<PAGE>
[GRAPHIC]
Annual Report August 31, 1999
Oppenheimer
CAPITAL
APPRECIATION FUND
[LOGO] OPPENHEIMERFUNDS -Registered Trademark-
THE RIGHT WAY TO INVEST
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTENTS
3 President's Letter
5 An Interview with Your Fund's Manager
9 Fund Performance
14 Financial Statements
35 Independent Auditors' Report
36 Federal Income Tax Information
37 Officers and Trustees
38 OppenheimerFunds Family
40 Information and Services
WE TOOK ADVANTAGE OF THE SEPTEMBER AND OCTOBER 1998 MARKET SLUMP to increase our
holdings in selected companies, many of which prospered in late 1998 and early
1999.
BROADENING MARKET STRENGTH IN APRIL 1999 PROVED BENEFICIAL for many of the
Fund's industrial holdings, as well as our technology and consumer cyclical
stocks.
WE SEE CONTINUING OPPORTUNITIES for growth in the enduring strength of the U.S.
economy.
AVERAGE ANNUAL TOTAL RETURNS
For the 1-Year Period
Ended 8/31/99 *
<TABLE>
<CAPTION>
Class A
Without With
Sales Chg. Sales Chg.
- ----------------------
<S> <C>
47.36% 38.89%
<CAPTION>
Class B
Without With
Sales Chg. Sales Chg.
- ----------------------
<S> <C>
46.20% 41.20%
<CAPTION>
Class C
Without With
Sales Chg. Sales Chg.
- ----------------------
<S> <C>
46.16% 45.16%
<CAPTION>
Class Y
Without With
Sales Chg. Sales Chg.
- ----------------------
<S> <C>
47.90% 47.90%
- ----------------------
</TABLE>
- ------------------
NOT FDIC INSURED.
NO BANK GUARANTEE.
MAY LOSE VALUE.
- ------------------
* See page 12 for further details.
2 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER,
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Capital
Appreciation fund
In many ways, the 1999 investment environment has, so far, unfolded as many
expected it would, producing both attractive opportunities and formidable
challenges for investors.
On the economic front, early worries about the effects of global weakness
in the wake of last year's credit and currency crises have abated. Instead, as
many economies around the world begin to strengthen, concerns now center around
whether the U.S. economy may be growing too quickly. Throughout the year,
consumers in the United States have continued to spend and borrow heavily, more
than offsetting any temporary slowdown in the industrial and export sectors.
The economy's strength has not gone unnoticed by the nation's monetary
policymakers. In an effort to ward off emerging inflationary pressures, the
Federal Reserve Board increased short-term interest rates this past summer.
Market reaction to robust economic growth has been mixed. The U.S. bond
market has generally declined, as fixed income investors became increasingly
concerned about the effects of rising interest rates.
In the stock market, the performance of large-capitalization growth stocks,
which has driven the market's advance over the past few years, has begun to
moderate, and many previously out-of-favor value-oriented mid-cap and small-cap
stocks have rallied. At the same time, a healthy percentage of actively managed,
diversified portfolios have once again begun to outperform unmanaged stock
indices such as Standard & Poor's 500.
At OppenheimerFunds, we applaud the Fed's pre-emptive strike against
inflation. In our view, history has repeatedly demonstrated that most financial
assets do best in a low-inflation environment. What's more, we believe that the
move to higher interest rates should be temporary.
3 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
One recent development IS quite troublesome to us however: the increasing
popularity of "day trading" among individuals seeking to make fast money in a
volatile stock market. In our opinion, day trading is not investing, it is
gambling. Experience proves that without extensive research and analysis,
attempting to time short-term price swings is a fool's errand. Instead, we
continue to encourage investors to maintain a long-term perspective that is
measured in years, not days.
Finally, while we remain alert to the potential impact of the Y2K issue, we
are encouraged by the progress made in addressing the matter. At
OppenheimerFunds, our shareholder accounting systems are already Y2K compliant,
and we have successfully participated in all required industrywide tests. We
intend to continue retesting our systems in order to help further protect
against any potential problems. After all, whether in our computer accounting
systems or the financial markets, managing risk is an important part of what
makes OppenheimerFunds THE RIGHT WAY TO INVEST.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
September 22, 1999
4 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
[PHOTO]
PORTFOLIO MANAGEMENT TEAM (L TO R)
Bruce Bartlett
Jane Putnam
(Portfolio Manager)
HOW DID OPPENHEIMER CAPITAL APPRECIATION FUND PERFORM DURING THE ONE-YEAR PERIOD
THAT ENDED AUGUST 31, 1999?
A. Given the fact that the fiscal year opened with sharp market declines in
September 1998, we are pleased with the Fund's performance over the period. The
Fund's strongest gains occurred in late 1998 and early 1999 in the technology
and consumer cyclical sectors. On the other hand, many of the Fund's investments
in financial companies suffered as a result of rising interest rates later in
1999.
TO WHAT DO YOU ATTRIBUTE THE FUND'S PERFORMANCE?
The Fund benefited from a generally positive market environment for equities
that favored our growth-at-a-reasonable-price investment strategy. Equities
markets began rising in mid-October 1998 when the Federal Reserve Board (the
Fed) cut interest rates, thereby signaling the Fed's willingness to act
decisively to avoid a recession in the United States. The move bolstered
investor confidence, causing stock prices to rise sharply, especially among
high-growth stocks that appeared likely to prosper in a slowing economy.
Most equities indices continued to rise through January 1999, when fears of
slowing economic growth again caused markets to falter. However, as winter
turned to spring, U.S. economic activity showed signs of unexpected strength as
did many global markets, and better-than-expected earnings were reported by a
wide range of companies. As a result, in early April market sentiment turned
positive again. This time, the market's strength was more broadly based, since
investors saw the potential for global industrial growth benefiting many
industries and market sectors.
5 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW DID YOU MANAGE THE FUND IN LIGHT OF THESE CONDITIONS?
