<PAGE>
==================================
Semiannual Report June 30, 1998
==================================
OPPENHEIMER
Total Return
Fund, Inc.
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview with the Fund's Managers
10 Statement of Investments
20 Statement of Assets and Liabilities
22 Statement of Operations
23 Statements of Changes in Net Assets
24 Financial Highlights
28 Notes to Financial Statements
34 Officers and Directors
36 Information and Services
Report highlights
- --------------------------------------------------------------------------------
. The Fund's growth strategy enabled investors to participate in the equity
market's strong performance during the last six months, while our
value-oriented holdings provided diversification and helped reduce risk.
. Corporate earnings began to show signs of weakness, which may indicate that
the economy is slowing.
. The Fund is positioned to generally perform well in a slowing economic
environment, and to help weather a correction if it does occur.
<TABLE>
<CAPTION>
==================================
Cumulative Total Returns
==================================
For the 6-Month Period
Ended 6/30/98
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
==================================
<S> <C>
14.84% 8.24%
==================================
<CAPTION>
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
==================================
<S> <C>
14.46% 9.46%
==================================
<CAPTION>
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
==================================
<S> <C>
14.41% 13.41%
==================================
<CAPTION>
Class Y
Without With
Sales Chg.(1) Sales Chg.(2)
==================================
<S> <C>
14.99% 14.99%
==================================
</TABLE>
Total returns include changes 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 that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
1. Includes changes in net asset value per share without deducting any sales
charges. This performance is not annualized.
2. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%
(1-year) and 1% (since inception on 5/1/93). Class C return includes the
applicable contingent deferred sales charge of 1%. Class Y shares were first
publicly offered on 6/1/94 and are not available for sale to individual
shareholders. An explanation of the different performance calculations is in the
Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge.
2 Oppenheimer Total Return Fund, Inc.
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Total Return Fund, Inc.
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Total Return Fund, Inc.
Dear shareholder,
- --------------------------------------------------------------------------------
As we move further into 1998, we remain impressed by the strength of the U.S.
economy, despite the volatility in the world's financial markets. While we've
seen a decline in stock prices this summer, taking a wider perspective of the
markets reveals that, over the long term, U.S. and many world markets have
continued to serve investors well.
At OppenheimerFunds, we are pleased to help our shareholders seek the
rewards of rising markets, but we also recognize that increasing levels of
return cannot last forever. In fact, we've already begun to see signs of change.
Because no one can predict exactly how the markets will react tomorrow or the
next day, we feel it is prudent to continually identify, evaluate and manage the
risks that may affect our fund shareholders.
One of the leading risks facing investors today is rooted in the fact that
stock valuations remain at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these circumstances, we believe,
regardless of daily fluctuations in the markets, it is unlikely that stocks will
sustain the unprecedented growth rate of the past three years. However, we also
believe that any market corrections we may see would be only temporary pauses on
the way to potential long-term gains.
We are also examining the potential economic effects of the "millennium
problem" that will render many computer systems unable to recognize the year
2000 when it arrives. Solving this problem may require some companies to divert
substantial human and financial resources from their core businesses, possibly
constraining global economic growth during 1999 and 2000.
For our part, we can report that OppenheimerFunds has made solid progress
toward ensuring that our shareholder accounting systems are fully "year 2000
compliant," and that all shareholder accounts will make a seamless transition
into the 21st century.
We encourage you to meet with your financial advisor to discuss how today's
uncertain markets or the millennium problem may affect your investments.
Together, you can prepare your investment portfolio for the challenges and
opportunities of the new century.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1998
3 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
===================================
Avg Annual Total Returns
===================================
For the Periods Ended 6/30/98(1)
Class A
1 year 5 year 10 year
===================================
<S> <C> <C>
21.75% 16.71% 15.55%
===================================
<CAPTION>
Class B
Since
1 year 5 year Inception
===================================
<S> <C> <C>
23.13% 16.88% 17.29%
===================================
<CAPTION>
Class C
Since
1 year 5 year Inception
===================================
<S> <C> <C>
27.05% N/A 24.58%
===================================
<CAPTION>
Class Y
Since
1 year 5 year Inception
===================================
<S> <C> <C>
29.41 N/A 21.55%
===================================
</TABLE>
<TABLE>
<CAPTION>
===================================
Cumulative Total Return
===================================
For the Period Ended 6/30/98(1)
Class A
5 year
===================================
<S> <C>
116.53% $21,653(4)
===================================
</TABLE>
Performance update
- --------------------------------------------------------------------------------
Oppenheimer Total Return Fund, Inc. combines growth and value styles of
investing. The disciplined pursuit of this strategy has enabled the Fund to
perform well in today's volatile market environment. For the six-month period
ending June 30, 1998, the Fund's Class A shares produced a cumulative total
return, without sales charges, of 14.84%.(2) The Fund's Class A shares also
ranked in the first quartile among all growth and income funds for the one-year
period ended 6/30/98, as measured by Lipper Analytical Services, Inc.(3)
Growth of $10,000
Over five years(4)
(without sales charges)
[THE FOLLOWING TABLE WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED
MATERIAL.]
<TABLE>
<CAPTION>
Oppenheimer Total
Return Fund, Inc.
Date Class A shares S&P 500 Index
- ---- -------------- -------------
<S> <C> <C>
6/30/93 $10,000 $10,000
$10,712 $10,257
$10,939 $10,495
$10,572 $10,098
$ 9,990 $10,140
$10,449 $10,634
$10,080 $10,633
$10,804 $11,667
$11,570 $12,779
$12,486 $13,794
$13,116 $14,624
$13,874 $15,409
$14,439 $16,099
$14,850 $16,597
$15,704 $17,979
$15,765 $18,462
$17,785 $21,683
$19,486 $23,307
$20,005 $23,976
$22,133 $27,318
6/30/98 $22,974 $28,220
</TABLE>
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 10/2/47. The Fund's maximum
sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 1% (since inception on
5/1/93). Class C returns for the one-year result include the contingent deferred
sales charge of 1%. Class C shares have an inception date of 8/29/95. Class Y
shares were first publicly offered on 6/1/94 and are not available for sale to
individual shareholders. An explanation of the different performance
calculations is in the Fund's prospectus. Class B and C shares are subject to an
annual 0.75% asset-based sales charge.
4 Oppenheimer Total Return Fund, Inc.
<PAGE>
Asset Allocation(5)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<S> <C>
Stocks 84.8%
Bonds 12.6
Cash Equivalents 2.6
</TABLE>
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer Total Return Fund, Inc. is for investors looking for tomorrow's
growth and today's income.
What We Look For
. Growth stocks with superior earnings potential and earnings momentum.
. Value stocks that trade at attractive prices.
. Dividend-paying stocks of quality companies for income.
. Convertible bonds that help take advantage of the stock market's upside
potential--while providing income as a hedge against uncertainties.
