Oppenheimer Total Return Fund, Inc.
Annual Report December 31, 1995
[COVER PHOTO] "We want
our money
to grow
because we
have some
long-term
goals, but
we also have
needs today."
[LOGO-OPPENHEIMER FUNDS(R)]
<PAGE>
This Fund is for people who want growth over time.
And because the Fund also seeks to provide income,
investors can look out for today's needs too.
News
Outperformed Average
Cumulative Total Return for the
10-Year Period Ended 12/31/95:
Oppenheimer Total Return Fund
Class A (at net asset value)(1)
290.52%
Lipper Growth & Income Funds
Average(3)
232.99%
The Funds Class A shares
are ranked **** among
1,371 equity funds as of
12/31/95 by Morningstar
Mutual Funds.(4)
How Your Fund Is Managed
Oppenheimer Total Return Fund, Inc. offers long-term investors the opportunity
for high total return. This strategy offers the potential for long-term growth
plus income by investing in stocks with growth potential as well as income-
producing stocks and bonds.
This disciplined approach helps to reduce risk through diversification and
enables the Fund to take advantage of a wide variety of market conditions.
Performance
Total return at net asset value for the 12 months ended 12/31/95 was 30.12%
for Class A shares and 29.03% for Class B shares.(1)
Your Funds average annual total returns at maximum offering price for Class
A shares for the 1-, 5-, and 10-year periods ended 12/31/95 were 22.64%, 16.06%
and 13.92%, respectively. For Class B shares, average annual total returns for
the 1-year period ended 12/31/95 and since inception of the Class on 5/1/93 were
24.03% and 10.74%, respectively.(2)
Outlook
"We continue to be very optimistic about the stock and bond markets and the
Fund. The interest rate environment seems favorable, inflation has remained
benign, and most important, we continue to find companies that show very strong
earnings growth."
Bruce Bartlett and Diane Sobin
Portfolio Managers
December 31, 1995
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. 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. For more complete information, please review the
prospectus carefully before you invest.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 12/31/94,
12/31/90 and 12/31/85, after deducting the current maximum initial sales charge
of 5.75%. The Fund's maximum sales charge rate for Class A shares was higher
during a portion of some of the periods shown, and actual investment results
will be different as a result of the change. Class B returns show results of
hypothetical investments on 12/31/94 and 5/1/93 (inception of class), and the
deduction of the applicable contingent deferred sales charge of 5% (1-year) and
3% (since inception). For Class Y shares, the average annual total returns for
the 1-year period ended 12/31/95 and since inception of the Class on 6/1/94 were
30.23% and 15.79%, respectively. Class C cumulative total return since inception
(8/29/95) was 7.82%. An explanation of the different performance calculations is
in the Funds prospectus.
3. Source: Lipper Analytical Services. The Lipper total return average for the
10-year period was for 120 growth and income funds. The average is shown for
comparative purposes only. Oppenheimer Total Return Fund, Inc. is characterized
by Lipper as a growth and income fund. Lipper performance does not take sales
charges into consideration.
4. Source: Morningstar Mutual Funds, 12/31/95. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"hybrid") based on risk-adjusted investment returns, after considering sales
charges and expenses. Investment return measures a fund's (or class's) 3-, 5-,
and 10-year (depending on the inception of the class or fund) average annual
total returns in excess of 90-day U.S. Treasury bill returns. Risk measures a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and returns are combined to produce star rankings, reflecting performance
relative to the average fund in a funds category. Five stars is the "highest"
ranking (top 10%), 4 stars is "above average" and 1 star is the "lowest"
(bottom 1%). The 4-star current ranking is a weighted average of the 3- and
5-year rankings for the class, which were 3 and 4 stars, respectively, weighted
40%/60%, respectively. There were 1,371 and 936 funds ranked in those respective
periods. Rankings are subject to change. The Funds Class A, B, C and Y shares
have the same portfolio.
2 Oppenheimer Total Return Fund, Inc.
<PAGE>
[Photo: James C. Swain]
Chairman
Oppenheimer
Total Return Fund
[Photo: Bridget A. Macaskill]
President
Oppenheimer
Total Return Fund
Dear OppenheimerFunds Shareholder,
The U.S. stock market put on quite a show in 1995 with the Dow Jones Industrial
Average breaking the 5000 barrier. During 1995, conditions were ideal for rising
stock prices. The economy grew fast enough to generate strong corporate
profits--but not so fast as to rekindle inflation. And intermediate-and
long-term interest rates fell sharply, as investors anticipated that the Federal
Reserve Board had shifted from its restrictive monetary policy of the prior
year.
Leading the rally on Wall Street for much of the year were technology
stocks. Even after a bumpy Fall, many stocks in semiconductors, computers,
software and telecommunications doubled during the year. The global demand for
these products--developed and manufactured by American companies--continued
unabated.
The reduction in the rate of growth of health care expenditures is just one
reason why inflation remains moderate. Another reason is the plentiful supply of
inexpensive energy. In addition, the emergence of capitalism throughout the
world has created a global economy of new markets and new competitors, dampening
prices and labor costs. And after many years of promise, technology has finally
created efficiencies in the business environment.
But the primary fuel to stock prices came from corporate profits, which
have been surging in the past few years, due in large part to a rise in U.S.
corporate productivity. The determination of Corporate America to be successful
in today's highly competitive markets has led to a strategy of tight cost
control with an emphasis on efficiency. With a global boom in technology and a
weak dollar in the first half of the year--which made U.S. goods more attractive
overseas--corporate earnings and profitability have remained very strong,
growing about 20% between 1994 and 1995.
With the Dow less than 1000 just 15 years ago and only 2500 five years ago,
it's clear that the stock market's advance has been tremendous. So the question
remains, "Is the case for stocks still strong?"
Certainly, market volatility would be expected at this point in a five year
bull market, especially since there hasn't been a "normal correction" of 10%
or more since 1990. And the slowdown in the economy is likely to translate into
soft profit growth this year.
But the underlying economic conditions that have driven stocks thus
far--moderate growth with low inflation, falling interest rates, and a Corporate
America that's committed to increased efficiency--remain in place. Additionally,
there is increasing demand for U.S. exports in light of expanding international
economies, as well as the increasing belief that U.S. technologies lead the
world. As a result, we believe that the stock market continues to offer a good
value for investors. But, realistically, we don't expect another year like 1995
any time soon.
Your portfolio manager discusses the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment goals
in the future.
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
January 22, 1996
3 Oppenheimer Total Return Fund, Inc.
<PAGE>
[Photos Left:Diane Sobin and Bruce Bartlett. Right: Michael Levine]
Q + A
Q How has the Fund performed?
An interview with your Fund's managers.
How has the Fund performed over the past 12 months?
