<PAGE> 1
[PHOTO]
OPPENHEIMER TOTAL RETURN FUND, INC.
Annual Report December 31, 1996
"We want our
money to grow
because we
have some
long-term
goals, but we
also have needs
today."
[OPPENHEIMERFUNDS LOGO]
<PAGE> 2
THIS FUND IS FOR PEOPLE WHO WANT GROWTH OVER TIME. AND BECAUSE THE FUND ALSO
SEEKS TO PROVIDE INCOME, INVESTORS CAN LOOK OUT FOR TODAY'S NEEDS TOO.
NEWS
OUTPERFORMED AVERAGE
Cumulative Total Return for the
10-Year Period Ended 12/31/96:
Oppenheimer Total Return
Fund, Inc.
Class A(at net asset value)(1)
290.62%
Lipper Growth & Income Funds Average for 123 Funds for the Period Ended
12/31/96(3)
246.66%
HOW YOUR FUND IS MANAGED
Oppenheimer Total Return Fund, Inc. offers long-term investors the opportunity
for high total return. The Fund offers the potential for long-term growth plus
the added advantage of income by investing in stocks with growth potential as
well as income-producing stocks and bonds.
This disciplined approach is designed to reduce risk through
diversification and to enable the Fund to take advantage of a wide variety of
market conditions.
PERFORMANCE
Total returns for the 12 months ended 12/31/96 for Class A, B, C and Y shares
were 19.73%, 18.78%, 18.67% and 19.88%, respectively, without deducting sales
charges.(1)
Your Fund's average annual total returns for Class A shares for the
1-, 5- and 10-year periods ended 12/31/96 were 12.84%, 13.10% and 13.92%,
respectively. For Class B shares, average annual total returns for the 1-year
period ended 12/31/96 and since inception on 5/1/93 were 13.78% and 12.99%,
respectively. For Class C shares, average annual total returns for the 1-year
period ended 12/31/96 and since inception on 8/29/95 were 17.67% and 21.05%,
respectively. For Class Y shares, average annual total returns for the 1-year
period ended 12/31/96 and since inception on 6/1/94 were 19.88% and 17.36%,
respectively.(2)
OUTLOOK
"We remain optimistic about the future. The Fund is very well positioned for the
transition to a slower economy. And, we believe our dual growth and value
approach gives us the flexibility to focus wherever the best investments exist."
Bruce Bartlett and Diane Sobin, Portfolio Managers
December 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER 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. Includes change in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken
into account.
2. Class A returns include 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 results would have been less. Class B returns include the
applicable contingent deferred sales charge of 5% (1-year) and 3% (since
inception). Class C returns include the deduction of the 1% contingent deferred
sales charge for the 1-year result. An explanation of the different performance
calculations is in the Fund's prospectus. Class B and Class C shares are
subject to an annual .75% asset-based sales charge.
3. Source: Lipper Analytical Services. The Lipper average is shown for
comparative purposes only. Funds included in the index may have different
investment policies and risks than the Fund. Oppenheimer Total Return Fund,
Inc. is characterized by Lipper as a growth & income fund. Lipper performance
is based on total return and does not take sales charges into account.
2 Oppenheimer Total Return Fund, Inc.
<PAGE> 3
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Total Return Fund, Inc.
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Total Return Fund, Inc.
DEAR SHAREHOLDER,
As 1996 has drawn to a close, we can look back and say that the past year has
certainly been one for the record books. But it has not necessarily been easy
for the faint of heart. During the first five months of the year, the stock
market reported tremendous gains, thanks in part to strong corporate earnings,
low inflation and stabilized interest rates. However, on the trail of a
six-year bull market and with indices reporting all-time highs, many experts
felt a correction was inevitable.
The stock market volatility that jolted investors in June and July did
not come as a complete surprise, but remarkably enough, by the end of September
the stock market had rebounded and resumed its record-setting pace. During the
fourth quarter, the Dow passed 6,500, both the S&P 500 and the technology-laden
NASDAQ posted all-time highs, and the Russell 2000 came very close to hitting
record levels.
What does the new year have in store for the stock market and its
investors? Of course, no one can predict the events of 1997 with complete
accuracy. Instead, the experts rely on several economic indicators to offer
clues about the market's direction. For example, the rate of unemployment has
dropped to its lowest level in seven years and wage growth continues to make
gains. As a result, consumer confidence is at its highest level since 1989.
What these events suggest to many experts is the likelihood of higher
inflation in 1997, countered by a possible increase in short-term interest
rates. However, an opposing view is that economic growth will taper off
sufficiently early in the year, calming fears of rising inflation and interest
rate increases. Although the Federal Reserve appeared to agree with this
reasoning in the third and fourth quarters of 1996, this may not be true in the
future.
The one thing we can accurately predict is that, regardless of the
scenario, OppenheimerFunds will continue to monitor significant events and act
appropriately. To that end, we view our outlook for the market as cautiously
optimistic. Whichever direction interest rates move, we expect the market's
volatile trading pattern to continue in the coming months. But while our
watchword may be "caution," in the near term, we are still finding plenty of
attractive investment opportunities today, both in the United States and
abroad. We believe the correct approach is to carefully evaluate companies
based on individual merits, such as strong management, fundamental business
policies and long-term prospects for the future. Based on this strategy and the
resilient performance the stock market has demonstrated in the past, our
long-term view remains positive.
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
January 22, 1997
3 Oppenheimer Total Return Fund, Inc.
<PAGE> 4
Q + A
[PHOTO]
Q What
areas are
you currently targeting?
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
[PHOTO]
HOW HAS THE FUND PERFORMED?
We have been consistently pleased with Oppenheimer Total Return Fund, Inc.'s
performance throughout the past year. Thanks largely to the successful
integration of growth and value investing into one investment strategy, the
Fund earned a very respectable total return for last year, without deducting
the sales charge, of 19.73%.(1) The Fund also was ranked 308 out of 523 growth &
income funds ranked by Lipper Analytical Services for the 1-year period ended
12/31/96.(2)
WHAT ARE THE PRIMARY REASONS FOR THE FUND'S POSITIVE PERFORMANCE?
Using a co-managed team structure to implement our combination of investment
styles enabled us to incorporate what we felt were the best opportunities from
each style. This resulted in a well-diversified portfolio that provided strong
performance over the period.
While, in general, the technology market was disappointing in 1996,
we consider our technology holdings to be some of the Fund's best-performing
investments in that year. This is because the companies we selected focused on
the development of efficiency-enhancing products, such as software programs.
Demand for these innovations has been strong, largely because they can help
lower costs of the businesses that set up the systems, while also improving
their quality of service.(3)
Our investments in healthcare also performed particularly well. In
general, the performance of the healthcare market was not noteworthy, and some
sectors, such as healthcare services, performed well below expectations this
year. But, we were able to target successful companies poised to thrive in an
evolving
1. Includes change in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken
into account.
2. Source: Lipper Analytical Services, 12/31/96. Oppenheimer Total Return Fund,
Inc. was ranked 85 out of 212 funds in its category for the 5-year period
ended 12/31/96 and 68 out of 123 funds for the 10-year period ended 12/31/96.
Oppenheimer Total Return Fund, Inc. is categorized by Lipper as a growth &
income fund. Lipper rankings compare average annual total returns and do not
take sales charges into consideration.
3. The Fund's portfolio is subject to change.
4 Oppenheimer Total Return Fund, Inc.
<PAGE> 5
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 We look
for investments that can generate
better-than-average
returns.
industry. For the most part, we found these businesses in the healthcare
supplies sector.
Finally, our fixed income investments also added to the performance of
the Fund. At the beginning of 1996, we shifted our income focus from Treasury
bonds to international fixed income securities.(4) This strategic move provided
the Fund with a strong total return from increased income and strong investment
earnings.
DID ANY INVESTMENTS NEGATIVELY IMPACT THE FUND?
Overall, we were pleased with the results of the portfolio's investments.
Using our stock selection process, we went to great lengths to avoid companies
with deteriorating fundamentals. Of course, there are always areas or companies
that do not match the results of our top performers. Electric utilities and
consumer cyclicals are examples. However, the portfolio was underweighted in
cyclicals over the year. And, in response to the weak performance of electric
utilities over the past twelve months, we've been reducing these holdings and
replacing them with other income-oriented investments.
[PHOTO]
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We're always on the lookout for investment opportunities that can generate
better-than-average returns. But as we see the economy moving into a slower
growth phase, we're seeking investments that can sustain those higher levels.
Technology remains attractive because of the tremendous potential of
efficiency-enhancing products. As other industries cut costs and streamline
operations through technological innovations, earnings should grow.