<TABLE>
<CAPTION>
Top 10 Stock Holdings(5)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Tyco International Ltd. 2.4% Dell Computer Corp. 1.4%
- --------------------------------------------------------------------------------
HEALTHSOUTH Corp. 1.7 CVS Corp. 1.4
- --------------------------------------------------------------------------------
Home Depot, Inc. 1.6 Kohl's Corp. 1.4
- --------------------------------------------------------------------------------
Travelers Group, Inc. 1.6 Merck & Co., Inc. 1.4
- --------------------------------------------------------------------------------
American Express Co. 1.6 Cardinal Health, Inc. 1.3
- --------------------------------------------------------------------------------
</TABLE>
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account. Past performance is not indicative of future results.
3. Source: Lipper Analytical Services, Inc., 6/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 106 of 668 among growth and
income funds for the 1-year period ended 6/30/98.
4. Results of a hypothetical $10,000 investment in Class A shares on June 30,
1993. The S&P 500 Index is a broad-based unmanaged stock index including
reinvestment of dividends, and cannot be purchased directly by investors.
5. Portfolio is subject to change. Percentages are as of June 30, 1998 and are
based on total market value of investments.
5 Oppenheimer Total Return Fund, Inc.
<PAGE>
"...our growth-and-value strategy helped enable Fund investors to participate in
the equity market's advance..."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How did the Fund perform during the first half of 1998?
Oppenheimer Total Return Fund, Inc. Class A shares performed very well over the
six-month period ended June 30, 1998, providing a cumulative total return of
14.84%, without deducting sales charges.(1) Our income-producing holdings
provided a cushion for the Fund during periods of market volatility, while our
combined growth-and-value strategy helped enable Fund investors to participate
in the equity market's rise during the first half of 1998.
How did the market perform during the period?
At the beginning of the year, we anticipated that the equity markets would
experience some difficulty as the turmoil in Asia restrained the earnings of
companies in the United States and around the world. Some companies did report
lower than expected earnings. However, for the most part, the U.S. equity market
appeared to shrug off concerns about Asia. The Asian crisis served to hold
global interest rates in check by lowering prices for goods, reducing the global
demand for money, and heightening the level of caution among central bankers in
the West. The benign interest rate environment, together with a seasonally
strong first quarter drove the Dow Jones Industrial Average, S&P 500, and other
U.S. stock indices sharply higher during the first several months of the year.
How did you manage the Fund in light of these conditions?
We maintained our disciplined approach of selecting stocks of individual
companies that met our criteria for growth and value. As such, we emphasized
companies that we believed could sustain above average levels of earnings, even
in the face of an economic slowdown.
6 Oppenheimer Total Return Fund, Inc.
<PAGE>
[PHOTO]
Portfolio Management Team (l to r)
John Doney
Bruce Bartlett
We identified several attractive growth opportunities in the consumer cyclical
sector, particularly in stocks of retail and specialty retail companies with
strong fundamentals, such as Home Depot and Kohl's Corp., a specialty department
store chain found primarily in the Midwest and mid-Atlantic regions of the
United States. Companies within these sectors are benefiting from an environment
of low unemployment, low interest rates and growing wages, all of which have
given consumers exceptional buying power. In addition, low interest rates,
together with increased housing affordability have led to record levels of new
home sales and new home starts. With people buying more homes and spending more
money to make them comfortable, companies that specialize in home improvement
are growing rapidly. In fact, our holdings in this sector performed well
throughout the first half of the year, helping to fuel the Fund's performance.
Technology is another area of strong growth in which we invested
substantially during the period. We sold some of our technology holdings in
semiconductor and PC-related businesses, areas that exhibited weakness during
the first half of the year. Instead, we found attractive opportunities in the
stocks of productivity enhancing software companies. We also invested in several
telecommunications equipment companies that focus on increasing the amount of
information that can be
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
7 Oppenheimer Total Return Fund, Inc.
<PAGE>
"We've been working to identify companies from both a growth and value
standpoint..."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
transmitted across a telecommunications system. Today's growing volume of voice,
video and data transmission is placing tremendous demands on the global
communications infrastructure, which is why we believe these companies are
growing now, and in our opinion are likely to continue to grow in the future.
How did the Fund's value-oriented investments perform during the period?
The value side of the Fund's portfolio provides a cushion to protect performance
when volatility, or a material correction occurs in the market. In the absence
of such a correction, our value-oriented holdings tended to underperform the
market, for the most part. However, our strategy is not structured to beat the
market during every period. Instead, we strive to help reduce risk through
diversification. Driven by a disciplined investment approach, the Fund has the
potential to perform well in a wide variety of market conditions. Throughout the
first six months of 1998, as in times past, we adhered to our objectives and
invested in companies with reliable earnings that we believed would outperform
the market in the event of a downturn. These holdings continue to help cushion
investors from the ups and downs of the market.
What challenges do you see in today's market and how is the Fund responding?
In our opinion, there is a risk that corporate profit growth may slow, in part,
due to decreased U.S. exports to Asia, as well as cheaper imports from the
region which will compete with domestic goods. Rising wages in a tight U.S.
labor market is also a concern. At the same time, we believe that many U.S.
stock valuations are at historically high levels, which may make them more
vulnerable to earnings disappointments.
8 Oppenheimer Total Return Fund, Inc.
<PAGE>
"... that we believe will sustain their levels of current earnings growth in a
challenging environment."
We believe we have positioned Oppenheimer Total Return Fund, Inc. to perform
well in such a slowing economic environment, and to help weather a correction
when and if it does occur. We've been working to identify companies from both a
growth and value standpoint that will sustain their levels of current earnings
growth in a challenging environment. Furthermore, we continue to invest in
income-producing securities, including fixed-income instruments, that will help
buffer the Fund against the effects of market volatility. In addition to cash
and U.S. Treasury securities, we seek stability and current income by investing
in convertible securities. While generally less volatile than stocks, the price
of a convertible is linked to both interest rates and the value of its
underlying company. Convertibles allow us to gain exposure to companies with
attractive fundamental characteristics while providing current income and
helping to reduce volatility.
What is your outlook for the Fund?
We have positioned the Fund to perform well in the slowing economy that we
anticipate for the second half of 1998. But regardless of the direction the
economy and markets take, we believe diversification remains the key to an
effective, long-term investment strategy. That's why we rigorously maintain our
strategy of building the portfolio one company and one investment at a time, and
why we believe Oppenheimer Total Return Fund, Inc. remains part of The Right Way
to Invest.
