Oppenheimer Total Return Fund, Inc.
Annual Report December 31, 1993
(FULL PAGE COVER PHOTO: MOTHER WITH CHILD ON SHOULDERS IN SNOW)
(OPPENHEIMER FUNDS(R) LOGO)
"We have long-term goals so we want to take advantage of the stock market's
growth opportunities, but we know there can be volatility.
"This Fund invests in stocks and bonds. That means we get the potential for
growth from stocks and income from bonds to help cushion against volatility."
<PAGE>
Fund Facts
In this report:
Answers to three timely questions you should ask your Fund's managers.
* How do you insulate the portfolio from volatility, with the U.S. stock market
near record highs?
* The U.S. economy is still growing at a moderate pace. How does the Fund
identify attractive companies in this environment?
* Global markets appear poised to grow faster than the U.S. economy. Is the
Fund prepared to take advantage of these opportunities?
Six Facts Every Shareholder Should Know About
Oppenheimer Total Return Fund, Inc.
1 The Fund's objective is to seek high total return.
2 For the 12 months ended December 31, 1993, the Fund produced a total
return at net asset value for Class A shares of 21.24%.(1) Total return
at net asset value for Class B shares since their inception on May 1,
1993 to December 31 was 13.91%.(1)
3 The Fund is ranked in the top 8% of all growth and income funds
tracked by Lipper Analytical Services for the 1-, 3-, 5-, and 10-year
periods ended December 31, 1993.(2)
4 The Fund was awarded a (four stars) ranking from Morningstar, Inc.(4)
5 At December 31, 1993, the Fund's top five stock holdings were.(5)
Atlantic Southeast Airlines, Inc. One of the nation's fastest growing
regional air carriers, operating out of hubs in Atlanta and Dallas.
Texas Utilities Co. One of the largest electric utilities in
the United States, providing service to nearly 5.6 million people in
372 cities and towns.
Medtronic, Inc. The world's leading producer of
pacemakers and other implantable medical devices.
Fingerhut Cos., Inc. One of the nation's largest diversified mail
order retailers.
American Greetings Corp. The second largest U.S. greeting card company.
6 "With the U.S. stock market now being driven by corporate profits
rather than declining interest rates, we are concentrating greater
attention on economically sensitive stocks. We believe that small and
mid-capitalization companies will outperform the market in the current
moderate-growth environment. We are also focusing greater attention
on overseas markets, where economic recoveries should create new
opportunities."
Portfolio Manager, John Wallace, December 31, 1993
1. Based on the change in net asset value per Class A share from 12/31/92 to
12/31/93. The Fund's average annual total returns after deducting the
current maximum sales charge of 5.75%, for the 1-, 5-, and 10-year periods
ended 12/31/93 were 14.27%, 15.03%, and 14.54%, respectively. Total return
for Class B shares from 5/1/93 (inception of the class) and held until
12/31/93 was 8.91%. This reflects the change in value of a hypothetical
investment made on 5/1/93 and held until 12/31/93, after applying the
contingent deferred sales charge of 5%. All figures assume reinvestment of
dividends and capital gains distributions. The Fund's maximum sales charge
rate on Class A shares was higher during a portion of the periods shown, and
actual investment performance would be affected by that change.
2. Source of data: Lipper Analytical Services, Inc., an independent mutual
fund monitoring service, 12/31/93. Lipper total return averages for the 1-,
3-, and 5-year periods ended 12/31/93 were for 269, 201, 176, and 98 growth
and income funds, respectively. These averages are shown for comparative
purposes only. Lipper performance rankings do not take sales charges into
consideration.
3. The Standard & Poor's 500 Index is an unmanaged index of common stocks
that is widely recognized as an indicator of overall market performance and
includes a factor for the reinvestment of dividends. The S&P 500 Index does
not take sales charges or taxes into consideration.
4. Morningstar Mutual Funds, an independent mutual fund monitoring service,
1/7/94, which ranks funds in specific investment categories monthly by a
quantitative system that uses investment performance, risk-assessment
factors, and adjusts returns for fees and sales loads. One star is the
lowest ranking, 5 stars the highest. Of the 1,002 equity funds ranked by
Morningstar for the period ended 11/30/93, 22.5% received the 4-star ranking
and 10% received a 5-star ranking.
5. The Fund's portfolio is subject to change.
2 Oppenheimer Total Return Fund, Inc.
<PAGE>
Report to Shareholders
"The Fund placed in the top 7% of all growth & income funds."
Oppenheimer Total Return Fund, Inc. provided a total return at net asset
value of 21.24% for Class A shares for the 12 months ended December 31,
1993.(6) This return, which was nearly double that of the S&P 500,(7)
placed the Fund in the top 7% of all growth and income funds.(8)
In seeking high total return, the Fund's managers emphasize two
types of investments: (1) Stocks of small and mid-size companies, to
maximize potential for capital appreciation; and (2) High-dividend paying
stocks, convertible bonds, and debt securities, which enhance current income
and help to minimize volatility--an important concern with U.S. stock
markets near record highs.
U.S. interest rates have declined throughout most of 1993,
driving up the price of high-dividend stocks, such as electric utilities. We
sold some of our investments in electric utilities at a substantial profit,
shifting the proceeds to telecommunications companies, which offer high
yields and greater potential for long-term growth.
With the U.S. economy growing at a modest pace, we believe the
key to superior returns is identifying companies that can translate the
economic expansion into rapid earnings growth. For example, we recently
invested in the Geon Company, a leading provider of polyvinyl chloride for
homebuilding. The company is expanding sales as a result of increased U.S.
housing starts and improving profit margins as a result of declining raw
materials costs and low inflation.
Our emphasis on the technology sector remains strong, as
corporations continue to use computing and communications equipment to
improve productivity. For instance, we increased our investment in Seagate
Technology, a leading manufacturer of disk drives and other devices,
primarily for the PC market. More powerful software and operating systems
increase the demand for high capacity storage products.
In the entertainment arena, we are building a position in a new
public company called Iwerks Entertainment. Founded by entrepreneurs from
the Walt Disney Company, Iwerks has developed an impressive portfolio of
interactive multimedia entertainment products, and could be a leading player
in this emerging industry.
We believe that new opportunities will be emerging in selected
global markets, particularly Europe, which appears to be lagging 12-18
months behind the U.S. on the path to recovery. We are also investigating
opportunities in Latin America, particularly Chile and Argentina, which are
beginning to emerge from extended economic downturns.