The Fund has performed very well. Much of the Fund's good performance is
attributable to its unique style of management. The Fund combines the best
attributes of growth and value investment styles, each of which has been
successful independently, but at different times. We're bringing the proven
advantages of both strategies together for consistent superior return potential.
[Photo: Jane Putnam]
What investments positively contributed to the Fund's performance?
The Fund has largely been driven by performance on the growth side of the
equation. In a period of favorable interest rates and slowing economic growth,
investors' attention decidedly turned to companies that were able to maintain
above average earnings growth.
Over the period, we had substantial exposure to some of the best-performing
areas of the market, with sig-nificant weightings in tech- nology and healthcare
stocks.
On the value side, our strategy worked well in areas where we were able to
capitalize on restructuring activity. Throughout the year, we found companies
working to improve productivity and efficiency--activities that can increase
returns to shareholders. A good example of this restructuring theme is in
banking, where an increase in merger activity should lead to better market
penetration and efficiency.(1)
Were there any investments that didn't perform as well as you'd expected?
Investments in the basic materials sector generally underperformed the market
as the economy slowed. While earnings for companies in this sector--typically
chemi-
1. The Fund's portfolio is subject to change.
4 Oppenheimer Total Return Fund, Inc.
<PAGE>
Facing page
Top left: Diane Sobin and Bruce Bartlett, Portfolio Managers
Top right: Michael Levine, Member of Equity Investments Team
Bottom: Jane Putnam, Member of Equity Investments Team
This page
Top: Robert Doll, Executive VP, Director of Equity Investments
Bottom: Bruce Bartlett, Member of Equity Investments Team
A The Fund has performed very well.
[Photo]
cal, paper, and metals firms--are currently strong, future earnings are less
predictable. Consequently, the market sold them off in favor of traditional
growth stocks.
What areas are you currently targeting?
Because they've corrected so much, basic materials companies are now
attractively priced. As a result, we're currently searching out the best stocks
in that sector. We're targeting both the higher quality firms and those that
have shown the strongest earnings growth potential.
Beyond our focus on basic materials, we're emphasizing companies that have
a relatively high degree of earnings visibility and predictability. During the
second half of the year, we also increased our holdings of both domestic and
foreign pharmaceutical firms. We believe these companies have good prospects
for growth in both earnings and dividends.
Furthermore, we consider U.S.-headquartered multinational companies
attractive based on their potential to grow earnings both domestically and
internationally.
In terms of income, we took profits in some of our long-term bonds after
their rally. At this time, we believe the best opportunities are in a
combination of convertible securities, utility, and energy stocks, as well as
cash.
We've been taking profits in some of our top performing stocks, and we've
increased our cash position to around 12%. At this time, cash works for us in
three ways. It's providing competitive income, but just as important, it can
provide a cushion against possible market volatility, and it's ready for us to
put to use when we find good buying opportunities.
[Photo]
What is your outlook for the Fund?
We continue to be very optimistic about the stock and bond markets and the Fund.
The interest rate environment seems favorable, inflation has remained benign,
and most important, we continue to find companies that show very strong earnings
growth. We believe these factors suggest a continuation of a strong market
environment, and that the Fund's growth and value strategy can position us to
take advantage of it.[Solid Box]
5 Oppenheimer Total Return Fund, Inc.
<PAGE>
Contents
Statement of Investments 7
Statement of Assets & Liabilities 15
Statement of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
Notes to Financial Statements 20
Independent Auditors' Report 24
Federal Income Tax Information 25
Shareholder Meeting 25
6 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments December 31, 1995
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations--1.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Treasury--1.1% U.S. Treasury Nts.:
7.50%, 12/31/96 $ 6,670,000 $ 6,820,075
7.75%, 11/30/99 10,000,000 10,837,500
7.75%, 12/31/99 5,000,000 5,429,684
-----------
Total U.S. Government Obligations (Cost $21,660,941) 23,087,259
===================================================================================================================================
Convertible Corporate Bonds and Notes--3.8%
- -----------------------------------------------------------------------------------------------------------------------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts., 6.50%, 7/6/10(1) 10,000,000 4,750,000
---------------------------------------------------------------------------------------------------------------
AMR Corp., 6.125% Cv. Sub. Debs., 11/1/24 8,000,000 8,320,000
---------------------------------------------------------------------------------------------------------------
Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 4,500,000 6,311,250
---------------------------------------------------------------------------------------------------------------
Delta Air Lines, Inc., 3.23% Cv. Sub. Nts., 6/15/03 4,000,000 3,810,000
---------------------------------------------------------------------------------------------------------------
Dovatron International Inc., 6% Cv. Sub. Nts., 10/15/02(2) 5,000,000 5,200,000
---------------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 5% Cv. Sub. Nts., 10/1/03 3,200,000 3,236,000
---------------------------------------------------------------------------------------------------------------
First Financial Management Corp., 5% Cv. Debs., 12/15/99 5,000,000 7,806,250
---------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 5% Cv. Sub. Debs., 4/1/01 4,000,000 6,410,000
---------------------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(2)(3)(7) 3,000,000 855,000
---------------------------------------------------------------------------------------------------------------
Staples, Inc., 4.50% Cv. Nts., 10/1/00(2) 2,500,000 2,512,500
---------------------------------------------------------------------------------------------------------------
Telxon Corp., 5.75% Cv. Debs., 1/1/03(2) 3,500,000 3,797,500
---------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(2) 4,000,000 4,305,000
---------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 5% Cv. Debs., 4/15/01 5,000,000 8,225,000
---------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 8.75% Cv. Sr. Nts., 1/10/15 6,598,850 6,829,810
---------------------------------------------------------------------------------------------------------------
U.S. Cellular Corp., Zero Coupon Cv. Liquid Yield Option Nts., 5.92%, 6/15/15(1) 17,644,000 6,263,620
---------------------------------------------------------------------------------------------------------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05(2) 2,500,000 2,859,375
-----------
Total Convertible Corporate Bonds and Notes (Cost $68,645,260) 81,491,305
Shares
===================================================================================================================================
Common Stocks--79.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--4.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals--2.5% Du Pont (E.I.) De Nemours & Co. 135,000 9,433,125
---------------------------------------------------------------------------------------------------------------
Ethyl Corp. 720,000 9,000,000
---------------------------------------------------------------------------------------------------------------
Monsanto Co. 75,000 9,187,500
---------------------------------------------------------------------------------------------------------------
Morton International, Inc. 370,000 13,273,750
---------------------------------------------------------------------------------------------------------------
PPG Industries, Inc. 130,000 5,947,500
---------------------------------------------------------------------------------------------------------------
W.R. Grace & Co. 110,000 6,503,750
-----------
53,345,625
- -----------------------------------------------------------------------------------------------------------------------------------
Gold--0.4% Newmont Mining Corp. 180,000 8,145,000
- -----------------------------------------------------------------------------------------------------------------------------------