9 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
Statement of Investments June 30, 1998 (Unaudited)
================================================================================================================
Market Value
Shares See Note 1
================================================================================================================
<S> <C> <C>
Common Stocks--79.7%
- ----------------------------------------------------------------------------------------------------------------
Basic Materials--1.8%
- ----------------------------------------------------------------------------------------------------------------
Chemicals--0.9%
Betzdearborn, Inc. 230,000 $ 9,703,125
- ----------------------------------------------------------------------------------------------------------------
Goodrich (B.F.) Co. 267,500 13,274,687
- ----------------------------------------------------------------------------------------------------------------
International Flavors & Fragrances, Inc. 260,000 11,293,750
--------------
34,271,562
- ----------------------------------------------------------------------------------------------------------------
Metals--0.2%
Aluminum Co. of America 100,000 6,593,750
- ----------------------------------------------------------------------------------------------------------------
Paper--0.7%
Sonoco Products Co. 330,000 9,982,500
- ----------------------------------------------------------------------------------------------------------------
Union Camp Corp. 310,000 15,383,750
--------------
25,366,250
- ----------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--19.7%
- ----------------------------------------------------------------------------------------------------------------
Autos & Housing--2.1%
AMB Property Corp. 216,100 5,294,450
- ----------------------------------------------------------------------------------------------------------------
Arden Realty, Inc. 247,500 6,404,062
- ----------------------------------------------------------------------------------------------------------------
Correctional Properties Trust(1) 93,000 1,883,250
- ----------------------------------------------------------------------------------------------------------------
General Motors Corp. 100,000 6,681,250
- ----------------------------------------------------------------------------------------------------------------
Indymac Mortgage Holdings, Inc. 240,000 5,460,000
- ----------------------------------------------------------------------------------------------------------------
Kilroy Realty Corp. 204,400 5,110,000
- ----------------------------------------------------------------------------------------------------------------
Lear Corp.(1) 271,800 13,946,737
- ----------------------------------------------------------------------------------------------------------------
Maytag Corp. 220,000 10,862,500
- ----------------------------------------------------------------------------------------------------------------
Republic Industries, Inc.(1) 1,000,000 25,000,000
--------------
80,642,249
- ----------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--2.8%
Bob Evans Farms, Inc. 215,000 4,555,312
- ----------------------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 610,000 24,171,250
- ----------------------------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc.(1) 200,000 3,387,500
- ----------------------------------------------------------------------------------------------------------------
Hasbro, Inc. 200,000 7,862,500
- ----------------------------------------------------------------------------------------------------------------
Landry's Seafood Restaurants, Inc.(1) 530,000 9,589,687
- ----------------------------------------------------------------------------------------------------------------
McDonald's Corp. 200,000 13,800,000
- ----------------------------------------------------------------------------------------------------------------
Mirage Resorts, Inc.(1) 300,000 6,393,750
- ----------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd. 208,000 16,536,000
- ----------------------------------------------------------------------------------------------------------------
Starbucks Corp.(1) 330,000 17,634,375
--------------
103,930,374
</TABLE>
10 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media--0.7%
R. H. Donnelley Corp.(1) 500,000 $ 18,062,500
- ----------------------------------------------------------------------------------------------------------------
Young & Rubicam, Inc.(1) 307,000 9,824,000
--------------
27,886,500
- ----------------------------------------------------------------------------------------------------------------
Retail: General--6.9%
CVS Corp. 1,329,364 51,762,111
- ----------------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc.(1) 300,000 16,143,750
- ----------------------------------------------------------------------------------------------------------------
Jones Apparel Group, Inc.(1) 1,068,400 39,063,375
- ----------------------------------------------------------------------------------------------------------------
Kohl's Corp.(1) 990,000 51,356,250
- ----------------------------------------------------------------------------------------------------------------
Penney (J.C.) Co., Inc. 250,000 18,078,125
- ----------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 695,000 42,221,250
- ----------------------------------------------------------------------------------------------------------------
Walgreen Co. 385,000 15,905,312
- ----------------------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 359,200 15,243,550
- ----------------------------------------------------------------------------------------------------------------
Wolverine World Wide, Inc. 437,500 9,488,281
--------------
259,262,004
- ----------------------------------------------------------------------------------------------------------------
Retail: Specialty--7.2%
Abercrombie & Fitch Co., Cl. A.(1) 350,000 15,400,000
- ----------------------------------------------------------------------------------------------------------------
AutoZone, Inc.(1) 500,000 15,968,750
- ----------------------------------------------------------------------------------------------------------------
Costco Cos., Inc.(1) 275,000 17,342,187
- ----------------------------------------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 341,600 17,058,650
- ----------------------------------------------------------------------------------------------------------------
General Nutrition Cos., Inc. 975,000 30,346,875
- ----------------------------------------------------------------------------------------------------------------
Home Depot, Inc. 728,500 60,511,031
- ----------------------------------------------------------------------------------------------------------------
Intimate Brands, Inc., Cl. A 510,000 14,056,875
- ----------------------------------------------------------------------------------------------------------------
Linens 'N Things, Inc.(1) 505,800 15,458,512
- ----------------------------------------------------------------------------------------------------------------
Lowe's Cos., Inc. 650,000 26,365,625
- ----------------------------------------------------------------------------------------------------------------
OfficeMax, Inc.(1) 1,100,000 18,150,000
- ----------------------------------------------------------------------------------------------------------------
Pier 1 Imports, Inc. 680,000 16,235,000
- ----------------------------------------------------------------------------------------------------------------
Stage Stores, Inc.(1) 275,000 12,443,750
- ----------------------------------------------------------------------------------------------------------------
Tiffany & Co. 245,000 11,760,000
--------------
271,097,255
- ----------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--12.8%
- ----------------------------------------------------------------------------------------------------------------
Beverages--0.6%
Anheuser-Busch Cos., Inc. 300,000 14,156,250
- ----------------------------------------------------------------------------------------------------------------
Diageo plc 581,094 6,913,633
--------------
21,069,883
</TABLE>
11 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
Statement of Investments (Unaudited) (Continued)
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Food--0.7%
Hormel Foods Corp. 315,000 $ 10,887,187
- ----------------------------------------------------------------------------------------------------------------
Kroger Co.(1) 200,000 8,575,000
- ----------------------------------------------------------------------------------------------------------------
Suiza Foods Corp.(1) 25,000 1,492,187
- ----------------------------------------------------------------------------------------------------------------
U.S. Foodservice, Inc.(1) 196,900 6,903,806
--------------
27,858,180
- ----------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.5%
Abbott Laboratories 375,000 15,328,125
- ----------------------------------------------------------------------------------------------------------------
American Home Products Corp. 600,000 31,050,000
- ----------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 335,000 38,504,062
- ----------------------------------------------------------------------------------------------------------------
Merck & Co., Inc. 380,000 50,825,000
- ----------------------------------------------------------------------------------------------------------------
Mylan Laboratories, Inc. 300,000 9,018,750
- ----------------------------------------------------------------------------------------------------------------
Pfizer, Inc. 120,000 13,042,500
- ----------------------------------------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. 250,000 11,531,250
--------------
169,299,687
- ----------------------------------------------------------------------------------------------------------------
Healthcare/Supplies & Services--4.8%
Bausch & Lomb, Inc. 200,000 10,025,000
- ----------------------------------------------------------------------------------------------------------------
Cardinal Health, Inc. 531,600 49,837,500
- ----------------------------------------------------------------------------------------------------------------
Guidant Corp. 269,200 19,197,325
- ----------------------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp.(1) 2,375,248 63,389,431
- ----------------------------------------------------------------------------------------------------------------
