[FRONT COVER]
Oppenheimer Total Return Fund, Inc.
Semiannual Report June 30, 1996
[Picture of Cafe Couple]
"We want our
money to grow
because we
have some
long-term
goals, but we
also have needs
today."
[LOGO-OPPENHEIMERFUNDS(R)]
<PAGE>
News
Outperformed Average
Cumulative Total Return for the
10-Year Period Ended 6/30/96:
Oppenheimer Total Return Fund
Class A(at net asset value)
257.59%
Lipper Growth & Income
Funds Average(3)
205.51%
The Fund's Class A shares are
ranked **** among 1,583 equity
funds as of 6/30/96 by Morningstar
Mutual Funds.(4)
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.
How Your Fund Is Managed
Oppenheimer Total Return Fund, Inc. offers long-term investors the opportunity
for high total return. This strategy offers potential long-term growth plus the
added advantage of income by investing in growth stocks as well as
income-producing stocks and bonds.
This approach helps to reduce risk and enables the Fund to take advantage
of a wide variety of market conditions.
Performance
Total return at net asset value for the six months ended 6/30/96 was 10.08% for
Class A shares, 9.50% for Class B shares and 9.44% for Class C shares.(1)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1-, 5-, and 10-year periods ended 6/30/96 were 17.61%,
15.35% and 12.91%, respectively. For Class B shares, average annual total
returns for the 1-year period ended 6/30/96 and since inception of the Class on
5/1/93 were 18.75% and 12.47%, respectively. For Class C shares, cumulative
total return since inception on 8/29/95 was 18.10%.(2)
Outlook
"We are optimistic looking forward. We continue to find numerous investment
alternatives that are attractive based upon both their growth prospects and
reasonable valuations. While market volatility has recently increased, we
believe we are well-positioned to capitalize on the opportunities this often
creates."
Bruce Bartlett and Diane Sobin
Portfolio Managers
June 30, 1996
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 6/30/95, 6/30/91
and 6/30/86, after deducting the current maximum initial sales charge of 5.75%.
Prior to 4/1/94, the Fund's maximum sales charge for Class A shares was higher,
so that actual account performance would have been less. Class B returns show
results of hypothetical investments on 6/30/95 and 5/1/93 (inception of class),
after the deduction of the applicable contingent deferred sales charge of 5%
(1-year) and 3% (since inception). Class C shares show results of a hypothetical
investment on 8/29/95 after the 1% contingent deferred sales charge. For Class Y
shares, the average annual total returns for the 1-year period ended 6/30/95 and
since inception of the Class on 6/1/94 were 24.77% and 17.06%, respectively. An
explanation of the different performance calculations is in the Fund's
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, 6/30/96. 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 fund's category. Five stars is the "highest"
ranking (top 10%), 4 stars is "above average" and 1 star is the "lowest" (bottom
10%). The 4-star current ranking is a weighted average of the 3-, 5-, and
10-year rankings for the class, which were 3, 3, and 4 stars, respectively,
weighted 20%/30%/50%. There were 1,583,997 and 539 funds ranked in those
respective periods. Rankings are subject to change. The Fund's Class A, B , C
and Y shares have the same portfolio.
2 Oppenheimer Total Return Fund, Inc.
<PAGE>
[PHOTO-JAMES C. SWAIN] [PHOTO-BRIDGET A. MACASKILL]
James C. Swain Bridget A. Macaskill
Chairman President
Oppenheimer Oppenheimer
Total Return Fund, Inc. Total Return Fund, Inc.
Dear Shareholder,
Against all odds, the stock market showed remarkable strength during the first
five months of 1996. However, in the few months that followed, the market
experienced significant volatility that resulted in a decline in the Dow of
about 7 percent.
Many experts said the stock market, having advanced to record heights in
1995 and void of any real market correction since 1990, was due for a downturn.
This was, after all, the longest bull market of the post-World War II era.
Thanks to the 10% rise in blue chip stocks during the first half of 1996 and the
early success of small stocks, the decline that occurred recently was somewhat
cushioned. While it's impossible to tell what will happen next, we are
optimistic that this turn was a correction within a bull market rather than the
onset of a bear market.
What made the market perform so well during the first part of the year? It
was another surprise: corporate profits. Between 1992 and 1995, corporate
profits of U.S. companies advanced at a double-digit rate. Investors widely
expected this year's profit tallies to be flat compared to 1995. After all, the
economy had been sluggish--growing at an annual rate of just 2.3% in the first
quarter of 1996. But corporate America continued to perform.
The reason corporate profits were so strong is that many U.S. companies
continued to successfully reduce costs. Often when a company achieves a small
increase in sales, the benefit goes straight to the bottom line. Indeed, the
U.S. Commerce Department reports indicated that corporate profits rose 15% for
the four quarters ended March 1996, while the economy grew only marginally.
Still, profits are not what they were in the early 1990s. That's why
investors are seeking out companies that can grow earnings regardless of the
fortunes of the economy. Which is just what many small companies in such fields
as technology, healthcare and specialty retailing have been doing, growing
earnings at double-digit--and even triple-digit rates. So it's not surprising
that the stocks of many of these small fast-growing companies have been such
strong performers.
The early strength of the stock market is all the more remarkable when you
consider that during the same period, interest rates moved up sharply. The yield
on the benchmark 30-year U.S. Treasury bond rose from about 6% in January to
over 7% today. Interest rates have been rising partly because investors are
concerned that the economy is growing fast enough to generate higher inflation.
However, we are watching this very closely, and would become very cautious
regarding the stock market's performance if inflation were to flare up.
As always, remember stock investments are generally meant for long-term
growth objectives, and often involve short-term volatility. So, it's critical
for investors to keep their focus on long-term goals and to put near-term
setbacks in proper prospective.
Your portfolio managers discuss the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. 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
July 22, 1996
3 Oppenheimer Total Return Fund, Inc.
<PAGE>
Q + A
[PHOTO: DIANNE SOBIN and BRUCE BARTLETT, PORTFOLIO MANAGERS]
[PHOTO: MICHAEL LEVINE, MEMBER OF EQUITY INVESTMENT TEAM]
An interview with your Fund's managers.
Q How
did the Fund
perform?
How has the Fund performed over the past six months?
Overall the Fund did exceptionally well in comparison with other growth and
income funds. Both our total return and yield ranked us in the top third of
funds with our investment objective, an achievement we've been able to
accomplish while maintaining a relatively low risk profile.
[PHOTO: JANE PUTNAM, MEMBER OF EQUITY INVESTMENTS]
What investments have contributed to the Fund's performance?
We believe the primary reason for our strong performance over the short and long
term is the successful integration of both a growth- and value-oriented
investment strategy. Because different approaches work better under different
market conditions, combining them helps to capture the benefits of each
strategy. At the same time, it helps to reduce risk when one or the other is out
of favor.
Though many of our value-oriented investments performed well over the
period, it was our growth-oriented investments that contributed most to our
returns. As investors increasingly sought companies that could grow faster than
the economy, growth stocks led the market upward.
