Semiannual Report February 28, 1999
OPPENHEIMER
Enterprise Fund
[PICTURE]
Oppenheimer Funds
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview with Your Fund's Manager
11 Financial Statements
29 Officers and Trustees
32 Information and Services
Report highlights
- ------------------
- - Technology was a key ingredient to the Fund's success, although by no
means the only factor. The Fund invested in Internet stocks, but was careful to
select the ones believed to have true staying power.
- - The Fund was also successful because it largely avoided poorly performing
industries such as energy, which was adversely impacted by plunging oil prices.
<TABLE>
<CAPTION>
Cumulative Total Returns
For the 6-Month Period
Ended 2/28/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------- -------------
<S> <C>
46.87% 38.43%
- ------------- -------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------- -------------
46.44% 41.44%
- ------------- -------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------- -------------
46.52% 45.52%
- ------------- -------------
</TABLE>
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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 the stock market can be volatile, 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.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer Enterprise Fund
<PAGE>
[PICTURE OF BRIDGET A. MACASKILL, PRESIDENT, OPPENHEIMER ENTERPRISE FUND]
Bridget A. Macaskill
President
Oppenheimer Enterprise Fund
Dear shareholder,
Contrary to what many analysts had expected, the U.S. economy appears to have
picked up steam over the past few months. The fourth quarter of 1998 posted the
fastest rate of economic growth in two years, and early indications suggest that
the first quarter of 1999 may follow suit.
With respect to the U.S. bond market, stronger-than-expected economic
growth has triggered concerns that the Federal Reserve may raise key interest
rates to forestall an acceleration of inflation. As a result, yields of
longer-term taxable bonds have risen from their October 1998 lows, when
investors had bid up prices during the global "flight to quality." At the same
time, tax exempt bond prices and yields have remained relatively stable.
In the U.S. stock market, it might appear at first glance that prices are
rising as rapidly as the economy is growing. However, a closer look reveals
that, with the exception of large-cap growth companies and the technology
industry, most stock prices remained relatively flat. What's more, the disparity
in valuations between large companies, which have led the market's advance, and
smaller ones, which have lagged, has become historically wide.
What do these observations mean for your investments? In our view, actively
managed portfolios that are closely monitored by expert money managers are
likely to provide better returns than passive index investing in 1999. That's
because selectivity is expected to be more critical to performance than it has
been over the past few years. In a potentially overvalued stock market and
rising interest-rate environment, the ability to identify the most promising
securities could become paramount.
Even though many equity investors may be tempted to jump aboard the
technology bandwagon, we suggest a more prudent course: broad diversification
beyond any single asset class, industry, capitalization range or geographic
region. We believe that the risks of this investment environment require
consideration of a broad range of investments and markets, including bonds. That
way, if one market experiences setbacks, one or more of the others may help
cushion the effects on your overall portfolio.
No matter what the financial markets have in store, we resolve to continue
working with your financial advisor to keep you apprised of potential risks and
opportunities. Providing you with the market information, professionally managed
investments and other resources you need to achieve your financial goals is an
important part of our enduring commitment to you as The Right Way to Invest.
Sincerely,
/S/ Bridget A. Macaskill
- ---------------------------
Bridget A. Macaskill
March 19, 1999
3 Oppenheimer Enterprise Fund
<PAGE>
An interview with your Fund's manager
- ------------------------------------------
How did the Fund perform?
Oppenheimer Enterprise Fund continued to perform very well relative to the
universe of mutual funds that invest primarily in small companies. For the
six-month period ended February 28, 1999, the Fund's Class A shares has
outperformed its benchmark, the Russell 2000 Index.(1) In addition, the Fund's
Class A shares were ranked 4 out of 48 micro-cap funds as measured by Lipper
Analytical Services for the one-year period ended March 31, 1999.(2)
What factors affected the Fund's performance?
Our emphasis on the technology sector, particularly computer software and the
Internet, was very important to performance. One example is the stock of TSI
International Software Ltd., which creates "application integration" software.
Corporations continuously exchange information with internal and external
partners, some of whom use different types of computer operating systems.
However, communicating between computers that use different operating systems
can be a problem. Because it's easier for corporations to buy a packaged
software solution from a company such as TSI rather than develop a complex
program in-house, TSI's revenues and profits have grown at a rapid rate.
"small company stocks are very attractively valued."
4 Oppenheimer Enterprise Fund
<PAGE>
[PICTURE PORTFOLIO TEAM]
Portfolio Management Team (l to r)
Bonnie Sherman
Alan Gilston
Jay Tracey (Portfolio Manager)
Susan Switzer
What about some winning companies outside technology?
School Specialty, Inc., a distributor of non-textbook educational supplies such
as art supplies, games, bulletin boards and furniture, holds a dominant position
in an industry with many small competitors. Traditionally, the company has
marketed its products directly to schools, but it is increasingly selling
directly to parents and is launching an Internet website specifically for that
purpose.