We never wavered from our disciplined strategy of seeking stocks with high
growth potential at a reasonable price. Accordingly, we took advantage of
falling prices in September and October of 1998 to increase selected holdings at
prices we considered to be bargains. When stock prices rose in late 1998 and
early 1999, so did the value of many of our holdings, particularly technology
companies, such as Cisco Systems, Inc., and consumer cyclical companies.
- ----------------------------------------
"WE NEVER WAVERED FROM OUR DISCIPLINED
STRATEGY OF SEEKING STOCKS WITH HIGH
GROWTH PORENTIAL AT A REASONABLE PRICE."
- ----------------------------------------
During the broad market rally that began in April 1999, stock prices of
many industrial companies rose along with expectations of growing global
industrial activity. Consequently, several of the Fund's investments in
industrial companies, such as manufacturer Sanmina Corp., began contributing
positively to performance. We also continued to score successes in the
fast-growing technology and consumer cyclical areas. In technology, top
performers included telecommunications equipment companies, business software
companies, and semiconductor makers. Among consumer cyclicals, the Fund
benefited from exposure to broadcasting and advertising companies, as well as
leisure and entertainment companies, such as Carnival Corp.
DID ANY INVESTMENTS DISAPPOINT DURING THE YEAR?
Some of our holdings in the financial services sector failed to keep pace with
the market's advances due to rising interest rates. Interest rates affect
financial companies in a variety of ways. For example, as interest rates
increase, the value of outstanding fixed-interest loans falls. In addition, the
overall level of financial activity tends to decrease as the cost of capital
rises.
6 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS
For the Periods Ended 9/30/99(1)
<TABLE>
<CAPTION>
Class A
1-Year 5-Year 10-Year
- ---------------------------------
<S> <C> <C>
31.68% 23.01% 15.91%
- ---------------------------------
<CAPTION>
Class B
Since
1-Year 5-Year Inception
- ---------------------------------
<S> <C> <C>
33.60% N/A 21.58%
- ---------------------------------
<CAPTION>
Class C
Since
1-Year 5-Year Inception
- ---------------------------------
<S> <C> <C>
37.61% 23.43% 19.91%
- ---------------------------------
<CAPTION>
Class Y
Since
1-Year 5-Year Inception
- ---------------------------------
<S> <C> <C>
40.22% N/A 17.36%
- ---------------------------------
</TABLE>
Nevertheless, companies such as Chase Manhattan Corp. and Citigroup, Inc.,
showed excellent earnings performance and remained poised to benefit from global
economic growth. We believe these companies continue to represent quality
investments at a reasonable price.
WHAT IS YOUR OUTLOOK OVER THE COMING MONTHS?
Going forward, we plan to adhere to our fundamental approach of seeking growth
at the right price. Most indications point to continuing low inflation and
robust consumer spending, which should drive U.S. economic performance. As a
result, we see opportunities for strong earnings growth.
We continue to believe companies offering technologies that improve
productivity and enhance communications will help drive the economy's expansion.
Likewise, we believe companies that cater to consumers' growing wealth, and
financial companies that help meet the world's increasing need for investment
and retirement products hold potential for success. Our goal is to identify the
specific companies that we believe are the most likely to succeed, and to invest
in them at a reasonable price.
1. See page 12 for further details.
7 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
In today's volatile economic environment, we believe our disciplined approach
and emphasis on individual stock selection should serve investors well. That's
why Oppenheimer Capital Appreciation Fund continues to be an important part of
THE RIGHT WAY TO INVEST.
SECTOR ALLOCATION(2)
[PIE CHART]
<TABLE>
<S> <C>
/ / Technology 35.2%
/ / Consumer
Cyclicals 14.8
/ / Consumer
Staples 14.5
/ / Financial 10.6
/ / Capital Goods 6.3
/ / Energy 6.2
/ / Healthcare 5.7
/ / Communication
Services 2.1
/ / Utilities 1.7
Basic Materials 1.6
Transportation 1.3
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES(2)
------------------------------------------------------------
<S> <C>
Communication Equipment 12.7%
------------------------------------------------------------
Computer Software 10.2
------------------------------------------------------------
Electronics 8.4
------------------------------------------------------------
Autos & Housing 5.2
------------------------------------------------------------
Diversified Financial 4.6
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 10 STOCK HOLDINGS(2)
------------------------------------------------------------
<S> <C>
Microsoft Corp. 4.6%
------------------------------------------------------------
Cisco Systems, Inc. 3.0
------------------------------------------------------------
Nokia Corp. 2.6
------------------------------------------------------------
Vitesse Semiconductor Corp. 2.2
------------------------------------------------------------
Novell, Inc. 1.7
------------------------------------------------------------
Carnival Corp. 1.7
------------------------------------------------------------
Citigroup, Inc. 1.7
------------------------------------------------------------
Royal Caribbean Cruises Ltd. 1.6
------------------------------------------------------------
Omnicom Group, Inc. 1.5
------------------------------------------------------------
General Instrument Corp. 1.5
------------------------------------------------------------
</TABLE>
2. Portfolio is subject to change. Percentages are as of August 31, 1999 and are
based on total market value of common stocks.
8 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
FUND PERFORMANCE
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION, BY THE MANAGER, OF THE FUND'S
PERFORMANCE DURING ITS FISCAL YEAR ENDED AUGUST 31, 1999, FOLLOWED BY A
GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF PERFORMANCE The fiscal year that ended
August 31, 1999, opened with sharp market declines in September 1998, driven by
fears of recession. The Fund took advantage of these conditions by purchasing
attractive stocks at prices the Manager considered to be bargains. When stock
prices recovered strongly starting in mid-October 1998, spurred by aggressive
action by the Federal Reserve Board, many of the Fund's holdings rose sharply.