We are pleased that Oppenheimer Total Return Fund has
consistently provided superior total returns, and thank you for your
continuing trust.
(James C. Swain signature) (Jon S. Fossel signature)
James C. Swain Jon S. Fossel
Chairman, Oppenheimer President, Oppenheimer
Total Return Fund, Inc. Total Return Fund, Inc.
January 21, 1994
Superior Total Return
For the 12 months ended December 31, 1993
S&P 500(7) Index 10.06%
Lipper growth & income funds average(8) 11.47%
Oppenheimer Total Return Fund, Inc.
Class A(6) (at net asset value) 21.24%
6. See footnote 1, page 2.
7. See footnote 3, page 2.
8. See footnote 2, page 2.
3 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Total Return Fund: A Solid Choice for Growth and Income
An investor who placed a $10,000 investment in Class A shares Oppenheimer
Total Return Fund, Inc. on December 31, 1983, and reinvested all dividends
and capital gains, would have seen the value of her investment grow to
$38,881 as of December 31, 1993, which is a 14.54% average annual return.(9)
In addition, the Fund outperformed the Lipper average for growth and income
funds during that same period.(10) Although past performance is no guarantee
of future results, this impressive track record demonstrates the benefits of
a long-term approach to investing.
Consistent Total Return Over the Long Term
Results of a hypothetical $10,000 investment in A shares on 12/31/83.
(Line graph comparing Oppenheimer Total Return Fund A(9) and
Lipper growth and income funds average(10))
9. This example is based on a hypothetical $10,000 investment in Class A
shares of the Fund on 12/31/83 after deducting the current maximum initial
sales charge of 5.75%, held until 12/31/93. The Fund's maximum sales charge
rate on Class A shares was higher during a portion of the periods shown, and
actual investment performance would be affected by that change.
Past performance is not indicative of future results. 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.
10. See footnote 2, page 2.
Left to right:
Portfolio Manager, John Wallace, talks with Oppenheimer Management
Corporation CEO, Jon Fossel.
4 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments
December 31, 1993
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
Repurchase Agreements--0.7%
Repurchase agreement with First Chicago Capital Markets, 3.125%, dated
12/31/93 and maturing 1/3/94, collateralized by U.S. Treasury Nts., 3.875%:
3/31/95, with a value of $3,750,000 $ 3,709,000 $3,709,000
4/30/95, with a value of $6,385,000 6,291,000 6,291,000
Total Repurchase Agreements (Cost $10,000,000) 10,000,000
Government Obligations--2.2%
Argentina (Republic of):
Bonds, Bonos de Consolidacion de Deudas:
Series I, 4.25%, 4/1/01(3) (4) 8,648,500 6,886,105
Series I, 3.1875%, 4/1/01(3) (4) 6,715,800(1) 5,835,909
Supplier, 4.25%, 4/1/07(3) (4) 1,235,500(1) 826,131
Par Bonds, 4%, 3/31/23(5) 5,000,000 3,437,500
Past Due Interest Bonds, 4.25%, 3/31/05(3) 3,000,000 2,636,250
Brazil (Federal Republic of) Interest Due and Unpaid Bonds, 8.75%, 1/1/01(3) 10,000,000 8,325,000
Venezuela (Republic of) Front-Loaded Coupon Reduction Bonds, Series A,
6%, 3/31/07(3) 5,000,000 3,825,000
Total Government Obligations (Cost $25,716,901) 31,771,895
Corporate Bonds and Notes--8.8%
Air Express International Corp., 6% Cv. Sub. Debs., 1/15/03 4,000,000 3,760,000
Baker (J.), Inc., 7% Cv. Sub. Nts., 6/1/02 3,000,000 3,945,000
Banco Nacional de Comercio Exterior SNC International Finance
BV, 8% Gtd. Matador Bonds, 8/5/03 6,000,000 6,180,000
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(6) 5,250,000 6,536,250
Box Energy Corp., 8.25% Cv. Sub. Nts., 12/1/02 3,000,000 3,952,500
Calfed, Inc., 10% Sub. Debs., 1/3/03 169,100 169,100
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(6) 6,500,000 5,630,625
CII Financial, Inc., 7.50% Cv. Sub. Debs., 9/15/01 1,085,000 843,587
Citibank, 17% CD, 8/10/94 1,228,200,000(1) 2,866,277
Comcast Corp., 1.125% Cv. Sub. Debs., 4/15/07 10,000,000 5,487,500
Conner Peripherals, Inc., 6.75% Cv. Sub. Debs., 3/1/01 3,000,000 2,617,500
Cross Timbers Oil Co., 5.25% Cv. Sub. Nts., 11/1/03 2,000,000 1,837,500
Delta Airlines, Inc., 3.23% Cv. Sub. Nts., 6/15/03 6,000,000 4,957,500
Employee Benefit Plans, Inc., 6.75% Cv. Sub. Debs., 7/31/06 3,000,000 2,163,750
Genesis Health Ventures, Inc., 6% Cv. Sr. Sub. Debs., 11/30/03 1,500,000 1,800,000
Greyhound Lines, Inc., 8.50% Cv. Sub. Debs., 3/31/07 3,000,000 3,495,000
Hillhaven Corp., 7.75% Cv. Sub. Debs., 11/1/02 2,000,000 2,635,000
Integrated Health Services, Inc., 5.75% Cv. Sub. Debs., 1/1/01 4,000,000 4,270,000
Interpool, Inc., 5.25% Cv. Sub. Exch. Nts., 12/15/18 5,000,000 5,062,500
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(6) 4,000,000 4,320,000
Kelley Oil & Gas Partners Ltd., 7.875% Cv. Sub. Nts., 12/15/99 2,500,000 2,003,125