Our best-performing investments came from holdings in healthcare,
technology and retailing stocks. In healthcare, we found opportunities in
companies offering new technologies or products. In technology, we emphasized
software and networking companies. And in retailing, we focused on companies
that benefited from strong retail sales growth in the U.S. Fortunately, all
three of these areas have appreciated, and benefited the Fund.(1)
An increased emphasis on small and medium-sized companies also helped
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
A Our total
return and
yield ranked
us in the top
third of funds
with similar
objectives.
performance. We found many of these companies to be attractive based upon their
ability to grow earnings at a faster rate than the broader market. Plus, stock
prices of larger companies appeared somewhat expensive in the beginning of 1996,
since they were market leaders in last year's rally.
To provide income, we've focused on a combination of convertible securities
and dividend income from common stocks. In common stocks, we found attractive
yields from selected utilities and oil-related companies. Taken together, our
income strategy has served us very well, especially at a time when interest rate
increases weakened the domestic bond market.
Did any investments negatively impact the Fund?
Not really. Fortunately, we moved out of the U.S. bond market at an opportune
time, and have been quite fortunate in our stock selection. We also managed to
avoid areas of the market that haven't done well and companies with earnings
disappointments.
What areas are you currently targeting?
Growth and value are investment strategies designed to reach the same goal over
time--long-term growth in capital. Whether we're looking at a company's earnings
growth or a stock's valuation, we try to find companies that have exceptional
prospects for growth that are sustainable. In the current market, that means
hand-picking companies that meet our criteria for long-term growth.
[PHOTO: ROBERT DOLL, EXECUTIVE VP, DIRECTOR OF EQUITY INVESTMENTS]
What is your outlook for the Fund?
We are very optimistic looking forward. We continue to find numerous investment
alternatives that are attractive based upon both their growth prospects and
reasonable valuations. While market volatility has recently increased, we
believe we are well-positioned to capitalize on the opportunities this often
creates. [SOLID BOX]
[PHOTO: BRUCE BARTLETT]
5 Oppenheimer Total Return Fund, Inc.
<PAGE>
Financials
Contents
Statement of Investments 7
Statement of Assets and Liabilities 17
Statement of Operations 18
Statements of Changes in Net Assets 19
Financial Highlights 20
Notes to Financial Statements 22
6 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
===================================================================================================================================
U.S. Government Obligations--1.1%
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5%, 1/31/98 $ 4,000,000 $ 3,937,500
7.50%, 12/31/96(10) 6,670,000 6,738,780
7.75%, 11/30/99(10) 10,000,000 10,415,619
7.75%, 12/31/99 5,000,000 5,212,500
------------
Total U.S. Government Obligations (Cost $25,660,460) 26,304,399
------------
===================================================================================================================================
Foreign Government Obligations--3.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, 11.25%, 4/10/06 DEM 2,950,000 1,955,505
---------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Unsub. Unsec. Bonds, 10.25%, 2/6/03 DEM 1,600,000 1,061,664
---------------------------------------------------------------------------------------------------------------
Australia (Commonwealth of) Bonds, 12%, 7/15/99 AUD 5,000,000 4,314,311
---------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon, 37.79%, 3/6/97(2) MXP 12,800,000 1,371,741
---------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, 10%, 3/5/01 DEM 480,000 321,653
---------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds,
Tranche A, 2%, 7/28/12(3) 6,070,000 2,023,966
---------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 6.25%, 7/28/11(3) 5,930,000 2,816,750
---------------------------------------------------------------------------------------------------------------
Canada (Government of) Bonds, 7.75%, 9/1/99 CAD 6,570,000 4,980,348
---------------------------------------------------------------------------------------------------------------
Central Bank of Costa Rica Interest Claim Bonds, Series B,
6.328%, 5/21/05(3) 943,643 872,870
---------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%, 5/15/03 DKK 13,600,000 2,454,368
---------------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Disc. Bonds, 6.063%, 2/28/25(3) 3,000,000 1,702,500
---------------------------------------------------------------------------------------------------------------
Finland (Republic of) Bonds, 9.50%, 3/15/04 FIM 14,000,000 3,440,274
---------------------------------------------------------------------------------------------------------------
Hashemite Kingdom of Jordan Interest Arrears Bonds, 6.625%, 12/23/05(3) 375,000 302,813
---------------------------------------------------------------------------------------------------------------
Italy (Republic of) Certificati di Credito del Tesoro Nts.,
11.20%, 8/1/00(3) ITL 6,280,000,000 4,194,994
---------------------------------------------------------------------------------------------------------------
National Treasury Management Agency (Irish Government) Bonds,
8%, 10/18/00 IEP 2,490,000 4,152,990
---------------------------------------------------------------------------------------------------------------
New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/01/01 AUD 2,250,000 2,011,797
---------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 8%, 2/15/01 NZD 2,440,000 1,606,994
---------------------------------------------------------------------------------------------------------------
Panama (Republic of) Debs., 6.629%, 5/10/02(3) 3,775,397 3,548,873
---------------------------------------------------------------------------------------------------------------
Panama (Republic of) Interest Reduction Bonds, 3.50%, 7/17/14(4)(5) 1,000,000 554,063
---------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon, 21.42%, 11/6/96(2) PLZ 4,500,000 1,541,302
---------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon, 22.40%, 7/24/96(2) PLZ 9,000,000 3,266,449
---------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,
12.25%, 3/25/00 ESP 273,000,000 2,413,566
---------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Debs., Series 1030, 13%, 6/15/01 SEK 23,800,000 4,385,738
---------------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, 13% Bonds, 2/5/99 ITL 540,000,000 362,830
---------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 13%, 7/14/00 GBP 4,380,000 8,171,032
---------------------------------------------------------------------------------------------------------------
United Mexican States Bonds, 10.375%, 1/29/03 DEM 5,450,000 3,657,468
---------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 6 625%, 12/18/07(3) 9,500,000 6,721,250
---------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.375%, 3/31/07(3) 4,200,000 3,039,750
------------
Total Foreign Government Obligations (Cost $75,976,313) 77,247,859
</TABLE>
7 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
===================================================================================================================================
Loan Participations--0.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement, Tranche A,
6.437%, 1/1/09(3) $ 5,800,000 $ 4,177,813
---------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement, Tranche B,
1.772%, 9/30/00(3)(6) JPY 107,061,343 834,575
------------
Total Loan Participations (Cost $5,069,102) 5,012,388
===================================================================================================================================
Non-Convertible Corporate Bonds and Notes--0.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Banco Bamerindus do Brasil SA, 9.258% Unsub. Nts., 12/22/97(3) 1,300,000 1,179,750
---------------------------------------------------------------------------------------------------------------
Banco Itamarati SA, 11.625% Sr. Unsec. Debs., 11/23/97 2,015,000 2,025,075
---------------------------------------------------------------------------------------------------------------
Indah Kiat International Finance Co. BV, 11.875% Sr. Sec. Gtd. Nts., 6/15/02 1,500,000 1,593,750
---------------------------------------------------------------------------------------------------------------
PT Hutama Karya, Zero Coupon Medium-Term Nts., 17.51%, 3/19/97(2) IDR 5,200,000,000 1,983,519
---------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01 1,500,000 1,646,250
---------------------------------------------------------------------------------------------------------------
Tjiwi Kimia International Finance Co. BV, 13.25% Sr. Gtd. Nts., 8/1/01 1,500,000 1,680,000
------------
Total Non-Convertible Corporate Bonds and Notes (Cost $10,010,378) 10,108,344
------------
===================================================================================================================================
Convertible Corporate Bonds and Notes--4.6%
- -----------------------------------------------------------------------------------------------------------------------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts., 6.50%, 7/6/10(2) 10,000,000 5,487,500
---------------------------------------------------------------------------------------------------------------
American Medical Response, Inc., 5.25% Cv. Sub. Nts., 2/1/01(7) 3,000,000 3,285,000