In addition, from a growth perspective, we find medium-cap companies
appealing because of their moderate size and ability to move quickly when
sound market opportunities present themselves.
[PHOTO]
WHAT IS YOUR OUTLOOK FOR THE FUND?
We remain optimistic about the future. The Fund is very well positioned for a
transition to a slower economy. And, we believe our dual growth and value
approach gives us the flexibility to focus wherever the best investments exist.
As a result, we're finding many excellent opportunities today and expect to see
them in the future as well.
4. Foreign investments are subject to additional risks and expenses such as
exchange rate fluctuations. See the prospectus for additional information.
5 Oppenheimer Total Return Fund, Inc.
<PAGE> 6
FINANCIALS
CONTENTS
<TABLE>
<S> <C>
STATEMENT OF INVESTMENTS 7
STATEMENT OF ASSETS AND LIABILITIES 19
STATEMENT OF OPERATIONS 20
STATEMENTS OF CHANGES IN NET ASSETS 21
FINANCIAL HIGHLIGHTS 22
NOTES TO FINANCIAL STATEMENTS 24
INDEPENDENT AUDITORS' REPORT 28
FEDERAL INCOME TAX INFORMATION 29
</TABLE>
6 Oppenheimer Total Return Fund, Inc.
<PAGE> 7
STATEMENT OF INVESTMENTS December 31, 1996
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
====================================================================================================================================
<S> <C> <C>
SHORT-TERM NOTES--3.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.40%, 1/2/97 $ 25,000,000 $ 24,996,097
----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, L.P., 5.43%, 1/16/97 50,000,000 49,886,875
----------------------------------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 5.70%, 1/3/97 12,500,000 12,496,042
------------
Total Short-Term Notes (Cost $87,379,014) 87,379,014
===================================================================================================================================
U.S. GOVERNMENT OBLIGATIONS--0.8%
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5%, 1/31/98 4,000,000 3,961,252
7.75%, 11/30/99(2)(3) 10,000,000 10,446,879
7.75%, 12/31/99(2) 5,000,000 5,229,690
-----------
Total U.S. Government Obligations (Cost $18,990,037) 19,637,821
===================================================================================================================================
FOREIGN GOVERNMENT OBLIGATIONS--2.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Banco Estado Minas Gerais, 8.25%, 2/10/00 2,000,000 1,931,250
----------------------------------------------------------------------------------------------------------------------------
Banco Hipotecario Nacional (Argentina) Medium-Term Nts.,
10.625%, 8/7/06(2) 1,000,000 1,037,500
----------------------------------------------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC International Finance
BV Gtd. Registered Bonds, 11.25%, 5/30/06 2,900,000 3,164,625
----------------------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon, 27.80%, 9/4/97(4) MXP 11,671,330 1,267,726
----------------------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, 10%, 3/5/01 DEM 1,100,000 764,449
----------------------------------------------------------------------------------------------------------------------------
Canada (Government of) Debs., 10.50%, 7/1/00 CAD 5,680,000 4,861,048
----------------------------------------------------------------------------------------------------------------------------
Central Bank of Costa Rica Interest Claim Bonds, Series B,
6.344%, 5/21/05(5)(6) 809,147 763,633
----------------------------------------------------------------------------------------------------------------------------
Comtel Brasileira Ltd. Nts., 10.75%, 9/26/04(7) 500,000 515,625
----------------------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%, 11/15/01 DKK 35,290,000 6,640,535
----------------------------------------------------------------------------------------------------------------------------
Hashemite Kingdom of Jordan Interest Arrears Bonds, 6.50%, 12/23/05(6) 2,225,000 2,052,562
----------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Sr. Unsec. Unsub. Global Bonds, 0.563%, 7/26/99(6) JPY 530,000,000 4,589,954
----------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali,
10.50%, 11/1/98 ITL 6,295,000,000 4,433,473
----------------------------------------------------------------------------------------------------------------------------
Ministry of Finance (Russian Government) Unsec. Unsub. Debs.,
Series REGS, 9.25%, 11/27/01 40,000 38,975
----------------------------------------------------------------------------------------------------------------------------
New Zealand (Government of) Bonds, 8%, 4/15/04 NZD 1,610,000 1,188,308
----------------------------------------------------------------------------------------------------------------------------
New Zealand (Government of) Index Linked Bonds, 4.60%, 2/15/16(6) NZD 78,000 53,995
----------------------------------------------------------------------------------------------------------------------------
Norwegian Government Bonds, 9.50%, 10/31/02 NOK 10,430,000 1,950,956
----------------------------------------------------------------------------------------------------------------------------
Panama (Republic of) Interest Reduction Bonds, 3.50%, 7/17/14(8) 4,000,000 2,783,760
----------------------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo,
11.625%, 2/23/98 PTE 336,000,000 2,295,675
----------------------------------------------------------------------------------------------------------------------------
Russia (Government of) Interest Nts., 12/29/49(9)(10) 2,000,000 1,392,500
----------------------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, Series 1030, 13%, 6/15/01 SEK 17,400,000 3,285,576
----------------------------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA Bonds, 13%, 2/5/99 ITL 540,000,000 382,441
----------------------------------------------------------------------------------------------------------------------------
Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR 5,720,000 1,164,615
</TABLE>
7 Oppenheimer Total Return Fund, Inc.
<PAGE> 8
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS
(CONTINUED)
Treasury Corp. of Victoria Gtd. Bonds, 12%, 9/22/01 AUD 6,660,000 $ 6,325,850
----------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 12.50%, 11/21/05 GBP 4,680,000 10,156,337
----------------------------------------------------------------------------------------------------------------------------
United Mexican States Bonds, 10.375%, 1/29/03 DEM 8,180,000 5,724,533
----------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Collateralized Par Bonds,
Series W-A, 6.75%, 3/31/20 2,250,000 1,726,875
----------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.625%, 3/31/07(6) 3,900,000 3,485,625
-----------
Total Foreign Government Obligations (Cost $72,013,641) 73,978,401
===================================================================================================================================
LOAN PARTICIPATIONS--0.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.625%, 9/4/06(5)(6) 1,875,000 1,448,437
----------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.437%, 1/1/09((2)6) 4,505,000 3,672,983
----------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement,
Tranche B, 1.772%, 9/30/00(5)(6) JPY 95,165,638 762,506
-----------
Total Loan Participations (Cost $5,544,705) 5,883,926
===================================================================================================================================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Banco Itamarati SA, 11.625% Sr. Unsec. Debs., 11/23/97(5) 2,015,000 2,070,412
----------------------------------------------------------------------------------------------------------------------------
Bank of America Malaysia, Zero Coupon Nts., 7.16%, 3/27/97(4) MYR 884,000 344,479
----------------------------------------------------------------------------------------------------------------------------
Bank of America Malaysia, Zero Coupon Nts., 7.22%, 4/11/97(4) MYR 2,383,000 925,861
----------------------------------------------------------------------------------------------------------------------------
Central Termica Guemes, 12% Bonds, 11/26/01(5) 1,200,000 1,218,000
----------------------------------------------------------------------------------------------------------------------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.16%, 3/24/97(4) MYR 733,000 285,807
----------------------------------------------------------------------------------------------------------------------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.17%, 5/5/97(4) MYR 700,000 270,729
----------------------------------------------------------------------------------------------------------------------------
Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD,
7.16%, 5/7/97(4) MYR 700,000 270,623
----------------------------------------------------------------------------------------------------------------------------
Empresas ICA Sociedad Controladora SA de CV, 11.875% Nts., 5/30/01 1,800,000 1,917,000
----------------------------------------------------------------------------------------------------------------------------
Indah Kiat International Finance Co. BV, 11.875% Sr. Sec. Gtd. Nts., 6/15/02 1,500,000 1,640,625
----------------------------------------------------------------------------------------------------------------------------
Mechala Group Jamaica Ltd., 12.75% Bonds, 12/30/99(5) 775,000 779,844
----------------------------------------------------------------------------------------------------------------------------
PT Hutama Karya, Zero Coupon Medium-Term Nts., 17.51%, 3/19/97(4) IDR 5,200,000,000 2,133,295
----------------------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Gtd. Nts., 6/15/01 1,500,000 1,687,500
----------------------------------------------------------------------------------------------------------------------------
Snap Ltd., 11.50% Sec. Bonds, 1/29/09 DEM 5,840,000 3,836,847
----------------------------------------------------------------------------------------------------------------------------
Tjiwi Kimia International Finance Co. BV, 13.25% Sr. Gtd. Nts., 8/1/01 1,500,000 1,695,000
-----------
Total Non-Convertible Corporate Bonds and Notes (Cost $18,813,807) 19,076,022
===================================================================================================================================
CONVERTIBLE CORPORATE BONDS AND NOTES--2.8%
- -----------------------------------------------------------------------------------------------------------------------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts., 6.50%, 7/6/10(4) 10,000,000 6,512,500
----------------------------------------------------------------------------------------------------------------------------
Central Garden & Pet Co., 6% Cv. Sub. Nts., 11/15/03(7) 4,100,000 4,069,250
----------------------------------------------------------------------------------------------------------------------------
Empresas ICA Sociedad Controladora SA de CV, 5% Cv. Sub. Debs., 3/15/04 600,000 423,000
----------------------------------------------------------------------------------------------------------------------------
First Financial Management Corp., 5% Cv. Debs., 12/15/99 1,500,000 2,593,125
----------------------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 5% Cv. Sub. Debs., 4/1/01 4,000,000 8,040,000