Laidlaw, Inc., 6% Cv. Sub. Debs., 1/15/99(6) 1,000,000 1,030,000
L.A. Gear, Inc., 7.75% Cv. Sub. Debs., 11/30/02 4,500,000 4,612,500
5 Oppenheimer Total Return Fund, Inc.
<PAGE>
Face Market Value
Amount See Note 1
Statement of Investments (Continued)
Corporate Bonds and Notes (continued)
Maxtor Corp., 5.75% Cv. Sub. Debs., 3/1/12 $ 2,000,000 $ 1,215,000
Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00(6) 2,000,000 2,450,000
Noble Affiliates, Inc., 4.25% Cv. Sub. Nts., 11/1/03 2,500,000 2,418,750
Novacare, Inc., 5.50% Cv. Sub. Debs., 1/15/00 3,000,000 2,782,500
Pacific Physician Services, 5.50% Cv. Sub. Debs., 12/15/03 4,000,000 4,375,000
Pharmaceutical Marketing Services, Inc., 6.25% Cv. Sub. Debs., 2/1/03(6) 2,750,000 2,791,250
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(6) (7) 4,000,000 4,340,000
Pioneer Financial Services, Inc., 8% Cv. Sub. Debs., 7/15/00 3,500,000 4,217,500
Roadmaster Industries, Inc., 8% Cv. Sub. Debs., 8/15/03 3,500,000 4,147,500
Seagate Technology, 6.75% Cv. Sub. Debs., 5/1/12 6,000,000 5,460,000
Shangri-La Asia Ltd., 2.875% Cv. Sub. Debs., 6/16/00(6) 4,300,000 4,047,375
Titan Wheel International, Inc., 4.75% Cv. Sub. Nts., 12/1/00 4,000,000 4,260,000
United Gaming, Inc. 7.50% Cv. Sub. Debs., 9/15/03(6) 3,000,000 2,985,000
Willcox & Gibbs, Inc., 7% Cv. Sub. Debs., 8/1/14 2,000,000 1,960,000
Total Corporate Bonds and Notes (Cost $118,461,848) 127,625,089
Units
Rights and Warrants--0.4%
Ciba-Geigy AG Wts., Exp. 6/95 1,500 13,889
Societa Telefonica SPA Wts., Exp. 9/94 650,000 5,486,272
Total Rights and Warrants (Cost $5,258,506) 5,500,161
Shares
Preferred Stocks--7.3%
Agco Corp., Cv. 140,000 6,545,000
AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A(2) (6) 150,000 7,875,000
Boise Cascade Corp., $1.58 Cum. Cv., Series G 390,000 9,262,500
Burlington Northern, Inc., $3.125 Cum. Cv., Series A 55,000 3,753,750
Catellus Development Corp., $7.25 Cv.(6) 220,000 10,862,500
Chemical Banking Corp., $5.00 Cv.(6) 100,000 8,450,000
Chiles Offshore Corp., $1.50 Cv. 125,000 2,843,750
Chrysler Financial Corp., $4.625 Cv. Depositary Shares, Series A(6) 50,000 7,450,000
Evergreen Media Corp., $3.00 Cv. Exch.(2) 25,000 1,250,000
Freeport-McMoRan Copper & Gold, Inc., Cv. Exch. Depositary Shares 320,000 8,040,000
Gensia Pharmaceuticals, Inc., $3.75 Cv. Exch.(6) 100,000 5,350,000
Hecla Mining Co., $3.50 Cv., Series B 110,000 5,788,750
Lynx Therapeutics, Inc., Series A(2) (6) 91,200 91,200
Noble Drilling Corp., $2.25 Cv. Exch., Series A 130,000 6,467,500
Olympic Financial Ltd., $2.00 Cum. Cv. Exch. 100,000 3,025,000
Philippine Long Distance Telephone Co., Cv. Global Depositary Shares,
Series II(6) 50,000 2,250,000
RJR Nabisco Holdings Corp., $8.35 Cum. Cv., Series A 650,000 4,550,000
Transco Energy Co., $3.00 Cum. Cv., Series E(6) 90,000 4,365,000
Unisys Corp., $3.75 Cv., Series A 145,000 7,014,375
Total Preferred Stocks (Cost $88,206,477) 105,234,325
6 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Common Stocks--79.7%
Basic Materials--3.1%
Chemicals--2.5%
Geon Co. (The) 435,000 $10,276,875
Hercules, Inc. 110,000 12,430,000
Lyondell Petrochemical Co. 400,000 8,500,000
Union Carbide Corp. 200,000 4,475,000
35,681,875
Metal: Miscellaneous--0.3%
Material Sciences Corp.(2) 200,000 4,575,000
Steel--0.3%
Oregon Steel Mills, Inc. 200,000 5,025,000
Consumer Cyclicals--17.5%
Airlines--2.3%
Atlantic Southeast Airlines, Inc. 610,000 20,892,500
Continental Airlines, Inc., Cl. B(2) 310,000 6,355,000
Mesa Airlines, Inc. 320,000 5,680,000
32,927,500
Automobiles--2.0%
General Motors Corp. 200,000 10,975,000
Harley-Davidson, Inc. 250,000 11,031,250
Volvo AB, Series B Free 110,000 7,113,166
29,119,416
Auto Parts:
After Market--0.5%
APS Holding Corp., Cl. A(2) 200,000 4,000,000
Cummins Engine Co., Inc. 55,000 2,956,250
6,956,250
Broadcast Media--1.5%
IDB Communications Group, Inc.(2) 185,000 10,175,000
Tele-Communications, Inc., Cl. A(2) 300,000 9,075,000
Turner Broadcasting System, Inc. 90,000 2,430,000
21,680,000
Entertainment--2.1%
Carnival Cruise Lines, Inc., Cl. A 270,000 12,791,250
Iwerks Entertainment, Inc.(2) (7) 465,000 12,438,750
New Line Cinema Corp.(2) 185,000 4,786,875
30,016,875
Hotels/Motels--0.7%
Promus Cos., Inc. (The) 225,000 10,293,750
Household Furnishings
and Appliances--1.1%
Baldwin Piano & Organ Co.(2) (7) 256,000 3,840,000
Maytag Corp. 200,000 3,600,000
Shaw Industries, Inc. 340,000 8,627,500
16,067,500
Leisure Time--0.8%
Acclaim Entertainment, Inc.(2) 200,000 4,250,000
Bally Gaming International, Inc.(2) 400,000 6,900,000
11,150,000
Manufactured Housing--0.3%
Fleetwood Enterprises, Inc. 190,000 4,512,500
7 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Statement of Investments (Continued)
Publishing--1.2%
American Greetings Corp., Cl. A 430,000 $14,620,000