Indeed, Internet stocks have contributed to the performance of the Fund.
For instance, Cyberian Outpost, Inc. is a leading Internet merchant of computer
products through their website, Outpost.com. We bought shares in the company
before it went public in late July. Although it's too early to expect the
company to post a profit, it is showing very favorable momentum in terms of
revenues and "page views," the number of times people visit their site.
1. The return on the Russell 2000 Index, which cannot be purchased directly by
investors, for the six-month period ended February 28, 1999, was 16.79%.
2. Source: Lipper Analytical Services, Inc., 3/31/99. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 4 out of 48 and 1 out of 24
micro-cap funds for the one- and three-year period, respectively, ended 3/31/99.
5 Oppenheimer Enterprise Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 3/31/993(3)
Class A
Since
1 year Inception
- --------------------
16.22% 32.88%
- --------------------
Class B
Since
1 year Inception
- --------------------
17.46% 33.80%
- --------------------
Class C
Since
1 year Inception
- --------------------
21.57% 34.25%
- --------------------
An interview with your Fund's manager
Since most Internet companies don't yet make a profit, how do you evaluate them?
We try to assess the company's opportunities down the line by asking a series of
questions: What share of the market is the company likely to have in a few
years? And therefore, what can we expect revenues and profits to be at that
point? Also, based on growth rates and future earnings per share, what would the
stock price likely be at that point in time?
One reason that Internet stocks have done so well over the last six to
twelve months is that aggregate advertising dollars spent on the Internet turned
out to be much higher in 1998 than initially forecast, as has the number of
households that are active on the Internet. These upside surprises over the past
year, relative to prior estimates, have helped to fuel the higher valuations
that you see in this group.
To be involved in Internet stocks today is a very aggressive posture, no
matter what you think of the company's prospects. We recognize that there's
speculation about Internet stocks and therefore we've been careful to focus on
the ones we think can be long-term winners.
3. Class A returns include the current maximum initial sales charge of 5.75%.
Class B returns include the applicable contingent deferred sales charge of 5%
(1-year) and 3% (since inception on 11/7/95). Class C returns include the
contingent deferred sales charge of 1% for the one-year period. Class B and C
shares are subject to a 0.75% asset-based sales charge. An explanation of the
different performance calculations is in the Fund's prospectus.
6 Oppenheimer Enterprise Fund
<PAGE>
What other areas have done well?
The healthcare industry has been a very good performer for the Fund. In
particular, we've had success by indirectly investing in the pharmaceuticals
industry through companies that provide outsourced services to the sector.
Applied Analytical Industries, Inc., a "contract research organization," is one
such company. It performs clinical trials and drug development research for
pharmaceuticals companies. Another very successful holding was Professional
Detailing, Inc., which provides outside sales and marketing for the
pharmaceuticals industry. Professional Detailing provides an alternative when
drug manufacturers want to launch or re-invigorate sales of a particular
product. Rather than going to the expense of hiring new salespeople, the company
simply hires Professional Detailing as its temporary sales force.
Have any areas proved to be disappointing?
One of the biggest disappointments was in the competitive local exchange
carriers (CLECs), as distinguished from the regional bell operating companies
(RBOCs). Although the CLECs have been winning business on the basis of price and
service against the RBOCs, the CLECs have not been generating sufficient
earnings. Instead, they've been reinvesting money back into their businesses,
and significant profits have been delayed.
7 Oppenheimer Enterprise Fund
<PAGE>
An interview with your Fund's manager
Another poorly performing sector was energy. The global economic slowdown has
diminished the demand for oil, causing prices to fall. Although energy companies
have become much more efficient in recent years due to technological advances in
oil exploration, the industry has had difficulty generating profits at the
current oil prices.
What is your outlook for small-cap stocks over the coming months?
Small-cap stocks, as measured by the Russell 2000 Index, have now underperformed
the Standard & Poor's 500 Index for five years in a row. As a result, small
company stocks are very attractively valued. However, whether or not that
translates into better performance for the small-cap market in 1999 is
impossible to say.
A major concern for investors has been "liquidity." The fact is, small-cap
stocks are more difficult to buy and sell than large-cap stocks. Many investors
see no need to take liquidity risk when large company profits remain relatively
strong. In addition, during a global economic slowdown, blue-chip companies are
perceived to be better able to weather the storm. Since the Asian economic
crisis became evident in 1997, investors have displayed a marked preference for
large company stocks that trade very actively.
8 Oppenheimer Enterprise Fund
<PAGE>
Portfolio Allocation (4)
[PIE CHART]
- - Stocks 80.0%
- - Cash Equivalents 20.0
We expect this liquidity concern to ease as global conditions improve and small
company stocks should begin to consistently demonstrate superior earnings
growth. That's why we are pleased that the average company in Oppenheimer
Enterprise Fund has been able to generate earnings growth in excess of 30% per
year. Maintaining a portfolio of companies that can sustain high earnings growth
is part of what makes Oppenheimer Enterprise Fund The Right Way to Invest.