---------------------------------------------------------------------------------------------------------------
Continental Airlines, Inc., 6.75% Cv. Sub. Nts., 4/15/06(7) 4,000,000 4,800,000
---------------------------------------------------------------------------------------------------------------
Corporate Express, Inc., 4.50% Cv. Nts., 7/1/00(7) 12,700,000 12,636,500
---------------------------------------------------------------------------------------------------------------
Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 4,500,000 5,343,750
---------------------------------------------------------------------------------------------------------------
Dovatron International, Inc., 6% Cv. Sub. Nts., 10/15/02 3,000,000 3,003,750
---------------------------------------------------------------------------------------------------------------
First Financial Management Corp., 5% Cv. Debs., 12/15/99 5,000,000 9,451,600
---------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 5% Cv. Sub. Debs., 4/1/01 4,000,000 7,650,000
---------------------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 5% Cv. Sub. Nts., 5/15/06 6,000,000 6,315,000
---------------------------------------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The), 5.25% Cv. Sub. Nts., 3/1/03 1,500,000 1,650,000
---------------------------------------------------------------------------------------------------------------
Nabors Industries, Inc., 5% Cv. Sub. Nts., 5/15/06 4,800,000 5,376,000
---------------------------------------------------------------------------------------------------------------
North American Vaccine, Inc., 6.50% Cv. Sub. Nts., 5/1/03(7) 3,000,000 2,928,750
---------------------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(6)(8) 3,000,000 300,000
---------------------------------------------------------------------------------------------------------------
Pioneer Financial Services, Inc., 6.50% Cv. Sub. Nts., 04/01/03 2,500,000 2,550,000
---------------------------------------------------------------------------------------------------------------
Richey Electronics, Inc., 7% Cv. Sub. Nts., 3/1/06(7) 5,000,000 5,268,750
---------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(7) 4,000,000 4,965,000
---------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 5% Cv. Debs., 4/15/01 5,000,000 9,562,500
---------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01(7) 4,000,000 4,375,000
---------------------------------------------------------------------------------------------------------------
U.S. Cellular Corp., Zero Coupon Cv. Liquid Yield Option Nts., 5.92%, 6/15/15(2) 17,644,000 5,910,740
---------------------------------------------------------------------------------------------------------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05(7) 2,500,000 3,412,500
---------------------------------------------------------------------------------------------------------------
U.S. Office Products Co., 5.50% Cv. Sub. Nts., 2/1/01 2,500,000 3,700,000
---------------------------------------------------------------------------------------------------------------
U.S. Office Products Co., 5.50% Cv. Sub. Nts., 5/15/03(7) 2,400,000 2,430,000
------------
Total Convertible Corporate Bonds and Notes (Cost $93,330,926) 110,402,340
</TABLE>
8 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
===================================================================================================================================
Common Stocks--75.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--3.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.2%
Cabot Corp. 195,000 $ 4,777,500
---------------------------------------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 150,000 11,868,750
---------------------------------------------------------------------------------------------------------------
Morton International, Inc. 330,000 12,292,500
------------
28,938,750
- -----------------------------------------------------------------------------------------------------------------------------------
Gold--0.7% Newmont Mining Corp. 340,000 16,787,500
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--1.1%
Allegheny Ludlum Corp. 225,000 4,246,875
---------------------------------------------------------------------------------------------------------------
Aluminum Co. of America 250,500 14,372,437
---------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 250,000 7,968,750
------------
26,588,062
- -----------------------------------------------------------------------------------------------------------------------------------
Paper--0.8%
Bowater, Inc. 160,000 6,020,000
---------------------------------------------------------------------------------------------------------------
Champion International Corp. 200,000 8,350,000
---------------------------------------------------------------------------------------------------------------
Willamette Industries, Inc. 60,000 3,570,000
------------
17,940,000
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--12.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--1.6%
AutoZone, Inc.(9) 380,000 13,205,000
---------------------------------------------------------------------------------------------------------------
Ford Motor Co. 100,000 3,237,500
---------------------------------------------------------------------------------------------------------------
General Motors Corp. 145,000 7,594,375
---------------------------------------------------------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 410,000 13,940,000
------------
37,976,875
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--3.1%
AMR Corp. 95,900 8,726,900
---------------------------------------------------------------------------------------------------------------
Applebee's International, Inc. 100,000 3,212,500
---------------------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 175,000 5,053,125
---------------------------------------------------------------------------------------------------------------
Disney (Walt) Co. 190,000 11,946,250
---------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 110,000 8,552,500
---------------------------------------------------------------------------------------------------------------
Landry's Seafood Restaurants, Inc.(9) 480,000 11,880,000
---------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.(9) 278,400 12,736,800
---------------------------------------------------------------------------------------------------------------
Starbucks Corp.(9) 250,000 7,062,500
---------------------------------------------------------------------------------------------------------------
U S West Media Group(9) 285,000 5,201,250
------------
74,371,825
- -----------------------------------------------------------------------------------------------------------------------------------
Media--1.5%
Dun & Bradstreet Corp. 170,000 10,625,000
---------------------------------------------------------------------------------------------------------------
Infinity Broadcasting Corp., Cl. A(9) 96,750 2,902,500
---------------------------------------------------------------------------------------------------------------
Tribune Co. 132,900 9,651,862
---------------------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B(9) 325,000 12,634,375
------------
35,813,737
</TABLE>
9 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: General--2.3%
Gucci Group NV(9) 50,000 $ 3,225,000
---------------------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(9) 75,000 3,684,375
---------------------------------------------------------------------------------------------------------------
Kohl's Corp.(9) 370,000 13,551,250
---------------------------------------------------------------------------------------------------------------
May Department Stores Co. 150,000 6,562,500
---------------------------------------------------------------------------------------------------------------
Price/Costco, Inc.(9) 260,000 5,622,500
---------------------------------------------------------------------------------------------------------------
Revco D.S., Inc.(9) 200,000 4,775,000
---------------------------------------------------------------------------------------------------------------
Sears Roebuck & Co. 90,000 4,376,250
---------------------------------------------------------------------------------------------------------------
Shaw Industries, Inc. 240,000 3,150,000
---------------------------------------------------------------------------------------------------------------
Unifi, Inc. 165,000 4,640,625
---------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 175,000 4,440,625
------------
54,028,125
- -----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--3.8%
adidas AG, ADS(7)(9) 76,000 3,193,003
---------------------------------------------------------------------------------------------------------------
Alco Standard Corp. 6,000 271,500
---------------------------------------------------------------------------------------------------------------
CompUSA, Inc.(9) 250,000 8,531,250
---------------------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc.(9) 350,000 6,125,000
---------------------------------------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The)(9) 237,400 7,656,150
---------------------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B 131,000 13,460,250
---------------------------------------------------------------------------------------------------------------
Nine West Group, Inc.(9) 250,000 12,781,250
---------------------------------------------------------------------------------------------------------------
OfficeMax, Inc.(9) 484,000 11,555,500
---------------------------------------------------------------------------------------------------------------
Reebok International Ltd. 50,000 1,681,250