Hillenbrand Industries, Inc. 10,000 600,000
- ----------------------------------------------------------------------------------------------------------------
Lynx Therapeutics, Inc. (New)(1)(2) 15,390 144,281
- ----------------------------------------------------------------------------------------------------------------
McKesson Corp. 250,000 20,312,500
- ----------------------------------------------------------------------------------------------------------------
Omnicare, Inc. 160,000 6,100,000
- ----------------------------------------------------------------------------------------------------------------
Orthodontic Centers of America, Inc.(1) 526,400 11,021,500
--------------
180,627,537
- ----------------------------------------------------------------------------------------------------------------
Household Goods--1.1%
Avon Products, Inc. 250,000 19,375,000
- ----------------------------------------------------------------------------------------------------------------
Newell Co. 400,000 19,925,000
- ----------------------------------------------------------------------------------------------------------------
Tupperware Corp. 125,000 3,515,625
--------------
42,815,625
- ----------------------------------------------------------------------------------------------------------------
Tobacco--1.1%
Philip Morris Cos., Inc. 885,000 34,846,875
- ----------------------------------------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 300,000 7,125,000
--------------
41,971,875
</TABLE>
12 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Energy--3.2%
- ----------------------------------------------------------------------------------------------------------------
Energy Services & Producers--1.1%
Halliburton Co. 410,000 $ 18,270,625
- ----------------------------------------------------------------------------------------------------------------
Nabors Industries, Inc.(1) 100,000 1,981,250
- ----------------------------------------------------------------------------------------------------------------
Schlumberger Ltd. 253,600 17,324,050
- ----------------------------------------------------------------------------------------------------------------
Stolt Comex Seaway SA(1) 153,600 2,976,000
- ----------------------------------------------------------------------------------------------------------------
Stolt Comex Seaway SA, ADR(1) 76,800 1,344,000
--------------
41,895,925
- ----------------------------------------------------------------------------------------------------------------
Oil-Integrated--2.1%
British Petroleum Co. plc, ADR 72,800 6,424,600
- ----------------------------------------------------------------------------------------------------------------
Enron Corp. 325,000 17,570,312
- ----------------------------------------------------------------------------------------------------------------
Exxon Corp. 175,000 12,479,688
- ----------------------------------------------------------------------------------------------------------------
Mobil Corp. 200,000 15,325,000
- ----------------------------------------------------------------------------------------------------------------
Unocal Corp. 150,000 5,362,500
- ----------------------------------------------------------------------------------------------------------------
USX-Marathon Group 575,000 19,729,688
--------------
76,891,788
- ----------------------------------------------------------------------------------------------------------------
Financial--20.1%
- ----------------------------------------------------------------------------------------------------------------
Banks--7.8%
Banc One Corp. 330,000 18,418,125
- ----------------------------------------------------------------------------------------------------------------
BankAmerica Corp. 250,000 21,609,375
- ----------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 350,000 26,425,000
- ----------------------------------------------------------------------------------------------------------------
Citicorp 100,000 14,925,000
- ----------------------------------------------------------------------------------------------------------------
East-West Bank(1)(2) 1,000,000 10,000,000
- ----------------------------------------------------------------------------------------------------------------
First Tennessee National Corp. 427,000 13,477,188
- ----------------------------------------------------------------------------------------------------------------
First Union Corp. 613,000 35,707,250
- ----------------------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 160,000 13,360,000
- ----------------------------------------------------------------------------------------------------------------
Local Financial Corp.(1) 400,000 5,200,000
- ----------------------------------------------------------------------------------------------------------------
National City Corp. 360,000 25,560,000
- ----------------------------------------------------------------------------------------------------------------
NationsBank Corp. 300,000 22,950,000
- ----------------------------------------------------------------------------------------------------------------
PNC Bank Corp. 270,000 14,529,375
- ----------------------------------------------------------------------------------------------------------------
Summit Bancorp 810,000 38,475,000
- ----------------------------------------------------------------------------------------------------------------
U.S. Bancorp 525,000 22,575,000
- ----------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc. 200,000 8,687,500
--------------
291,898,813
</TABLE>
13 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
Statement of Investments (Unaudited) (Continued)
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Diversified Financial--8.7%
American Express Co. 510,000 $ 58,140,000
- ----------------------------------------------------------------------------------------------------------------
Anthracitr Mortgage Capital, Inc.(1) 400,000 5,550,000
- ----------------------------------------------------------------------------------------------------------------
Associates First Capital Corp., Cl. A 309,000 23,754,375
- ----------------------------------------------------------------------------------------------------------------
Beneficial Corp. 150,000 22,978,125
- ----------------------------------------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 250,000 12,687,500
- ----------------------------------------------------------------------------------------------------------------
Freddie Mac 880,000 41,415,000
- ----------------------------------------------------------------------------------------------------------------
Health Care Property Investors, Inc. 101,000 3,642,313
- ----------------------------------------------------------------------------------------------------------------
Household International, Inc. 880,500 43,804,875
- ----------------------------------------------------------------------------------------------------------------
Imperial Credit Commercial Mortgage Investment Corp. 500,000 6,531,250
- ----------------------------------------------------------------------------------------------------------------
MBNA Corp. 109,625 3,617,625
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 375,000 34,265,625
- ----------------------------------------------------------------------------------------------------------------
Schwab (Charles) Corp. 318,800 10,361,000
- ----------------------------------------------------------------------------------------------------------------
Travelers Group, Inc. 994,007 60,261,705
--------------
327,009,393
- ----------------------------------------------------------------------------------------------------------------
Insurance--3.5%
Allstate Corp. 215,000 19,685,938
- ----------------------------------------------------------------------------------------------------------------
American General Corp. 300,000 21,356,250
- ----------------------------------------------------------------------------------------------------------------
Chubb Corp. 190,000 15,271,250
- ----------------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. 200,000 22,875,000
- ----------------------------------------------------------------------------------------------------------------
NAC Re Corp. 161,700 8,630,738
- ----------------------------------------------------------------------------------------------------------------
St. Paul Cos., Inc. 300,000 12,618,750
- ----------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. 532,500 30,585,469
--------------
131,023,395
- ----------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--0.1%
Avalon Bay Communities, Inc. 50,000 1,900,000
- ----------------------------------------------------------------------------------------------------------------
Industrial--6.5%
- ----------------------------------------------------------------------------------------------------------------
Electrical Equipment--0.6%
AMP, Inc. 425,000 14,609,375
- ----------------------------------------------------------------------------------------------------------------
Honeywell, Inc. 100,000 8,356,250
--------------
22,965,625
- ----------------------------------------------------------------------------------------------------------------
Industrial Materials--0.4%
Owens-Illinois, Inc.(1) 100,000 4,475,000
- ----------------------------------------------------------------------------------------------------------------
Sherwin-Williams Co. 302,200 10,010,375
--------------
14,485,375
</TABLE>
14 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Services--2.3%
Allied Waste Industries, Inc.(1) 615,000 $ 14,760,000
- ----------------------------------------------------------------------------------------------------------------
American Disposal Services, Inc.(1) 312,600 14,653,125
- ----------------------------------------------------------------------------------------------------------------
Central Parking Corp. 83,300 3,790,150
- ----------------------------------------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co. 375,000 17,156,250
- ----------------------------------------------------------------------------------------------------------------
ServiceMaster Co. (The) 468,100 17,817,056
- ----------------------------------------------------------------------------------------------------------------
USA Waste Services, Inc.(1) 359,250 17,737,969
--------------
85,914,550
- ----------------------------------------------------------------------------------------------------------------