<TABLE>
<CAPTION>
Top 5 Industries (4)
- -----------------------------------------------------
<S> <C>
Computer Software/Services 22.3%
- -----------------------------------------------------
Industrial Services 11.4
- -----------------------------------------------------
Retail: Specialty 6.1
- -----------------------------------------------------
Healthcare/Supplies & Services 5.0
- -----------------------------------------------------
Computer Hardware 5.0
- -----------------------------------------------------
Top 10 Stock Holdings (4)
- -----------------------------------------------------
MicroFinancial, Inc. 1.8%
- -----------------------------------------------------
Micromuse, Inc. 1.8
- -----------------------------------------------------
Handleman Co. 1.7
- -----------------------------------------------------
Cyberian Outpost, Inc. 1.7
- -----------------------------------------------------
School Specialty, Inc. 1.7
- -----------------------------------------------------
Labor Ready, Inc. 1.6
- -----------------------------------------------------
Applied Analytical Industries, Inc. 1.6
- -----------------------------------------------------
Echelon Corp. 1.5
- -----------------------------------------------------
TSI International Software Ltd. 1.5
- -----------------------------------------------------
Priority Healthcare Corp., Cl. B 1.5
- -----------------------------------------------------
<FN>
4. Portfolio is subject to change. Percentages are as of February 28, 1999, and
are based on total market value of investments.
</FN>
</TABLE>
9 Oppenheimer Enterprise Fund
<PAGE>
Financials
----------
10 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments February 28, 1999 (Unaudited)
Market Value
Shares See Note 1
- -----------------------------------------------------------------
<S> <C> <C>
Common Stocks-81.6%
- -----------------------------------------------------------------
Capital Goods-14.3%
- -----------------------------------------------------------------
Aerospace/Defense-1.1%
Armor Holdings, Inc.(1) 200,000 $ 2,925,000
- -----------------------------------------------------------------
Industrial Services-11.7%
Corporate Executive Board Co.(1) 150,000 3,675,000
- -----------------------------------------------------------------
Kendle International, Inc.(1) 80,000 1,930,000
- -----------------------------------------------------------------
Labor Ready, Inc.(1) 150,000 4,228,125
- -----------------------------------------------------------------
META Group, Inc.(1) 80,000 1,790,000
- -----------------------------------------------------------------
Professional Detailing, Inc.(1) 120,000 3,735,000
- -----------------------------------------------------------------
Quanta Services, Inc.(1) 110,000 2,970,000
- -----------------------------------------------------------------
Rainbow Rentals, Inc.(1) 180,000 1,912,500
- -----------------------------------------------------------------
Recycling Industries, Inc.(1) 500,000 109,375
- -----------------------------------------------------------------
Stericycle, Inc.(1) 90,000 1,141,875
- -----------------------------------------------------------------
U.S. Liquids, Inc.(1) 105,700 2,398,069
- -----------------------------------------------------------------
U.S.A. Floral Products, Inc.(1) 180,000 2,520,000
- -----------------------------------------------------------------
Unidigital, Inc.(1) 100,000 450,000
- -----------------------------------------------------------------
Waste Connections, Inc.(1) 180,000 3,600,000
-------------
30,459,944
- -----------------------------------------------------------------
Manufacturing-1.5%
AstroPower, Inc.(1) 100,000 1,000,000
- -----------------------------------------------------------------
International Isotopes, Inc.(1) 50,000 575,000
- -----------------------------------------------------------------
Koala Corp.(1) 120,000 2,400,000
-------------
3,975,000
- -----------------------------------------------------------------
Consumer Cyclicals-13.3%
- -----------------------------------------------------------------
Leisure & Entertainment-3.2%
Global Vacation Group, Inc.(1) 170,000 1,785,000
- -----------------------------------------------------------------
Handleman Co.(1) 350,000 4,528,125
- -----------------------------------------------------------------
JAKKS Pacific, Inc.(1) 120,000 2,002,500
-------------
8,315,625
- -----------------------------------------------------------------
Media-1.6%
Cumulus Media, Inc., Cl. A(1) 100,000 1,175,000
- -----------------------------------------------------------------
Tweeter Home Entertainment Group, Inc.(1) 80,000 3,030,000
-------------
4,205,000
</TABLE>
11 Oppenheimer Enterprise Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- --------------------------------------------------------------
<S> <C> <C>
Retail: General-2.2%
Cutter & Buck, Inc.(1) 80,000 $ 2,370,000
- --------------------------------------------------------------
Quicksilver, Inc.(1) 100,000 3,393,750
-------------
5,763,750
- --------------------------------------------------------------
Retail: Specialty-6.3%
Blue Rhino Corp.(1) 210,000 3,583,125
- --------------------------------------------------------------
Chico's Fas, Inc.(1) 100,000 2,462,500
- --------------------------------------------------------------