---------------------------------------------------------------------------------------------------------------
Staples, Inc.(9) 237,500 4,631,250
---------------------------------------------------------------------------------------------------------------
TJX Cos., Inc. 295,000 9,956,250
---------------------------------------------------------------------------------------------------------------
U.S. Office Products Co.(9) 40,700 1,709,400
---------------------------------------------------------------------------------------------------------------
Walgreen Co. 285,000 9,547,500
------------
91,099,553
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--15.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages--0.5%
Anheuser-Busch Cos., Inc. 170,000 12,750,000
- -----------------------------------------------------------------------------------------------------------------------------------
Food--1.8%
CPC International, Inc. 175,000 12,600,000
---------------------------------------------------------------------------------------------------------------
General Mills, Inc. 40,000 2,180,000
---------------------------------------------------------------------------------------------------------------
Hormel Foods Corp. 150,000 4,012,500
---------------------------------------------------------------------------------------------------------------
JP Foodservice, Inc.(9) 95,500 2,387,500
---------------------------------------------------------------------------------------------------------------
Kroger Co.(9) 140,000 5,530,000
---------------------------------------------------------------------------------------------------------------
Safeway, Inc.(9) 325,000 10,725,000
---------------------------------------------------------------------------------------------------------------
Vons Cos., Inc. (The)(9) 165,000 6,166,875
------------
43,601,875
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--5.8%
Abbott Laboratories 575,000 25,012,500
---------------------------------------------------------------------------------------------------------------
American Home Products Corp. 100,000 6,012,500
---------------------------------------------------------------------------------------------------------------
Astra AB Free, Series A 725,000 32,013,538
---------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 215,000 19,350,000
</TABLE>
10 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs
(continued)
Corvas International, Inc.(9) 8,346 $ 40,687
---------------------------------------------------------------------------------------------------------------
Genzyme Corp.(9) 205,000 10,301,250
---------------------------------------------------------------------------------------------------------------
Johnson & Johnson 200,000 9,900,000
---------------------------------------------------------------------------------------------------------------
Lilly (Eli) & Co. 180,000 11,700,000
---------------------------------------------------------------------------------------------------------------
Neurex Corp.(9) 125,000 2,734,375
---------------------------------------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. 190,000 8,431,250
---------------------------------------------------------------------------------------------------------------
SmithKline Beecham PLC, ADR 245,000 13,321,875
------------
138,817,975
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies &
Services--4.0%
Baxter International, Inc. 245,000 11,576,250
---------------------------------------------------------------------------------------------------------------
Boston Scientific Corp.(9) 175,000 7,875,000
---------------------------------------------------------------------------------------------------------------
Cardinal Health, Inc. 195,000 14,064,375
---------------------------------------------------------------------------------------------------------------
Compdent Corp.(9) 81,600 3,794,400
---------------------------------------------------------------------------------------------------------------
Guidant Corp. 215,000 10,588,750
---------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp.(9) 865,000 31,140,000
---------------------------------------------------------------------------------------------------------------
Lynx Therapeutics, Inc. (New)(9) 15,390 130,815
---------------------------------------------------------------------------------------------------------------
Medaphis Corp.(9) 64,100 2,547,975
---------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 115,000 6,440,000
---------------------------------------------------------------------------------------------------------------
Molecular Devices Corp.(9) 265,000 2,351,875
---------------------------------------------------------------------------------------------------------------
Orthodontic Centers of America, Inc.(9) 165,000 4,372,500
---------------------------------------------------------------------------------------------------------------
St. Jude Medical, Inc.(9) 46,300 1,551,050
------------
96,432,990
- -----------------------------------------------------------------------------------------------------------------------------------
Household Goods--1.3%
Avon Products, Inc. 270,000 12,183,750
---------------------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 255,000 19,698,750
------------
31,882,500
- -----------------------------------------------------------------------------------------------------------------------------------
Tobacco--2.1%
Philip Morris Cos., Inc. 470,000 48,880,000
- -----------------------------------------------------------------------------------------------------------------------------------
Energy--6.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Energy Services &
Producers--3.0%
Coastal Corp. 160,000 6,680,000
---------------------------------------------------------------------------------------------------------------
Dresser Industries, Inc. 85,000 2,507,500
---------------------------------------------------------------------------------------------------------------
Halliburton Co. 217,500 12,071,250
---------------------------------------------------------------------------------------------------------------
J. Ray McDermott, SA(9) 135,000 3,375,000
---------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 245,700 14,956,987
---------------------------------------------------------------------------------------------------------------
Schlumberger Ltd. 220,000 18,535,000
---------------------------------------------------------------------------------------------------------------
Seacor Holdings, Inc.(9) 150,000 6,712,500
---------------------------------------------------------------------------------------------------------------
Western Atlas, Inc.(9) 100,000 5,825,000
------------
70,663,237
- -----------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--3.1%
Chevron Corp. 310,000 18,290,000
---------------------------------------------------------------------------------------------------------------
Louisiana Land & Exploration Co. 100,000 5,762,500
---------------------------------------------------------------------------------------------------------------
MAPCO, Inc. 150,000 8,456,250
---------------------------------------------------------------------------------------------------------------
Mobil Corp. 228,000 25,564,500
---------------------------------------------------------------------------------------------------------------
Unocal Corp. 330,000 11,137,500
---------------------------------------------------------------------------------------------------------------
USX-Marathon Group 200,000 4,025,000
------------
73,235,750
</TABLE>
11 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Financial--9.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Banks--5.2%
BankAmerica Corp. 50,000 $ 3,787,500
---------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 212,400 15,000,750
---------------------------------------------------------------------------------------------------------------
CoreStates Financial Corp. 390,000 15,015,000
---------------------------------------------------------------------------------------------------------------
Deutsche Bank AG 70,000 3,315,729
---------------------------------------------------------------------------------------------------------------
Dresdner Bank AG 131,500 3,300,159
---------------------------------------------------------------------------------------------------------------
First Bank System, Inc. 100,000 5,800,000
---------------------------------------------------------------------------------------------------------------
Firstar Corp. 384,000 17,712,000
---------------------------------------------------------------------------------------------------------------
Great Western Financial Corp. 210,000 5,013,750
---------------------------------------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. 75,000 6,346,875
---------------------------------------------------------------------------------------------------------------
National City Corp. 180,000 6,322,500
---------------------------------------------------------------------------------------------------------------
NationsBank Corp. 50,000 4,131,250
---------------------------------------------------------------------------------------------------------------
Summit Bancorp 250,000 8,781,250
---------------------------------------------------------------------------------------------------------------
TCF Financial Corp. 370,000 12,302,500
---------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc. 320,000 9,560,000
---------------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 30,000 7,166,250
------------
123,555,513
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--2.9%