</TABLE>
8 Oppenheimer Total Return Fund, Inc.
<PAGE> 9
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE
BONDS AND NOTES
(CONTINUED)
IRSA Inversiones y Representaciones SA, 4.50%
Puttable & Redeemable Cv. Knockout Securities, 8/2/03(7) $ 7,758,000 $ 7,724,059
----------------------------------------------------------------------------------------------------------------------------
Nabors Industries, Inc., 5% Cv. Sub. Nts., 5/15/06 4,800,000 5,952,000
----------------------------------------------------------------------------------------------------------------------------
Offshore Logistics, Inc., 6% Cv. Sub. Nts., 12/15/03(5) 5,000,000 5,262,500
----------------------------------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(5)(11) 3,000,000 30,000
----------------------------------------------------------------------------------------------------------------------------
Seacor Holdings, Inc., 5.375% Cv. Sub. Nts., 11/15/06(7) 3,000,000 3,474,375
----------------------------------------------------------------------------------------------------------------------------
Sports Authority, Inc. (The), 5.25% Cv. Sub. Nts., 9/15/01(7) 3,000,000 2,816,250
----------------------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(7) 4,000,000 4,715,000
----------------------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 5% Cv. Debs., 4/15/01 5,000,000 8,912,500
----------------------------------------------------------------------------------------------------------------------------
U.S. Filter Corp., 4.50% Cv. Sub. Nts., 12/15/01 3,000,000 3,063,750
----------------------------------------------------------------------------------------------------------------------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05 1,250,000 2,200,000
----------------------------------------------------------------------------------------------------------------------------
U.S. Filter Corp., 6% Cv. Sub. Nts., 9/15/05 1,250,000 2,200,000
----------------------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01(7) 4,000,000 4,785,000
-----------
Total Convertible Corporate Bonds and Notes (Cost $61,220,865) 72,773,309
<CAPTION>
SHARES
===================================================================================================================================
<S> <C> <C>
COMMON STOCKS--80.7%
- -----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--4.9%
- -----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--3.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Betzdearborn, Inc. 145,100 8,488,350
----------------------------------------------------------------------------------------------------------------------------
Cabot Corp. 94,900 2,384,362
----------------------------------------------------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 362,800 34,239,250
----------------------------------------------------------------------------------------------------------------------------
IMC Global, Inc. 165,000 6,455,625
----------------------------------------------------------------------------------------------------------------------------
Morton International, Inc. 440,000 17,930,000
----------------------------------------------------------------------------------------------------------------------------
Praxair, Inc. 535,000 24,676,875
-----------
94,174,462
- -----------------------------------------------------------------------------------------------------------------------------------
GOLD--0.4%
Newmont Mining Corp. 260,000 11,635,000
- -----------------------------------------------------------------------------------------------------------------------------------
METALS--0.9%
Allegheny Teledyne, Inc. 250,000 5,750,000
----------------------------------------------------------------------------------------------------------------------------
Aluminum Co. of America 150,000 9,562,500
----------------------------------------------------------------------------------------------------------------------------
Nucor Corp. 150,900 7,695,900
-----------
23,008,400
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--14.3%
- -----------------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--1.6%
General Motors Corp. 170,000 9,477,500
----------------------------------------------------------------------------------------------------------------------------
Lear Seating Corp.(12) 200,000 6,825,000
----------------------------------------------------------------------------------------------------------------------------
Miller Industries, Inc.(12) 120,000 2,400,000
----------------------------------------------------------------------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 190,000 5,842,500
----------------------------------------------------------------------------------------------------------------------------
Sherwin-Williams Co. 221,100 12,381,600
----------------------------------------------------------------------------------------------------------------------------
SPX Corp. 125,000 4,843,750
-----------
41,770,350
- -----------------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--3.8%
Brinker International, Inc.(12) 200,000 3,200,000
----------------------------------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 310,000 10,230,000
----------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 160,000 12,840,000
----------------------------------------------------------------------------------------------------------------------------
Gaylord Entertainment Co., Cl. A 400,000 9,150,000
----------------------------------------------------------------------------------------------------------------------------
HFS, Inc.(12) 141,400 8,448,650
</TABLE>
9 Oppenheimer Total Return Fund, Inc.
<PAGE> 10
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LEISURE & ENTERTAINMENT
(CONTINUED)
Landry's Seafood Restaurants, Inc.(12) 580,000 $ 12,397,500
----------------------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 126,300 9,020,651
----------------------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.(12) 455,100 13,994,325
----------------------------------------------------------------------------------------------------------------------------
Starbucks Corp.(12) 275,000 7,871,875
----------------------------------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B(12) 225,000 7,846,875
----------------------------------------------------------------------------------------------------------------------------
West Marine, Inc.(12) 150,000 4,237,500
------------
99,237,376
- -----------------------------------------------------------------------------------------------------------------------------------
MEDIA--0.8%
Comcast Corp., Cl. A Special 300,000 5,343,750
----------------------------------------------------------------------------------------------------------------------------
Cox Communications, Inc., Cl. A(12) 260,000 6,012,500
----------------------------------------------------------------------------------------------------------------------------
U S West Media Group(12) 450,000 8,325,000
------------
19,681,250
- -----------------------------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--3.6%
Federated Department Stores, Inc.(12) 200,000 6,825,000
----------------------------------------------------------------------------------------------------------------------------
Gucci Group NV 154,500 9,868,687
----------------------------------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(12) 275,000 10,278,125
----------------------------------------------------------------------------------------------------------------------------
Kohl's Corp.(12) 370,000 14,522,500
----------------------------------------------------------------------------------------------------------------------------
May Department Stores Cos. 150,000 7,012,500
----------------------------------------------------------------------------------------------------------------------------
Price/Costco, Inc.(12) 550,000 13,818,750
----------------------------------------------------------------------------------------------------------------------------
Revco D.S., Inc.(12) 285,000 10,545,000
----------------------------------------------------------------------------------------------------------------------------
Shaw Industries, Inc. 380,000 4,465,000
----------------------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 395,000 9,035,625
----------------------------------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 73,900 2,189,287
----------------------------------------------------------------------------------------------------------------------------
Wolverine World Wide, Inc. 155,000 4,495,000
------------
93,055,474
- -----------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--4.5%
adidas AG, ADS(7) 76,000 3,279,453
----------------------------------------------------------------------------------------------------------------------------
Central Garden & Pet Co.(12) 50,000 1,053,125
----------------------------------------------------------------------------------------------------------------------------
CompUSA, Inc.(12) 358,200 7,387,875
----------------------------------------------------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 125,000 4,812,500
----------------------------------------------------------------------------------------------------------------------------
Gadzooks, Inc.(12) 100,000 1,825,000
----------------------------------------------------------------------------------------------------------------------------
Home Depot, Inc. 274,000 13,734,250
----------------------------------------------------------------------------------------------------------------------------
Intimate Brands, Inc., Cl. A 225,000 3,825,000
----------------------------------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B 253,100 15,122,725
----------------------------------------------------------------------------------------------------------------------------
Nine West Group, Inc.(12) 562,000 26,062,750
----------------------------------------------------------------------------------------------------------------------------
OfficeMax, Inc.(12) 651,000 6,916,875
----------------------------------------------------------------------------------------------------------------------------
Pacific Sunware of California, Inc.(12) 87,500 2,253,125
----------------------------------------------------------------------------------------------------------------------------
Sports Authority, Inc. (The)(12) 50,000 1,087,500
----------------------------------------------------------------------------------------------------------------------------
Staples, Inc.(12) 337,500 6,096,094
----------------------------------------------------------------------------------------------------------------------------
Tiffany & Co. 150,000 5,493,750
----------------------------------------------------------------------------------------------------------------------------
TJX Cos., Inc. 170,000 8,053,750
----------------------------------------------------------------------------------------------------------------------------
Walgreen Co. 200,000 8,000,000
----------------------------------------------------------------------------------------------------------------------------