Metals--1.7% Aluminum Co. of America 345,500 18,268,312
---------------------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co. 370,000 9,666,250
---------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 300,000 8,437,500
-----------
36,372,062
</TABLE>
7 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Paper--0.3% Weyerhaeuser Co. 100,000 $ 4,325,000
--------------------------------------------------------------------------------------------------
Willamette Industries, Inc. 65,000 3,656,250
-----------
7,981,250
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--14.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.6% Clayton Homes, Inc. 308,375 6,591,516
- -----------------------------------------------------------------------------------------------------------------------------------
General Motors Corp. 120,000 6,345,000
-----------
12,936,516
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--4.6% Applebee's International, Inc. 200,000 4,550,000
--------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 195,000 4,753,125
--------------------------------------------------------------------------------------------------
Eastman Kodak Co. 110,000 7,370,000
--------------------------------------------------------------------------------------------------
Hasbro, Inc. 120,000 3,720,000
--------------------------------------------------------------------------------------------------
Landry's Seafood Restaurants, Inc.(4) 450,000 7,678,125
--------------------------------------------------------------------------------------------------
McDonald's Corp. 620,000 27,977,500
--------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.(4) 68,000 2,023,000
--------------------------------------------------------------------------------------------------
Starbucks Corp.(4) 50,000 1,050,000
--------------------------------------------------------------------------------------------------
US West Media Group(4) 785,000 14,915,000
--------------------------------------------------------------------------------------------------
Walt Disney Co. 250,000 14,750,000
--------------------------------------------------------------------------------------------------
Wendy's International, Inc. 500,000 10,625,000
-----------
99,411,750
- -----------------------------------------------------------------------------------------------------------------------------------
Media--0.8% Belo (A.H.) Corp., Series A 131,900 4,583,525
--------------------------------------------------------------------------------------------------
Dun & Bradstreet Corp. 200,000 12,950,000
-----------
17,533,525
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: General--2.9% Authentic Fitness Corp. 242,000 5,021,500
--------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(4) 75,000 2,953,125
--------------------------------------------------------------------------------------------------
Kohl's Corp.(4) 165,000 8,662,500
--------------------------------------------------------------------------------------------------
May Department Stores Co. 290,000 12,252,500
--------------------------------------------------------------------------------------------------
Nordstrom, Inc. 90,000 3,645,000
--------------------------------------------------------------------------------------------------
Revco D.S., Inc.(4) 220,000 6,215,000
--------------------------------------------------------------------------------------------------
Sears, Roebuck & Co. 115,000 4,485,000
--------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 752,600 18,815,000
-----------
62,049,625
</TABLE>
8 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--5.1% adidas AG, ADS(4) 76,000 $ 2,018,750
--------------------------------------------------------------------------------------------------
Alco Standard Corp. 390,000 17,793,750
--------------------------------------------------------------------------------------------------
CompUSA, Inc.(4) 200,000 6,225,000
--------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc.(4) 455,000 10,465,000
--------------------------------------------------------------------------------------------------
Men's Wearhouse, Inc.(4) 297,400 7,658,050
--------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B 248,500 17,301,812
--------------------------------------------------------------------------------------------------
Nine West Group, Inc.(4) 350,000 13,125,000
--------------------------------------------------------------------------------------------------
OfficeMax, Inc.(4) 244,000 5,459,500
--------------------------------------------------------------------------------------------------
Rite Aid Corp. 325,000 11,131,250
--------------------------------------------------------------------------------------------------
Staples, Inc. 25,000 609,375
--------------------------------------------------------------------------------------------------
Tandy Corp. 110,000 4,565,000
--------------------------------------------------------------------------------------------------
The Limited, Inc. 200,000 3,475,000
--------------------------------------------------------------------------------------------------
TJX Cos., Inc. 360,000 6,795,000
--------------------------------------------------------------------------------------------------
Walgreen Co. 85,000 2,539,375
------------
109,161,862
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--11.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Food--0.6% CPC International, Inc. 120,000 8,235,000
--------------------------------------------------------------------------------------------------
Quaker Oats Co. 130,000 4,485,000
------------
12,720,000
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--5.9% Abbott Laboratories 505,000 21,083,750
--------------------------------------------------------------------------------------------------
American Home Products Corp. 85,000 8,245,000
--------------------------------------------------------------------------------------------------
Astra AB Free, Series A 700,000 27,990,680
--------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 245,000 21,039,375
--------------------------------------------------------------------------------------------------
Johnson & Johnson 120,000 10,275,000
--------------------------------------------------------------------------------------------------
Lilly (Eli) & Co. 300,000 16,875,000
--------------------------------------------------------------------------------------------------
Smithkline Beecham PLC, ADR Equity Units (one ADR represents
five equity units; each unit consists of one cl. B ordinary share
and one share of cumulative participating preferred stock)(5) 275,000 15,262,500
--------------------------------------------------------------------------------------------------
Teva Pharmaceutical Industries Ltd., ADR 150,000 6,956,250
------------
127,727,555
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies & Baxter International, Inc. 275,000 11,515,625
Services--2.2% --------------------------------------------------------------------------------------------------
Guidant Corp. 115,000 4,858,750
--------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp. 365,000 10,630,625
--------------------------------------------------------------------------------------------------
Lynx Therapeutics, Inc.(4)(6) 153,900 30,780
--------------------------------------------------------------------------------------------------
Medtronic, Inc. 300,000 16,762,500
--------------------------------------------------------------------------------------------------
Molecular Devices Corp.(4) 265,000 2,782,500
------------
46,580,780
- -----------------------------------------------------------------------------------------------------------------------------------
Household Goods--0.6% Kimberly-Clark Corp. 160,000 13,240,000
- -----------------------------------------------------------------------------------------------------------------------------------
Tobacco--1.7% Philip Morris Cos., Inc. 400,000 36,200,000
</TABLE>
9 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Energy--7.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Energy Services & Coastal Corp. 200,000 $ 7,450,000
Producers--3.9% --------------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 227,000 4,284,625
--------------------------------------------------------------------------------------------------
Dresser Industries, Inc. 500,000 12,187,500
--------------------------------------------------------------------------------------------------
Halliburton Co. 220,000 11,137,500
--------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 260,000 16,510,000
--------------------------------------------------------------------------------------------------
Schlumberger Ltd. 270,000 18,697,500