Steck-Vaughn Publishing Corp.(2) 290,000 2,718,750
17,338,750
Restaurants--0.3%
Buffets, Inc.(2) 150,000 3,862,500
Retail: Specialty--2.1%
Lowe's Cos., Inc. 125,000 7,406,250
Musicland Stores Corp.(2) 540,000 11,205,000
Regis Corp.(2) (7) 650,000 6,825,000
Spiegel, Inc., Cl. A 235,000 5,287,500
30,723,750
Retail Stores: General
Merchandise Chains--1.7%
Fingerhut Cos., Inc. 550,000 15,468,750
Meyer (Fred), Inc.(2) 250,000 9,000,000
24,468,750
Shoes--0.2%
Baker (J.), Inc. 185,000 3,237,500
Textiles: Apparel
Manufacturers--0.2%
Chic by H.I.S., Inc.(2) 275,000 3,437,500
Toys--0.5%
Mattel, Inc. 250,000 6,906,250
Consumer Non-Cyclicals--10.6%
Drugs--0.7%
Astra AB Free, Series A 350,000 7,978,167
Nature's Bounty, Inc.(2) 115,000 2,386,250
10,364,417
Food: Grain and
Agriculture--0.2%
Ralston-Continental Baking Group 345,000 2,889,375
Food Processing--0.6%
McCormick & Co., Inc., Non-Vtg. 350,000 8,618,750
Healthcare: Diversified--1.0%
Bristol-Myers Squibb Co. 250,000 14,531,250
Healthcare: Miscellaneous--4.5%
Amgen, Inc.(2) 175,000 8,662,500
Amylin Pharmaceuticals, Inc.(2) 125,000 1,625,000
Chiron Corp.(2) 150,000 12,600,000
COR Therapeutics, Inc.(2) 425,000 6,428,125
Dentsply International, Inc.(2) 205,000 9,020,000
Genentech, Inc.(2) 200,000 10,100,000
Healthsource, Inc.(2) 215,000 11,878,750
Matrix Pharmaceutical, Inc.(2) 124,000 1,302,000
PCI Services, Inc.(2) (7) 330,000 3,712,500
65,328,875
Hospital Management--1.7%
Community Psychiatric Centers 328,500 4,599,000
Homecare Management, Inc.(2) 175,000 2,384,375
Living Centers of America, Inc.(2) 175,000 4,790,625
Sun Healthcare Group, Inc.(2) 200,000 3,350,000
Wellpoint Health Networks, Inc., Cl. A(2) 279,600 8,667,600
23,791,600
8 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Medical Products--1.5%
Lynx Therapeutics, Inc.(2) (6) 62,700 $ 12,540
Medtronic, Inc. 195,000 16,014,375
Sybron Corp. of Delaware(2) 175,000 5,600,000
21,626,915
Retail Stores:
Food Chains--0.4%
Whole Foods Market, Inc. 240,000 5,400,000
Energy--3.5%
Oil: Integrated
Domestic--0.8%
Seagull Energy Corp.(2) 175,000 4,440,625
Trident NGL Holding, Inc.(2) 275,000 3,231,250
Vintage Petroleum, Inc. 215,000 3,896,875
11,568,750
Oil: Integrated
International--1.4%
Repsol SA, ADR 200,000 6,175,000
Societe Nationale Elf Acquitaine 130,000 9,174,536
YPF Sociedad Anonima, Sponsored ADR 200,000 5,200,000
20,549,536
Oil and Gas Drilling--0.4%
Cross Timbers Oil Co. 200,000 2,850,000
Noble Drilling Corp.(2) 250,000 2,187,500
5,037,500
Oil Well Services
and Equipment--0.9%
Hombeck Offshore Services, Inc.(2) 250,000 3,625,000
McDermott International, Inc. 290,300 7,692,950
Weatherford International, Inc.(2) 200,000 2,125,000
13,442,950
Financial--10.4%
Financial Services:
Miscellaneous--1.8%
Advanta Corp., Cl. B 100,000 2,900,000
First Financial Caribbean Corp. 150,000 2,512,500
H & R Block, Inc. 150,000 6,112,500
Itel Corp.(2) 135,000 3,780,000
Primerica Corp. 280,000 10,885,000
26,190,000
Insurance: Life--0.5%
Bankers Life Holding Corp. 350,000 7,525,000
Insurance: Multi-line--1.1%
CCP Insurance, Inc. 250,000 6,968,750
Equitable Cos., Inc. 300,000 8,100,000
15,068,750
Major Banks: Other--2.7%
American Federal Bank, FSB 150,000 1,575,000
Banco Santander SA 210,000 9,756,163
C.S. Holdings 12,500 6,203,583
Commonwealth Bank of Australia 796,000 5,159,583
Independence Bancorp, Inc. 240,000 8,940,000
Westpac Banking Corp., Sponsored ADR 475,000 7,540,625
39,174,954
9 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Statement of Investments (Continued)
Major Banks: Regional--2.9%
CoreStates Financial Corp. 125,000 $ 3,265,625
First Interstate Bancorp 150,000 9,618,750
Midlantic Corp.(2) 275,000 7,012,500
Signet Banking Corp.(2) 275,000 9,556,250
Summit Bancorporation (The) 275,000 5,843,750
U.S. Bancorp 250,000 6,250,000
41,546,875
Savings and
Loans/Holding Cos.--1.4%
Coast Savings Financial, Inc.(2) 200,000 2,850,000
Onbancorp, Inc. 300,000 10,537,500
TCF Financial Corp. 190,000 6,460,000
19,847,500
Industrial--7.7%
Building Materials Group--0.4%
Owens-Corning Fiberglas Corp.(2) 115,000 5,103,125
Commercial Services--0.4%
Manitowoc Co., Inc. 190,000 6,127,500
Conglomerates--2.5%
Litton Industries, Inc.(2) 160,000 10,300,000
Philips NV, New York Shares(2) 350,000 7,218,750
Teledyne, Inc. 200,000 5,200,000
Tenneco, Inc. 250,000 13,156,250
35,875,000
Electrical Equipment--0.4%
Amphenol Corp., Cl. A(2) 300,000 4,950,000
Tencor Instruments(2) 100,000 1,250,000
6,200,000
Manufacturing:
Diversified Industrials--2.4%
AlliedSignal, Inc. 80,000 6,320,000
Pall Corp. 250,000 4,593,750
Trinity Industries, Inc. 300,000 12,937,500
Tyco Laboratories, Inc. 216,000 11,151,000
35,002,250
Railroads--0.4%
Southern Pacific Rail Corp.(2) 300,000 5,925,000
Transportation:
Miscellaneous--0.2%
Stolt Comex Seaway SA(2) 175,000 2,100,000
Truckers--1.0%