Our strongest gains in late 1998 and early 1999 occurred in the technology and
consumer cyclical sectors. Although the stock market's advance stalled in
January 1999, it resumed in April in response to strong U.S. economic
performance and unexpectedly good corporate earnings reports from a broad range
of companies and industries. The Fund's industrial holdings benefited from the
resulting broad market strength, as did technology holdings in areas such as
telecommunications equipment, business software and semiconductors, and consumer
cyclical holdings in areas such as cruise lines, broadcasting and advertising,
and product manufacturers. On the other hand, the Fund's holdings in financial
companies suffered as a result of rising interest rates, while other investments
suffered from company-specific problems. The Fund's portfolio holdings,
allocations and strategies are subject to change.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until August 31, 1999; in the case of Class A shares, performance is
measured over a ten year period; in the case of Class B shares, from the
inception of the class on November 1, 1995, in the case of Class C shares, from
the inception of the class on December 1, 1993, and in the case of Class Y
shares, from the inception of the class on November 3, 1997. The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B and Class C
shares, and reinvestment of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
Index performance reflects the reinvestment of dividends but does not consider
the effect of capital gains or transaction costs, and none of the data in the
graphs shows the effect of taxes. The Fund's performance reflects the effect of
Fund business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index shown.
9 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
FUND PERFORMANCE
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Capital Appreciation Fund (Class A) and S&P 500
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer Capital Appreciation Fund Class A $62,661
S&P 500 $53,404
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 8/31/99(2)
<S> <C> <C>
1-Year 38.89% 5-Year 22.60% 10-Year 15.91%
</TABLE>
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Capital Appreciation Fund (Class B) and S&P 500
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer Capital Appreciation Fund Class B $24,290
S&P 500 $21,695
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 8/31/99(2)
<S> <C>
1-Year 41.20% Life 22.39%
</TABLE>
The performance information for S&P 500 in the graphs begins on 12/31/88 for
Class A, 10/31/95 for Class B, 11/30/93 for Class C and 10/31/97 for Class Y.
10 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Capital Appreciation Fund (Class C) and S&P 500
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer Capital Appreciation Fund Class C $32,191
S&P 500 $29,092
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 8/31/99(2)
<S> <C> <C>
1-Year 45.16% 5-Year 23.02% Life 20.41%
</TABLE>
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Capital Appreciation Fund (Class Y) and S&P 500
[GRAPH]
<TABLE>
<S> <C>
Oppenheimer Capital Appreciation Fund Class Y $14,824
S&P 500 $13,689
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN OF CLASS Y SHARES OF THE FUND AT 8/31/99(2)
<S> <C>
1-Year 47.90% Life 18.74%
</TABLE>
1. The Fund changed its fiscal year end from 12/31 to 8/31.
2. See page 12 for further details.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
11 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
NOTES
- --------------------------------------------------------------------------------
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. BECAUSE OF ONGOING
MARKET VOLATILITY, THE FUND'S PERFORMANCE MAY BE SUBJECT TO SUBSTANTIAL
SHORT-TERM CHANGES. FOR UPDATES ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR
FINANCIAL ADVISOR, CALL US AT 1.800.525.7048 OR VISIT OUR WEBSITE,
WWW.OPPENHEIMERFUNDS.COM.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
CLASS A The inception date of the Fund was 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 3% (since inception). Class B shares are subject to an annual 0.75%
asset-based sales charge. The ending account value shown in the graph is net of
the applicable 3% contingent deferred 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 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
agreement with the Distributor.
An explanation of the different performance calculations is in the Fund's
prospectus.
12 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
[GRAPHIC]
13 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF INVESTMENTS August 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--94.2%
- -------------------------------------------------------------------------------
BASIC MATERIALS--1.6%
- -------------------------------------------------------------------------------
CHEMICALS--1.2%
PPG Industries, Inc. 380,000 $22,823,750
- -------------------------------------------------------------------------------
Union Carbide Corp. 260,000 14,787,500
------------
37,611,250
- -------------------------------------------------------------------------------
PAPER--0.4%
Boise Cascade Corp. 160,000 5,820,000
- -------------------------------------------------------------------------------
Rayonier, Inc. 137,700 5,714,550
------------
11,534,550
- -------------------------------------------------------------------------------
CAPITAL GOODS--6.0%
- -------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.9%
Sanmina Corp.(1) 570,000 42,750,000
- -----------------------------------------------------------------------------------
Vishay Intertechnology, Inc.(1) 800,000 17,150,000
------------
59,900,000
- -----------------------------------------------------------------------------------
INDUSTRIAL SERVICES--1.2%
Allied Waste Industries, Inc.(1) 750,000 9,562,500
- -----------------------------------------------------------------------------------
Republic Services, Inc.(1) 560,000 6,090,000
- -----------------------------------------------------------------------------------
Waste Management, Inc. 1,000,000 21,812,500
------------
37,465,000
- -----------------------------------------------------------------------------------
MANUFACTURING--2.9%
AlliedSignal, Inc. 500,000 30,625,000
- -----------------------------------------------------------------------------------
Corning, Inc. 250,000 16,625,000
- -----------------------------------------------------------------------------------
Herman Miller, Inc. 400,000 9,425,000
- -----------------------------------------------------------------------------------
Tyco International Ltd. 355,575 36,024,192
------------
92,699,192
- -----------------------------------------------------------------------------------
COMMUNICATION SERVICES--2.0%
- -----------------------------------------------------------------------------------
TELECOMMUNICATIONS-LONG DISTANCE--1.0%
Intermedia Communications, Inc.(1) 338,000 8,788,000
- -----------------------------------------------------------------------------------
MCI WorldCom, Inc.(1) 300,000 22,725,000
------------
31,513,000
- -----------------------------------------------------------------------------------
TELEPHONE UTILITIES--0.8%
Ameritech Corp. 220,000 13,887,500
- -----------------------------------------------------------------------------------