--------------------------------------------------------------------------------------------------
Weatherford Enterra, Inc.(4) 170,000 4,908,750
--------------------------------------------------------------------------------------------------
Western Atlas, Inc.(4) 180,000 9,090,000
------------
84,265,875
- -----------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--3.9% Atlantic Richfield Co. 190,000 21,042,500
--------------------------------------------------------------------------------------------------
MAPCO, Inc. 50,000 2,731,250
--------------------------------------------------------------------------------------------------
Mobil Corp. 113,000 12,656,000
--------------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 850,000 18,168,750
--------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 115,000 16,229,375
--------------------------------------------------------------------------------------------------
Sun Co., Inc. 137,500 3,764,063
--------------------------------------------------------------------------------------------------
Unocal Corp. 350,000 10,193,750
------------
84,785,688
- -----------------------------------------------------------------------------------------------------------------------------------
Financial--8.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Banks--4.7% Bank of New York Co., Inc. (The) 250,000 12,187,500
--------------------------------------------------------------------------------------------------
Chase Manhattan Corp. 130,000 7,881,250
--------------------------------------------------------------------------------------------------
CoreStates Financial Corp. 500,000 18,937,500
--------------------------------------------------------------------------------------------------
First Bank System, Inc. 200,000 9,925,000
--------------------------------------------------------------------------------------------------
Firstar Corp. 370,000 14,661,250
--------------------------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. 105,000 8,426,250
--------------------------------------------------------------------------------------------------
TCF Financial Corp. 410,000 13,581,250
--------------------------------------------------------------------------------------------------
UJB Financial Corp. 250,000 8,937,500
--------------------------------------------------------------------------------------------------
Washington Mutual, Inc. 200,000 5,775,000
------------
100,312,500
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--2.3% H & R Block, Inc. 300,000 12,150,000
--------------------------------------------------------------------------------------------------
Household International, Inc. 250,000 14,781,250
--------------------------------------------------------------------------------------------------
MBNA Corp. 175,000 6,453,125
--------------------------------------------------------------------------------------------------
Travelers Group, Inc. 270,000 16,976,250
------------
50,360,625
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance--1.0% Chubb Corp. 110,000 10,642,500
--------------------------------------------------------------------------------------------------
MGIC Investment Corp. 120,000 6,510,000
--------------------------------------------------------------------------------------------------
Prudential Reinsurance Holdings, Inc. 137,400 3,211,725
------------
20,364,225
</TABLE>
10 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial--10.4%
- -----------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.6% Emerson Electric Co. 280,000 $22,890,000
--------------------------------------------------------------------------------------------------
General Electric Co. 450,000 32,400,000
--------------------------------------------------------------------------------------------------
Honeywell, Inc. 365,000 17,748,125
--------------------------------------------------------------------------------------------------
Westinghouse Electric Corp. 250,000 4,125,000
-----------
77,163,125
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--0.5% Corning, Inc. 195,000 6,240,000
--------------------------------------------------------------------------------------------------
Rayonier, Inc. 150,000 5,006,250
-----------
11,246,250
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Services--2.1% Browning-Ferris Industries, Inc. 300,000 8,850,000
--------------------------------------------------------------------------------------------------
Danka Business System PLC, Sponsored ADR 200,000 7,400,000
--------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 250,000 9,718,750
--------------------------------------------------------------------------------------------------
Service Corp. International 400,000 17,600,000
--------------------------------------------------------------------------------------------------
USA Waste Services, Inc.(4) 100,000 1,887,500
-----------
45,456,250
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--2.9% American Standard Cos., Inc.(4) 146,500 4,102,000
--------------------------------------------------------------------------------------------------
Hanson PLC, ADR 1,115,000 17,003,750
--------------------------------------------------------------------------------------------------
Tenneco, Inc. 420,000 20,842,500
--------------------------------------------------------------------------------------------------
Tyco International Ltd. 590,000 21,018,750
-----------
62,967,000
-----------
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation--1.3% Burlington Northern Santa Fe Corp. 180,000 14,040,000
--------------------------------------------------------------------------------------------------
Union Pacific Corp. 190,000 12,540,000
-----------
26,580,000
- -----------------------------------------------------------------------------------------------------------------------------------
Technology--13.4%
- -----------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.7% Boeing Co. 190,000 14,891,250
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--3.7% Bay Networks, Inc.(4) 225,000 9,253,125
--------------------------------------------------------------------------------------------------
Cisco Systems, Inc.(4) 235,000 17,536,875
--------------------------------------------------------------------------------------------------
International Business Machines Corp. 70,000 6,422,500
--------------------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(4) 293,400 5,354,550
--------------------------------------------------------------------------------------------------
Objective Systems Integrators, Inc.(4) 12,000 657,000
--------------------------------------------------------------------------------------------------
Xerox Corp. 300,000 41,100,000
-----------
80,324,050
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software--1.7% Adobe Systems, Inc. 215,000 13,330,000
--------------------------------------------------------------------------------------------------
General Motors Corp., Cl. E 100,000 5,200,000
--------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 197,300 15,014,830
--------------------------------------------------------------------------------------------------
Oracle Corp.(4) 70,000 2,966,250
-----------
36,511,080
</TABLE>
11 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Electronics--3.5% ADT Ltd.(4) 900,000 $ 13,500,000
--------------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 335,000 16,456,875
--------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 200,000 16,750,000
--------------------------------------------------------------------------------------------------
Intel Corp. 220,000 12,485,000
--------------------------------------------------------------------------------------------------
LSI Logic Corp.(4) 114,500 3,749,875
--------------------------------------------------------------------------------------------------
Motorola, Inc. 135,000 7,695,000
--------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 75,000 3,881,250
--------------
74,518,000
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications- AT&T Corp. 420,000 27,195,000
Technology--3.8% --------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 315,000 6,142,500
--------------------------------------------------------------------------------------------------
LCI International, Inc.(4) 825,000 16,912,500
--------------------------------------------------------------------------------------------------
Millicom, Inc.(4) 400,000 --
--------------------------------------------------------------------------------------------------
WorldCom, Inc.(4) 863,300 30,431,325
--------------
80,681,325
- -----------------------------------------------------------------------------------------------------------------------------------
Utilities--9.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--6.0% Allegheny Power System, Inc. 450,000 12,881,250