Wet Seal, Inc., Cl. A(12) 87,500 1,870,312
------------
116,874,084
</TABLE>
10 Oppenheimer Total Return Fund, Inc.
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER NON-CYCLICALS--15.7%
- -----------------------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.5%
Anheuser-Busch Cos., Inc. 350,000 $ 14,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
FOOD--1.3%
Albertson's, Inc. 200,000 7,125,000
----------------------------------------------------------------------------------------------------------------------------
Hormel Foods Corp. 255,000 6,885,000
----------------------------------------------------------------------------------------------------------------------------
JP Foodservice, Inc.(12) 196,900 5,488,587
----------------------------------------------------------------------------------------------------------------------------
Richfood Holdings, Inc. 202,500 4,910,625
----------------------------------------------------------------------------------------------------------------------------
Vons Cos., Inc. (The)(12) 140,000 8,382,500
------------
32,791,712
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--3.6%
Abbott Laboratories 425,000 21,568,750
----------------------------------------------------------------------------------------------------------------------------
American Home Products Corp. 305,000 17,880,625
----------------------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 125,000 13,593,750
----------------------------------------------------------------------------------------------------------------------------
Genzyme Corp.(12) 310,000 6,742,500
----------------------------------------------------------------------------------------------------------------------------
Johnson & Johnson 290,000 14,427,500
----------------------------------------------------------------------------------------------------------------------------
Neurex Corp.(12) 125,000 2,125,000
----------------------------------------------------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. 200,000 7,925,000
----------------------------------------------------------------------------------------------------------------------------
SmithKline Beecham plc, ADR 150,000 10,200,000
------------
94,463,125
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES &
SERVICES--5.9%
Baxter International, Inc. 270,000 11,070,000
----------------------------------------------------------------------------------------------------------------------------
Becton, Dickinson & Co. 250,000 10,843,750
----------------------------------------------------------------------------------------------------------------------------
Boston Scientific Corp.(12) 175,000 10,500,000
----------------------------------------------------------------------------------------------------------------------------
Cardinal Health, Inc. 580,000 33,785,000
----------------------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp.(12) 1,180,000 45,577,500
----------------------------------------------------------------------------------------------------------------------------
Hillenbrand Industries, Inc. 170,000 6,162,500
----------------------------------------------------------------------------------------------------------------------------
Lynx Therapeutics, Inc. (New)(12) 15,390 61,560
----------------------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 115,000 7,820,000
----------------------------------------------------------------------------------------------------------------------------
Molecular Devices Corp.(12) 190,000 2,956,875
----------------------------------------------------------------------------------------------------------------------------
Orthodontic Centers of America, Inc.(12) 601,400 9,622,400
----------------------------------------------------------------------------------------------------------------------------
Vencor, Inc.(12) 300,000 9,487,500
----------------------------------------------------------------------------------------------------------------------------
WellPoint Health Networks, Inc.(12) 183,000 6,290,625
------------
154,177,710
- -----------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--2.7%
Avon Products, Inc. 365,000 20,850,625
----------------------------------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 430,000 40,957,500
----------------------------------------------------------------------------------------------------------------------------
Tambrands, Inc. 200,000 8,175,000
------------
69,983,125
</TABLE>
11 Oppenheimer Total Return Fund, Inc.
<PAGE> 12
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOBACCO--1.7%
Philip Morris Cos., Inc. 315,000 $ 35,476,875
----------------------------------------------------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 300,000 10,200,000
------------
45,676,875
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY--6.0%
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES &
PRODUCERS--2.2%
Dresser Industries, Inc. 135,000 4,185,000
----------------------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 120,000 8,640,000
----------------------------------------------------------------------------------------------------------------------------
Schlumberger Ltd. 241,800 24,149,775
----------------------------------------------------------------------------------------------------------------------------
Seacor Holdings, Inc.(12) 100,000 6,300,000
----------------------------------------------------------------------------------------------------------------------------
Tidewater, Inc. 330,000 14,932,500
------------
58,207,275
- -----------------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED--3.8%
Amoco Corp. 150,000 12,075,000
----------------------------------------------------------------------------------------------------------------------------
Exxon Corp. 160,000 15,680,000
----------------------------------------------------------------------------------------------------------------------------
Louisiana Land & Exploration Co. 125,000 6,703,125
----------------------------------------------------------------------------------------------------------------------------
MAPCO, Inc. 290,000 9,860,000
----------------------------------------------------------------------------------------------------------------------------
Mobil Corp. 85,000 10,391,250
----------------------------------------------------------------------------------------------------------------------------
Union Pacific Resources Group, Inc. 509,083 14,890,678
----------------------------------------------------------------------------------------------------------------------------
Unocal Corp. 400,000 16,250,000
----------------------------------------------------------------------------------------------------------------------------
USX-Marathon Group 600,000 14,325,000
------------
100,175,053
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--13.5%
- -----------------------------------------------------------------------------------------------------------------------------------
BANKS--6.3%
BankAmerica Corp. 285,000 28,428,750
----------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 222,400 19,849,200
----------------------------------------------------------------------------------------------------------------------------
Citicorp 70,000 7,210,000
----------------------------------------------------------------------------------------------------------------------------
CoreStates Financial Corp. 100,000 5,187,500
----------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG 70,000 3,261,288
----------------------------------------------------------------------------------------------------------------------------
Dresdner Bank AG 131,500 3,925,095
----------------------------------------------------------------------------------------------------------------------------
First America Bank Corp. 103,400 6,216,925
----------------------------------------------------------------------------------------------------------------------------
Firstar Corp. 246,700 12,951,750
----------------------------------------------------------------------------------------------------------------------------
National City Corp. 160,000 7,180,000
----------------------------------------------------------------------------------------------------------------------------
PNC Bank Corp. 300,000 11,287,500
----------------------------------------------------------------------------------------------------------------------------
Societe Generale 47,000 5,071,809
----------------------------------------------------------------------------------------------------------------------------
Summit Bancorp 440,000 19,250,000
----------------------------------------------------------------------------------------------------------------------------
TCF Financial Corp. 390,000 16,965,000
----------------------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc. 385,000 16,675,313
------------
163,460,130
</TABLE>
12 Oppenheimer Total Return Fund, Inc.
<PAGE> 13
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL--5.6%
Associates First Capital Corp., Cl. A 307,100 $ 13,550,788
----------------------------------------------------------------------------------------------------------------------------
Concord EFS, Inc.(12) 135,000 3,813,750
----------------------------------------------------------------------------------------------------------------------------
Fannie Mae 85,000 3,166,250
----------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 190,000 20,923,750
----------------------------------------------------------------------------------------------------------------------------
Household International, Inc. 496,000 45,756,000
----------------------------------------------------------------------------------------------------------------------------
MBNA Corp. 597,500 24,796,250
----------------------------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 776,667 35,241,265
------------
147,248,053
- -----------------------------------------------------------------------------------------------------------------------------------
INSURANCE--1.6%
Allstate Corp. 200,000 11,575,000
----------------------------------------------------------------------------------------------------------------------------
ITT Hartford Group, Inc. 225,000 15,187,500
----------------------------------------------------------------------------------------------------------------------------
MGIC Investment Corp. 140,500 10,678,000
----------------------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. 75,000 3,328,125
-----------
40,768,625
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--7.7%
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.4%
Honeywell, Inc. 570,500 37,510,375
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--2.9%
AccuStaff, Inc.(12) 215,000 4,541,875
----------------------------------------------------------------------------------------------------------------------------
Corrections Corp. of America(12) 200,000 6,125,000
----------------------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 464,800 12,084,800
----------------------------------------------------------------------------------------------------------------------------
Service Corp. International 1,383,000 38,724,000
----------------------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc.(12) 160,000 5,500,000
----------------------------------------------------------------------------------------------------------------------------
USA Waste Services, Inc.(12) 295,000 9,403,125
-----------
76,378,800
- -----------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING--2.1%
American Standard Cos., Inc.(12) 386,500 14,783,625
----------------------------------------------------------------------------------------------------------------------------
New Holland NV(12) 362,000 7,556,750
----------------------------------------------------------------------------------------------------------------------------
Tenneco, Inc. (New) 120,000 5,415,000
----------------------------------------------------------------------------------------------------------------------------
Tyco International Ltd. 490,000 25,908,750
----------------------------------------------------------------------------------------------------------------------------
U.S. Filter Corp.(12) 50,000 1,587,500
-----------
55,251,625
- -----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.3%
Alexander & Baldwin, Inc. 70,000 1,750,000
----------------------------------------------------------------------------------------------------------------------------
Canadian Pacific Ltd. (New) 460,000 12,190,000
----------------------------------------------------------------------------------------------------------------------------
Newport News Shipbuilding, Inc.(12) 24,000 360,000
----------------------------------------------------------------------------------------------------------------------------