CenturyTel, Inc. 330,000 12,973,125
------------
26,860,625
14 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS: WIRELESS--0.2%
NorthPoint Communications Group, Inc.(1) 195,600 $ 5,171,175
- -----------------------------------------------------------------------------------
CONSUMER CYCLICALS--13.8%
- -----------------------------------------------------------------------------------
AUTOS & HOUSING--4.9%
Arvin Industries, Inc. 244,900 8,755,175
- -----------------------------------------------------------------------------------
Centex Corp. 582,000 16,368,750
- -----------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 455,550 13,296,366
- -----------------------------------------------------------------------------------
Ford Motor Co. 800,000 41,700,000
- -----------------------------------------------------------------------------------
Gentex Corp.(1) 697,000 13,330,125
- -----------------------------------------------------------------------------------
Lafarge Corp. 375,300 10,320,750
- -----------------------------------------------------------------------------------
Southdown, Inc. 400,000 20,200,000
- -----------------------------------------------------------------------------------
Toll Brothers, Inc.(1) 509,600 10,319,400
- -----------------------------------------------------------------------------------
USG Corp. 460,000 22,540,000
------------
156,830,566
- -----------------------------------------------------------------------------------
CONSUMER SERVICES--2.6%
Budget Group, Inc., Cl. A(1) 992,000 8,742,000
- -----------------------------------------------------------------------------------
Hertz Corp., Cl. A 175,000 7,054,687
- -----------------------------------------------------------------------------------
Omnicom Group, Inc. 600,000 45,225,000
- -----------------------------------------------------------------------------------
Young & Rubicam, Inc. 500,000 22,312,500
------------
83,334,187
- -----------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--2.7%
Callaway Golf Co. 430,000 4,273,125
- -----------------------------------------------------------------------------------
Carnival Corp. 1,130,000 50,496,875
- -----------------------------------------------------------------------------------
Harley-Davidson, Inc. 250,000 13,625,000
- -----------------------------------------------------------------------------------
Harrah's Entertainment, Inc.(1) 500,000 11,250,000
- -----------------------------------------------------------------------------------
Mandalay Resort Group(1) 400,000 8,200,000
------------
87,845,000
- -----------------------------------------------------------------------------------
MEDIA--0.4%
News Corp. Ltd., Sponsored ADR 430,000 12,604,375
- -----------------------------------------------------------------------------------
RETAIL: GENERAL--0.9%
Dayton Hudson Corp. 170,000 9,860,000
- -----------------------------------------------------------------------------------
K Mart Corp.(1) 770,000 9,673,125
- -----------------------------------------------------------------------------------
Nordstrom, Inc. 300,000 8,493,750
------------
28,026,875
15 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
- -----------------------------------------------------------------------------------
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------
<S> <C> <C>
RETAIL: SPECIALTY--0.9%
AutoNation, Inc.(1) 560,000 $ 7,245,000
- -----------------------------------------------------------------------------------
CSK Auto Corp.(1) 139,400 3,310,750
- -----------------------------------------------------------------------------------
TJX Cos., Inc. 225,000 6,496,875
- -----------------------------------------------------------------------------------
Zale Corp.(1) 360,000 12,487,500
------------
29,540,125
- -----------------------------------------------------------------------------------
TEXTILE/APPAREL & HOME FURNISHINGS--1.4%
Jones Apparel Group, Inc.(1) 700,000 18,156,250
- -----------------------------------------------------------------------------------
Tommy Hilfiger Corp.(1) 800,000 27,150,000
------------
45,306,250
- -----------------------------------------------------------------------------------
CONSUMER STAPLES--13.7%
- -----------------------------------------------------------------------------------
BEVERAGES--1.5%
Adolph Coors Co., Cl. B 236,100 13,472,456
- -----------------------------------------------------------------------------------
Seagram Co. Ltd. (The) 660,000 35,021,250
------------
48,493,706
- -----------------------------------------------------------------------------------
BROADCASTING--3.5%
AMFM, Inc.(1) 550,000 27,087,500
- -----------------------------------------------------------------------------------
CBS Corp.(1) 700,000 32,900,000
- -----------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 450,000 14,681,250
- -----------------------------------------------------------------------------------
Infinity Broadcasting Corp., Cl. A(1) 669,600 18,121,050
- -----------------------------------------------------------------------------------
Rogers Communications, Inc., Cl. B(1) 1,005,200 17,683,378
- -----------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., Cl. A(1) 100,000 1,625,000
------------
112,098,178
- -----------------------------------------------------------------------------------
ENTERTAINMENT--3.4%
Brinker International, Inc.(1) 350,000 8,400,000
- -----------------------------------------------------------------------------------
Outback Steakhouse, Inc.(1) 200,000 5,925,000
- -----------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd. 1,030,000 48,216,875
- -----------------------------------------------------------------------------------
Time Warner, Inc. 620,000 36,773,750
- -----------------------------------------------------------------------------------
Wendy's International, Inc. 330,000 9,240,000
------------
108,555,625
- -----------------------------------------------------------------------------------
FOOD--1.6%
Del Monte Foods Co.(1) 700,000 10,587,500
- -----------------------------------------------------------------------------------
IBP, Inc. 550,000 12,615,625
- -----------------------------------------------------------------------------------
Keebler Foods Co.(1) 465,000 13,862,812
- -----------------------------------------------------------------------------------
Nabisco Holdings Corp., Cl. A 330,000 12,973,125
------------
50,039,062
16 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------
<S> <C> <C>
FOOD & DRUG RETAILERS--2.4%
CVS Corp. 865,000 $36,059,688
- -----------------------------------------------------------------------------------
Kroger Co.(1) 180,000 4,162,500
- -----------------------------------------------------------------------------------
Safeway, Inc.(1) 765,000 35,620,313
------------
75,842,501
- -----------------------------------------------------------------------------------
HOUSEHOLD GOODS--1.3%
Avon Products, Inc. 942,000 41,330,250
- -----------------------------------------------------------------------------------
ENERGY--5.9%
- -----------------------------------------------------------------------------------
ENERGY SERVICES--2.6%
Coastal Corp. 580,000 25,121,250
- -----------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 145,200 6,570,300