Cyberian Outpost, Inc.(1)(2) 375,000 4,478,906
- --------------------------------------------------------------
School Specialty, Inc.(1) 200,000 4,412,500
- --------------------------------------------------------------
Select Comfort Corp.(1) 60,000 1,432,500
-------------
16,369,531
- --------------------------------------------------------------
Consumer Staples-8.6%
- --------------------------------------------------------------
Beverages-0.8%
Packaged Ice, Inc.(1) 250,000 2,125,000
- --------------------------------------------------------------
Consumer Services-4.0%
Applied Analytical Industries, Inc.(1) 160,000 4,160,000
- --------------------------------------------------------------
Cornell Corrections, Inc.(1) 100,000 1,650,000
- --------------------------------------------------------------
Correctional Services Corp.(1) 100,000 1,150,000
- --------------------------------------------------------------
Creditrust Corp.(1) 70,000 1,750,000
- --------------------------------------------------------------
Rent-Way, Inc.(1) 80,000 1,810,000
-------------
10,520,000
- --------------------------------------------------------------
Education-2.0%
Career Education Corp.(1) 110,000 3,093,750
- --------------------------------------------------------------
Corinthian Colleges, Inc.(1) 100,000 2,237,500
-------------
5,331,250
- --------------------------------------------------------------
Entertainment-1.2%
P.F. Chang's China Bistro, Inc.(1) 75,000 1,800,000
- --------------------------------------------------------------
Silver Diner, Inc.(1)(3) 80,000 120,000
- --------------------------------------------------------------
Silver Diner, Inc.(1)(2)(3) 750,000 1,068,750
-------------
2,988,750
- --------------------------------------------------------------
Food-0.6%
Balance Bar Co.(1) 150,000 1,434,375
</TABLE>
12 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------
<S> <C> <C>
Energy-1.0%
- ----------------------------------------------------------------
Energy Services & Producers-0.1%
FX Energy, Inc.(1) 60,000 $ 251,250
- ----------------------------------------------------------------
Oil: Domestic-0.9%
EEX Corp.(1) 400,000 2,425,000
- ----------------------------------------------------------------
Financial-7.9%
- ----------------------------------------------------------------
Banks-3.3%
First International Bancorp, Inc. 180,000 1,935,000
- ----------------------------------------------------------------
Investors Financial Services Corp. 50,000 2,900,000
- ----------------------------------------------------------------
TeleBanc Financial Corp.(1) 90,000 3,735,000
-------------
8,570,000
- ----------------------------------------------------------------
Diversified Financial-2.5%
MicroFinancial, Inc.(1) 400,000 4,900,000
- ----------------------------------------------------------------
Rock Financial Corp. 110,000 1,540,000
-------------
6,440,000
- ----------------------------------------------------------------
Insurance-2.1%
21st Century Holding Co.(1) 125,000 765,625
- ----------------------------------------------------------------
Advance Paradigm, Inc.(1) 100,000 3,606,250
- ----------------------------------------------------------------
Scottish Annuity & Life Holdings Ltd.(1) 120,000 1,185,000
-------------
5,556,875
Healthcare-7.7%
- ----------------------------------------------------------------
Healthcare/Drugs-2.6%
Invitrogen Corp.(1) 75,000 1,153,125
- ----------------------------------------------------------------
Lynx Therapeutics, Inc. (New)(1)(2) 150,000 1,650,000
- ----------------------------------------------------------------
Syncor International Corp.(1) 100,000 2,762,500
- ----------------------------------------------------------------
Ventana Medical Systems, Inc.(1) 64,000 1,112,000
-------------
6,677,625
- ----------------------------------------------------------------
Healthcare/Supplies & Services-5.1%
Albany Molecular Research, Inc.(1) 18,600 372,000
- ----------------------------------------------------------------
Autonomous Technologies Corp.(1)(2) 200,000 1,282,500
- ----------------------------------------------------------------
Colorado MEDtech, Inc.(1) 250,000 3,281,250
- ----------------------------------------------------------------
EP MedSystems, Inc.(1)(3) 600,000 1,725,000
- ----------------------------------------------------------------
Hanger Orthopedic Group, Inc.(1) 110,000 1,670,625
- ----------------------------------------------------------------
Ortivus AB, Cl. B(1) 41,400 272,236
- ----------------------------------------------------------------
Polartechnics Ltd.(1) 500,000 853,780
- ----------------------------------------------------------------
Priority Healthcare Corp., Cl. B(1) 100,000 3,893,750
-------------
13,351,141
</TABLE>
13 Oppenheimer Enterprise Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
------- -------------
<S> <C> <C>
Technology-28.2%
Computer Hardware-5.1%
Apex PC Solutions, Inc.(1) 100,000 $ 2,450,000
- --------------------------------------------------------------
Com21, Inc.(1) 130,000 3,063,125
- --------------------------------------------------------------
Echelon Corp.(1) 600,000 4,087,500
- --------------------------------------------------------------
Javelin Systems, Inc.(1) 100,000 1,225,000
- --------------------------------------------------------------