Union Pacific Corp. 320,000 19,240,000
-----------
33,540,000
</TABLE>
13 Oppenheimer Total Return Fund, Inc.
<PAGE> 14
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY--12.2%
- -----------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--0.6%
Precision Castparts Corp. 300,000 $14,887,500
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--2.8%
Applied Magnetics Corp.(12) 65 1,950
----------------------------------------------------------------------------------------------------------------------------
Compaq Computer Corp.(12) 105,000 7,796,250
----------------------------------------------------------------------------------------------------------------------------
Gateway 2000, Inc.(12) 405,000 21,692,813
----------------------------------------------------------------------------------------------------------------------------
Ingram Micro, Inc., Cl. A(12) 123,600 2,842,800
----------------------------------------------------------------------------------------------------------------------------
Seagate Technology(12) 760,000 30,020,000
----------------------------------------------------------------------------------------------------------------------------
Sun Microsystems, Inc.(12) 460,000 11,816,250
------------
74,170,063
- -----------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--1.3%
BMC Software, Inc.(12) 285,000 11,791,875
----------------------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 237,500 11,815,625
----------------------------------------------------------------------------------------------------------------------------
Microsoft Corp.(12) 90,000 7,436,250
----------------------------------------------------------------------------------------------------------------------------
Oracle Corp.(12) 97,500 4,070,625
------------
35,114,375
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS--4.3%
ADT Ltd.(12) 475,000 10,865,625
----------------------------------------------------------------------------------------------------------------------------
Analog Devices, Inc.(12) 421,300 14,271,538
----------------------------------------------------------------------------------------------------------------------------
DuPont Photomasks, Inc.(12) 82,500 3,743,438
----------------------------------------------------------------------------------------------------------------------------
ESS Technology, Inc.(12) 100,000 2,812,500
----------------------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 165,000 8,291,250
----------------------------------------------------------------------------------------------------------------------------
Input/Output, Inc.(12) 150,000 2,775,000
----------------------------------------------------------------------------------------------------------------------------
Intel Corp. 490,000 64,159,375
----------------------------------------------------------------------------------------------------------------------------
Photronics, Inc.(12) 117,200 3,193,700
----------------------------------------------------------------------------------------------------------------------------
Ultrak, Inc.(12) 66,900 2,040,450
------------
112,152,876
- -----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--3.2%
3Com Corp.(12) 250,000 18,343,750
----------------------------------------------------------------------------------------------------------------------------
Cisco Systems, Inc.(12) 295,000 18,769,375
----------------------------------------------------------------------------------------------------------------------------
LCI International, Inc.(12) 760,000 16,340,000
----------------------------------------------------------------------------------------------------------------------------
Millicom, Inc.(12) 400,000 --
----------------------------------------------------------------------------------------------------------------------------
Newbridge Networks Corp.(12) 200,000 5,650,000
----------------------------------------------------------------------------------------------------------------------------
Periphonics Corp.(12) 132,400 3,872,700
----------------------------------------------------------------------------------------------------------------------------
Uniphase Corp.(12) 100,000 5,250,000
----------------------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(12) 602,800 15,710,475
------------
83,936,300
</TABLE>
14 Oppenheimer Total Return Fund, Inc.
<PAGE> 15
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES--6.4%
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.9%
Allegheny Power System, Inc. 460,000 $ 13,972,500
----------------------------------------------------------------------------------------------------------------------------
Boston Edison Co. 150,000 4,031,250
----------------------------------------------------------------------------------------------------------------------------
Carolina Power & Light Co. 275,000 10,037,500
----------------------------------------------------------------------------------------------------------------------------
CINergy Corp. 239,000 7,976,625
----------------------------------------------------------------------------------------------------------------------------
FPL Group, Inc. 225,000 10,350,000
----------------------------------------------------------------------------------------------------------------------------
Public Service Co. of Colorado 200,000 7,775,000
----------------------------------------------------------------------------------------------------------------------------
SCANA Corp. 180,000 4,815,000
----------------------------------------------------------------------------------------------------------------------------
Southern Company 421,000 9,525,125
----------------------------------------------------------------------------------------------------------------------------
Texas Utilities Co. 175,000 7,131,250
-------------
75,614,250
- -----------------------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--2.0%
Columbia Gas System, Inc. 155,000 9,861,875
----------------------------------------------------------------------------------------------------------------------------
El Paso Natural Gas Co. 286,160 14,451,080
----------------------------------------------------------------------------------------------------------------------------
PanEnergy Corp. 177,500 7,987,500
----------------------------------------------------------------------------------------------------------------------------
Sonat, Inc. 410,000 21,115,000
-------------
53,415,455
- -----------------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--1.5%
BCE, Inc. 175,000 8,356,250
----------------------------------------------------------------------------------------------------------------------------
GTE Corp. 450,000 20,475,000
----------------------------------------------------------------------------------------------------------------------------
Pacific Telesis Group 100,000 3,675,000
----------------------------------------------------------------------------------------------------------------------------
SBC Communications, Inc. 130,000 6,727,500
-------------
39,233,750
-------------
Total Common Stocks (Cost $1,683,421,947) 2,111,593,448
===================================================================================================================================
PREFERRED STOCKS--1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary Shares
each representing 0.05 Shares of Step-Up Cv. Preferred Stock 290,000 8,047,500
----------------------------------------------------------------------------------------------------------------------------
Microsoft Corp., $2.196 Cv., Series A 185,000 14,823,125
----------------------------------------------------------------------------------------------------------------------------
Money Store (The), $1.72 Cv. Preferred 70,000 1,916,250
-------------
Total Preferred Stocks (Cost $23,637,550) 24,786,875
===================================================================================================================================
OTHER SECURITIES--0.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Cooper Industries, Inc., Debt Exchangeable for Common Stock,
6% Exchangeable Nts., 1/1/99 365,000 7,071,875
----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.25% Structured Yield
Product Exchangeable for Stock of IMC Global, Inc. 90,900 3,647,363
----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50% Cv. Structured Yield
Product Exchangeable for Stock due 8/15/98 110,000 7,397,500
----------------------------------------------------------------------------------------------------------------------------
RJR Nabisco Holdings Corp., $6.50 Cv., Series C 400,000 2,700,000
-------------
Total Other Securities (Cost $16,457,506) 20,816,738
</TABLE>
15 Oppenheimer Total Return Fund, Inc.
<PAGE> 16
STATEMENT OF INVESTMENTS (Continued)
<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 $ --
----------------------------------------------------------------------------------------------------------------------------
Venezuela Government Wts., Exp. 4/20 11,250 --
----------
Total Rights, Warrants and Certificates (Cost $0) --
<CAPTION>
FACE
AMOUNT(1)
===================================================================================================================================
<S> <C> <C>
STRUCTURED INSTRUMENTS--1.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch,
6.28% Deutsche Mark Currency Protected Yield Curve CD, 7/25/97 $ 1,000,000 996,500
----------------------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch,
13.50% Greek Drachma/Swiss Franc Linked Nts., 2/5/97 2,000,000 2,024,200
----------------------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch, 17% CD,
4/2/97 (indexed to the Russian Federation GKO, Zero Coupon, 3/26/97) 850,000 847,875
----------------------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch, 17.30% CD,
2/26/97 (indexed to the Federation GKO, Zero Coupon, 2/19/97)(5) 2,000,000 1,997,000
----------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, New York Branch, Czech Koruna Linked Nts.,
Zero Coupon Debs., 12.548%, 2/3/97(4) CZK 69,000,000 2,508,491
----------------------------------------------------------------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp., Zero Coupon
Korean Won/U.S. Dollar Linked Nts., 10.87%, 6/9/97(4) 600,000 557,880
----------------------------------------------------------------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp., Zero Coupon Nts.,
Linked to Greek Drachma/Swiss Franc Exchange Rate, 14.437%, 12/10/97(4) 2,300,000 1,961,440
----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, 15% U.S. Dollar Nts.