- -----------------------------------------------------------------------------------
Halliburton Co. 490,000 22,723,750
- -----------------------------------------------------------------------------------
Nabors Industries, Inc.(1) 420,000 11,340,000
- -----------------------------------------------------------------------------------
Transocean Offshore, Inc. 300,000 10,200,000
- -----------------------------------------------------------------------------------
Varco International, Inc.(1) 679,800 8,412,525
------------
84,367,825
- -----------------------------------------------------------------------------------
OIL - DOMESTIC--1.1%
Amerada Hess Corp. 400,000 24,825,000
- -----------------------------------------------------------------------------------
Forest Oil Corp.(1) 660,000 9,858,750
------------
34,683,750
- -----------------------------------------------------------------------------------
OIL - INTERNATIONAL--2.2%
Mobil Corp . 350,000 35,831,250
- -----------------------------------------------------------------------------------
Texaco, Inc. 160,000 10,160,000
- -----------------------------------------------------------------------------------
Total Fina SA, Sponsored ADR 350,000 22,771,875
------------
68,763,125
- -----------------------------------------------------------------------------------
FINANCIAL--10.0%
- -----------------------------------------------------------------------------------
BANKS--2.0%
BankBoston Corp. 310,000 14,395,625
- -----------------------------------------------------------------------------------
Chase Manhattan Corp. 390,000 32,638,125
- -----------------------------------------------------------------------------------
Fleet Financial Group, Inc. 430,000 17,119,375
------------
64,153,125
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--4.4%
Citigroup, Inc. 1,128,750 50,158,828
- -----------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 158,000 9,450,375
- -----------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 320,000 23,880,000
- -----------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 330,000 28,318,125
17 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
- -----------------------------------------------------------------------------------
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------
<S> <C> <C>
Diversified Financial Continued
Price (T. Rowe) Associates, Inc. 236,800 $ 7,326,000
- -----------------------------------------------------------------------------------
Schwab (Charles) Corp. 500,000 19,750,000
------------
138,883,328
- -----------------------------------------------------------------------------------
INSURANCE--2.7%
Allstate Corp. 470,000 15,421,875
- -----------------------------------------------------------------------------------
American International Group, Inc. 250,093 23,180,495
- -----------------------------------------------------------------------------------
Equitable Cos., Inc. 438,000 27,046,500
- -----------------------------------------------------------------------------------
Progressive Corp. 200,000 20,400,000
------------
86,048,870
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--0.9%
Boston Properties, Inc. 870,000 28,981,875
- -----------------------------------------------------------------------------------
HEALTHCARE--5.3%
- -----------------------------------------------------------------------------------
HEALTHCARE/DRUGS--4.1%
Amgen, Inc.(1) 450,000 37,434,375
- -----------------------------------------------------------------------------------
Elan Corp. plc, ADR(1) 1,162,000 37,256,625
- -----------------------------------------------------------------------------------
Genetech, Inc.(1) 39,500 6,487,875
- -----------------------------------------------------------------------------------
Genzyme Corp. (General Division)(1) 180,800 10,203,900
- -----------------------------------------------------------------------------------
Pfizer, Inc. 420,000 15,855,000
- -----------------------------------------------------------------------------------
Schering-Plough Corp. 470,000 24,704,375
------------
131,942,150
- -----------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--1.2%
Baxter International, Inc. 340,000 22,801,250
- -----------------------------------------------------------------------------------
Cardinal Health, Inc. 220,800 14,076,000
- -----------------------------------------------------------------------------------
Safeskin Corp.(1) 200,000 1,587,500
------------
38,464,750
- -----------------------------------------------------------------------------------
TECHNOLOGY--33.1%
- -----------------------------------------------------------------------------------
COMPUTER HARDWARE--3.0%
Apple Computer, Inc.(1) 310,000 20,227,500
- -----------------------------------------------------------------------------------
EMC Corp.(1) 400,000 24,000,000
- -----------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(1) 200,000 15,750,000
- -----------------------------------------------------------------------------------
Seagate Technology, Inc.(1) 1,100,000 36,506,250
------------
96,483,750
- -----------------------------------------------------------------------------------
COMPUTER SERVICES--0.6%
Unisys Corp.(1) 450,000 19,350,000
18 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE--9.6%
America Online, Inc.(1) 100,000 $ 9,131,250
- -----------------------------------------------------------------------------------
BMC Software, Inc.(1) 650,000 34,978,125
- -----------------------------------------------------------------------------------
I2 Technologies, Inc.(1) 700,000 22,225,000
- -----------------------------------------------------------------------------------
Microsoft Corp.(1) 1,500,000 138,843,750
- -----------------------------------------------------------------------------------
Novell, Inc.(1) 2,200,000 52,112,500
- -----------------------------------------------------------------------------------
Oracle Corp.(1) 630,000 22,995,000
- -----------------------------------------------------------------------------------
Veritas Software Corp.(1) 430,000 25,477,500
------------
305,763,125
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--12.0%
Alcatel SA, Sponsored ADR 500,000 15,468,750
- -----------------------------------------------------------------------------------
CIENA Corp.(1) 690,000 24,236,250
- -----------------------------------------------------------------------------------
Cisco Systems, Inc.(1) 1,330,000 90,190,625
- -----------------------------------------------------------------------------------
General Instrument Corp.(1) 890,000 43,776,875
- -----------------------------------------------------------------------------------
Lucent Technologies, Inc. 550,000 35,234,375
- -----------------------------------------------------------------------------------
Nokia Corp., A Shares, Sponsored ADR 940,000 78,372,500
- -----------------------------------------------------------------------------------
Nortel Networks Corp. 540,000 22,173,750
- -----------------------------------------------------------------------------------
QUALCOMM, Inc.(1) 200,000 38,437,500
- -----------------------------------------------------------------------------------
Tellabs, Inc.(1) 560,000 33,355,000
------------
381,245,625
- -----------------------------------------------------------------------------------
ELECTRONICS--7.9%
