -- Note 9 1,008,258 54,681,820 -- --
Redeemed (2,607,552) (139,869,957) (1,940,608) (95,812,623)
------------------------------------------------------------------------
Net increase 3,242,928 $ 169,590,582 5,550,050 $ 270,627,361
========================================================================
- --------------------------------------------------------------------------------
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 six months ended
February 29, 2008, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------
Investment securities $ 4,491,766,961 $ 3,071,893,533
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate as shown in the following table:
35 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
FEE SCHEDULE
---------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $700 million 0.60
Next $1 billion 0.58
Next $2 billion 0.56
Next $2 billion 0.54
Next $2 billion 0.52
Next $2.5 billion 0.50
Over $11 billion 0.48
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended February 29, 2008, the
Fund paid $9,185,615 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000
annually 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 (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund 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 service 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 (the "Plans") for Class B, Class C
and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to
compensate the Distributor for its services in connection with the distribution
of those shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% on Class B and Class C
shares and 0.25% on Class N shares. The Distributor also receives a service fee
of 0.25% per year under each plan. If either the Class B, Class C or Class N
plan is terminated
36 | OPPENHEIMER CAPITAL APPRECIATION FUND
by the Fund or by the shareholders of a class, the Board of Trustees and its
independent trustees must determine whether the Distributor shall be entitled to
payment from the Fund of all or a portion of the service fee and/or asset-based
sales charge in respect to shares sold prior to the effective date of such
termination. The Distributor's aggregate uncompensated expenses under the Plans
at December 31, 2007 for Class B, Class C and Class N shares were $10,412,187,
$13,106,510 and $3,878,602, 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
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- --------------------------------------------------------------------------------------------------
February 29, 2008 $ 922,590 $ 20,394 $ 604,422 $ 22,472 $ 4,762
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended February 29,
2008, OFS waived $10,327 for Class N. 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 six months ended February 29, 2008, the Manager waived $62,140
for IMMF management fees.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.
Foreign currency exchange contracts are reported on a schedule following
the Statement of Investments. Forward contracts will be valued daily based upon
the closing prices of the forward currency rates determined at the close of the
Exchange as provided by a bank, dealer or pricing service. The resulting
unrealized appreciation (depreciation) is reported in the Statement of Assets
and Liabilities as a receivable or payable and in the Statement of Operations
within the change in unrealized appreciation (depreciation). At contract close,
the difference between the original cost of the contract and the value at the
close date is recorded as a realized gain (loss) in the Statement of Operations.
37 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options. When an option is written, the Fund receives a premium and becomes
obligated to sell or purchase the underlying security at a fixed price, upon
exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded. The difference between the premium
received or paid, and market value of the option, is recorded as unrealized
appreciation or depreciation. The net change in unrealized appreciation or
depreciation is reported in the Statement of Operations. When an option is
exercised, the cost of the security purchased or the proceeds of the security
sale are adjusted by the amount of premium received or paid. Upon the expiration
or closing of the option transaction, a gain or loss is reported in the
Statement of Operations.
Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Options written are reported
in a schedule following the Statement of Investments and as a liability in the
Statement of Assets and Liabilities.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk that there
may be an illiquid market where the Fund is unable to close the contract.
Written option activity for the six months ended February 29, 2008 was as
follows:
CALL OPTIONS
-------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ------------------------------------------------------------
Options outstanding as of
August 31, 2007 -- $ --
Options written 9,000 1,862,817
-------------------------
Options outstanding as of
February 29, 2008 9,000 $1,862,817
=========================
38 | OPPENHEIMER CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
7. ILLIQUID SECURITIES
As of February 29, 2008, investments in securities included issues that are
illiquid. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or dispose of them promptly at an
acceptable price. The Fund will not invest more than 10% of its net assets
(determined at the time of purchase and reviewed periodically) in illiquid
securities. Securities that are illiquid are marked with an applicable footnote
on the Statement of Investments.
- --------------------------------------------------------------------------------
8. RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, Financial Accounting Standards Board ("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 February
29, 2008, 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.