Manufacturing--3.0%
American Standard Cos., Inc.(1) 285,300 12,749,344
- ----------------------------------------------------------------------------------------------------------------
Tenneco, Inc. (New) 300,000 11,418,750
- ----------------------------------------------------------------------------------------------------------------
Tyco International Ltd. 1,410,000 88,830,000
--------------
112,998,094
- ----------------------------------------------------------------------------------------------------------------
Transportation--0.2%
Kansas City Southern Industries, Inc. 150,000 7,443,750
- ----------------------------------------------------------------------------------------------------------------
Technology--9.8%
- ----------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.6%
Precision Castparts Corp. 436,300 23,287,513
- ----------------------------------------------------------------------------------------------------------------
Raytheon Co., Cl. A 12,754 734,949
--------------
24,022,462
- ----------------------------------------------------------------------------------------------------------------
Computer Hardware--2.4%
Dell Computer Corp.(1) 560,000 51,975,000
- ----------------------------------------------------------------------------------------------------------------
EMC Corp.(1) 360,000 16,132,500
- ----------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 110,000 6,586,250
- ----------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 145,000 16,647,813
--------------
91,341,563
- ----------------------------------------------------------------------------------------------------------------
Computer Software/Services--3.3%
BMC Software, Inc.(1) 700,000 36,356,250
- ----------------------------------------------------------------------------------------------------------------
CBT Group Public Ltd. Co., Sponsored ADR(1) 333,000 17,815,500
- ----------------------------------------------------------------------------------------------------------------
Compuware Corp.(1) 530,000 27,096,250
- ----------------------------------------------------------------------------------------------------------------
HBO & Co. 270,000 9,517,500
- ----------------------------------------------------------------------------------------------------------------
J.D. Edwards & Co.(1) 130,500 5,603,344
- ----------------------------------------------------------------------------------------------------------------
Microsoft Corp.(1) 149,200 16,169,550
- ----------------------------------------------------------------------------------------------------------------
Peoplesoft, Inc.(1) 180,000 8,460,000
- ----------------------------------------------------------------------------------------------------------------
Visio Corp.(1) 50,000 2,387,500
--------------
123,405,894
</TABLE>
15 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
Statement of Investments (Unaudited) (Continued)
================================================================================================================
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electronics--0.4%
Photronics, Inc.(1) 314,400 $ 6,936,450
- ----------------------------------------------------------------------------------------------------------------
Thermo Electron Corp.(1) 190,476 6,511,898
--------------
13,448,348
- ----------------------------------------------------------------------------------------------------------------
Telecommunications-Technology--3.1%
Airtouch Communications, Inc.(1) 325,000 18,992,188
- ----------------------------------------------------------------------------------------------------------------
CIENA Corp.(1) 280,000 19,495,000
- ----------------------------------------------------------------------------------------------------------------
Cisco Systems, Inc. 268,000 24,672,750
- ----------------------------------------------------------------------------------------------------------------
Lucent Technologies, Inc. 100,000 8,318,750
- ----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A(1) 250,000 6,218,750
- ----------------------------------------------------------------------------------------------------------------
Northern Telecom Ltd. 150,000 8,512,500
- ----------------------------------------------------------------------------------------------------------------
Uniphase Corp.(1) 450,000 28,251,563
--------------
114,461,501
- ----------------------------------------------------------------------------------------------------------------
Utilities--5.8%
- ----------------------------------------------------------------------------------------------------------------
Electric Utilities--2.4%
Allegheny Energy, Inc. 210,000 6,326,250
- ----------------------------------------------------------------------------------------------------------------
BEC Energy 225,000 9,337,500
- ----------------------------------------------------------------------------------------------------------------
Carolina Power & Light Co. 110,000 4,771,250
- ----------------------------------------------------------------------------------------------------------------
CINergy Corp. 134,800 4,718,000
- ----------------------------------------------------------------------------------------------------------------
Edison International 375,000 11,085,938
- ----------------------------------------------------------------------------------------------------------------
FPL Group, Inc. 110,000 6,930,000
- ----------------------------------------------------------------------------------------------------------------
Illinova Corp. 200,000 6,000,000
- ----------------------------------------------------------------------------------------------------------------
New Century Energies, Inc. 310,000 14,085,625
- ----------------------------------------------------------------------------------------------------------------
Southern Co. 298,500 8,264,719
- ----------------------------------------------------------------------------------------------------------------
Texas Utilities Co. 200,000 8,325,000
- ----------------------------------------------------------------------------------------------------------------
Unicom Corp. 300,000 10,518,750
--------------
90,363,032
- ----------------------------------------------------------------------------------------------------------------
Telephone Utilities--3.4%
Bell Atlantic Corp. 896,800 40,916,500
- ----------------------------------------------------------------------------------------------------------------
GTE Corp. 500,000 27,812,500
- ----------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.(1) 268,203 9,353,580
- ----------------------------------------------------------------------------------------------------------------
SBC Communications, Inc. 600,000 24,000,000
- ----------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(1) 512,800 24,838,750
--------------
126,921,330
--------------
Total Common Stocks (Cost $1,950,377,194) 2,991,083,569
</TABLE>
16 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
================================================================================================================
Market Value
Shares See Note 1
================================================================================================================
<S> <C> <C>
Preferred Stocks--2.9%
- ----------------------------------------------------------------------------------------------------------------
Airtouch Communications, Inc.,
4.25% Cv. Cum., Series C, Non-Vtg. 110,000 $ 9,075,000
- ----------------------------------------------------------------------------------------------------------------
Big Flower Press Holdings, Inc., $3.00 Cv. Preferred Stock(3) 100,000 6,050,000
- ----------------------------------------------------------------------------------------------------------------
Dollar General Corp., 8.50% Cv. Preferred Stock 271,100 10,657,619
- ----------------------------------------------------------------------------------------------------------------
Microsoft Corp., $2.196 Cv., Series A 205,000 19,475,000
- ----------------------------------------------------------------------------------------------------------------
Newell Financial Trust I, 5.25% Cv. Preferred Stock(3) 163,000 9,515,125
- ----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 6.50% Cv. Preferred Stock(3) 80,000 3,940,000
- ----------------------------------------------------------------------------------------------------------------
Owens-Illinois, Inc., 4.75% Cv. Preferred Stock 157,200 8,194,050
- ----------------------------------------------------------------------------------------------------------------
St. George Bank, ADR, $1.35 Cv. Structured Yield Product
Exchangeable for Common Stock of St. George Bank, ADR(2) 76,000 3,648,000
- ----------------------------------------------------------------------------------------------------------------
Suiza Capital Trust II/Suiza Foods Corp.,
5.50% Cv. Preferred Stock(3) 170,000 8,500,000
- ----------------------------------------------------------------------------------------------------------------
TCI Communications, Inc., $2.125 Cv. Cum., Series A 100,000 8,075,000
- ----------------------------------------------------------------------------------------------------------------
TCI Pacific Communications, Inc.,
5% Cv. Cum. Sr. Preferred, Cl. A 50,000 10,547,656
- ----------------------------------------------------------------------------------------------------------------
Union Pacific Capital Trust, 6.25% Cv. Preferred Stock(3) 87,600 4,040,550
- ----------------------------------------------------------------------------------------------------------------
WinStar Communications, Inc., 7% Cv. Preferred Stock(3) 115,000 6,253,125
--------------
Total Preferred Stocks (Cost $88,645,831) 107,971,125
================================================================================================================
Other Securities--1.7%
- ----------------------------------------------------------------------------------------------------------------
Central Parking Finance Trust, 5.25% Cv. Preferred Stock(3) 105,000 2,625,000
- ----------------------------------------------------------------------------------------------------------------
Cooper Industries, Inc., 6% Debt Exchangeable Nts.
for Common Stock of Wyman-Gordon Co., 1/1/99 365,000 6,433,125
- ----------------------------------------------------------------------------------------------------------------
Houston Industries, Inc., 7% Automatic Common
Exchange Securities, Exchangeable for Time Warner, Inc.