Maxwell Technologies, Inc.(1) 60,000 1,541,250
- --------------------------------------------------------------
NVIDIA Corp.(1) 40,000 877,500
-------------
13,244,375
- --------------------------------------------------------------
Computer Software/Services-22.8%
A Consulting Team, Inc.(1) 100,000 650,000
- --------------------------------------------------------------
Activision, Inc.(1) 130,000 1,413,750
- --------------------------------------------------------------
Allaire Corp.(1) 29,900 1,457,625
- --------------------------------------------------------------
Aware, Inc.(1) 80,000 2,770,000
- --------------------------------------------------------------
BindView Development Corp.(1) 150,000 3,375,000
- --------------------------------------------------------------
Brio Technology, Inc.(1) 100,000 1,850,000
- --------------------------------------------------------------
Catapult Communications Corp.(1) 150,000 1,509,375
- --------------------------------------------------------------
Concord Communications, Inc.(1) 50,000 2,831,250
- --------------------------------------------------------------
DA Consulting Group, Inc.(1) 90,000 1,035,000
- --------------------------------------------------------------
Descartes Systems Group, Inc. (The)(1) 250,000 1,714,087
- --------------------------------------------------------------
DSET Corp.(1) 200,000 2,400,000
- --------------------------------------------------------------
Exchange Applications, Inc.(1) 50,000 825,000
- --------------------------------------------------------------
Information Advantage, Inc.(1) 300,000 3,600,000
- --------------------------------------------------------------
Intraware, Inc.(1) 25,000 471,874
- --------------------------------------------------------------
MEDE AMERICA Corp.(1) 100,000 1,712,500
- --------------------------------------------------------------
Micromuse, Inc.(1) 150,000 4,837,500
- --------------------------------------------------------------
NetGravity, Inc.(1) 100,000 2,112,500
- --------------------------------------------------------------
New Era of Networks, Inc.(1) 30,000 1,871,250
- --------------------------------------------------------------
ONYX Software Corp.(1) 35,000 649,687
- --------------------------------------------------------------
pcOrder.com, Inc.(1) 3,350 157,869
- --------------------------------------------------------------
Rogue Wave Software, Inc.(1) 300,000 2,475,000
- --------------------------------------------------------------
Segue Software, Inc.(1) 130,000 1,600,625
- --------------------------------------------------------------
SERENA Software, Inc.(1) 150,000 1,968,750
- --------------------------------------------------------------
Smith-Gardner & Associates, Inc.(1) 52,700 671,925
- --------------------------------------------------------------
SOFTWORKS, Inc.(1) 300,000 2,662,500
- --------------------------------------------------------------
</TABLE>
14 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Computer Software/Services (continued)
Superior Consultant Holdings Corp.(1) 35,000 $ 1,155,000
- ---------------------------------------------------------------------------------------------
Tier Technologies, Inc., Cl. B(1) 150,000 1,959,375
- ---------------------------------------------------------------------------------------------
TSI International Software Ltd.(1) 80,000 4,015,000
- ---------------------------------------------------------------------------------------------
Verity, Inc.(1) 80,000 3,090,000
- ---------------------------------------------------------------------------------------------
Vignette Corp.(1) 25,900 1,405,075
- ---------------------------------------------------------------------------------------------
WebTrends Corp.(1) 50,000 1,256,250
--------------
59,503,767
Electronics-0.4%
- ---------------------------------------------------------------------------------------------
Spectrian Corp.(1) 100,000 1,168,750
- ---------------------------------------------------------------------------------------------
Telecommunications-0.6%
- ---------------------------------------------------------------------------------------------
Telecommunications/Technology-0.6%
MGC Communications, Inc.(1) 250,000 1,507,813
--------------
Total Common Stocks (Cost $164,448,461) 213,109,821
Face
Amount
- --------------------------------------------------------------------------------------------
Repurchase Agreements-20.4%
- --------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
4.73%, dated 2/26/99, to be repurchased at $53,421,049 on
3/1/99, collateralized by U.S. Treasury Nts., 5.375%-7.875%,
6/30/99-2/15/07, with a value of $54,815,295 (Cost $53,400,000) $53,400,000 53,400,000
Total Investments, at Value (Cost $217,848,461) 102.0% 266,509,821
Liabilities in Excess of Other Assets (2.0) (5,133,997)
------------ --------------
Net Assets 100.0% $ 261,375,824
============ ==============
<FN>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted-See Note 5 of Notes to Financial
Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting securities of the
issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or
during the period ended February 28, 1999. The aggregate fair value of securities of
affiliated companies held by the Fund as of February 28, 1999, amounts to $2,913,750.