Atmel Corp.(1) 600,000 23,587,500
- -----------------------------------------------------------------------------------
Flextronics International Ltd.(1) 500,000 29,343,750
- -----------------------------------------------------------------------------------
LSI Logic Corp.(1) 370,000 20,997,500
- -----------------------------------------------------------------------------------
Micron Technology, Inc.(1) 500,000 37,281,250
- -----------------------------------------------------------------------------------
National Semiconductor Corp.(1) 865,000 24,382,188
- -----------------------------------------------------------------------------------
Novellus Systems, Inc.(1) 350,000 18,878,125
- -----------------------------------------------------------------------------------
Texas Instruments, Inc. 400,000 32,825,000
- -----------------------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 960,000 65,280,000
------------
252,575,313
- -----------------------------------------------------------------------------------
TRANSPORTATION--1.2%
- -----------------------------------------------------------------------------------
RAILROADS & TRUCKERS--1.2%
Canadian Pacific Ltd. (New) 250,000 5,859,375
- -----------------------------------------------------------------------------------
Kansas City Southern Industries, Inc. 440,000 20,377,500
- -----------------------------------------------------------------------------------
Navistar International Corp.(1) 250,000 12,156,250
------------
38,393,125
</TABLE>
19 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES--1.6%
- ----------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
Potomac Electric Power Co. 700,000 $ 18,550,000
- ----------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--1.0%
Enron Corp. 320,000 13,400,000
- ----------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The) 490,000 20,212,500
--------------
33,612,500
--------------
Total Common Stocks (Cost $2,308,650,394) 3,004,863,728
<CAPTION>
Face
Amount
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM NOTES--2.3%(2)
New Center Asset Trust, 5.15%, 10/7/99 $ 25,000,000 24,867,750
- ----------------------------------------------------------------------------------------------------------------------
Prudential Funding Corp., 5.29%, 10/14/99 25,000,000 24,842,035
- ----------------------------------------------------------------------------------------------------------------------
Prudential Funding Corp., 5.30%, 10/12/99 25,000,000 24,849,097
--------------
Total Short-Term Notes (Cost $74,558,882) 74,558,882
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--3.3%
<S> <C> <C>
Repurchase agreement with First Chicago Capital Markets, 5.41%, dated 8/31/99,
to be repurchased at $103,915,614 on 9/1/99, collateralized by U.S. Treasury
Nts., 4%-6.375%, 11/30/99-2/28/03, with a value of $102,981,310, and U.S.
Treasury Bills, 9/15/99, with a value of $3,076,650 (Cost $103,900,000) 103,900,000 103,900,000
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,487,109,276) 99.8% 3,183,322,610
- ----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.2 5,304,759
NET ASSETS 100.0% $3,188,627,369
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
20 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES August 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at value (cost $2,487,109,276)-see accompanying statement $ 3,183,322,610
- -------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 7,689,864
Interest and dividends 2,566,259
Other 281,114
---------------
Total assets 3,193,859,847
- -------------------------------------------------------------------------------------------------------------
LIABILITIES
Bank overdraft 1,044,952
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 2,153,744
Distribution and service plan fees 980,660
Transfer and shareholder servicing agent fees 322,850
Trustees' compensation--Note 1 225,331
Shareholder reports 185,266
Custodian fees 20,440
Other 299,235
---------------
Total liabilities 5,232,478
- -------------------------------------------------------------------------------------------------------------
NET ASSETS $ 3,188,627,369
---------------
---------------
- -------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $ 2,284,780,588
- -------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (213,477)
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 207,846,924
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies--Note 3 696,213,334
---------------
Net assets $ 3,188,627,369
---------------
---------------
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of $2,071,316,529
and 46,310,458 shares of beneficial interest outstanding) $ 44.73
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 47.46
- -------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $531,625,365 and 12,227,026 shares
of beneficial interest outstanding) $ 43.48
- -------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $165,230,873 and 3,837,322 shares of
beneficial interest outstanding) $ 43.06
- -------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$420,454,602 and 9,383,171 shares of beneficial interest outstanding) $ 44.81
</TABLE>
See accompanying Notes to Financial Statements.
21 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended August 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $31,335) $ 15,427,760
- ------------------------------------------------------------------------------------------
Interest 10,173,934
-------------
Total income 25,601,694
- ------------------------------------------------------------------------------------------
EXPENSES
Management fees--Note 4 16,112,987
- ------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 3,444,635
Class B 3,712,308
Class C 1,262,906
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 3,130,001
Class B 643,288
Class C 219,981
Class Y 35,260
- ------------------------------------------------------------------------------------------
Shareholder reports 748,052
- ------------------------------------------------------------------------------------------
Registration and filing fees 222,240
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 100,066
- ------------------------------------------------------------------------------------------
Trustees' compensation--Note 1 97,911
- ------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 63,945
- ------------------------------------------------------------------------------------------
Insurance expenses 20,127
- ------------------------------------------------------------------------------------------
Other 131,073
-------------
Total expenses 29,944,780
Less expenses paid indirectly--Note 1 (28,218)
-------------
Net expenses 29,916,562
- ------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (4,314,868)
- ------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
Net realized gain on:
Investments 213,362,731
Foreign currency transactions 25,186
-------------
Net realized gain 213,387,917
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 635,462,136
Translation of assets and liabilities denominated in foreign currencies 186,133
-------------
Net change 635,648,269
-------------
Net realized and unrealized gain 849,036,186
- ------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 844,721,318
-------------
-------------
</TABLE>
See accompanying Notes to Financial Statements.