Associates First Capital Corp., Cl. A(9) 128,000 4,816,000
---------------------------------------------------------------------------------------------------------------
Household International, Inc. 356,000 27,056,000
---------------------------------------------------------------------------------------------------------------
MBNA Corp. 472,500 13,466,250
---------------------------------------------------------------------------------------------------------------
Societe Generale de Paris 22,000 2,418,762
---------------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 467,500 21,329,687
------------
69,086,699
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance--1.2%
Chubb Corp. 320,000 15,960,000
---------------------------------------------------------------------------------------------------------------
MGIC Investment Corp. 140,500 7,885,562
---------------------------------------------------------------------------------------------------------------
Travelers/Aetna Property Casualty Corp., Cl. A(9) 137,400 3,898,725
------------
27,744,287
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial--9.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.6%
Emerson Electric Co. 330,000 29,823,750
---------------------------------------------------------------------------------------------------------------
General Electric Co. 310,000 26,815,000
---------------------------------------------------------------------------------------------------------------
Honeywell, Inc. 555,500 30,274,750
------------
86,913,500
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Services--2.6%
AccuStaff, Inc.(9) 200,000 5,450,000
---------------------------------------------------------------------------------------------------------------
Corrections Corp. of America(9) 80,000 5,600,000
---------------------------------------------------------------------------------------------------------------
Danka Business Systems PLC, Sponsored ADR 200,000 5,850,000
---------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 182,400 9,712,800
---------------------------------------------------------------------------------------------------------------
Service Corp. International 545,000 31,337,500
---------------------------------------------------------------------------------------------------------------
USA Waste Services, Inc.(9) 175,000 5,184,375
------------
63,134,675
</TABLE>
12 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--2.4%
American Standard Cos., Inc.(9) 266,500 $ 8,794,500
---------------------------------------------------------------------------------------------------------------
Greenfield Industries, Inc. 30,000 990,000
---------------------------------------------------------------------------------------------------------------
Hanson PLC, ADR 300,000 4,275,000
---------------------------------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 110,000 7,590,000
---------------------------------------------------------------------------------------------------------------
Tenneco, Inc. 320,000 16,360,000
---------------------------------------------------------------------------------------------------------------
Tyco International Ltd. 490,000 19,967,500
---------------------------------------------------------------------------------------------------------------
Wyman-Gordon Co. 10,000 177,500
------------
58,154,500
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation--1.1%
Alexander & Baldwin, Inc. 50,000 1,206,250
---------------------------------------------------------------------------------------------------------------
Canadian Pacific Ltd. 220,000 4,840,000
---------------------------------------------------------------------------------------------------------------
Union Pacific Corp. 290,000 20,263,750
------------
26,310,000
- -----------------------------------------------------------------------------------------------------------------------------------
Technology--12.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--1.2%
Boeing Co. 165,000 14,375,625
---------------------------------------------------------------------------------------------------------------
Northrop Grumman Corp. 66,600 4,537,125
---------------------------------------------------------------------------------------------------------------
Rockwell International Corp. 150,000 8,587,500
------------
27,500,250
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--1.6%
Compaq Computer Corp.(9) 185,000 9,111,250
---------------------------------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(9) 433,400 8,722,175
---------------------------------------------------------------------------------------------------------------
Sun Microsystems, Inc.(9) 200,000 11,775,000
---------------------------------------------------------------------------------------------------------------
Xerox Corp. 170,000 9,095,000
------------
38,703,425
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software--2.1%
Computer Associates International, Inc. 95,000 6,768,750
---------------------------------------------------------------------------------------------------------------
Electronic Data Systems Corp. 311,170 16,725,387
---------------------------------------------------------------------------------------------------------------
First Data Corp. 40,000 3,185,000
---------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 197,300 14,678,575
---------------------------------------------------------------------------------------------------------------
Oracle Corp.(9) 212,500 8,380,469
------------
49,738,181
- -----------------------------------------------------------------------------------------------------------------------------------
Electronics--2.2%
ADT Ltd. 500,000 9,437,500
---------------------------------------------------------------------------------------------------------------
Flextronics International, Ltd.(9) 59,200 1,554,000
---------------------------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 135,000 8,116,875
---------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 280,000 27,895,000
---------------------------------------------------------------------------------------------------------------
SCI Systems, Inc.(9) 159,100 6,463,438
------------
53,466,813
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--5.2%
AT&T Corp. 440,000 27,280,000
---------------------------------------------------------------------------------------------------------------
Cisco Systems, Inc.(9) 510,000 28,878,750
---------------------------------------------------------------------------------------------------------------
LCI International, Inc.(9) 735,000 23,060,625
---------------------------------------------------------------------------------------------------------------
Millicom, Inc. (In Escrow)(9) 400,000 --
---------------------------------------------------------------------------------------------------------------
Newbridge Networks Corp.(9) 75,000 4,912,500
---------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(9) 718,300 39,775,863
------------
123,907,738
</TABLE>
13 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Utilities--6.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--3.3%
Allegheny Power System, Inc. 450,000 $ 13,893,750
---------------------------------------------------------------------------------------------------------------
Baltimore Gas & Electric Co. 250,000 7,093,750
---------------------------------------------------------------------------------------------------------------
Carolina Power & Light Co. 250,000 9,500,000
---------------------------------------------------------------------------------------------------------------
Dominion Resources, Inc. 275,000 11,000,000
---------------------------------------------------------------------------------------------------------------
DTE Energy Co. 165,000 5,094,375
---------------------------------------------------------------------------------------------------------------
FPL Group, Inc. 200,000 9,200,000
---------------------------------------------------------------------------------------------------------------
Portland General Corp. 150,000 4,631,250
---------------------------------------------------------------------------------------------------------------
SCANA Corp. 135,000 3,796,875
---------------------------------------------------------------------------------------------------------------
The Southern Company 446,000 10,982,750
---------------------------------------------------------------------------------------------------------------
Unicom Corp. 170,000 4,738,750
------------
79,931,500
- -----------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--1.2%
Columbia Gas System, Inc. (The) 130,000 6,776,250
---------------------------------------------------------------------------------------------------------------
PanEnergy Corp. 202,500 6,657,188
---------------------------------------------------------------------------------------------------------------
Sonat, Inc. 325,000 14,625,000
------------
28,058,438
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--2.2%
BCE, Inc. 220,000 8,690,000
---------------------------------------------------------------------------------------------------------------
GTE Corp. 675,000 30,206,250
---------------------------------------------------------------------------------------------------------------
U S West Communications Group 460,000 14,662,500
------------
53,558,750
------------
Total Common Stocks (Cost $1,416,752,635) 1,809,573,023
===================================================================================================================================
Preferred Stocks--0.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary Shares each
representing 0.05 Shares of Step-Up Cv. Preferred Stock 290,000 7,902,500