Transactions during the period in which the issuer was an affiliate are as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Shares Shares
August 31, Gross Gross February 28,
1998 Additions Reductions 1999
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cyberian Outpost, Inc.* 375,000 - - 375,000
- ------------------------------------------------------------------------
EP MedSystems, Inc. 538,500 61,500 - 600,000
- ------------------------------------------------------------------------
Silver Diner, Inc. 830,000 - - 830,000
<FN>
*Not an affiliate as of February 28, 1999.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Enterprise Fund
<PAGE>
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (including repurchase agreement
of $53,400,000)-see accompanying statement:
Unaffiliated companies (cost $214,906,652) $263,596,071
Affiliated companies (cost $2,941,809) 2,913,750
- -------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 2,894,155
Investments sold 1,961,495
Interest and dividends 21,048
Other 16,422
-------------
Total assets 271,402,941
- -------------------------------------------------------------------------------
Liabilities
Bank overdraft 76,447
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 9,643,203
Shares of beneficial interest redeemed 119,648
Distribution and service plan fees 91,387
Trustees' compensation-Note 1 71,428
Shareholder reports 22,050
Other 2,954
-------------
Total liabilities 10,027,117
- -------------------------------------------------------------------------------
Net Assets $261,375,824
=============
Composition of Net Assets
Paid-in capital $202,495,721
- -------------------------------------------------------------------------------
Accumulated net investment loss (810,496)
- -------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 11,029,239
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 48,661,360
-------------
Net assets $261,375,824
=============
</TABLE>
16 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
Net Asset Value Per Share
<S> <C>
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $152,269,397 and 7,167,962 shares of beneficial interest outstanding) $21.24
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $22.54
- -----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $91,057,637
and 4,402,841 shares of beneficial interest outstanding) $20.68
- -----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $18,048,790
and 872,268 shares of beneficial interest outstanding) $20.69
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Enterprise Fund
<PAGE>
Statement of Operations For the Six Months Ended February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
- --------------------------------------------------------------------------------------
Investment Income
Interest $ 931,809
- --------------------------------------------------------------------------------------
Dividends 31,500
-------------
Total income 963,309
- --------------------------------------------------------------------------------------
Expenses
Management fees-Note 4 682,323
- --------------------------------------------------------------------------------------
Distribution and service plan fees-Note 4:
Class A 130,714
Class B 317,755
Class C 63,654
- --------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees-Note 4 384,612
- --------------------------------------------------------------------------------------
Shareholder reports 65,256
- --------------------------------------------------------------------------------------
Registration and filing fees 19,977
- --------------------------------------------------------------------------------------
Trustees' compensation-Note 1 11,546
- --------------------------------------------------------------------------------------
Legal, auditing and other professional fees 9,668
- --------------------------------------------------------------------------------------
Custodian fees and expenses 4,582
- --------------------------------------------------------------------------------------
Insurance expenses 2,550
- --------------------------------------------------------------------------------------
Other 17,929
-------------
Total expenses 1,710,566
Less expenses paid indirectly-Note 4 (4,187)
-------------
Net expenses 1,706,379
- --------------------------------------------------------------------------------------
Net Investment Loss (743,070)
- --------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 11,314,388
Foreign currency transactions (2,171)
-------------
Net realized gain 11,312,217
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 54,505,448
Translation of assets and liabilities denominated in foreign currencies 103,731
-------------
Net change 54,609,179
-------------
Net realized and unrealized gain 65,921,396
- --------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $65,178,326
=============
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer Enterprise Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1999 August 31,
(Unaudited) 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment loss $ (743,070) $ (1,326,655)
- ------------------------------------------------------------------------------------------
Net realized gain 11,312,217 10,331,533
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 54,609,179 (24,465,371)
------------------- -------------
Net increase (decrease) in net assets resulting
from operations 65,178,326 (15,460,493)
- ------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions from net realized gain:
Class A (1,826,095) (4,786,108)
Class B (1,122,686) (2,599,048)
Class C (228,443) (542,632)
- ------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions-Note 2:
Class A 41,676,097 35,326,895
Class B 26,022,257 26,047,046
Class C 4,905,043 4,821,481
- ------------------------------------------------------------------------------------------
Net Assets
Total increase 134,604,499 42,807,141
Beginning of period 126,771,325 83,964,184
------------------- -------------
End of period (including accumulated net investment
losses of $810,496 and $67,426, respectively) $ 261,375,824 $126,771,325
=================== =============
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Enterprise Fund
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
---------------------------------------------
Six Months
Ended
February 28,
1999 Year Ended August 31,
(Unaudited) 1998 1997 1996(1)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.72 $ 16.98 $ 15.48 $ 10.00
- -----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.05) (.14) (.09) (.05)
Net realized and unrealized gain (loss) 6.89 (.75) 2.66 5.53
------------ -------- -------- -----------
Total income (loss) from investment
operations 6.84 (.89) 2.57 5.48
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net
realized gain (.32) (1.37) (1.07) -
- -----------------------------------------------------------------------------------------
Net asset value, end of period $ 21.24 $ 14.72 $ 16.98 $ 15.48
============ ======== ======== ===========
- -----------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 46.87% (5.65)% 17.88% 54.80%
- -----------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 152,269 $74,456 $52,455 $ 44,421
- -----------------------------------------------------------------------------------------
Average net assets (in thousands) $ 107,519 $72,059 $42,895 $ 30,655
- -----------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (0.50)%(3) (0.81)% (1.18)% (0.59)%(3)
Expenses(4) 1.55%(3) 1.48% 1.50% 1.66%(3)
- -----------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43% 182% 142% 156%