Linked to Czech Koruna/Swiss Franc, 12/21/98 1,200,000 1,199,040
----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Zero Coupon U.S. Dollar Nts.
Linked to Greek Drachma/Swiss Franc, 15.639%, 12/23/97(4) 1,500,000 1,494,900
----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Zero Coupon U.S. Dollar Nts.
Linked to Greek Drachma/Swiss Franc, 15.453%, 12/26/97(4) 1,500,000 1,497,900
----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.886%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 2,000,000 1,999,200
----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.408%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 2,000,000 1,999,200
----------------------------------------------------------------------------------------------------------------------------
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)(4) 4,200,000 4,198,320
----------------------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12.384%, 1/3/97 (indexed to the Brazilian National Treasury Nts.,
Zero Coupon, 1/2/97)(4) 4,000,000 3,998,400
----------------------------------------------------------------------------------------------------------------------------
Swiss Bank Corp., New York Branch, 6.05% CD, 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 1,734,850
-----------
Total Structured Instruments (Cost $29,049,296) 29,015,196
</TABLE>
16 Oppenheimer Total Return Fund, Inc.
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
DATE STRIKE CONTRACTS SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PUT OPTIONS PURCHASED--0.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Australian Dollar Put Opt. 1/97 1.28 AUD 3,905,000 $ 5,272
----------------------------------------------------------------------------------------------------------------------------
Australian Dollar Put Opt. 2/97 1.282 AUD 3,900,000 10,335
----------------------------------------------------------------------------------------------------------------------------
Deutsche Mark Put Opt. 2/97 1.545 DEM 23,750,000 130,530
----------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%, 2/1/06 Put Opt. 7/97 99.96 ITL 3,203 2,242
----------------------------------------------------------------------------------------------------------------------------
Japanese Yen Put Opt. 3/97 115 JPY 620,000,000 85,560
----------------------------------------------------------------------------------------------------------------------------
New Zealand Dollar Put Opt. 3/97 1.43 NZD 1,693,000 10,226
----------------------------------------------------------------------------------------------------------------------------
New Zealand Dollar Put Opt. 3/97 1.44 NZD 52,800 192
----------------------------------------------------------------------------------------------------------------------------
New Zealand Dollar Put Opt. 3/97 1.453 NZD 23,500 54
------------
Total Put Options Purchased (Cost $448,786) 244,411
<CAPTION>
FACE
AMOUNT
===================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--5.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with J.P. Morgan Securities, Inc.,
6.50%, dated 12/31/96, to be repurchased at $71,225,711 on 1/2/97,
collateralized by U.S. Treasury Bonds, 7.875%--12%, 5/15/09--2/15/21,
with a value of $58,761,504 and U.S. Treasury Nts., 4.75%--6%,
8/31/98--9/30/98, with a value of $14,589,775 $71,200,000 71,200,000
----------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 6.50%, dated 12/31/96,
to be repurchased at $83,830,261 on 1/2/97,collateralized by
U.S. Treasury Nts., 5.75%--8.75%, 9/30/97--8/31/00, with a value of $86,406,815 83,800,000 83,800,000
--------------
Total Repurchase Agreements (Cost $155,000,000) 155,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $2,171,977,154) 100.1% 2,620,185,161
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (2,863,594)
----------- --------------
NET ASSETS 100.0% $2,617,321,567
=========== ==============
</TABLE>
17 Oppenheimer Total Return Fund, Inc.
<PAGE> 18
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1. Face amount is reported in U.S. Dollars, except for those denoted in the following currencies:
<S> <C>
AUD--Australian Dollar JPY--Japanese Yen
CAD--Canadian Dollar MXP--Mexican Peso
CZK--Czech Koruna MYR--Malaysian Ringgit
DEM--German Deutsche Mark NOK--Norwegian Krone
DKK--Danish Krone NZD--New Zealand Dollar
GBP--British Pound Sterling PTE--Portuguese Escudo
IDR--Indonesian Rupiah SEK--Swedish Krona
ITL--Italian Lira ZAR--South African Rand
</TABLE>
2. A sufficient amount of liquid assets has been designated to cover
outstanding call options, as follows:
<TABLE>
<CAPTION>
CONTRACTS/FACE 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 3,178,670 1/97 1.229 AUD $20,502 $ 318
---------------------------------------------------------------------------------------------------------------------------
Banco Hipotecario Nacional (Argentina)
Medium-Term Nts., 10.625%, 8/7/06 1,000,000 8/00 $100.00 9,200 30,000
---------------------------------------------------------------------------------------------------------------------------
Call Option on British Pound Sterling 1,290,000 1/97 1.632 GBP 29,051 103,071
---------------------------------------------------------------------------------------------------------------------------
Call Option on British Pound Sterling 2,500,000 3/97 1.69 GBP 46,000 83,350
---------------------------------------------------------------------------------------------------------------------------
Call Option on British Pound Sterling 910,000 3/97 1.71 GBP 17,772 28,301
---------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan
Participation Agreement,
Tranche A, 6.437%, 1/1/09 4,505,000 1/97 $79.875 49,105 135,150
---------------------------------------------------------------------------------------------------------------------------
Call Option on New Zealand Dollar 1,693,000 3/97 1.412 NZD 11,174 9,938
---------------------------------------------------------------------------------------------------------------------------
Call Option on New Zealand Dollar 52,800 3/97 1.419 NZD 341 381
---------------------------------------------------------------------------------------------------------------------------
Call Option on New Zealand Dollar 23,500 3/97 1.428 NZD 164 223
-------- --------
$183,309 $390,732
======== ========
</TABLE>
3. A sufficient amount of securities has been designated to cover
outstanding forward foreign currency exchange contracts. See Note 5 of
Notes to Financial Statements.
4. For zero coupon bonds, the interest rate shown is the effective yield
on the date of purchase.
5. Identifies issues considered to be illiquid--See Note 7 of Notes to
Financial Statements.
6. Represents the current interest rate for a variable rate security.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid under guidelines established
by the Board of Directors. These securities amount to $31,379,012 or
1.20% of the Fund's net assets, at December 31, 1996.
8. Represents the current interest rate for an increasing rate security.
9. When-issued security to be delivered and settled after December 31,
1996.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
11. Non-income producing--issuer is in default of interest payment.
12. Non-income producing security.
See accompanying Notes to Financial Statements.
18 Oppenheimer Total Return Fund, Inc.
<PAGE> 19
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
<TABLE>
<S> <C>
==============================================================================================================
ASSETS
Investments, at value (cost $2,171,977,154)--see accompanying statement $2,620,185,161
-------------------------------------------------------------------------------------------------------
Cash 6,739,797
-------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5 138,091
-------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 13,688,515
Interest, dividends and principal paydowns 5,744,650
Shares of capital stock sold 4,969,889
Closed forward foreign currency exchange contracts 183,735
-------------------------------------------------------------------------------------------------------
Other 77,488
--------------
Total assets 2,651,727,326
==============================================================================================================
LIABILITIES
Options written, at value (premiums received $183,309)--see accompanying statement--Note 6 390,731
-------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 23,376,555
Shares of capital stock redeemed 4,245,040
Dividends 3,999,174
Distribution and service plan fees 1,297,178
Closed forward foreign currency exchange contracts 351,868
Transfer and shareholder servicing agent fees 84,655
Directors' fees 10,797
Other 649,761
--------------
Total liabilities 34,405,759
==============================================================================================================
NET ASSETS $2,617,321,567
==============
==============================================================================================================
COMPOSITION OF
NET ASSETS
Par value of shares of capital stock $ 26,841,566
-------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,134,457,377
-------------------------------------------------------------------------------------------------------
Overdistributed net investment income (364,489)
-------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 8,265,055
-------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 448,122,058
--------------
Net assets $2,617,321,567
==============
==============================================================================================================
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,826,598,516
and 186,889,306 shares of capital stock outstanding) $ 9.77
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.37
-------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $754,917,593 and 77,852,227 shares of capital stock outstanding) $ 9.70
-------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $17,553,545 and 1,805,922 shares of capital stock outstanding) $ 9.72
-------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $18,251,913 and 1,868,204 shares of capital stock outstanding) $ 9.77
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Total Return Fund, Inc.