Common Stock, 7/1/00 211,000 15,719,500
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.25% Structured Yield
Product Exchangeable for Stock of IMC Global, Inc. 90,900 2,863,350
- ----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 7.25% Structured Yield Product
Exchangeable for Common Stock of SunAmerica, Inc., 6/15/99 75,000 5,437,500
- ----------------------------------------------------------------------------------------------------------------
Premier Parks, Inc., 7.50% Cv. Preferred Stock 464,000 29,464,000
--------------
Total Other Securities (Cost $50,791,948) 62,542,475
<CAPTION>
Units
================================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.0%
- ----------------------------------------------------------------------------------------------------------------
American Satellite Network, Inc. Wts., Exp. 6/99 100,000 --
- ----------------------------------------------------------------------------------------------------------------
Iwerks Entertainment, Inc. Wts., Exp. 7/99 48,379 --
--------------
Total Rights, Warrants and Certificates (Cost $0) --
</TABLE>
17 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
Statement of Investments (Unaudited) (Continued)
================================================================================================================
Face Market Value
Amount(1) See Note 1
================================================================================================================
<S> <C> <C>
U.S. Government Obligations--9.0%
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 6.625%, 2/15/27 $ 51,350,000 $ 58,025,551
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, 6.92%, 11/15/18(4) 108,000,000 33,828,840
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, 6.02%, 2/15/20(4) 200,000,000 58,332,400
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS, 6.51%, 8/15/19(4) 336,000,000 100,828,560
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.25%, 2/15/07 31,200,000 32,691,766
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.25%, 3/31/99 10,000,000 10,059,380
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.625%, 3/31/02 30,050,000 31,129,937
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.75%, 11/30/99 10,000,000 10,300,010
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.75%, 12/31/99 5,000,000 5,157,815
--------------
Total U.S. Government Obligations (Cost $304,370,110) 340,354,259
================================================================================================================
Non-Convertible Corporate Bonds and Notes--0.0%
- ----------------------------------------------------------------------------------------------------------------
Dresdner Finance BV, 5.50% Gtd. Nts., 4/30/04(DEM) (Cost $279,377) 417,000 440,574
================================================================================================================
Convertible Corporate Bonds and Notes--3.4%
- ----------------------------------------------------------------------------------------------------------------
Affiliated Computer Services, Inc., 4% Cv. Sub. Nts., 3/15/05(3) 5,000,000 5,468,750
- ----------------------------------------------------------------------------------------------------------------
American Retirement Corp., 5.75% Cv. Sub. Debs., 10/1/02 3,220,000 3,059,000
- ----------------------------------------------------------------------------------------------------------------
Atria Communities, Inc., 5% Cv. Sub. Nts., 10/15/02(3) 3,950,000 3,880,875
- ----------------------------------------------------------------------------------------------------------------
Concentra Managed Care, Inc., 4.50% Cv. Sub. Nts., 3/15/03(3) 8,500,000 7,671,250
- ----------------------------------------------------------------------------------------------------------------
Corestaff, Inc., 2.94% Cv. Sub. Nts., 8/15/04 5,000,000 4,843,750
- ----------------------------------------------------------------------------------------------------------------
EMC Corp., 3.25% Cv. Sub. Nts., 3/15/02(3) 5,000,000 10,318,750
- ----------------------------------------------------------------------------------------------------------------
HealthSouth Corp., 3.25% Cv. Sub. Nts., 4/1/03(3) 10,000,000 9,987,500
- ----------------------------------------------------------------------------------------------------------------
Home Depot, Inc., 3.25% Cv. Sub. Nts., 10/1/01 18,600,000 34,735,500
- ----------------------------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones SA, 4.50%
Puttable & Redeemable Cv. Knockout Securities, 8/2/03(3) 7,758,000 8,519,254
- ----------------------------------------------------------------------------------------------------------------
Level One Communications, Inc., 4% Cv. Sub. Nts., 9/1/04(3) 3,500,000 3,933,125
- ----------------------------------------------------------------------------------------------------------------
Offshore Logistics, Inc., 6% Cv. Sub. Nts., 12/15/03(3) 5,000,000 5,250,000
- ----------------------------------------------------------------------------------------------------------------
Pier 1 Imports, Inc., 5.75% Cv. Sub. Nts., 10/1/03 3,300,000 6,496,875
- ----------------------------------------------------------------------------------------------------------------
Sanifill, Inc., 5% Cv. Sub. Debs., 3/1/06 2,000,000 3,565,000
- ----------------------------------------------------------------------------------------------------------------
Scandinavian Broadcasting System SA,
7.25% Cv. Sub. Debs., 8/1/05 3,000,000 3,262,500
- ----------------------------------------------------------------------------------------------------------------
Sunrise Assisted Living, Inc., 5.50% Cv. Nts., 6/15/02(3) 3,409,000 3,681,720
- ----------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(3) 1,500,000 1,603,125
- ----------------------------------------------------------------------------------------------------------------
Tower Automotive, Inc., 5% Cv. Sub. Nts., 8/1/04(3) 3,340,000 3,477,775
- ----------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01 4,333,000 7,284,856
--------------
Total Convertible Corporate Bonds and Notes (Cost $101,795,566) 127,039,605
</TABLE>
18 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================
================================================================================================================
Face Market Value
Amount(1) See Note 1
================================================================================================================
<S> <C> <C>
Repurchase Agreements--2.5%
- ----------------------------------------------------------------------------------------------------------------
Repurchase agreement with Salomon Smith Barney Holdings,
Inc., 5.90% dated 6/30/98, to be repurchased at $95,715,684 on
7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%,
2/15/15-2/15/19, with a value of $98,244,538 (Cost $95,700,000) $ 95,700,000 $ 95,700,000
- ----------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $2,591,960,026) 99.2% 3,725,131,607
- ----------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.8 29,412,037
------------ --------------
Net Assets 100.0% $3,754,543,644
============ ==============
</TABLE>
Face amount is reported in U.S. Dollars, except for those denoted in the
following currency:
DEM--German Mark
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
3. 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 $104,715,924 or 2.79% of the Fund's net
assets as of June 30, 1998.
4. For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
See accompanying Notes to Financial Statements.