Roadway Services, Inc. 75,000 4,500,000
TNT Freightways Corp. 350,000 9,450,000
13,950,000
Technology--19.0%
Aerospace/Defense--0.7%
Martin Marietta Corp. 220,000 9,790,000
Communication:
Equipment/Manufacturers--0.4%
Newbridge Networks Corp.(2) 110,000 6,022,500
Computer Software
and Services--3.8%
Adobe Systems, Inc. 325,000 7,231,250
Bolt Beranek and Newman, Inc.(2) 200,000 2,400,000
Cornerstone Imaging, Inc.(2) 47,300 697,675
Exabyte Corp.(2) 200,000 3,525,000
10 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Computer Software and Services (continued)
INTERLINQ Software Corp.(2) (7) 300,000 $ 2,062,500
Network General Corp.(2) 200,000 3,575,000
Platinum Technology, Inc.(2) 400,000 4,300,000
SHL Systemhouse, Inc.(2) 1,851,500 13,423,375
Sierra On-Line, Inc.(2) 195,000 3,583,125
Sligos SA 47,085 4,401,887
Sybase, Inc.(2) 165,000 6,930,000
Symantec Corp. 150,000 2,737,500
54,867,312
Computer Systems--3.1%
Apple Computer, Inc. 210,000 6,142,500
Auspex Systems, Inc.(2) 400,000 3,800,000
Cisco Systems, Inc.(2) 200,000 12,925,000
Madge NV 182,500 2,737,500
Mentor Graphics Corp. 250,000 3,437,500
Seagate Technology(2) 250,000 5,937,500
Sensormatic Electronics Corp. 285,000 9,939,375
44,919,375
Electronics:
Instrumentation--1.5%
Belden, Inc.(2) 420,000 7,822,500
Thermo Electron Corp.(2) 307,500 12,915,000
20,737,500
Electronics:
Semiconductors--2.3%
Applied Materials, Inc.(2) 350,000 13,562,500
Atmel Corp.(2) 140,000 4,847,500
Dallas Semiconductor Corp.(2) 145,000 2,247,500
Intel Corp. 200,000 12,400,000
33,057,500
Office Equipment
and Supplies--0.6%
Moore Corp. Ltd. 440,000 8,415,000
Telecommunications--6.6%
A+ Communications, Inc.(2) 150,000 1,950,000
Atlantic Tele-Network, Inc. 200,000 2,850,000
Cellular, Inc.(2) 100,000 1,750,000
Communications Central, Inc.(2) 75,000 993,750
LCI International, Inc.(2) 320,000 11,840,000
LDDS Communications, Inc., Cl. A(2) 75,000 3,618,750
McCaw Cellular Communications, Inc.(2) 200,000 10,100,000
Millicom, Inc.(2) 514,968 12,101,748
NEXTEL Communications, Inc., Cl. A(2) 255,000 9,498,750
Octel Communications Corp.(2) 165,000 4,578,750
PacTel Corp.(2) 240,000 5,970,000
Paging Network, Inc.(2) 255,000 7,777,500
Societa Italiana per L'Eserrcizio delle Telecomunicazioni SPA 3,500,000 7,351,634
Telecommunication de Argentina, Cl. B 565,000 3,555,168
Vodafone Group PLC 130,000 11,602,500
95,538,550
11 Oppenheimer Total Return Fund, Inc.
<PAGE>
Market Value
Shares See Note 1
Statement of Investments (Continued)
Utilities--7.9%
Electric Cos.--5.4%
Allegheny Power System, Inc. 300,000 $ 7,950,000
Entergy Corp. 325,000 11,700,000
FPL Group, Inc. 125,000 4,890,625
Houston Industries, Inc. 300,000 14,287,500
Oklahoma Gas & Electric Co. 225,000 8,325,000
Public Service Enterprise Group, Inc. 425,000 13,600,000
Texas Utilities Co. 400,000 17,300,000
78,053,125
Natural Gas--1.5%
Equitable Resources, Inc. 200,000 7,325,000
Panhandle Eastern Corp. 250,000 5,906,250
Williams Cos., Inc. (The) 350,000 8,531,250
21,762,500
Telephone (New)--1.0%
GTE Corp. 200,000 7,000,000
Pacific Telesis Group 150,000 8,100,000
15,100,000
Total Common Stocks (Cost $967,317,517) 1,149,029,900
Total Investments, at Value (Cost $1,214,961,249) 99.1% 1,429,161,370
Other Assets Net of Liabilities .9 12,949,579
Net Assets 100.0% $1,442,110,949
<FN>
1. Face amount is reported in foreign currency.
2. Non-income producing security.
3. Represents the current interest rate for a variable rate security.
4. Interest or dividend is paid in kind.
5. Represents the current interest rate for an increasing rate security.
6. Restricted security--See Note 6 of Notes to Financial Statements.
7. 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 year ended December 31, 1993.
The aggregate fair value of all securities of affiliated companies as of December 31, 1993 amounted to $29,506,250.
Transactions during the period in which the issuer was an affiliate are as follows:
</TABLE>
<TABLE>
<CAPTION>
Balance Balance
December 31, 1992 Gross Additions Gross Reductions December 31, 1993
Share/Face Cost Share/Face Cost Share/Face Cost Share/Face Cost
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Baldwin Piano & Organ Co. -- $ -- 256,000 $ 4,418,500 -- $ -- 256,000 $ 4,418,500
INTERLINQ Software Corp. -- -- 300,000 2,332,500 -- -- 300,000 2,332,500
Iwerks Entertainment, Inc. -- -- 465,000 14,569,045 -- -- 465,000 14,569,045
PCI Services, Inc.(8) 285,000 3,001,437 60,000 551,250 15,000 174,562 330,000 3,378,125
Physicians Clinical
Laboratory, Inc., 7.50%
Cv. Sub. Debs., 8/15/00 -- -- 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
Regis Corp. 460,000 5,221,863 190,000 1,742,500 -- -- 650,000 6,964,363
$8,223,300 $27,613,795 $174,562 $35,662,533
</TABLE>
8. Not an affiliate as of December 31, 1993.
See accompanying Notes to Financial Statements.