<FN>
1. For the period from November 7, 1995 (commencement of operations) to August 31, 1996.
2. Assumes a $1,000 hypothetical initial investment on the business day before the first
day of the fiscal period (or commencement of operations), 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.
</FN>
</TABLE>
20 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
--------------------------------------------- --------------------------------
Six Months Six Months
Ended Ended
February 28, February 28,
1999 Year Ended August 31, 1999 Year Ended August 31,
(Unaudited) 1998 1997 1996(1) (Unaudited) 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.38 $ 16.75 $ 15.39 $ 10.00 $ 14.38 $ 16.74 $ 15.39
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.06) (.15) (.18) (.14) (.06) (.16) (.18)
Net realized and unrealized gain (loss) 6.68 (.85) 2.61 5.53 6.69 (.83) 2.60
------------ -------- -------- ----------- ------------ -------- --------
Total income (loss) from investment
operations 6.62 (1.00) 2.43 5.39 6.63 (.99) 2.42
- ---------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net
realized gain (.32) (1.37) (1.07) - (.32) (1.37) (1.07)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.68 $ 14.38 $ 16.75 $ 15.39 $ 20.69 $ 14.38 $ 16.74
============ ======== ======== =========== ============ ======== ========
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(2) 46.44% (6.43)% 17.03% 53.90% 46.52% (6.38)% 16.97%
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 91,058 $43,570 $25,856 $ 20,606 $ 18,049 $ 8,746 $ 5,653
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 64,338 $39,003 $20,410 $ 14,123 $ 12,887 $ 7,908 $ 4,539
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment loss (1.25)%(3) (1.58)% (1.96)% (1.37)%(3) (1.25)%(3) (1.58)% (1.96)%
Expenses(4) 2.30%(3) 2.26% 2.27% 2.44%(3) 2.30%(3) 2.26% 2.27%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43% 182% 142% 156% 43% 182% 142%
1996(1)
-----------
<S> <C>
Per Share Operating Data
Net asset value, beginning of period $ 10.00
- -------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.14)
Net realized and unrealized gain (loss) 5.53
-----------
Total income (loss) from investment
operations 5.39
- -------------------------------------------------------
Distributions to shareholders from net
realized gain -
- -------------------------------------------------------
Net asset value, end of period $ 15.39
===========
- -------------------------------------------------------
Total Return, at Net Asset Value(2) 53.90%
- -------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 4,846
- -------------------------------------------------------
Average net assets (in thousands) $ 3,472
- -------------------------------------------------------
Ratios to average net assets:
Net investment loss (1.35)%(3)
Expenses(4) 2.43%(3)
- -------------------------------------------------------
Portfolio turnover rate(5) 156%
<FN>
4. The expense ratio reflects the effect of gross 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 February 28, 1999, were $119,815,749 and $64,917,307, respectively.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Enterprise Fund
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Enterprise 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. It emphasizes investments in common stocks and other equity
securities of "small-cap" companies. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge, except for
purchases greater than $1 million. Class A, Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. 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.
- --------------------------------------------------------------------------------
Investment 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.
22 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
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.
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 six months ended
February 28, 1999, a provision of $1,621 was made for the Fund's projected
benefit obligations and payments of $714 were made to retired trustees,
resulting in an accumulated liability of $68,334 as of February 28, 1999.
23 Oppenheimer Enterprise Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
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 fees 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 Trustee 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.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily due to net operating losses. The character of the 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.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and options written
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.
24 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1999 August 31, 1998
------------------------- -------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,590,846 $ 50,328,114 2,577,394 $ 46,616,420
Distributions reinvested 97,625 1,743,602 295,161 4,571,937
Redeemed (579,783) (10,395,619) (902,443) (15,861,462)
---------- ------------- ---------- -------------
Net increase 2,108,688 $ 41,676,097 1,970,112 $ 35,326,895
========== ============= ========== =============
- ------------------------------------------------------------------------------
Class B:
Sold 1,545,897 $ 29,149,586 1,709,642 $ 30,191,456
Distributions reinvested 60,637 1,056,293 159,530 2,428,045
Redeemed (232,617) (4,183,622) (384,289) (6,572,455)
---------- ------------- ---------- -------------
Net increase 1,373,917 $ 26,022,257 1,484,883 $ 26,047,046
========== ============= ========== =============
- ------------------------------------------------------------------------------
Class C:
Sold 679,074 $ 12,392,795 421,843 $ 7,464,131
Distributions reinvested 12,525 218,068 33,204 505,369
Redeemed (427,487) (7,705,820) (184,608) (3,148,019)
---------- ------------- ---------- -------------
Net increase 264,112 $ 4,905,043 270,439 $ 4,821,481
========== ============= ========== =============
</TABLE>
- --------------------------------------------------------------------------------
3. Unrealized Gains and Losses on Investments
As of February 28, 1999, net unrealized appreciation on investments of
$48,661,360 was composed of gross appreciation of $59,150,176, and gross
depreciation of $10,488,816.