19 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
========================================================================================
Statement of Assets and Liabilities June 30, 1998 (Unaudited)
========================================================================================
========================================================================================
<S> <C>
Assets
Investments, at value (cost $2,591,960,026)--see accompanying statement $3,725,131,607
- ----------------------------------------------------------------------------------------
Cash 356,271
- ----------------------------------------------------------------------------------------
Receivables:
Investments sold 28,629,815
Interest, dividends and principal paydowns 8,010,443
Shares of capital stock sold 2,468,169
- ----------------------------------------------------------------------------------------
Other 88,951
--------------
Total assets 3,764,685,256
========================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 4,162,230
Shares of capital stock redeemed 2,640,965
Distribution and service plan fees 1,821,222
Transfer and shareholder servicing agent fees 838,909
Shareholder reports 347,082
Custodian fees 24,845
Other 306,359
--------------
Total liabilities 10,141,612
========================================================================================
Net Assets $3,754,543,644
==============
========================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 29,957,381
- ----------------------------------------------------------------------------------------
Additional paid-in capital 2,467,703,022
- ----------------------------------------------------------------------------------------
Undistributed net investment income 4,669,502
- ----------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 119,042,188
- ----------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 1,133,171,551
--------------
Net assets $3,754,543,644
==============
</TABLE>
20 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
===================================================================================================================
===================================================================================================================
===================================================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $2,522,670,363 and 200,668,706 shares of capital stock outstanding) $12.57
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $13.34
- -------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $1,147,122,213
and 92,136,304 shares of capital stock outstanding) $12.45
- -------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $49,126,490
and 3,937,091 shares of capital stock outstanding) $12.48
- -------------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $35,624,578 and 2,831,711 shares of capital stock outstanding) $12.58
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
Statement of Operations For the Six Months Ended June 30, 1998 (Unaudited)
=======================================================================================
=======================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $31,437) $ 19,607,822
- ---------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $29,243) 17,771,558
-------------
Total income 37,379,380
=======================================================================================
Expenses
Management fees--Note 4 9,146,957
- ---------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,229,120
Class B 5,304,977
Class C 213,337
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 1,407,987
Class B 629,157
Class C 25,268
Class Y 15,014
- ---------------------------------------------------------------------------------------
Shareholder reports 333,886
- ---------------------------------------------------------------------------------------
Registration and filing fees:
Class A 35,276
Class B 20,531
Class C 2,625
Class Y 1,850
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 43,795
- ---------------------------------------------------------------------------------------
Legal, auditing and other professional fees 43,266
- ---------------------------------------------------------------------------------------
Directors' fees and expenses 32,796
- ---------------------------------------------------------------------------------------
Insurance expenses 14,559
- ---------------------------------------------------------------------------------------
Other 24,376
-------------
Total expenses 19,524,777
=======================================================================================
Net Investment Income 17,854,603
=======================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 106,297,871
Closing and expiration of option contracts written--Note 5 348,126
Foreign currency transactions (1,464,480)
-------------
Net realized gain 105,181,517
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 359,282,056
Translation of assets and liabilities denominated in foreign currencies 1,555,306
-------------
Net change 360,837,362
-------------
Net realized and unrealized gain 466,018,879
=======================================================================================
Net Increase in Net Assets Resulting from Operations $ 483,873,482
=============
</TABLE>
22 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================================
Statements of Changes in Net Assets
==============================================================================================================
Six Months Ended Year Ended
June 30, 1998 December 31,
(Unaudited) 1997
==============================================================================================================
<S> <C> <C>
Operations
Net investment income $ 17,854,603 $ 35,274,289
- --------------------------------------------------------------------------------------------------------------
Net realized gain 105,181,517 344,889,410
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 360,837,362 324,212,131
--------------- ---------------
Net increase in net assets resulting from operations 483,873,482 704,375,830
==============================================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment
income:
Class A (12,139,457) (25,899,439)
Class B (1,274,279) (4,145,345)
Class C (49,203) (125,521)
Class Y (182,919) (304,885)
- --------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (233,156,326)
Class B -- (103,661,283)
Class C -- (3,743,308)
Class Y -- (2,706,730)
==============================================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets resulting from capital stock
transactions--Note 2:
Class A (33,239,864) 179,892,536
Class B 18,455,638 136,818,203
Class C 6,861,370 16,813,077
Class Y 4,719,122 6,041,378
==============================================================================================================
Net Assets
Total increase 467,023,890 670,198,187
- --------------------------------------------------------------------------------------------------------------
Beginning of period 3,287,519,754 2,617,321,567
--------------- ---------------
End of period (including undistributed net investment
income of $4,669,502 and $460,757, respectively) $ 3,754,543,644 $ 3,287,519,754
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------
Six Months
Ended
June 30,
1998 Year Ended December 31,
(Unaudited) 1997 1996 1995
======================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $11.00 $9.77 $9.35 $7.80
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .16 .20 .23
Net realized and unrealized gain (loss) 1.56 2.49 1.63 2.09
------ ------ ----- -----
Total income (loss) from investment
operations 1.63 2.65 1.83 2.32
- ----------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.06) (.14) (.20) (.22)
Distributions from net realized gain -- (1.28) (1.21) (.55)
------ ------ ----- -----
Total dividends and distributions
to shareholders (.06) (1.42) (1.41) (.77)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.57 $11.00 $9.77 $9.35
====== ====== ===== =====
======================================================================================================================
Total Return, at Net Asset Value(4) 14.84% 27.39% 19.73% 30.12%
======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $2,522,670 $2,237,603 $1,826,599 $1,550,710
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,395,069 $2,045,166 $1,684,726 $1,394,245
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.27%(5) 1.43% 1.96% 2.53%
Expenses 0.86%(5) 0.89% 0.90% 0.92%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 17.9% 91.7% 117.5% 84.8%
</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 3, 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.
24 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
====================================================================================================================================
Class A Class B
- --------------------------- -------------------------------------------------------------------------------------------------
Six Months
Ended
June 30,
Year Ended December 31 1998 Year Ended December 31,
1994 1993 (Unaudited) 1997 1996 1995 1994 1993(3)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
$8.69 $7.84 $10.89 $9.70 $9.29 $7.76 $8.66 $8.29
- ------------------------------------------------------------------------------------------------------------------------------------
.23 .18 .03 .07 .12 .15 .17 .09
(.91) 1.45 1.54 2.45 1.62 2.08 (.91) .97
----- ----- ------ ------ ----- ----- ----- -----
(.68) 1.63 1.57 2.52 1.74 2.23 (.74) 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
(.21) (.20) (.01) (.05) (.12) (.15) (.16) (.11)
-- (.58) -- (1.28) (1.21) (.55) -- (.58)
----- ----- ------ ------ ----- ----- ----- -----
(.21) (.78) (.01) (1.33) (1.33) (.70) (.16) (.69)
- ------------------------------------------------------------------------------------------------------------------------------------
$7.80 $8.69 $12.45 $10.89 $9.70 $9.29 $7.76 $8.66
===== ===== ====== ====== ===== ===== ===== =====
====================================================================================================================================
(7.86)% 21.24% 14.46% 26.17% 18.78% 29.03% (8.64)% 13.09%
====================================================================================================================================
$1,235,637 $1,223,395 $1,147,122 $986,713 $754,918 $589,804 $429,427 $218,716
- ------------------------------------------------------------------------------------------------------------------------------------
$1,261,729 $ 992,381 $1,070,680 $877,911 $671,593 $510,744 $360,773 $ 90,952
- ------------------------------------------------------------------------------------------------------------------------------------
2.88% 2.21% 0.46%(5) 0.62% 1.15% 1.70% 2.11% 1.09%(5)
1.01% 0.93% 1.67%(5) 1.71% 1.71% 1.75% 1.87% 1.87%(5)
- ------------------------------------------------------------------------------------------------------------------------------------
117.2% 143.9% 17.9% 91.7% 117.5% 84.8% 117.2% 143.9%
</TABLE>
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1998 were $630,198,671 and $600,759,113, respectively.