---------------------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., 4.25% Cv. Preferred(9) 360,500 1,047,703
---------------------------------------------------------------------------------------------------------------
Greenfield Capital Trust, 6% Cum. Cv., Non-Vtg.(7) 105,000 5,381,250
------------
Total Preferred Stocks (Cost $13,429,080) 14,331,453
------------
===================================================================================================================================
Other Securities--1.9%
- -----------------------------------------------------------------------------------------------------------------------------------
American Express Co., Debt Exchangeable for Common Stock of
First Data Corp., 6.25%, 10/15/96 140,000 9,187,500
---------------------------------------------------------------------------------------------------------------
Coeur d'Alene Mines Corp., $1.488 Cum. Mandatory Adjustable
Redeemable Cv. Securities, 3/15/00 280,000 5,530,000
---------------------------------------------------------------------------------------------------------------
Cooper Industries, Inc., Debt Exchangeable for Common Stock,
6% Exchangeable Nts., 1/1/99 405,000 6,783,750
---------------------------------------------------------------------------------------------------------------
Enron Corp., 6.25% Cv. Automatic Common Exchangeable Securities,
redeemable into Enron Oil & Gas Co. Common Stock, 12/31/98 145,000 3,751,875
---------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50% Cv. Structured Yield Enhanced
Product Exchangeable for Stock due 8/15/98 110,000 5,940,000
---------------------------------------------------------------------------------------------------------------
Occidental Petroleum Corp., $3.00 Cum. Cv. Canadian
Occidental Petroleum Ltd.-Indexed 210,000 13,046,250
------------
Total Other Securities (Cost $37,509,171) 44,239,375
</TABLE>
14 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Market Value
Units See Note 1
<S> <C> <C>
===================================================================================================================================
Rights, Warrants and Certificates--0.0%
- -----------------------------------------------------------------------------------------------------------------------------------
American Satellite Network, Inc. Wts., Exp. 6/99 100,000 $ --
Windmere Corp. Wts., Exp. 1/98 5,815 --
------------
Total Rights, Warrants and Certificates (Cost $0) --
Face
Amount(1)
===================================================================================================================================
Structured Instruments--0.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch,
14% CD Linked Nts., 12/17/96 (indexed to the cross
currency rates of Greek Drachma and European Currency Unit) $ 2,000,000 2,003,200
---------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch,
5.60% CD Linked Nts., 1/30/97 (indexed to the closing
Nikkei 225 Index on 1/23/97, 10 yr. Japanese Yen swap
rate & New Zealand Dollar on 1/28/97) NZD 3,017,046 2,239,381
---------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch, 14%
CD Linked Nts., 11/25/96 (indexed to the cross currency
rates of Greek Drachma and European Currency Unit) 2,000,000 1,962,600
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit
Linked Nts., 12.38%, 1/3/97 (indexed to the Brazilian
National Treasury Nts., Zero Coupon, 1/2/97)(2) 4,000,000 3,770,800
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit
Linked Nts., 12.38%, 1/3/97 (indexed to the Brazilian
National Treasury Nts., Zero Coupon, 1/2/97)(2) 4,200,000 3,959,340
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit
Linked Nts., 12.64%, 1/3/97 (indexed to the Brazilian
National Treasury Nts., Zero Coupon, 1/2/97)(2) 2,000,000 1,885,400
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit
Linked Nts., 12.89%, 1/3/97 (indexed to the Brazilian
National Treasury Nts., Zero Coupon, 1/2/97)(2) 2,000,000 1,885,400
---------------------------------------------------------------------------------------------------------------
Swiss Bank Corp., New York Branch, 6.05% CD Linked Nts., 6/20/97
(indexed to the closing Nikkei 225 Index on 1/23/97 5 yr
& 3 mos. Japanese Yen Swap rate & New Zealand Dollar) 1,700,000 1,717,255
------------
Total Structured Instruments (Cost $19,189,839) 19,423,376
</TABLE>
15 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
===================================================================================================================================
Repurchase Agreement--10.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.45%, dated 6/28/96, to be repurchased at $259,317,720 on
7/1/96, collateralized by U.S. Treasury Bonds,
6.25%--11.25%, 2/15/07--8/15/23, with a value of
$173,766,132, and U.S. Treasury Nts., 4.75%--7.875%,
9/30/97--2/15/05 with a value of $90,681,089 (Cost
$259,200,000) $259,200,000 $ 259,200,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,956,127,904) 99.4% 2,375,842,557
- -----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.6 13,350,469
------------ --------------
Net Assets 100.0% $2,389,193,026
============ ==============
</TABLE>
<TABLE>
<CAPTION>
1. Face amount is reported in U.S. Dollars, except for those
denoted in the following currencies:
<S> <C> <C>
AUD--Australian Dollar FIM--Finnish Markka JPY--Japanese Yen
CAD--Canadian Dollar GBP--British Pound Sterling MXP--Mexican Peso
DEM--German Deutsche Mark IDR--Indonesian Rupiah NZD--New Zealand Dollar
DKK--Danish Krone IEP--Irish Punt PLZ--Polish Zloty
ESP--Spanish Peseta ITL--Italian Lira SEK--Swedish Krona
</TABLE>
2. For zero coupon bonds, the interest rate shown is the
effective yield on the date of purchase.
3. Represents the current interest rate for a variable rate
security.
4. When-issued security to be delivered and settled after
June 30, 1996.
5. Represents the current interest rate for an increasing
rate security.
6. Identifies issues considered to be illiquid--See Note 7
of Notes to Financial Statements.
7. 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 $52,675,753 or 2.20% of the
Fund's net assets, at June 30, 1996.
8. Non-income producing--issuer is in default of interest
payment.
9. Non-income producing security.
10. A sufficient amount of liquid assets has been designated
to cover outstanding written call options, as follows:
<TABLE>
<CAPTION>
Face/Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Call Option on Australian Dollar 1,600,000 7/3/96 1.25 AUD $12,160 $ 1,280
----------------------------------------------------------------------------------------------------------------
Call Option on Morocco (Kingdom of)
Loan Participation Agreement,
Tranche A, 6.437%, 1/1/09 2,500 7/12/96 $71.25 23,750 30,750
------- -------
$35,910 $32,030
======= =======
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
<S> <C>
====================================================================================================================================
Assets Investments, at value (cost $1,956,127,904) (including repurchase agreements
of $259,200,000)--see accompanying statement $2,375,842,557
---------------------------------------------------------------------------------------------------------------
Cash 522,278
---------------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5 290,739
---------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 26,464,214
Interest and dividends 7,735,817
Shares of capital stock sold 2,435,494
---------------------------------------------------------------------------------------------------------------
Other 106,731
--------------
Total assets 2,413,397,830
==============
====================================================================================================================================
Liabilities Unrealized depreciation on forward foreign currency exchange contracts--Note 5 111,810
---------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $35,910)--see accompanying statement--Note 6 32,030
---------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 17,257,652
Shares of capital stock redeemed 4,126,979
Distribution and service plan fees 1,164,908
Shareholder reports 334,533
Transfer and shareholder servicing agent fees 65,519
Directors' fees 3,581
Other 1,107,792
--------------
Total liabilities 24,204,804
====================================================================================================================================
Net Assets $2,389,193,026
====================================================================================================================================
Composition of
Net Assets
Par value of shares of capital stock $ 23,502,955
---------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,811,332,270
---------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (823,840)
---------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment and foreign currency transactions 135,296,007
---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 419,885,634
--------------
Net assets $2,389,193,026
==============
====================================================================================================================================
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,694,050,617 and 166,309,807 shares of capital stock outstanding) $10.19
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.81
---------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $674,993,276 and 66,738,337 shares of capital stock outstanding)
$10.11
---------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $6,951,836 and 685,281 shares of capital stock outstanding) $10.14
---------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $13,197,297 and 1,296,126 shares of capital stock outstanding) $10.18
See accompanying Notes to Financial Statements.