--------------------------------------------------------------------------------------------------
Baltimore Gas & Electric Co. 500,000 14,250,000
--------------------------------------------------------------------------------------------------
Carolina Power & Light Co. 250,000 8,625,000
--------------------------------------------------------------------------------------------------
Detroit Edison Co. 340,000 11,730,000
--------------------------------------------------------------------------------------------------
Dominion Resources, Inc. 300,000 12,375,000
--------------------------------------------------------------------------------------------------
FPL Group, Inc. 200,000 9,275,000
--------------------------------------------------------------------------------------------------
Houston Industries, Inc. 1,000,000 24,250,000
--------------------------------------------------------------------------------------------------
Pacific Gas & Electric Co. 300,000 8,512,500
--------------------------------------------------------------------------------------------------
SCEcorp 300,000 5,325,000
--------------------------------------------------------------------------------------------------
The Southern Company 446,000 10,982,750
--------------------------------------------------------------------------------------------------
Unicom Corp. 340,000 11,135,000
--------------
129,341,500
- -----------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--0.8% Panhandle Eastern Corp. 202,500 5,644,688
--------------------------------------------------------------------------------------------------
Sonat, Inc. 335,000 11,934,375
--------------
17,579,063
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--2.7% GTE Corp. 725,000 31,900,000
--------------------------------------------------------------------------------------------------
US West Communications Group 710,000 25,382,500
--------------
57,282,500
--------------
Total Common Stocks (Cost $1,355,415,484) 1,698,035,856
</TABLE>
12 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
===================================================================================================================================
Preferred Stocks--4.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Alco Standard Corp., $5.04 Depositary Shares each
representing 1/100 of a share of Conversion Preferred Stock,
Series BB, Automatically Convertible Equity Securities 30,000 $ 2,565,000
--------------------------------------------------------------------------------------------------
American Express Co., Debt Exchangeable for
Common Stock of First Data Corp., 6.25%, 10/15/96 140,000 7,770,000
--------------------------------------------------------------------------------------------------
Boise Cascade Corp., $1.58 Cum. Cv., Series G 200,000 5,725,000
--------------------------------------------------------------------------------------------------
Cooper Industries, Inc., Debt Exchangeable for
Common Stock, 6% Exchangeable Nts., 1/1/99(4) 455,000 6,256,250
--------------------------------------------------------------------------------------------------
Delta Air Lines, Inc., $3.50 Cv. Depositary Shares, Series C 95,000 5,640,625
--------------------------------------------------------------------------------------------------
Enron Corp., 6.25% Cv. Automatic Common Exchangeable Securities 145,000 3,480,000
--------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cv. Depositary Shares 270,000 7,357,500
--------------------------------------------------------------------------------------------------
General Motors Corp., $3.25 Cv., Series C 150,000 10,987,500
--------------------------------------------------------------------------------------------------
James River Corp. of Virginia, $3.375 Cum. Cv. Exchangeable,
Series K 112,000 5,152,000
--------------------------------------------------------------------------------------------------
James River Corp. of Virginia, Depositary Shares each
representing a one-hundredth interest in a share of Series P,
9% Cum. Cv. Preferred Stock, Dividend Enhanced Convertible Stock 200,000 4,675,000
--------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50% Cv. Structured Yield
Enhanced Product Exchangeable for Stock due 8/15/98 110,000 5,706,250
--------------------------------------------------------------------------------------------------
Noble Drilling Corp., $1.50 Cv. Exchangeable 150,000 3,862,500
--------------------------------------------------------------------------------------------------
Occidental Petroleum Corp., $3.00 Cum. Cv.
Canadian Occidental Petroleum Ltd.-Indexed 210,000 13,046,250
--------------------------------------------------------------------------------------------------
Olympic Financial Ltd., $2.00 Cum. Cv. Exchangeable 26,000 1,950,000
--------------------------------------------------------------------------------------------------
Owens-Corni ng Capital LLC, 6.50% Cv. Monthly Income
Preferred Securities(2) 50,000 2,993,750
--------------------------------------------------------------------------------------------------
Reynolds Metals Co., 7% Preferred Redeemable Increased
Dividend Equity Securities, $3.31 Cv., 12/31/97 112,500 5,695,312
-----------
Total Preferred Stocks (Cost $80,143,596) 92,862,937
Units
===================================================================================================================================
Rights, Warrants and Certificates--0.0%
- -----------------------------------------------------------------------------------------------------------------------------------
American Satellite Network, Inc. Wts., Exp. 6/99 100,000 --
--------------------------------------------------------------------------------------------------
Morgan Stanley Group Inc., Japanese Index Call Wts., Exp. 5/96 59,400 70,538
--------------------------------------------------------------------------------------------------
Windmere Corp. Wts., Exp. 1/98 5,815 --
-----------
Total Rights, Warrants and Certificates (Cost $356,479) 70,538
</TABLE>
13 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
===================================================================================================================================
Repurchase Agreement--12.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 5.90%,
dated 12/29/95, to be repurchased at $269,176,344 on 1/2/96,
collateralized by U.S. Treasury Nts., 5.125%--8.75%,
12/31/96--11/5/04, with a value of $146,015,148, U.S. Treasury
Bonds, 6.25%--11.25%, 8/15/03--8/15/23, with a
value of $88,488,691 and U.S. Treasury Bills maturing 11/14/96,
with a value of $40,128,351 (Cost $269,000,000) $269,000,000 $ 269,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,795,221,760) 100.7% 2,164,547,895
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.7) (15,670,770)
------------ --------------
Net Assets 100.0% $2,148,877,125
============ ==============
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended. This security has been determined
to be liquid under guidelines established by the Board of Directors. These
securities amount to $22,523,125 or 1.05% of the Fund's net assets, at December
31, 1995.
3. Non-income producing--issuer is in default of interest payment.
4. Non-income producing security.
5. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
6. Identifies issues considered to be illiquid--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 period ended December 31, 1995.
Transactions during the period in which the issuer was an affiliate are as
follows:
<TABLE>
<CAPTION>
Balance December 31, 1994 Gross Additions Gross Reductions Balance December 31, 1995 Dividend/
------------------------------ ---------------- ------------------ ------------------------- Interest
Stocks Shares/Face Cost Shares/Face Cost Shares/Face Cost Shares/Face Cost Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Angeion Corp. 500,000 $ 1,187,500 -- $ -- 500,000 $ 1,187,500 -- $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Angeion Corp.
Wts. 500,000 -- -- -- 500,000 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Iwerks
Entertainment
Inc. 540,000 15,476,580 -- -- 540,000 15,476,580 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Regis Corp. of
Minnesota 700,000 7,670,613 -- -- 700,000 7,670,613 -- -- --
Bonds and Notes
- -----------------------------------------------------------------------------------------------------------------------------------
Physician's Clinical
Laboratory, Inc.,
7.50% Cv. Sub.
Debs., 8/15/00(8) 4,000,000 4,000,000 -- -- 1,000,000 950,663 3,000,000 3,049,337 102,064
----------- -------- ----------- ---------- --------
$28,334,693 $ -- $25,285,356 $3,049,337 $102,064
=========== ======== =========== ========== ========
</TABLE>
8. Not an affiliate as of December 31, 1995. See accompanying Notes to Financial
Statements.