12 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Assets and Liabilities
December 31, 1993
<TABLE>
<S> <C>
Assets
Investments, at value (cost $1,214,961,249)--see accompanying statement $1,429,161,370
Cash 30,167
Receivables:
Investments sold 24,806,097
Shares of capital stock sold 15,272,714
Dividends and interest 4,123,395
Other 118,350
Total assets 1,473,512,093
Liabilities
Payables and other liabilities:
Investments purchased 18,865,867
Shares of capital stock redeemed 7,904,245
Dividends and distributions 3,597,615
Distribution assistance--Note 5 546,280
Other 487,137
Total liabilities 31,401,144
Net Assets $1,442,110,949
Composition of Net Assets
Par value of shares of capital stock $ 16,597,128
Additional paid-in capital 1,218,925,789
Distributions in excess of net investment income (750,275)
Distributions in excess of net realized gain from investment,
written option and foreign currency transactions (6,864,692)
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies--Note 3 214,202,999
Net assets $1,442,110,949
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,223,394,721 and
140,710,761 shares of capital stock outstanding) $8.69
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $9.22
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$218,716,228 and 25,260,515 shares of capital stock outstanding) $8.66
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Operations
For the Year Ended December 31, 1993
<TABLE>
<S> <C>
Investment Income
Dividends (net of withholding taxes of $27,561) $ 21,865,430
Interest 11,060,805
Total income 32,926,235
Expenses
Management fees--Note 5 6,012,518
Distribution assistance:
Class A--Note 5 1,459,739
Class B--Note 5 602,794
Transfer and shareholder servicing agent fees--Note 5 1,286,727
Shareholder reports 495,556
Registration and filing fees:
Class A 102,600
Class B 72,087
Custodian fees and expenses 133,044
Legal and auditing fees 62,484
Directors' fees and expenses 40,205
Other 85,861
Total expenses 10,353,615
Net Investment Income 22,572,620
Realized and Unrealized Gain (Loss) on Investments,
Options Written And Foreign Currency Transactions
Net realized gain (loss) from:
Investments 82,937,211
Closing of option contracts written--Note 4 (156,395)
Foreign currency transactions (314,792)
Net change in unrealized appreciation or depreciation on:
Investments 96,121,166
Translation of assets and liabilities denominated in foreign currencies (3,006,241)
Net realized and unrealized gain on investments, options written and foreign
currency transactions 175,580,949
Net Increase in Net Assets Resulting From Operations $198,153,569
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992
<S> <C> <C>
Operations
Net investment income $ 22,572,620 $ 17,769,530
Net realized gain on investments, options written
and foreign currency transactions 82,466,024 39,664,447
Net change in unrealized appreciation or depreciation
on investments, options written and translation of assets
and liabilities denominated in foreign currencies 93,114,925 30,349,025
Net increase in net assets resulting from operations 198,153,569 87,783,002
Equalization
Net change 3,854,582 (1,086,852)
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A ($.20 and $.201 per share, respectively) (23,576,552) (18,046,891)
Class B ($.1091 per share) (1,142,362) --
Distributions from net realized gain on investments,
options written and foreign currency transactions:
Class A ($.5834 and $.373 per share, respectively) (76,215,894) (35,843,007)
Class B ($.5834 per share) (13,016,692) --
Capital Stock Transactions
Net increase in net assets resulting from Class A
capital stock transactions--Note 2 335,283,270 206,802,941
Net increase in net assets resulting from Class B
capital stock transactions--Note 2 223,296,915 --
Net Assets
Total increase 646,636,836 239,609,193
Beginning of year 795,474,113 555,864,920
End of year (including of undistributed
net investment income of ($3,054,070) and $1,345,782, respectively) $1,442,110,949 $795,474,113
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Total Return Fund, Inc.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
Year Period
Ended Ended
Dec. 31, Dec. 31,
1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1993(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $7.84 $7.49 $6.13 $6.68 $6.35 $5.95 $6.76 $6.81 $5.40 $5.74 $8.23
Income (loss) from
investment
operations:
Net investment income .18 .17 .24 .24 .27 .26 .25 .35 .25 .26 .09
Net realized and
unrealized gain
(loss) on
investments,
options written and
foreign currency
transactions 1.45 .75 1.91 (.49) .93 .53 .63 1.00 1.58 (.39) 1.03
Total income (loss)
from investment
operations 1.63 .92 2.15 (.25) 1.20 .79 .88 1.35 1.83 (.13) 1.12
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.20) (.20) (.23) (.24) (.28) (.27) (.32) (.37) (.21) (.21) (.11)
Distributions from
net realized gain
on investments,
options written and
foreign currency
transactions (.58) (.37) (.56) (.06) (.59) (.12) (1.37) (1.03) (.21) -- (.58)
Total dividends and
distributions to
shareholders (.78) (.57) (.79) (.30) (.87) (.39) (1.69) (1.40) (.42) (.21) (.69)
Net asset value,
end of period $8.69 $7.84 $7.49 $6.13 $6.68 $6.35 $5.95 $6.76 $6.81 $5.40 $8.66
Total Return, at
Net Asset Value(2) 21.24% 12.83% 36.26% (3.86)% 19.25% 13.35% 12.35% 19.70% 34.36% (5.74)% 13.91%
Ratios/Supplemental Data:
Net assets, end of
period (in
thousands) $1,223,395 $795,474 $555,865 $396,240 $389,413 $314,039 $274,068 $234,674 $229,783 $197,758 $218,716
Average net assets
(in thousands) $992,381 $662,917 $475,741 $394,903 $356,994 $298,509 $277,877 $246,530 $213,803 $199,287 $90,952
Number of shares
outstanding at end
of period (in
thousands) 140,711 101,433 74,245 64,644 58,333 49,464 46,080 34,703 33,720 36,627 25,261
Ratios to average
net assets:
Net investment
income 2.21% 2.68% 3.26% 3.87% 3.96% 4.22% 3.42% 4.37% 3.81% 4.84% 1.09%(3)
Expenses .93% .96% .95% .98% .98% .94% .88% .85% .89% .95% 1.87%(3)
Portfolio turnover
rate(4) 143.9% 143.5% 161.5% 114.1% 151.6% 127.3% 173.4% 88.3% 143.9% 202.6% 143.9%
<FN>
1. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net
asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns.