</TABLE>
17 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited)
<S> <C>
====================================================================================================================================
Investment Income Dividends (net of foreign withholding taxes of $224,937) $18,713,857
---------------------------------------------------------------------------------------------------------------
Interest 14,992,650
------------
Total income 33,706,507
====================================================================================================================================
Expenses Management fees--Note 4 6,050,539
---------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 1,469,184
Class B 3,163,037
Class C 20,913
---------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,201,188
---------------------------------------------------------------------------------------------------------------
Shareholder reports 307,351
---------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 242,930
---------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 64,106
Class C 2,152
Class Y 3,330
---------------------------------------------------------------------------------------------------------------
Directors' fees and expenses 35,856
---------------------------------------------------------------------------------------------------------------
Legal and auditing fees 25,992
---------------------------------------------------------------------------------------------------------------
Insurance expenses 24,010
---------------------------------------------------------------------------------------------------------------
Other 73,734
------------
Total expenses 12,684,322
====================================================================================================================================
Net Investment Income 21,022,185
====================================================================================================================================
Realized and Unrealized
Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 142,482,905
Closing and expiration of options written 228,902
Foreign currency transactions (313,376)
------------
Net realized gain 142,398,431
---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 51,236,680
Translation of assets and liabilities denominated in foreign currencies (677,181)
------------
Net change 50,559,499
------------
Net realized and unrealized gain 192,957,930
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $213,980,115
============
See accompanying Notes to Financial Statements.
</TABLE>
18 Oppenheimer Total Return Fund, Inc.
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1996 December 31,
(Unaudited) 1995
<S> <C> <C>
====================================================================================================================================
Operations Net investment income $ 21,022,185 $ 44,120,320
Net realized gain 142,398,431 137,567,265
Net change in unrealized appreciation or depreciation 50,559,499 314,781,561
-------------- --------------
Net increase in net assets resulting from operations 213,980,115 496,469,146
====================================================================================================================================
Dividends and
Distributions to
Shareholders
Dividends from net investment income:
Class A (16,528,996) (35,374,788)
Class B (3,993,895) (9,099,459)
Class C (36,195) (11,241)
Class Y (122,587) (121,199)
---------------------------------------------------------------------------------------------------------------
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
Transactions
Net increase in net assets resulting from capital stock transactions--Note 2:
Class A 4,907,225 69,917,082
Class B 31,532,856 72,588,581
Class C 4,992,184 1,689,246
Class Y 5,585,194 5,093,914
====================================================================================================================================
Net Assets Total increase 240,315,901 482,738,965
---------------------------------------------------------------------------------------------------------------
Beginning of period 2,148,877,125 1,666,138,160
-------------- --------------
End of period (including overdistributed net investment income
of $823,840 and $1,164,352, respectively) $2,389,193,026 $2,148,877,125
============== ==============
See accompanying Notes to Financial Statements.
</TABLE>
19 Oppenheimer Total Return Fund, Inc.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Six Months
Ended
June 30, 1996 Year Ended December 31,
(Unaudited) 1995 1994 1993
====================================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $9.35 $7.80 $8.69 $7.84
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 .23 0.23 0.18
Net realized and unrealized gain (loss) .84 2.09 (.91) 1.45
---------- --------- --------- -------
Total income (loss) from investment operations .94 2.32 (.68) 1.63
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.10) (.22) (.21) (.20)
Distributions from net realized gain -- (.55) -- (.58)
---------- --------- --------- -------
Total dividends and distributions to shareholder (.10) (.77) (.21) (.78)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.19 $9.35 $7.80 $8.69
========== ========= ========= =========
====================================================================================================================================
Total Return, at Net Asset Value(4) 10.08% 30.12% (7.86%) 21.24%
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,694,051 $1,550,710 $1,235,637 $1,223,395
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,633,147 $1,394,245 $1,261,729 $ 992,381
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.08%(5) 2.53% 2.88% 2.21%
Expenses 0.89%(5) 0.92% 1.01% 0.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 52.80% 84.8% 117.2% 143.9%
Average brokerage commission rate(7) $0.0592 $0.0532 -- --
</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 (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
20 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Six Months Period
Ended Ended Ended
Year Ended December 31, June 30, 1996 Year Ended December 31, June 30, 1996 Dec. 31
1992 1991 (Unaudited) 1995 1994 1993 (Unaudited) 1995(2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
$7.49 $6.13 $9.29 $7.76 $8.66 $8.23 $9.33 $9.19
- ------------------------------------------------------------------------------------------------------------------------------------
.17 .24 .05 .15 .17 .09 .04 .07
.75 1.91 .83 2.08 (.91) 1.03 .84 .73
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
.92 2.15 .88 2.23 (.74) 1.12 .88 .80
- ------------------------------------------------------------------------------------------------------------------------------------
(.20) (.23) (.06) (.15) (.16) (.11) (.07) (.11)
(.37) (.56) -- (.55) -- (.58) -- (.55)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(.57) (.79) (.06) (.70) (.16) (.69) (0.07) (.66)
- ------------------------------------------------------------------------------------------------------------------------------------
$7.84 $7.49 $10.11 9.29 $7.76 $8.66 $10.14 $9.33
========== ========== ========== ========== ========== ========== ========== ==========
====================================================================================================================================
12.83% 36.26% 9.50% 29.03% (8.64)% 13.91% 9.44% 8.82%
========== ========== ========== ========== ========== ========== ========== ==========
====================================================================================================================================
$795,474 $555,865 $674,993 $589,804 $429,427 $218,716 $6,952 $1,655
- ------------------------------------------------------------------------------------------------------------------------------------
$662,917 $475,741 $636,903 $510,744 $360,773 $ 90,952 $4,228 $784
- ------------------------------------------------------------------------------------------------------------------------------------
2.68% 3.26% 1.27%(5) 1.70% 2.11% 1.09%(5) 1.22%(5) 1.42%(5)
0.96% 0.95% 1.70%(5) 1.75% 1.87% 1.87%(5) 1.79%(5) 1.77%(5)
- ------------------------------------------------------------------------------------------------------------------------------------
143.5% 161.5% 52.8% 84.8% 117.2% 143.9% 52.8% 84.8%
-- -- $0.0592 $0.0532 -- -- $0.0592 $0.0532
<CAPTION>
Class Y
- --------------------------------------------------------------------------------
Six Months
Ended Year Ended
June 30, 1996 December 31,
(Unaudited) 1995 1994(1)
================================================================================
<S> <C> <C>
$9.35 $7.80 $8.23
- --------------------------------------------------------------------------------
0.07 0.20 0.15
0.86 2.13 (0.41)
---------- ---------- ----------
0.93 2.33 (0.26)
- --------------------------------------------------------------------------------
(0.10) (0.23) (0.17)
-- (0.55) --
---------- ---------- ----------
(0.10) (0.78) (0.17)
- --------------------------------------------------------------------------------
$10.18 $9.35 $7.80
=========== ========== ============
================================================================================
10.03% 30.23% (3.15)%
================================================================================
$13,197 $6,709 $1,074
- --------------------------------------------------------------------------------
$10,552 $3,944 $ 320
- --------------------------------------------------------------------------------
2.16%(5) 2.51% 4.07%(5)
0.83%(5) 0.87% 0.96%(5)
- --------------------------------------------------------------------------------
52.8% 84.8% 117.2%
$0.0592 $0.0532 --
</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 June 30, 1996 were $1,085,932,420 and $1,077,379,077, respectively.
7. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
21 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements (Unaudited)
================================================================================
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 investments 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.
- --------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At June 30, 1996, securities with an
aggregate market value of $300,000, representing .01% of the Fund's net assets,
were in default.
- --------------------------------------------------------------------------------
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.
22 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
1. Significant
Accounting Policies
(continued)
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily 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.