14 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Assets and Liabilities December 31, 1995
<TABLE>
<CAPTION>
===================================================================================================================================
<S> <C>
Assets Investments, at value (including repurchase agreement of $269,000,000)
(cost $1,795,221,760)--see accompanying statement $2,164,547,895
--------------------------------------------------------------------------------------------------
Cash 603,529
--------------------------------------------------------------------------------------------------
Receivables:
Investments sold 13,152,993
Interest and dividends 5,980,940
Shares of capital stock sold 4,827,689
--------------------------------------------------------------------------------------------------
Other 62,042
--------------
Total assets 2,189,175,088
===================================================================================================================================
Liabilities Payables and other liabilities:
Investments purchased 30,940,597
Dividends 3,892,085
Shares of capital stock redeemed 3,474,228
Distribution and service plan fees 1,041,460
Transfer and shareholder servicing agent fees 166,991
Other 782,602
-------------
Total liabilities 40,297,963
===================================================================================================================================
Net Assets $2,148,877,125
==============
===================================================================================================================================
Composition of Par value of shares of capital stock $ 23,024,708
Net Assets --------------------------------------------------------------------------------------------------
Additional paid-in capital 1,764,793,058
--------------------------------------------------------------------------------------------------
Overdistributed net investment income (1,164,352)
--------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (7,102,424)
--------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 369,326,135
--------------
Net assets $2,148,877,125
--------------
===================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of
$1,550,709,986 and 165,838,320 shares of capital stock outstanding) $9.35
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $9.92
--------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $589,803,565 and 63,513,824 shares of capital stock outstanding) $9.29
--------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $1,654,870 and 177,427 shares of capital stock outstanding) $9.33
--------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $6,708,704 and 717,512 shares of capital stock outstanding) $9.35
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Operations For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
===================================================================================================================================
<S> <C>
Investment Income Dividends (net of foreign withholding taxes of $464,690) $ 45,617,587
--------------------------------------------------------------------------------------------------
Interest:
Unaffiliated companies 20,247,858
Affiliated companies 102,064
------------
Total income 65,967,509
===================================================================================================================================
Expenses Management fees--Note 5 10,289,397
--------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 5:
Class A 2,439,398
Class B 5,101,553
Class C 2,582
--------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 2,377,275
--------------------------------------------------------------------------------------------------
Shareholder reports 1,115,661
--------------------------------------------------------------------------------------------------
Custodian fees and expenses 180,855
--------------------------------------------------------------------------------------------------
Legal and auditing fees 46,421
--------------------------------------------------------------------------------------------------
Insurance expenses 43,168
--------------------------------------------------------------------------------------------------
Directors' fees and expenses 34,014
--------------------------------------------------------------------------------------------------
Registration and filing fees:
Class B 31,950
Class C 548
Class Y 1,347
--------------------------------------------------------------------------------------------------
Other 183,020
------------
Total expenses 21,847,189
===================================================================================================================================
Net Investment Income 44,120,320
===================================================================================================================================
Realized and Unrealized Net realized gain (loss) on:
Gain (Loss) Investments:
Unaffiliated companies 144,804,260
Affiliated companies (7,738,343)
Closing and expiration of option contracts written--Note 4 6,574
Foreign currency transactions 494,774
------------
Net realized gain 137,567,265
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 314,314,802
Translation of assets and liabilities denominated in foreign currencies 466,759
------------
Net change 314,781,561
------------
Net realized and unrealized gain 452,348,826
===================================================================================================================================
Net Increase in Net Assets Resulting From Operations $496,469,146
============
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994
<S> <C> <C>
===================================================================================================================================
Operations Net investment income $ 44,120,320 $ 43,933,939
--------------------------------------------------------------------------------------------------
Net realized gain (loss) 137,567,265 (22,943,925)
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 314,781,561 (159,658,425)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 496,469,146 (138,668,411)
===================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A (35,374,788) (32,935,100)
Shareholders Class B (9,099,459) (7,410,674)
Class C (11,241) --
Class Y (121,199) (9,979)
--------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (85,267,758) --
Class B (32,692,902) --
Class C (84,903) --
Class Y (366,754) --
===================================================================================================================================
Capital Stock Net increase in net assets resulting from capital stock transactions--Note 2:
Transactions Class A 69,917,082 150,027,163
Class B 72,588,581 251,910,438
Class C 1,689,246 --
Class Y 5,093,914 1,113,774
===================================================================================================================================
Net Assets Total increase 482,738,965 224,027,211
--------------------------------------------------------------------------------------------------
Beginning of period 1,666,138,160 1,442,110,949
-------------- --------------
End of period [including undistributed (overdistributed) net
investment income of ($1,164,352) and $1,960,766, respectively] $2,148,877,125 $1,666,138,160
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Total Return Fund, Inc.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------
Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
==============================================================================================================
Per Share Operating Data:
Net asset value, beginning of period $7.80 $8.69 $7.84 $7.49 $6.13
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 .23 .18 .17 .24
Net realized and unrealized gain (loss) 2.09 (.91) 1.45 .75 1.91
---------- ---------- --------- -------- ---------
Total income (loss) from investment operations 2.32 (.68) 1.63 .92 2.15
- --------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.21) (.20) (.20) (.23)
Distributions from net realized gain (.55) -- (.58) (.37) (.56)
---------- ---------- --------- -------- ---------
Total dividends and distributions
to shareholders (.77) (.21) (.78) (.57) (.79)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.35 $7.80 $8.69 $7.84 $7.49
========== ========== ========= ======== =========
==============================================================================================================
Total Return, at Net Asset Value(4) 30.12% (7.86)% 21.24% 12.83% 36.26%
==============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,550,710 $1,235,637 $1,223,395 $795,474 $555,865
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,394,245 $1,261,729 $992,381 $662,917 $475,741
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.53% 2.88% 2.21% 2.68% 3.26%
Expenses .92% 1.01% .93% .96% .95%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 84.8% 117.2% 143.9% 143.5% 161.5%
Average brokerage commission rate(7) $0.08 -- -- -- --
</TABLE>
1. For the period from June 1, 1994 (inception of offering) to December 31,
1994.
2. For the period from August 29, 1995 (inception of offering) to December 31,
1995.
3. For the period from May 1, 1993 (inception of offering) to December 31, 1993.
4. 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. Total returns are not annualized for
periods of less than one full year.