3. Annualized.
4. 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 year ended December 31, 1993 were $1,939,566,810 and
$1,478,337,981, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Oppenheimer Total Return Fund, Inc. (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 advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers both Class A and Class
B shares. Class A shares are sold with a front-end sales charge. Class B
shares may be subject to a contingent deferred sales charge. Both classes of
shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution plan, expenses directly
attributable to a particular class and exclusive voting rights with respect
to matters affecting a single 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 4:00 p.m. (New York
time) 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 asked
price or the last sale price on the prior trading day. Long-term debt
securities are valued by a portfolio pricing service approved by the Board of
Directors. Long-term debt securities which cannot be valued by the approved
portfolio pricing service are valued by averaging the mean between the bid
and asked prices obtained from two active market makers in such securities.
Short-term 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. Securities for which market quotes are
not readily available are valued under procedures established by the Board of
Directors to determine fair value in good faith. A call option is valued
based upon the last sales 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 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 or asked price closest to the last reported sale
price 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 securities and investment income
are translated at the rate of exchange prevailing on the respective dates of
such transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. Risks may arise from the potential inability of the counterparty to
meet the terms of the contract and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
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 results 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. 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.
Call Options Written. The Fund may write covered call options. When an option
is written, the Fund receives a premium and becomes obligated to sell the
underlying security at a fixed price, upon exercise of the option. In writing
an option, the Fund bears the market risk of an unfavorable change in the
price of the security underlying the written option. Exercise of an option
written by the Fund could result in the Fund selling a security at a price
different from the current market value. All securities covering call options
written are held in escrow by the custodian bank.
Allocation of Income, Expenses and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and 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 Income 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 tax provision is required.
17 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements (Continued)
Equalization. Prior to September 24, 1993, the Fund followed the accounting
practice of equalization, by which a portion of the proceeds from sales and
costs of redemption of Fund shares equivalent on a per share basis to the
amount of undistributed net investment income were credited or charged to
undistributed income. The cumula tive effect of the change in accounting
practice resulted in a reclassification of $3,804,345 from undistributed net
investment income to paid-in capital.
Distributions to Shareholders. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
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. Discount on securities purchased is amortized over the life
of the respective securities, in accordance with federal income tax
requirements. 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.
2. Shares of Capital Stock
The Fund has authorized 500,000,000 and 200,000,000 shares of $.10 par value
Class A and Class B capital stock, respectively. Transactions in shares of
capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1993(1) Year Ended December 31, 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class A:
Sold 40,537,799 $ 349,550,087 29,867,549 $224,008,089
Dividends and distributions reinvested 10,935,488 90,416,322 6,634,600 51,706,015
Redeemed (12,195,290) (104,683,139) (9,313,962) (68,911,163)
Net increase 39,277,997 $ 335,283,270 27,188,187 $206,802,941
Class B:
Sold 24,707,937 $ 219,055,169 -- $ --
Dividends and distributions reinvested 1,561,693 13,222,296 -- --
Redeemed (1,009,115) (8,980,550) -- --
Net increase 25,260,515 $ 223,296,915 -- $ --
<FN>
1. For the year ended December 31, 1993 for Class A shares and for the period
from May 1, 1993 (inception of offering) to December 31, 1993 for Class B shares.
</TABLE>
3. Unrealized Gains and Losses on Investments
At December 31, 1993, net unrealized appreciation on investments of
$217,209,204 was composed of gross appreciation of $234,591,257, and gross
depreciation of $17,382,053.
4. Call Option Activity
Call option activity for the year ended December 31, 1993 was as follows:
<TABLE>
<CAPTION>
Number of Amount of
Options Premiums
<S> <C> <C>
Options outstanding at December 31, 1992 -- $ --
Options written 2,000 432,420
Options cancelled in closing purchase transactions (2,000) (432,420)
Options outstanding at December 31, 1993 -- $ --
</TABLE>
The cost of cancelling options in closing purchase transactions was $588,815,
resulting in a net short-term capital loss of $156,395.
5. 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 .75% on
the first $100 million of net assets with a reduction of .05% on each $100
million thereafter, to .50% on net assets in excess of $500 million. The
Manager has agreed to reimburse the Fund if aggregate expenses (with specified
exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
For the year ended December 31, 1993, commissions (sales charges paid by
investors) on sales of Class A shares totaled $9,700,404, of which $2,958,311
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of
the Manager, as general distributor, and by an affiliated broker/dealer.
During the year ended December 31, 1993, OFDI received contingent deferred
sales charges of $87,358 upon redemption of Class B shares.
18 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such services
are allocated ratably to these companies.
Under separate approved plans of distribution, each class may expend up to
.25% of its net assets annually to reimburse OFDI for costs incurred in
distributing shares of the Fund (sold subsequent to March 31, 1988 for Class
A), including amounts paid to brokers, dealers, banks and other financial
institutions. In addition, Class B shares are subject to an asset-based sales
charge of .75% of net assets annually, to reimburse OFDI for sales
commissions paid from its own resources at the time of sale and associated
financing costs. In the event of termination or discontinuance of the Class B
plan of distribution, the Fund would be contractually obligated to pay OFDI
for any expenses not previously reimbursed or recovered through contingent
deferred sales charges. During the year ended December 31, 1993, OFDI paid
$78,379 to an affiliated broker/dealer as reimbursement for Class A
distribution-related expenses and retained $602,794 as reimbursement for
Class B distribution-related expenses and sales commissions.
6. Restricted Securities
The Fund owns securities purchased in private placement transactions, without
registration under the Securities Act of 1933 (the Act). The securities are
valued under methods approved by the Board of Directors as reflecting fair
value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act
that are determined to be liquid by the Board of Directors or by the Manager
under Board-approved guidelines. Restricted and illiquid securities amount to
$103,740, or .01% of the Fund's net assets, at December 31, 1993.
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit as of December 31, 1993
<S> <C> <C> <C>
AMR Corp., $3.00 Cum. Cv. Depositary Shares,
Series A(1) 6/26/93--10/2/93 $ 51.81 $ 52.50
Banco Nacional de Mexico SA, 7%
Exch. Sub. Debs., 12/15/99(1) 12/1/92--3/2/93 $ 99.90 $124.50
Catellus Development Corp., $7.25 Cv.(1) 11/1/93--11/9/93 $ 49.97 $ 49.38
Chemical Banking Corp., $5.00 Cv.(1) 6/25/92--8/19/92 $ 78.93 $ 84.50
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(1) 1/9/93 $ 84.54 $ 86.63
Chrysler Financial Corp., $4.625 Cv.