- --------------------------------------------------------------------------------
9. ACQUISITIONS
ACQUISITION OF OPPENHEIMER ENTERPRISE FUND. On December 6, 2007, the Fund
acquired all of the net assets of Oppenheimer Enterprise Fund, pursuant to an
Agreement and Plan of Reorganization approved by the Oppenheimer Enterprise Fund
shareholders on November 30, 2007. The Fund issued (at an exchange ratio of
0.330252 for Class A, 0.330480 for Class B, 0.333725 for Class C, 0. 330601 for
Class N and 0.331157 for Class Y of the Fund to one share of Oppenheimer
Enterprise Fund) 2,355,831; 647,939; 414,965; 1,083,571 and 223,067 shares of
beneficial interest for Class A, Class B, Class C, Class N and Class Y,
respectively, valued at $123,445,542, $30,731,728, $19,519,982, $55,738,877 and
$12,061,279 in exchange for the net assets, resulting in combined Class A net
assets of $7,093,539,541, Class B net assets of $892,790,045, Class C net assets
of $839,221,703, Class N net assets of $333,435,765 and Class Y net assets of
$1,215,931,488 on December 6, 2007. The net assets acquired included net
unrealized appreciation of $29,718,252 and an unused capital loss carryforward
of $302,145,508, potential utilization subject to tax limitations. The exchange
qualified as a tax-free reorganization for federal income tax purposes.
- --------------------------------------------------------------------------------
ACQUISITION OF OPPENHEIMER GROWTH FUND. On November 8, 2007, the Fund acquired
all of the net assets of Oppenheimer Growth Fund, pursuant to an Agreement and
Plan of Reorganization approved by the Oppenheimer Growth Fund shareholders on
November 2, 2007. The Fund issued (at an exchange ratio of 0.687366 for Class A,
0.682644 for Class B, 0.699572 for Class C, 0.689827 for Class N and 0.674404
for Class Y of the Fund to one share
39 | OPPENHEIMER CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
9. ACQUISITIONS Continued
of Oppenheimer Growth Fund) 20,020,561; 2,867,901; 1,638,942; 319,321
and 737,937 shares of beneficial interest for Class A, Class B, Class C, Class N
and Class Y, respectively, valued at $1,052,080,459, $136,798,881, $77,538,345,
$16,483,392 and $39,981,416 in exchange for the net assets, resulting in
combined Class A net assets of $6,714,105,786, Class B net assets of
$849,545,980, Class C net assets of $790,187,644, Class N net assets of
$267,719,775 and Class Y net assets of $1,113,923,160 on November 8, 2007. The
net assets acquired included net unrealized appreciation of $144,800,454 and an
unused capital loss carryforward of $281,079,134, potential utilization subject
to tax limitations. The exchange qualified as a tax-free reorganization for
federal income tax purposes.
- --------------------------------------------------------------------------------
ACQUISITION OF OPPENHEIMER EMERGING TECHNOLOGIES FUND. On October 25, 2007, the
Fund acquired all of the net assets of Oppenheimer Emerging Technologies Fund,
pursuant to an Agreement and Plan of Reorganization approved by the Oppenheimer
Emerging Technologies Fund shareholders on October 19, 2007. The Fund issued (at
an exchange ratio of 0.072494 for Class A, 0.076031 for Class B, 0.076738 for
Class C, 0.072686 for Class N and 0.073348 for Class Y of the Fund to one share
of Oppenheimer Emerging Technologies Fund) 1,865,679; 714,548; 440,525; 93,002
and 47,254 shares of beneficial interest for Class A, Class B, Class C, Class N
and Class Y, respectively, valued at $101,082,519, $35,155,797, $21,497,615,
$4,950,483 and $2,639,125 in exchange for the net assets, resulting in combined
Class A net assets of $6,054,910,103, Class B net assets of $778,891,603, Class
C net assets of $761,499,825, Class N net assets of $266,537,439 and Class Y net
assets of $1,134,454,218 on October 25, 2007. The net assets acquired included
net unrealized appreciation of $28,193,198 and an unused capital loss
carryforward of $438,362,602, potential utilization subject to tax limitations.
The exchange qualified as a tax-free reorganization for federal income tax
purposes.
40 | OPPENHEIMER CAPITAL APPRECIATION 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.
41 | OPPENHEIMER CAPITAL APPRECIATION FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. 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 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 02/29/2008, 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) Not applicable to semiannual reports.
(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 Capital Appreciation Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 04/16/2008
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
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John V. Murphy
Principal Executive Officer
Date: 04/16/2008
By: /s/ Brian W. Wixted
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Brian W. Wixted
Principal Financial Officer
Date: 04/16/2008