18 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Class B Class C Class Y
- ---------------------------------------------------------- ------------------------------- -------- ---------------
Period
Ended Year Ended
Year Ended December 31, Dec. 31, December 31,
1990 1989 1988 1987 1986 1995 1994 1993(3) 1995(2) 1995 1994(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================================================================================
$6.68 $6.35 $5.95 $6.76 $6.81 $7.76 $8.66 $8.23 $9.19 $7.80 $8.23
- --------------------------------------------------------------------------------------------------------------------------------
.24 .27 .26 .25 .35 .15 .17 .09 .07 .20 .15
(.49) .93 .53 .63 1.00 2.08 (.91) 1.03 .73 2.13 (.41)
- --------- ------- -------- -------- -------- -------- -------- ------- -------- ------ -----
(.25) 1.20 .79 .88 1.35 2.23 (.74) 1.12 .80 2.33 (.26)
- --------------------------------------------------------------------------------------------------------------------------------
(.24) (.28) (.27) (.32) (.37) (.15) (.16) (.11) (.11) (.23) (.17)
(.06) (.59) (.12) (1.37) (1.03) (.55) -- (.58) (.55) (.55) --
-------- ------ ------- ------- ------- -------- -------- ------- ------- ------ ------
(.30) (.87) (.39) (1.69) (1.40) (.70) (.16) (.69) (.66) (.78) (.17)
- --------------------------------------------------------------------------------------------------------------------------------
$6.13 $6.68 $6.35 $5.95 $6.76 $9.29 $7.76 $8.66 $9.33 $9.35 $7.80
========= ======== ======== ======= ======== ======== ======== ======= ====== ====== ======
================================================================================================================================
(3.86)% 19.25% 13.35% 12.35% 19.70% 29.03% (8.64)% 13.91% 8.82% 30.23% (3.15)%
================================================================================================================================
$396,240 $389,413 $314,039 $274,068 $234,674 $589,804 $429,427 $218,716 $1,655 $6,709 $1,074
- --------------------------------------------------------------------------------------------------------------------------------
$394,903 $356,994 $298,509 $277,877 $246,530 $510,744 $360,773 $ 90,952 $ 784 $3,944 $ 320
- --------------------------------------------------------------------------------------------------------------------------------
3.87% 3.96% 4.22% 3.42% 4.37% 1.70% 2.11% 1.09%(5) 1.42%(5) 2.51% 4.07%(5)
.98% .98% .94% .88% .85% 1.75% 1.87% 1.87%(5) 1.77%(5) .87% .96%(5)
- --------------------------------------------------------------------------------------------------------------------------------
114.1% 151.6% 127.3% 173.4% 88.3% 84.8% 117.2% 143.9% 84.8% 84.8% 117.2%
-- -- -- -- -- $0.08 -- -- $0.08 $0.08 --
</TABLE>
5. Annualized.
6. 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 December 31, 1995 were $1,485,059,143 and $1,650,904,965,
respectively.
7. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
19 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 objective is to seek high
total return through invest ments which are expected to provide opportunities
for growth or to produce income, or both. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C
and Class Y shares. Class A shares are sold with a front-end sales charge. 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 expenses directly attributable to
a particular class and exclusive voting rights with respect to matters affecting
a single class. Class A, Class B and Class C have separate distribution and/or
service plans. No such plan has been adopted for Class Y shares. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- -------------------------------------------------------------------------------
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
asked price 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 Directors. Such securities which cannot be
valued by the 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 Directors 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. Options are valued based upon the last sale
price on the principal exchange on which the option is traded or, in the absence
of any transactions that day, the value is based upon the last sale price on the
prior trading date if it is within the spread between the closing bid and asked
prices. If the last sale price is outside the spread, the closing bid 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 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, 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 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.
- -------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
20 Oppenheimer Total Return Fund, Inc.
<PAGE>
===============================================================================
1. Significant
Accounting Policies
(continued)
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes. Also, due
to timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
During the year ended December 31, 1995, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, during the year ended
December 31, 1995, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $2,638,751. Accumulated net realized loss
on investments was decreased by the same amount.
- -------------------------------------------------------------------------------
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.
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.
===============================================================================
2. Capital Stock
The Fund has authorized 450,000,000, 200,000,000, 200,000,000 and 10,000,000
shares of $.10 par value Class A, Class B, Class C and Class Y capital stock,
respectively. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1995(2) Year Ended December 31, 1994(1)
--------------------------------- --------------------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Class A:
Sold 18,844,314 $166,165,690 36,009,865 $302,062,255
Dividends and distributions reinvested 12,296,649 112,950,173 3,725,296 30,098,615
Redeemed (23,719,242) (209,198,781) (22,029,323) (182,133,707)
------------ ------------ ---------- ------------
Net increase 7,421,721 $ 69,917,082 17,705,838 $150,027,163
============ ============ ========== ============
- -------------------------------------------------------------------------------------------------------------
Class B:
Sold 13,740,203 $120,055,138 35,786,510 $297,977,920
Dividends and distributions reinvested 4,344,180 39,709,825 864,830 6,912,262
Redeemed (9,944,572) (87,176,382) (6,537,842) (52,979,744)
------------ ------------ ---------- ------------
Net increase 8,139,811 $ 72,588,581 30,113,498 $251,910,438
============ ============ ========== ============
- -------------------------------------------------------------------------------------------------------------
Class C:
Sold 172,793 $ 1,648,892 -- $ --
Dividends and distributions reinvested 10,117 93,507 -- --
Redeemed (5,483) (53,153) -- --
----------- ------------ --------- ------------
Net increase 177,427 $ 1,689,246 -- $ --
=========== ============ ========== ============
- -------------------------------------------------------------------------------------------------------------
Class Y:
Sold 635,605 $ 5,604,059 144,607 $ 1,168,840
Dividends and distributions reinvested 52,875 487,953 1,275 9,979
Redeemed (108,744) (998,098) (8,106) (65,045)
----------- ------------ --------- ------------
Net increase 579,736 $ 5,093,914 137,776 $ 1,113,774
=========== ============ ========= ============
</TABLE>
1. For the year ended December 31, 1994 for Class A and Class B shares and for
the period from June 1, 1994 (inception of offering) to December 31, 1994 for
Class Y shares.
2. For the year ended December 31, 1995 for Class A, Class B and Class Y shares
and for the period from August 29, 1995 (inception of offering) to December 31,
1995 for Class C shares.
21 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements (Continued)
===============================================================================
3. Unrealized Gains and
Losses on Investments
At December 31, 1995, net unrealized appreciation on investments of $369,326,135
was composed of gross appreciation of $389,468,272, and gross depreciation of
$20,142,137.
===============================================================================
4. Option Activity
The Fund may buy and sell put and call options, or write covered put and call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended December 31, 1995 was as
follows:
<TABLE>
<CAPTION>
Call Options
---------------------------
Number of Amount of
Options Premiums
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
Options outstanding at December 31, 1994 500 $ 36,499
- ----------------------------------------------------------------------------------------------
Options written 1,350 272,066
- ----------------------------------------------------------------------------------------------
Options closed or expired (50) (19,225)
- ----------------------------------------------------------------------------------------------
Options exercised (1,800) (289,340)
----- --------
-- $ --
Options outstanding at December 31, 1995 ===== ========
</TABLE>
22 Oppenheimer Total Return Fund, Inc.
<PAGE>
===============================================================================
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 a fee of .75% on the first
$100 million of average annual 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 state regulatory limit on Fund expenses.