25 Oppenheimer Enterprise Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual 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, and 0.60% of average annual net assets in excess of $800 million. The
Fund's management fee for the six months ended February 28, 1999, was 0.75% of
average annual net assets for each class of shares.
For the six months ended February 28, 1999, commissions (sales charges paid
by investors) on sales of Class A shares totaled $470,004, of which $132,087 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class A, Class
B and Class C shares totaled $50,931, $660,134 and $40,885, respectively.
Amounts paid to an affiliated broker/dealer for Class B and Class C shares were
$54,591 and $1,434, respectively. During the six months ended February 28, 1999,
OFDI received contingent deferred sales charges of $62,775 and $2,032,
respectively, upon redemption of Class B and Class C shares, as reimbursement
for sales commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund and other Oppenheimer funds. OFS's
total costs of providing such services are allocated ratably to these funds.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended February 28, 1999, OFDI paid $6,098 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
26 Oppenheimer Enterprise Fund
<PAGE>
- --------------------------------------------------------------------------------
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class B and Class C shares. Each fee is computed
on the average annual net assets of Class B or Class C shares, determined as of
the close of each regular business day. During the six months ended February 28,
1999, OFDI paid $1,508 to an affiliated broker/dealer as compensation for Class
B personal service and maintenance expenses and retained $267,702 and $43,340,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. If either Plan is terminated
by the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to OFDI for distributing shares before the Plan was
terminated. As of February 28, 1999, OFDI had incurred excess distribution and
servicing costs of $1,571,499 for Class B and $125,042 for Class C.
- --------------------------------------------------------------------------------
5. Illiquid and Restricted Securities
As of February 28, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of February 28, 1999, was $8,480,156, which
represents 3.24% of the Fund's net assets, of which $6,830,156 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation
Cost Per Unit as of
Security Acquisition Dates Per Unit February 28, 1999
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Autonomous Technologies Corp. 6/12/97 $ 3.00 $ 6.41
- --------------------------------------------------------------------------------
Cyberian Outpost, Inc. 3/12/98 2.65 11.94
- --------------------------------------------------------------------------------
Silver Diner, Inc. 7/10/96-1/14/98 1.37-5.50 1.43
</TABLE>
27 Oppenheimer Enterprise Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
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 six months ended February
28, 1999.
- --------------------------------------------------------------------------------
7. Other Matters
The Board of Trustees approved the inception of Class Y for the Fund, to be
offered on April 1, 1999.
28 Oppenheimer Enterprise Fund
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- --------------------------------------------------------------------------------
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
Jay W. Tracey, III, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- --------------------------------------------------------------------------------
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 Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records
of the Fund without examination of the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Enterprise
Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Enterprise 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, are not insured by the FDIC or any other agency,
and involve investment risks, including the possible loss of the principal
amount invested.
</TABLE>
29 Oppenheimer Enterprise Fund
<PAGE>
<TABLE>
<CAPTION>
OppenheimerFunds Family
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Real Asset Funds
- -----------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
- -----------------------------------------------------------------------------------------
Global Stock Funds
- -----------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
- -----------------------------------------------------------------------------------------
Stock Funds
- -----------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
- -----------------------------------------------------------------------------------------
Stock & Bond Funds
- -----------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Multiple Strategies Fund
Income Fund(1) Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund(2)
- -----------------------------------------------------------------------------------------
Taxable Bond Funds
- -----------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
- -----------------------------------------------------------------------------------------
Municipal Bond Funds
- -----------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund MMunicipal Fund
- -----------------------------------------------------------------------------------------
Money Market Funds(4)
- -----------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
<FN>
1. On 12/22/98, the Fund's name was changed from "Main Street Income & Growth Fund."
2. On 4/1/99, the Fund's name was changed from "Equity Income Fund."
3. Available only to investors 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, NY 10048-0203.
Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
</FN>
</TABLE>
30 Oppenheimer Enterprise Fund
<PAGE>
<PAGE>
Information and services
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
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handle administrative requests. You can reach them at our General Information
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When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com-we're here to help.
OppenheimerFunds
Distributor, Inc.
Internet
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Online transactions now available
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OppenheimerFunds
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24 hours a day, timely and insightful messages on the economy and issues that
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1-800-835-3104
RS 0885.001.0299 April 29, 1999