Depositary Shares, Series A(1) 2/12/92 $ 50.00 $149.00
Gensia Pharmaceuticals, Inc., $3.75 Cv. Exch.(1) 5/11/93--5/25/93 $ 46.94 $ 53.50
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(1) 9/22/92--10/16/92 $ 98.87 $108.00
Laidlaw, Inc., 6% Cv. Sub. Debs., 1/15/99(1) 12/31/93 $103.00 $103.00
Lynx Therapeutics, Inc. 10/19/92 $ .20 $ .20
Lynx Therapeutics, Inc., Series A 10/19/92 $ 1.00 $ 1.00
Medaphis Corp., 6.50% Cv. Sub. Nts., 1/1/00(1) 3/3/93 $ 9.50 $122.50
Pharmaceutical Marketing Services, Inc.,
6.25% Cv. Sub. Debs., 2/1/03(1) 1/27/93 $100.00 $101.50
Philippine Long Distance Telephone Co.,
Cv. Global Depositary Shares, Series II(1) 10/9/92--12/17/92 $ 24.92 $ 45.00
Physicians Clinical Laboratory, Inc.,
7.50% Cv. Sub. Debs., 8/15/00(1) 8/18/93 $100.00 $108.50
Shangri-La Asia Ltd., 2.875% Cv. Sub. Debs., 6/16/00(1) 12/13/93 $ 86.00 $ 94.13
Transco Energy Co., $3.00 Cum. Cv., Series E(1) 10/29/93 $ 50.00 $ 48.50
United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03(1) 9/15/93 $100.00 $ 99.50
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
19 Oppenheimer Total Return Fund, Inc.
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders of Oppenheimer Total Return Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Oppenheimer Total Return Fund,
Inc. as of December 31, 1993, the related statement of operations for the
year then ended, the statements of changes in net assets for the years ended
December 31, 1993 and 1992, and the financial highlights for the period
January 1, 1984 to December 31, 1993. 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 also includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of securities
owned at December 31, 1993 by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Total
Return Fund, Inc. at December 31, 1993, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
Denver, Colorado
January 21, 1994
20 Oppenheimer Total Return Fund, Inc.
<PAGE>
Federal Income Tax Information (Unaudited)
In early 1994, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1993.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Distributions of $.015 and $.5684 per share were paid on June 25, 1993 and
December 23, 1993, of which $.005 and $.3243 were designated as "capital gain
distributions" for federal income tax purposes. Whether received in stock or
cash, the capital gain distributions should be treated by shareholders as
gains 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 December 31, 1993
which are not designated as capital gain distributions should be multiplied
by 35.7% 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.
21 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Total Return Fund, Inc.
Officers and Directors
James C. Swain, Chairman and Chief Executive Officer
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director and President
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Andrew J. Donohue, Vice President
John L. Wallace, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Lynn M. Coluccy, Assistant Treasurer
Robert G. Zack, Assistant Secretary
Investment Advisor
Oppenheimer Management Corporation
Distributor
Oppenheimer Funds Distributor, Inc.
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
Custodian of Portfolio Securities
The Bank of New York
Independent Auditors
Deloitte & Touche
Legal Counsel
Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of Oppenheimer Total Return Fund,
Inc. This report must be preceded or accompanied by a Prospectus of
Oppenheimer Total Return Fund, Inc. For material information concerning
the Fund, see the Prospectus.
22 Oppenheimer Total Return Fund, Inc.
<PAGE>
The Family of OppenheimerFunds
OppenheimerFunds offers over 30 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your children's
education, or tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that
you are investing with a respected financial institution with over 30 years
of experience in helping people just like you reach their financial goals.
And you're investing with a leader in global, growth stock, and flexible
fixed income investments--with over 1.7 million shareholder accounts and more
than $25 billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.(1) For more information on OppenheimerFunds, please
contact your financial advisor or call us at 1-800-525-7048 for a
prospectus. You may also write us at the address shown on the back cover.
As always, please read the prospectus carefully before you invest.
<TABLE>
<S> <C> <C>
Specialty Stock Funds Global Bio-Tech Fund Gold & Special Minerals Fund
Global Environment Fund
Stock Funds Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
Stock and Bond Funds Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
Bond Funds High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund(3)
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Government Securities Fund
Strategic Investment Grade Bond Fund
Tax-Exempt Funds New York Tax-Exempt Fund(2) Tax-Free Bond Fund
Main Street California Tax-Exempt Fund(2) Insured Tax-Exempt Bond Fund
Pennsylvania Tax-Exempt Fund(2) Intermediate Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(2)
Money Market Funds Money Market Fund Tax-Exempt Cash Reserves
Cash Reserves
<FN>
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange privileges are subject to change or termination.
2. Available only to residents of those states.
3. Formerly GNMA Fund.
</TABLE>
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203. (C) Copyright 1994 Oppenheimer
Management Corporation. All rights reserved.
23 Oppenheimer Total Return Fund, Inc.
<PAGE>
"How may I help you?"
General Information
1-800-525-7048
Talk to a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m.
to 2:00 p.m. ET.
Telephone Transactions
1-800-852-8457
Make account transactions with a Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
PhoneLink
1-800-533-3310
Get automated information or make automated transactions.
24 hours a day, 7 days a week.
Telecommunication
Device for the Deaf
1-800-843-4461
Service for the hearing impaired.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
OppenheimerFunds Information Hotline
1-800-835-3104
Hear timely and insightful
messages on the economy and
issues that affect your finances.
24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 30 different funds designed to help meet
virtually every investment need, Oppenheimer Shareholder Services offers a
variety of services to satisfy your individual needs. Whenever you require help,
we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives.
"We also make it easy for you to redeem shares, exchange shares, or conduct
AccountLink transactions, simply by calling our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated voice
response system, is available 24 hours a day, 7 days a week. PhoneLink gives you
access to variety of fund, account, and market information. You can even make
purchases, exchanges and redemptions using your touch-tone phone. Of course,
PhoneLink will always give you the option to speak with a Customer Service
Representative during regular business hours.
"When you invest in OppenheimerFunds, you know you'll receive a high level of
customer service. The International Customer Service Association knows it, too,
as it recently awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
(Photo of Barbara Hennigar)
Barbara Hennigar
President
Oppenheimer Shareholder Services
1993 Award of Excellence
International Customer Service Association
RA420.0294.R
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Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
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