<PAGE> 20
STATEMENT OF OPERATIONS For the Year Ended December 31, 1996
<TABLE>
==============================================================================================================
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $50,205) $ 34,379,002
-------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $261,206) 33,517,384
------------
Total income 67,896,386
==============================================================================================================
EXPENSES
Management fees--Note 4 12,631,975
-------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 3,068,444
Class B 6,709,692
Class C 82,374
-------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 2,897,019
-------------------------------------------------------------------------------------------------------
Shareholder reports 620,763
-------------------------------------------------------------------------------------------------------
Custodian fees and expenses 307,358
-------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 181,767
Class B 33,177
Class C 5,405
Class Y 4,881
-------------------------------------------------------------------------------------------------------
Directors' fees and expenses 68,244
-------------------------------------------------------------------------------------------------------
Legal and auditing fees 61,624
-------------------------------------------------------------------------------------------------------
Insurance expenses 46,566
-------------------------------------------------------------------------------------------------------
Other 122,017
-----------
Total expenses 26,841,306
==============================================================================================================
NET INVESTMENT INCOME 41,055,080
==============================================================================================================
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain on:
Investments and options written (including premiums on options exercised) 299,931,324
Closing of futures contracts 227,640
Closing and expiration of options written--Note 6 995,498
Foreign currency transactions 2,216,197
------------
Net realized gain 303,370,659
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 82,610,254
Translation of assets and liabilities denominated in foreign currencies (3,814,331)
------------
Net change 78,795,923
------------
Net realized and unrealized gain 382,166,582
==============================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $423,221,662
============
</TABLE>
See accompanying Notes to Financial Statements.
20 Oppenheimer Total Return Fund, Inc.
<PAGE> 21
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995
==================================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 41,055,080 $ 44,120,320
---------------------------------------------------------------------------------------------------------------------------
Net realized gain 303,370,659 137,567,265
---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 78,795,923 314,781,561
-------------- --------------
Net increase in net assets resulting from operations 423,221,662 496,469,146
==================================================================================================================================
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (33,143,640) (35,374,788)
Class B (7,780,831) (9,099,459)
Class C (120,797) (11,241)
Class Y (290,763) (121,199)
---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (201,096,072) (85,267,758)
Class B (83,631,438) (32,692,902)
Class C (1,874,710) (84,903)
Class Y (1,947,759) (366,754)
==================================================================================================================================
CAPITAL STOCK
TRANSACTIONS
Net increase in net assets resulting from capital stock transactions--Note 2:
Class A 206,458,102 69,917,082
Class B 140,890,490 72,588,581
Class C 16,404,454 1,689,246
Class Y 11,355,744 5,093,914
==================================================================================================================================
NET ASSETS
Total increase 468,444,442 482,738,965
---------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,148,877,125 1,666,138,160
-------------- --------------
End of period (including overdistributed net investment income
of $364,489 and $1,164,352 respectively) $2,617,321,567 $2,148,877,125
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Total Return Fund, Inc.
<PAGE> 22
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995 1994
===============================================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $9.35 $7.80 $8.69
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .23 .23
Net realized and unrealized gain (loss) 1.63 2.09 (.91)
---------- --------- ---------
Total income (loss) from investment operations 1.83 2.32 (.68)
- ---------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.20) (.22) (.21)
Distributions from net realized gain (1.21) (.55) --
---------- --------- ---------
Total dividends and distributions to shareholders (1.41) (.77) (.21)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.35 $7.80
========== ========= =========
===============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 19.73% 30.12% (7.86)%
===============================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,826,599 $1,550,710 $1,235,637
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,684,726 $1,394,245 $1,261,729
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.96% 2.53% 2.88%
Expenses 0.90% 0.92% 1.01%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 117.5% 84.8% 117.2%
Average brokerage commission rate(7) $0.0591 $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.
22 Oppenheimer Total Return Fund, Inc.
<PAGE> 23
<TABLE>
<CAPTION>
CLASS B
- ----------------------- -----------------------------------------------------
YEAR ENDED DECEMBER 31,
1993 1992 1996 1995 1994 1993(3)
==================================================================================
<S> <C> <C> <C> <C> <C>
$7.84 $7.49 $9.29 $7.76 $8.66 $8.23
- ----------------------------------------------------------------------------------
.18 .17 .12 .15 .17 .09
1.45 .75 1.62 2.08 (.91) 1.03
--------- --------- --------- --------- -------- --------
1.63 .92 1.74 2.23 (.74) 1.12
- ----------------------------------------------------------------------------------
(.20) (.20) (.12) (.15) (.16) (.11)
(.58) (.37) (1.21) (.55) -- (.58)
--------- --------- --------- --------- -------- --------
(.78) (.57) (1.33) (.70) (.16) (.69)
- ----------------------------------------------------------------------------------
$8.69 $7.84 $9.70 $9.29 $7.76 $8.66
========= ========= ========= ========= ======== ========
==================================================================================
21.24% 12.83% 18.78% 29.03% (8.64)% 13.91%
==================================================================================
$1,223,395 $795,474 $754,918 $589,804 $429,427 $218,716
- ----------------------------------------------------------------------------------
$992,381 $662,917 $671,593 $510,744 $360,773 $ 90,952
- ----------------------------------------------------------------------------------
2.21% 2.68% 1.15% 1.70% 2.11% 1.09%(5)
0.93% 0.96% 1.71% 1.75% 1.87% 1.87%(5)
- ----------------------------------------------------------------------------------
143.9% 143.5% 117.5% 84.8% 117.2% 143.9%
-- -- $0.0591 $0.0532 -- --
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS Y
---------------------- -----------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1996 1995(2) 1996 1995 1994(1)
=======================================================================
<S> <C> <C>
$9.33 $9.19 $9.35 $7.80 $8.23
- -----------------------------------------------------------------------
.16 .07 .23 .20 .15
1.57 .73 1.61 2.13 (.41)
------- ------- -------- ------- --------
1.73 .80 1.84 2.33 (.26)
- -----------------------------------------------------------------------
(.13) (.11) (.21) (.23) (.17)
(1.21) (.55) (1.21) (.55) --
------- -------- -------- -------- ---------
(1.34) (.66) (1.42) (.78) (.17)
- -----------------------------------------------------------------------
$9.72 $9.33 $9.77 $9.35 $7.80
======= ======== ======== ======== =========
=======================================================================
18.67% 8.82% 19.88% 30.23% (3.15)%
=======================================================================
$17,554 $1,655 $18,252 $6,709 $1,074
- -----------------------------------------------------------------------
$ 8,277 $ 784 $13,083 $3,944 $ 320
- -----------------------------------------------------------------------
1.05% 1.42%(5) 2.08% 2.51% 4.07%(5)
1.76% 1.77%(5) 0.77% 0.87% 0.96%(5)
- -----------------------------------------------------------------------
117.5% 84.8% 117.5% 84.8% 117.2%
$0.0591 $0.0532 $0.0591 $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 December 31, 1996 were $2,704,801,613 and $2,433,438,627,
respectively.
7. Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.
See accompanying Notes to Financial Statements.
23 Oppenheimer Total Return Fund, Inc.
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Total Return Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to
seek high total return through investments which are expected to provide
opportunities for growth or to produce income, or both. The Fund's
investment adviser 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 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 is used.
-------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of securities and
investment income are translated at the rate of exchange prevailing on
the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from
changes in market values of securities held and reported with all other
foreign currency gains and losses in the Fund's Statement of Operations.
-------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book Entry
System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market
value of the underlying securities is required to be at least 102% of
the resale price at the time of purchase. If the seller of the agreement
defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
-------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and
losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating
expenses directly attributable to a specific class are charged against
the operations of that class.
-------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal income or excise tax
provision is required.
-------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
24 Oppenheimer Total Return Fund, Inc.
<PAGE> 25
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of the distributions made during the
year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also,
due to timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gain (loss) was recorded by the Fund.
During the year ended December 31, 1996, the Fund adjusted the
classification of distributions to shareholders to reflect the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly,
during the year ended December 31, 1996, amounts have been reclassified
to reflect a decrease in paid-in capital of $1,627,613, a decrease in
overdistributed net investment income of $1,080,814, and an increase in
accumulated net realized gain on investments of $546,799.