22 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income (loss) $ (4,314,868) $ 6,575,863
- ----------------------------------------------------------------------------------------------------------
Net realized gain 213,387,917 170,824,591
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 635,648,269 (311,950,541)
------------------------------------
Net increase (decrease) in net assets resulting from operations 844,721,318 (134,550,087)
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (3,435,127) (4,817,561)
Class B - (22,645)
Class C - (355,999)
Class Y (1,089,768) -
- ----------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (101,506,314) (143,987,822)
Class B (17,982,633) (9,888,962)
Class C (6,603,979) (5,546,656)
Class Y (14,490,090) (7,627,140)
- ----------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions-Note 2:
Class A 332,180,412 274,408,889
Class B 250,141,075 178,884,590
Class C 57,426,203 54,452,106
Class Y 165,100,529 215,487,626
- ----------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase 1,504,461,626 416,436,339
- ----------------------------------------------------------------------------------------------------------
Beginning of period 1,684,165,743 1,267,729,404
------------------------------------
End of period [including undistributed (overdistributed)
net investment income of $(213,477) and $4,304,905, respectively] $ 3,188,627,369 $ 1,684,165,743
------------------------------------
------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
23 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
Class A 1999 1998 1997 1996(1) 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $32.53 $38.63 $30.81 $27.44 $22.63 $25.72
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) .17 .18 .11 .24 .20
Net realized and unrealized gain (loss) 14.87 (1.55) 11.36 3.26 7.61 (.11)
------------------------------------------------------------------------
Total income (loss) from
investment operations 14.83 (1.38) 11.54 3.37 7.85 .09
- --------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income (.09) (.15) (.17) -- (.24) (.20)
Distributions from net realized gain (2.54) (4.57) (3.55) -- (2.80) (2.98)
------------------------------------------------------------------------
Total dividends and distributions
to shareholders (2.63) (4.72) (3.72) -- (3.04) (3.18)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $44.73 $32.53 $38.63 $30.81 $27.44 $22.63
------------------------------------------------------------------------
------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 47.36% (4.06)% 40.52 12.28% 34.85% 0.46%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2,071 $1,234 $1,179 $789 $758 $302
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $1,789 $1,353 $ 986 $790 $538 $325
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.05)% 0.48% 0.53% 0.55% 1.08% 0.72%
Expenses 1.04% 1.00%(4) 1.01%(4) 1.09%(4) 1.03%(4) 1.16%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 59% 60% 66% 45% 72% 35%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1999, were $2,020,577,965 and $1,408,782,951, respectively.
24 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
Class B 1999 1998 1997 1996(1) 1995(6)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $31.85 $38.07 $30.56 $27.37 $29.77
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.21) (.02) .07 -- (.14)
Net realized and unrealized gain (loss) 14.38 (1.62) 11.05 3.19 .78
----------------------------------------------------------
Total income (loss) from
investment operations 14.17 (1.64) 11.12 3.19 .64
- -------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.01) (.06) -- (.24)
Distributions from net realized gain (2.54) (4.57) (3.55) -- (2.80)
----------------------------------------------------------
Total dividends and distributions
to shareholders (2.54) (4.58) (3.61) -- (3.04)
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $43.48 $31.85 $38.07 $30.56 $27.37
----------------------------------------------------------
----------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 46.20% (4.86)% 39.30% 11.65% 1.67%
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $532 $194 $52 $5 $3
- -------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $372 $133 $24 $4 $1
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.86)% (0.37)% (0.33)% (0.25)% (0.54)%
Expenses 1.84% 1.81%(4) 1.86%(4) 1.94%(4) 2.62%(4)
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 59% 60% 66% 45% 72%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1999 were $2,020,577,965 and $1,408,782,951, respectively.
6. For the period from November 1, 1995 (inception of offering) to December 31,
1995.
25 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
Class C 1999 1998 1997 1996(1) 1995 1994(7)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $31.57 $37.76 $30.27 $27.11 $22.50 $25.72
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.23) (.03) .01 (.03) .09 --
Net realized and unrealized gain (loss) 14.26 (1.59) 11.03 3.19 7.43 (.15)
------------------------------------------------------------------------
Total income (loss) from
investment operations 14.03 (1.62) 11.04 3.16 7.52 (.15)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- -- -- -- (.11) (.09)
Distributions from net realized gain (2.54) (4.57) (3.55) -- (2.80) (2.98)
------------------------------------------------------------------------
Total dividends and distributions
to shareholders (2.54) (4.57) (3.55) -- (2.91) (3.07)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $43.06 $31.57 $37.76 $30.27 $27.11 $22.50
------------------------------------------------------------------------
------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 46.16% (4.84)% 39.35% 11.66% 33.56% (0.50)%
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $165 $76 $36 $10 $7 $1
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $126 $62 $20 $9 $4 $(8)
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.86)% (0.36)% (0.32)% (0.30)% 0.19% (0.02)%
Expenses 1.85% 1.82%(4) 1.85%(4) 1.93%(4) 1.90%(4) 2.18%
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 59% 60% 66% 45% 72% 35%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1999, were $2,020,577,965 and $1,408,782,951, respectively.
6. For the period from November 1, 1995 (inception of offering) to December 31,
1995.
7. Per share amounts calculated based on the weighted average number of shares
outstanding during the period.
8. Less than $500,000.
26 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
AUG. 31, AUG. 31,
Class Y 1999 1998(9)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $32.56 $40.15
- ---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .13 .30
Net realized and unrealized gain (loss) 14.85 (3.11)
-----------------
Total income (loss) from
investment operations 14.98 (2.81)
- ---------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.19) (.21)
Distributions from net realized gain (2.54) (4.57)
-----------------
Total dividends and distributions
to shareholders (2.73) (4.78)
- ---------------------------------------------------------------------------------------
Net asset value, end of period $44.81 $32.56
-----------------
-----------------
- ---------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 47.90% (7.45)%
- ---------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $420 $181
- ---------------------------------------------------------------------------------------
Average net assets (in millions) $307 $139
- ---------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0.30% 0.75%
Expenses 0.68% 0.69%(4)
- ---------------------------------------------------------------------------------------
Portfolio turnover rate(5) 59% 60%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended August 31, 1999 were $2,020,577,965 and $1,408,782,951, respectively.
6. For the period from November 1, 1995 (inception of offering) to December 31,
1995.
7. Per share amounts calculated based on the weighted average number of shares
outstanding during the period.
8. Less than $500,000.
9. For the period from November 3, 1997 (inception of offering) to August 31,
1998.
See accompanying Notes to Financial Statements.
27 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Capital Appreciation Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager). The Fund offers Class A, Class B, Class C and Class Y shares.