- --------------------------------------------------------------------------------
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>
Six Months Ended June 30, 1996 Year Ended December 31, 1995(1)
------------------------------ -------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 11,000,817 $ 108,200,227 18,844,314 $ 166,165,690
Dividends and distributions reinvested 1,526,950 15,203,648 12,296,649 112,950,173
Redeemed (12,056,280) (118,496,650) (23,719,242) (209,198,781)
----------- ------------ ----------- ------------
Net increase 471,487 $ 4,907,225 7,421,721 $ 69,917,082
=========== ============ =========== ============
- ------------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 8,010,304 $ 78,082,857 13,740,203 $ 120,055,138
Dividends and distributions reinvested 380,769 3,767,394 4,344,180 39,709,825
Redeemed (5,166,560) (50,317,395) (9,944,572) (87,176,382)
----------- ------------ ----------- ------------
Net increase 3,224,513 $ 31,532,856 8,139,811 $ 72,588,581
=========== ============ =========== ============
- ------------------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 535,764 $ 5,267,048 172,793 $ 1,648,892
Dividends and distributions reinvested 3,469 34,531 10,117 93,507
Redeemed (31,379) (309,395) (5,483) (53,153)
----------- ------------ ----------- ------------
Net increase 507,854 $ 4,992,184 177,427 $ 1,689,246
=========== ============ =========== ============
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y:
Sold 772,213 $ 7,501,663 635,605 $ 5,604,059
Dividends and distributions reinvested 12,300 122,587 52,875 487,953
Redeemed (205,899) (2,039,056) (108,744) (998,098)
----------- ------------ ----------- ------------
Net increase 578,614 $ 5,585,194 579,736 $ 5,093,914
=========== ============ =========== ============
</TABLE>
1. 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.
================================================================================
3. Unrealized Gains and
Losses on Investments
At June 30, 1996, net unrealized appreciation on investments and options written
of $419,718,533 was composed of gross appreciation of $437,697,312, and gross
depreciation of $17,978,779.
23 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% on the first
$100 million of average annual net assets with a reduction of 0.05% on each $100
million thereafter, to 0.50% on net assets in excess of $500 million. The
Manager has agreed to reimburse the Fund if aggregate expenses (with specified
exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
For the six months ended June 30, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $2,365,855, of which $729,976 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 $2,232,143 and $47,784, of which $171,351 and $1,971,
respectively, was paid to an affiliated broker/dealer. During the six months
ended June 30, 1996, OFDI received contingent deferred sales charges of $547,225
and $1,064, respectively, upon redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at the time of sale of such
shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and
shareholder servicing agent for the Fund, and for other registered investment
companies. OFS's total costs of providing such services are allocated ratably
to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average annual net
assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended June 30, 1996, OFDI paid $112,919 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted compensation type Distribution and Service Plans for
Class B and Class C shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the Plans,
the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class
B shares that are outstanding for 6 years or less and on Class C shares, as
compensation for sales commissions paid from its own resources at the time of
sale and associated financing costs. If the Plans are terminated by the Fund,
the Board of Directors may allow the Fund to continue payments of the
asset-based sales charge to OFDI for certain expenses it incurred before the
Plans were terminated. OFDI also receives a service fee of 0.25% per year as
compensation 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 financial institutions. Both fees are computed
on the average annual net assets of Class B and Class C shares, determined as of
the close of each regular business day. During the six months ended June 30,
1996, OFDI paid $44,026 to an affiliated broker/dealer as compensation for Class
B personal service and maintenance expenses and retained $2,514,564 and $20,913,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. At June 30, 1996, OFDI had
incurred unreimbursed expenses of $20,065,763 for Class B and $94,377 for Class
C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks.
They may also be used to tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon the purchase or sale of
a security denominated in a foreign currency. In addition, the Fund may enter
into such contracts as a hedge against changes in foreign currency exchange
rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will realize a gain or loss
upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported
with all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms
of the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
24 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
5. Forward Contracts
(continued)
At June 30, 1996, the Fund had outstanding forward contracts to purchase and
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Contract Amount Valuation as of Unrealized Unrealized
Contracts to Purchase Exchange Date (000's) June 30, 1996 Appreciation Depreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
German Deutsche Mark (DEM) 7/1/96 3,045 DEM $ 2,000,686 $ 5,415 $ --
Italian Lira (ITL) 5/9/97 5,762,494 ITL 3,687,011 72,122 --
New Zealand Dollar (NZD) 8/18/96--4/14/97 4,539 NZD 4,077,801 33,390 --
----------- -------- --------
$ 9,765,498 $110,927 $ --
Contracts to Sell
`-----------------------------------------------------------------------------------------------------------------------------------
Australian Dollar (AUD) 7/3/96--7/8/96 292 AUD $ 230,131 $ -- $ 515
Japanese Yen (JPY) 12/18/96--4/14/97 94,100 JPY 887,998 36,667 --
New Zealand Dollar (NZD) 8/22/96--4/14/97 6,014 NZD 4,077,801 -- 64,093
Swiss Franc (CHF) 7/26/96--5/9/97 21,418 CHF 17,402,181 143,145 47,202
----------- -------- --------
$22,598,111 179,812 111,810
=========== -------- --------
Total Appreciation and Depreciation $290,739 $111,810
======== ========
</TABLE>
================================================================================
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered 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 six months ended June 30, 1996 was as follows:
<TABLE>
<CAPTION>
Call Options
---------------------------------------
Number of Amount of
Options Premiums
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1995 -- $ --
- ------------------------------------------------------------------------------------------------------------------------------------
Options written 12,475,853 290,648
- ------------------------------------------------------------------------------------------------------------------------------------
Options closed or expired (7,727,453) (228,902)
- ------------------------------------------------------------------------------------------------------------------------------------
Options exercised (3,145,900) (25,836)
---------- ----------
Options outstanding at June 30, 1996 1,602,500 $ 35,910
========== =========
</TABLE>
25 Oppenheimer Total Return Fund, Inc.
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
7. Illiquid and Restricted
Securities
At June 30, 1996, 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. A security may also be considered
illiquid if its valuation has not changed for a certain period of time. The Fund
intends to invest no more than 10% of its net assets (determined at the time of
purchase and reviewed from time to time) in illiquid or restricted securities.
The aggregate value of these securities subject to this limitation at June 30,
1996 was $1,134,575 which represents less than 0.05% 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 June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Physicians Clinical Laboratory, Inc.,
7.50% Cv. Sub. Debs., 8/15/00 8/17/93--10/25/95 $1.020 $0.100
- ------------------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation
Agreement, Tranche B, 1.772%, 9/30/00 1/9/96--4/1/96 $0.008 $0.008
</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.
26 Oppenheimer Total Return Fund, Inc.
<PAGE>
Oppenheimer Total Return Fund, Inc.
================================================================================
Officers and Directors
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Bruce Bartlett, Vice President
Diane Sobin, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor
OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder
Servicing Agent
OppenheimerFunds Services
================================================================================
Custodian of
Portfolio Securities
The Bank of New York
================================================================================
Independent Auditors
Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors. 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.
27 Oppenheimer Total Return Fund, Inc.
<PAGE>
[BACK COVER]
Information
General Information
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Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
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OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful messages on the economy and issues that
affect your investments 1-800-835-3104
RS0420.001.0696 August 31, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
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.
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P.O. Box 5270
Denver, CO 80217-5270
- ---------------------------------------------
Bulk Rate
U.S. Postage
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- ---------------------------------------------