For the year ended December 31, 1995, commissions (sales charges paid by
investors) on sales of Class A shares totaled $4,061,349, of which $1,236,003
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 B and
Class C shares totaled $2,949,198 and $13,076, of which $240,339 was paid to an
affiliated broker/dealer. During the year ended December 31, 1995, OFDI received
contingent deferred sales charges of $1,488,860 upon redemption of Class B
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 for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net
assets annually to compensate OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other institutions. In
addition, Class B and Class C shares are subject to an asset-based sales charge
of .75% of net assets annually, to compensate 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 or Class C plan, the
Board of Directors may allow the Fund to continue payment of the asset-based
sales charge to OFDI for distribution expenses incurred on Class B or Class C
shares sold prior to termination or discontinuance of the plan. At December 31,
1995, OFDI had incurred unreimbursed expenses of $18,856,726 for Class B and
$22,302 for Class C. During the year ended December 31, 1995, OFDI paid $176,017
and $52,749, respectively, to an affiliated broker/dealer as compensation for
Class A and Class B personal service and maintenance expenses, and retained
$4,233,886 and $2,325, respectively, as compensation for Class B and Class C
sales commissions and service fee advances, as well as financing costs,
respectively.
================================================================================
6. Illiquid and Restricted
Securities
At December 31, 1995, investments in securities included issues that are
illiquid or restricted. The 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 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 illiquid and
restricted securities. The aggregate value of these securities subject to this
limitation at December 31, 1995 was $30,780 which represents less than .01% of
the Fund's net assets. Information concerning these securities is as follows:
<TABLE>
<CAPTION>
Valuation Per Unit as
Security Acquisition Date Cost Per Unit of Dec. 31, 1995
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Lynx Therapeutics, Inc. 10/19/92 $.67 $.20
</TABLE>
Pursuant to guidelines adopted by the Board of Directors, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
23 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, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended December 31, 1995
and 1994, and the financial highlights for the period January 1, 1986 to
December 31, 1995. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1995 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, 1995, 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 LLP
Denver, Colorado
January 22, 1996
24 Oppenheimer Total Return Fund, Inc.
<PAGE>
Federal Income Tax Information (Unaudited)
===============================================================================
In early 1996, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1995. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $.6240, $.6046, $.6123 and $.6252 per share were paid to
Class A, Class B, Class C and Class Y shareholders, respectively, on December
27, 1995, of which, for each class of shares, $.4301 was designated as a
"capital gain distribution" for federal income tax purposes. Whether received in
stock or cash, the capital gain distribution should be treated by shareholders
as a gain from the sale of capital assets held for more than one year (long-term
capital gains).
Dividends paid by the Fund during the fiscal year ended December 31, 1995
which are not designated as capital gain distributions should be multiplied by
62.18% 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.
Shareholder Meeting (Unaudited)
===============================================================================
On July 26, 1995, a special shareholder meeting was held at which the nine
Directors identified below were elected, the selection of Deloitte & Touche LLP
as the independent certified public accountants and auditors of the Fund for the
fiscal year beginning January 1, 1995 was ratified (Proposal No. 1), and the
Fund's amended Class B 12b-1 Distribution and Service Plan was approved by Class
B shareholders (Proposal No. 2). The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/ Broker
Nominee/Proposal For Against Abstain Non-Votes Total
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Robert G. Avis 116,498,343.470 2,777,694.854 -- 2,546,072 119,276,038.324
William A. Baker 116,252,727.328 3,023,310.996 -- 2,546,072 119,276,038.324
Charles Conrad, Jr. 116,818,400.216 2,457,638.108 -- 2,546,072 119,276,038.324
Jon S. Fossel 116,454,599.752 2,821,438.572 -- 2,546,072 119,276,038.324
Raymond J. Kalinowski 116,433,926.500 2,842,111.824 -- 2,546,072 119,276,038.324
C. Howard Kast 116,206,535.263 3,069,503.061 -- 2,546,072 119,276,038.324
Robert M. Kirchner 116,537,828.993 2,738,209.331 -- 2,546,072 119,276,038.324
Ned M. Steel 116,314,824.274 2,961,214.050 -- 2,546,072 119,276,038.324
James C. Swain 116,882,313.931 2,393,724.393 -- 2,546,072 119,276,038.324
Proposal No. 1 113,378,286.653 836,840.483 5,060,911.188 2,546,072 119,276,038.324
Proposal No. 2 26,380,366.184 748,906.162 1,870,305.706 7,901,703 28,999,578.052
</TABLE>
25 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Total Return Fund, Inc.
===============================================================================
Officers and Directors
James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Bridget A. Macaskill, Director and President
Ned M. Steel, Director
Andrew J. Donohue, Vice President
Bruce Bartlett, Vice President
Diane Sobin, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
===============================================================================
Investment Advisor OppenheimerFunds, Inc.
===============================================================================
Distributor OppenheimerFunds Distributor, Inc.
===============================================================================
Transfer and Oppenheimer Fund Services
Shareholder
Servicing Agent
===============================================================================
Custodian of The Bank of New York
Portfolio Securities
===============================================================================
Independent Auditors Deloitte & Touche LLP
===============================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, 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.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
26 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Funds Family
================================================================================
OppenheimerFunds offers over 35 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 35 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 2.8 million shareholder accounts and more than $41
billion under Oppenheimer's management and that of our affiliates.
At OppenheimerFunds, we don't charge a fee to exchange shares. And you can
exchange shares easily by mail or by telephone.(1) For more information on
Oppenheimer funds, 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>
<CAPTION>
<S> <C> <C>
============================================================================================
Stock Funds Global Emerging Growth Fund Growth Fund
Enterprise Fund Global Fund
Discovery Fund Quest Global Value Fund
Quest Small Cap Value Fund Oppenheimer Fund
Gold & Special Minerals Fund Value Stock Fund
Target Fund Quest Value Fund
============================================================================================
Stock & Bond Funds Main Street Income & Growth Fund Global Growth & Income Fund
Quest Opportunity Value Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
============================================================================================
Bond Funds International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Strategic Income Fund Limited-Term Government Fund
Champion Income Fund
============================================================================================
Tax-Exempt Funds California Tax-Exempt Fund(2) Pennsylvania Tax-Exempt Fund(2)
Florida Tax-Exempt Fund(2) Tax-Free Bond Fund
New Jersey Tax-Exempt Fund(2) Insured Tax-Exempt Fund
New York Tax-Exempt Fund(2 Intermediate Tax-Exempt Fund
============================================================================================
Money Market Funds Money Market Fund Cash Reserves
</TABLE>
1. Exchange privileges are subject to change or termination. Shares may be
exchanged only for shares of the same class of eligible funds.
2. Available only to investors in certain states.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203.
(C) Copyright 1996 OppenheimerFunds, Inc. All rights reserved.
27 Oppenheimer Total Return Fund, Inc.
<PAGE>
Information
General Information
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PhoneLink
24 hours a day, automated
information and transactions
1-800-533-3310
Telecommunications Device
for the Deaf (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RA0420.001.1295 February 28, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Service
"How may I help you?"
As an Oppenheimer funds 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
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. 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 to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
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--we're here to help.
- -------------------------------------------------------------------------------
[Oppenheimer Logo]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- --------------
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