Class A shares are sold with a front-end sales charge on investments up to $1
million. Class B and Class C shares may be subject to a contingent deferred
sales charge (CDSC). Class Y shares are sold to certain institutional investors
without either a front-end sales charge or a CDSC. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own expenses directly attributable to that class and exclusive
voting rights with respect to matters affecting that class. Classes A, B and C
have separate distribution and/or service plans. No such plan has been adopted
for Class Y shares. Class B shares will automatically convert to Class A shares
six years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
28 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily 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 continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted a nonfunded retirement plan for
the Fund's independent Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
August 31, 1999, a provision of $34,519 was made for the Fund's projected
benefit obligations and payments of $13,955 were made to retired trustees,
resulting in an accumulated liability of $213,539 as of August 31, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustees in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under
the plan will be determined based upon the performance of the selected funds.
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
income per share.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
29 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended August 31, 1999, amounts have been reclassified to reflect a decrease
in overdistributed net investment income of $4,321,381. Accumulated net realized
gain on investments was decreased by the same amount.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
30 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 1999 YEAR ENDED AUGUST 31, 1998(1)
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 16,486,612 $682,694,426 13,360,963 $517,903,302
Dividends and/or
distributions reinvested 2,761,935 101,086,519 4,096,261 139,027,036
Redeemed (10,867,095) (451,600,533) (10,058,269) (382,521,449)
-----------------------------------------------------------------------------
Net increase 8,381,452 $332,180,412 7,398,955 $274,408,889
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 8,303,860 $339,552,020 5,675,971 $216,655,405
Dividends and/or
distributions reinvested 488,475 17,477,638 287,140 9,596,214
Redeemed (2,644,213) (106,888,583) (1,256,002) (47,367,029)
-----------------------------------------------------------------------------
Net increase 6,148,122 $250,141,075 4,707,109 $178,884,590
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 3,159,608 $128,803,033 1,858,420 $ 70,478,018
Dividends and/or
distributions reinvested 180,148 6,384,452 163,665 5,420,589
Redeemed (1,911,652) (77,761,282) (570,252) (21,446,501)
-----------------------------------------------------------------------------
Net increase 1,428,104 $ 57,426,203 1,451,833 $ 54,452,106
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 4,483,054 $191,633,897 5,790,579 $225,327,981
Dividends and/or
distributions reinvested 426,028 15,579,858 235,557 7,983,016
Redeemed (1,069,125) (42,113,226) (482,922) (17,823,371)
-----------------------------------------------------------------------------
Net increase 3,839,957 $165,100,529 5,543,214 $215,487,626
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
</TABLE>
1. For the year ended August 31, 1998 for Class A, B and C shares and for the
period November 3, 1997 (inception of offering) to August 31, 1998 for Class Y
shares.
31 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of August 31, 1999, net unrealized appreciation on securities of $696,213,334
was composed of gross appreciation of $849,511,698, and gross depreciation of
$153,298,364.
- -------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets of the Fund, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, 0.60% of the next $700 million, 0.58% of the next $1.0 billion and
0.56% of average annual net assets in excess of $2.5 billion. The Fund's
management fee for the year ended August 31, 1999 was 0.62% of average net
assets for each class of shares.
- -------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- -------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
August 31, 1999 $5,517,361 $1,584,946 $990,319 $6,605,832 $506,690
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
August 31, 1999 $18,001 $727,007 $39,179
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
32 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
- --------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares. The Distributor makes payments to plan recipients quarterly at an annual
rate not to exceed 0.25% of the average annual net assets consisting of Class A
shares of the Fund. For the fiscal year ended August 31, 1999, payments under
the Class A Plan totaled $3,444,635, all of which was paid by the Distributor to
recipients. That included $202,222 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the plans. If either the
Class B or the Class C plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended August 31,
1999 were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $3,712,308 $3,221,441 $11,195,215 2.11%
Class C Plan 1,262,906 756,267 1,084,580 0.66
</TABLE>
33 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuations. Risks to the Fund include
the potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
- -------------------------------------------------------------------------------
6. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended August 31,
1999.
34 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER CAPITAL APPRECIATION FUND:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Capital Appreciation Fund as of
August 31, 1999, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the three-year period then ended, the eight-month period ended August 31,
1996 and for each of the years in the two-year period ended December 31, 1995.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Capital Appreciation Fund as of August 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the three-year period then ended, the eight-month period
ended August 31, 1996 and for each of the years in the two-year period ended
December 31, 1995, in conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
September 22, 1999
35 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION UNAUDITED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $2.6234, $2.5379, $2.5379 and $2.7288, per share were paid
to Class A, Class B, Class C and Class Y shareholders, respectively, on December
15, 1998, of which $1.9551 was designated as a "capital gain distribution" for
federal income tax purposes. Whether received in stock or in cash, the capital
gain distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended August 31, 1999
which are not designated as capital gain distributions should be multiplied by
17% to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
36 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
OPPENHEIMER CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Jane Putnam, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
- --------------------------------------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG LLP
- --------------------------------------------------------------------------------
LEGAL COUNSEL Mayer, Brown & Platt
This is a copy of a report to shareholders of
Oppenheimer Capital Appreciation Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Capital Appreciation Fund. For material
information concerning the Fund, see the
Prospectus.
SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY
BANK, AND ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING
THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
37 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
GLOBAL EQUITY
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
- --------------------------------------------------------------------------------------------------------
EQUITY
Stock Stock & Bond
Enterprise Fund(1) Main Street-Registered Trademark-
Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street-Registered Trademark-
Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Specialty
Real Asset Fund
Gold & Special Minerals Fund
- --------------------------------------------------------------------------------------------------------
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Florida Municipal Fund(3)
High Yield Fund New Jersey Municipal Fund(3)
Champion Income Fund New York Municipal Fund(3)
Strategic Income Fund Pennsylvania Municipal Fund(3)
Bond Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
- --------------------------------------------------------------------------------------------------------
MONEY MARKET(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY10048-0203.
- -C- Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
38 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE>
INFORMATION AND SERVICES
- -------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you can
benefit from special services designed to make
investing simple. Whether it's automatic
investment plans, timely market updates, or
immediate account access, you can count on
us whenever you need assistance. So call us
today, or visit our website--we're here to help.
INTERNET
24-hr access to account information and transactions
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
- --------------------------------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS INFORMATION HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
RA0320.001.0899 October 29, 1999