-------------------------------------------------------------------------
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 million, 200 million, 200 million and 10
million shares of $.10 par value Class A, Class B, Class C and Class Y
capital stock, respectively. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 YEAR ENDED DECEMBER 31, 1995(1)
---------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 20,733,025 $208,977,166 18,844,314 $166,165,690
Dividends and distributions reinvested 22,428,454 219,649,555 12,296,649 112,950,173
Redeemed (22,110,493) (222,168,619) (23,719,242) (209,198,781)
----------- ------------ ----------- -------------
Net increase 21,050,986 $206,458,102 7,421,721 $ 69,917,082
=========== ============ =========== =============
----------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 14,539,920 $145,115,033 13,740,203 $120,055,138
Dividends and distributions reinvested 8,941,258 86,830,460 4,344,180 39,709,825
Redeemed (9,142,775) (91,055,003) (9,944,572) (87,176,382)
----------- ------------- ---------- ------------
Net increase 14,338,403 $140,890,490 8,139,811 $ 72,588,581
=========== ============= ========== ============
----------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 1,529,403 $ 15,491,645 172,793 $ 1,648,892
Dividends and distributions reinvested 198,823 1,933,848 10,117 93,507
Redeemed (99,731) (1,021,039) (5,483) (53,153)
---------- ------------ ---------- -----------
Net increase 1,628,495 $ 16,404,454 177,427 $ 1,689,246
========== ============ ========== ===========
----------------------------------------------------------------------------------------------------------------------------
Class Y:
Sold 1,481,212 $14,899,947 635,605 $ 5,604,059
Dividends and distributions reinvested 228,630 2,238,523 52,875 487,953
Redeemed (559,150) (5,782,726) (108,744) (998,098)
---------- ----------- ---------- -----------
Net increase 1,150,692 $11,355,744 579,736 $ 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 December 31, 1996, net unrealized appreciation on investments and
options written of $448,000,585 was composed of gross appreciation of
$476,480,803 and gross depreciation of $28,480,218.
25 Oppenheimer Total Return Fund, Inc.
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (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, 0.70% of
the next $100 million, 0.65% of the next $100 million, 0.60% of the next
$100 million, 0.55% of the next $100 million, and 0.50% of net assets in
excess of $500 million. The Manager has agreed to reimburse the Fund if
aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended December 31, 1996, commissions (sales charges
paid by investors) on sales of Class A shares totaled $4,329,798, of
which $934,605 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
$4,468,914 and $142,701, of which $371,419 and $4,807, respectively, was
paid to an affiliated broker/dealer. During the year ended December 31,
1996, OFDI received contingent deferred sales charges of $1,054,974 and
$3,567, 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 year ended December 31, 1996, OFDI paid $235,887 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 and Class C shares, as
compensation for sales commissions paid from its own resources at the
time of sale and associated financing costs. 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 year ended
December 31, 1996, OFDI paid $93,473 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and
retained $5,318,916 and $76,238, respectively, as compensation for Class
B and Class C sales commissions and service fee advances, as well as
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. At December 31, 1996, OFDI had incurred unreimbursed
expenses of $18,066,359 for Class B and $189,390 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.
26 Oppenheimer Total Return Fund, Inc.
<PAGE> 27
================================================================================
5. FORWARD CONTRACTS
(CONTINUED)
At December 31, 1996, the Fund had outstanding forward contracts to
purchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF UNREALIZED
CONTRACTS TO PURCHASE EXCHANGE DATE (000'S) DECEMBER 31, 1996 APPRECIATION
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
South African Rand (ZAR) 1/3/97 5,630 ZAR $1,202,320 $ 3,277
Spanish Peseta (ESP) 10/20/97 528,537 ESP 4,063,928 41,969
---------- --------
$5,266,248 45,246
========== ========
CONTRACTS TO SELL
---------------------------------------------------------------------------------------------------------------------------
Swiss Franc (CHF) 10/20/97 5,100 CHF $3,929,114 92,845
========== --------
$138,091
========
</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 year ended December 31, 1996 was as
follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
---------------------------------- ---------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at December 31, 1995 -- $ -- -- $ --
---------------------------------------------------------------------------------------------------------------------------
Options written 50,620,173 1,257,664 940,238 105,639
---------------------------------------------------------------------------------------------------------------------------
Options closed or expired (30,043,398) (910,598) (940,238) (105,639)
---------------------------------------------------------------------------------------------------------------------------
Options exercised (10,958,700) (163,757) -- --
---------------------------------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1996 9,618,075 $ 183,309 -- $ --
=========== =========== ======== ==========
</TABLE>
================================================================================
7. ILLIQUID AND RESTRICTED
SECURITIES
At December 31, 1996, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in
private placement transactions, are not registered under the Securities
Act of 1933, may have contractual restrictions on resale, and are valued
under methods approved by the Board of Directors as reflecting fair
value. A security may be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain
period of time. The Fund intends to invest no more than 10% of its net
assets (determined at the time of purchase and reviewed from time to
time) in illiquid and restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid or
restricted securities subject to this limitation at December 31, 1996
was $14,362,332 which represents less than 0.55% of the Fund's net
assets.
27 Oppenheimer Total Return Fund, Inc.
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Directors and Shareholders of Oppenheimer Total Return Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Total Return Fund, Inc. as of
December 31, 1996, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended December 31, 1996
and 1995, and the financial highlights for the period January 1, 1992 to
December 31, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
December 31, 1996 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Total Return Fund, Inc. at December 31, 1996, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
January 22, 1997
28 Oppenheimer Total Return Fund, Inc.
<PAGE> 29
FEDERAL INCOME TAX INFORMATION (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1996.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Distributions of $1.2585, $1.2337, $1.2361 and $1.2640 per share were
paid to Class A, Class B, Class C and Class Y shareholders, respectively, on
December 20, 1996, of which, for each class of shares, $0.8174 was designated
as a "capital gain distribution" for federal income tax purposes. Whether
received in stock or cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of capital assets held for more than one
year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended December 31,
1996 which are not designated as capital gain distributions should be
multiplied by 22.60% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for specific
guidance.
29 Oppenheimer Total Return Fund, Inc.
<PAGE> 30
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 ADVISER
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.
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.
30 Oppenheimer Total Return Fund, Inc.
<PAGE> 31
OPPENHEIMERFUNDS FAMILY
================================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your
children's education or tax-free income, we have the funds to help you
seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable
knowing that you are investing with a respected financial institution
with over 35 years of experience in helping people just like you reach
their financial goals. And you're investing with a leader in global,
growth stock and flexible fixed-income investments--with over 3 million
shareholder accounts and more than $60 billion under OppenheimerFunds'
management and that of our affiliates.
At OppenheimerFunds we don't charge a fee to exchange shares.
And you can exchange shares easily by mail or by telephone.(1) For more
information on Oppenheimer funds, please contact your financial adviser
or call us at 1-800-525-7048 for a prospectus. You may also write us at
the address shown on the back cover. As always, please read the
prospectus carefully before you invest.
<TABLE>
=============================================================================================
STOCK FUNDS
<S> <C>
Developing Markets Fund Growth Fund
Global Emerging Growth Fund Global Fund
Enterprise Fund(2) Quest Global Value Fund
International Growth Fund Disciplined Value Fund
Discovery Fund Oppenheimer Fund
Quest Small Cap Value Fund Value Stock Fund
Gold & Special Minerals Fund Quest Value Fund
Capital Appreciation Fund(3)
</TABLE>
<TABLE>
===============================================================================================
STOCK & BOND FUNDS
<S> <C>
Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
</TABLE>
<TABLE>
================================================================================================
BOND FUNDS
<S> <C>
International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
</TABLE>
<TABLE>
================================================================================================
MUNICIPAL FUNDS
<S> <C>
California Municipal Fund(4) Insured Municipal Fund
Florida Municipal Fund(4) Intermediate Municipal Fund
New Jersey Municipal Fund(4)
New York Municipal Fund(4) Rochester Division
Pennsylvania Municipal Fund(4) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
</TABLE>
<TABLE>
================================================================================================
MONEY MARKET FUNDS(5)
<S> <C>
Money Market Fund Cash Reserves
</TABLE>
<TABLE>
===============================================================================================
LIFESPAN
<S> <C>
Growth Fund Income Fund
Balanced Fund
</TABLE>
1. Exchange privileges are subject to change or termination.
Shares may be exchanged only for shares of the same class of
eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. On 12/18/96, the Fund's name was changed from "Target Fund."
4. Available only to investors in certain states.
5. An investment in money market funds is neither insured nor
guaranteed by the U.S. government and there can be no assurance
that a money market fund will be able to maintain a stable net
asset value of $1.00 per share. Oppenheimer funds are
distributed by OppenheimerFunds Distributor, Inc., Two World
Trade Center, New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
31 Oppenheimer Total Return Fund, Inc.
<PAGE> 32
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PHONELINK
24 hours a day, automated
information and transactions
1-800-533-3310
TELECOMMUNICATIONS DEVICE
FOR THE DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RA0420.001.1296 February 28, 1997
[PHOTO]
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.
[OPPENHEIMER FUNDS LOGO]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
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Bulk Rate
U.S. Postage
PAID
Permit No. 130
Torrington, CT
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