See accompanying Notes to Financial Statements.
25 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
===========================================================================================
Financial Highlights (Continued)
===========================================================================================
Class C
-----------------------------------------
Six Months
Ended
June 30,
1998 Year Ended December 31,
(Unaudited) 1997 1996
===========================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.92 $ 9.72 $ 9.33
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .03 .07 .16
Net realized and unrealized gain (loss) 1.54 2.46 1.57
------ ------ ------
Total income (loss) from investment
operations 1.57 2.53 1.73
- -------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.05) (.13)
Distributions from net realized gain -- (1.28) (1.21)
------ ------ ------
Total dividends and distributions
to shareholders (.01) (1.33) (1.34)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $12.48 $10.92 $ 9.72
====== ====== ======
===========================================================================================
Total Return, at Net Asset Value(4) 14.41% 26.23% 18.67%
===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $49,126 $36,657 $17,554
- -------------------------------------------------------------------------------------------
Average net assets (in thousands) $43,091 $27,349 $ 8,277
- -------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.46%(5) 0.63% 1.05%
Expenses 1.68%(5) 1.72% 1.76%
- -------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 17.9% 91.7% 117.5%
<CAPTION>
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 3, 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.
</TABLE>
26 Oppenheimer Total Return Fund, Inc.
<PAGE>
<TABLE>
<CAPTION>
========================================================================================
========================================================================================
Class Y
- ------ -------------------------------------------------------------------------
Six Months
Ended
June 30,
1998 Year Ended December 31,
1995(2) (Unaudited) 1997 1996 1995 1994(1)
========================================================================================
<S> <C> <C> <C> <C> <C>
$9.19 $11.00 $ 9.77 $9.35 $7.80 $8.23
- -----------------------------------------------------------------------------------------
.07 .09 .18 .23 .20 .15
.73 1.56 2.48 1.61 2.13 (.41)
----- ------ ------ ----- ----- -----
.80 1.65 2.66 1.84 2.33 (.26)
- -----------------------------------------------------------------------------------------
(.11) (.07) (.15) (.21) (.23) (.17)
(.55) -- (1.28) (1.21) (.55) --
----- ------ ------ ----- ----- -----
(.66) (.07) (1.43) (1.42) (.78) (.17)
- -----------------------------------------------------------------------------------------
$9.33 $12.58 $11.00 $9.77 $9.35 $7.80
===== ====== ====== ===== ===== =====
=========================================================================================
8.82% 14.99% 27.53% 19.88% 30.23% (3.15)%
=========================================================================================
$1,655 $35,625 $26,546 $18,252 $6,709 $1,074
- -----------------------------------------------------------------------------------------
$ 784 $32,863 $21,977 $13,083 $3,944 $ 320
- -----------------------------------------------------------------------------------------
1.42%(5) 1.51%(5) 1.60% 2.08% 2.51% 4.07%(5)
1.77%(5) 0.65%(5) 0.74% 0.77% 0.87% 0.96%(5)
- -----------------------------------------------------------------------------------------
84.8% 17.9% 91.7% 117.5% 84.8% 117.2%
</TABLE>
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1998 were $630,198,671 and $600,759,113, respectively.
See accompanying Notes to Financial Statements.
27 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited)
================================================================================
================================================================================
1. Significant Accounting Policies
Oppenheimer Total Return Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek high
total return. The Fund intends to seek its investment objective through
investment in securities which it believes will provide a high return, including
investments which are expected to provide opportunities for growth or to produce
income, or both. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own expenses directly attributable to that class and exclusive
voting rights with respect to matters affecting that class. Classes A, B and 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 an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of 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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
28 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
================================================================================
================================================================================
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. 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.
29 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
1. Significant Accounting Policies (continued)
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>
Six Months Ended June 30, 1998 Year Ended December 31, 1997
------------------------------ ----------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 10,036,591 $ 118,592,683 18,977,566 $ 206,996,029
Dividends and
distributions reinvested 907,588 10,949,720 22,473,543 244,366,731
Redeemed (13,725,473) (162,782,267) (24,890,415) (271,470,224)
----------- ------------- ----------- -------------
Net increase (decrease) (2,781,294) $ (33,239,864) 16,560,694 $ 179,892,536
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------
Class B:
Sold 6,925,752 $ 81,260,046 12,559,650 $ 135,933,408
Dividends and
distributions reinvested 101,544 1,214,824 9,542,266 102,769,569
Redeemed (5,459,211) (64,019,232) (9,385,924) (101,884,774)
----------- ------------- ----------- -------------
Net increase 1,568,085 $ 18,455,638 12,715,992 $ 136,818,203
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------
Class C:
Sold 987,450 $ 11,636,057 1,650,829 $ 17,900,517
Dividends and
distributions reinvested 3,939 47,136 345,135 3,728,540
Redeemed (411,603) (4,821,823) (444,581) (4,815,980)
----------- ------------- ----------- -------------
Net increase 579,786 $ 6,861,370 1,551,383 $ 16,813,077
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------
Class Y:
Sold 1,013,861 $ 11,743,498 1,064,357 $ 11,578,084
Dividends and
distributions reinvested 15,149 182,919 276,903 3,011,615
Redeemed (610,502) (7,207,295) (796,261) (8,548,321)
----------- ------------- ----------- -------------
Net increase 418,508 $ 4,719,122 544,999 $ 6,041,378
=========== ============= =========== =============
</TABLE>
30 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
================================================================================
================================================================================
3. Unrealized Gains and Losses on Investments
At June 30, 1998, net unrealized appreciation on investments of $1,133,171,581
was composed of gross appreciation of $1,165,660,321, and gross depreciation of
$32,488,740.
================================================================================
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% of the first
$100 million of 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.
For the six months ended June 30, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $2,282,024, of which $771,045 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $2,588,254 and $102,099, respectively, of which $248,456
and $6,009, respectively, was paid to an affiliated broker/dealer. During the
six months ended June 30, 1998, OFDI received contingent deferred sales charges
of $575,815 and $5,671, 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 shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended June 30, 1998, OFDI paid $184,185 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
31 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class B and Class C shares. Each fee is computed
on the average annual net assets of Class B and Class C shares, determined as of
the close of each regular business day. During the six months ended June 30,
1998, OFDI paid $80,947 and $3,511, respectively, to an affiliated broker/dealer
as compensation for Class B and Class C personal service and maintenance
expenses and retained $4,135,510 and $100,772, respectively, as compensation for
Class B and Class C sales commissions and service fee advances, as well as
financing costs. If either Plan is terminated by the Fund, the Board of
Directors may allow the Fund to continue payments of the asset-based sales
charge to OFDI for distributing shares before the Plan was terminated. At June
30, 1998, OFDI had incurred excess distribution and servicing costs of
$15,078,558 for Class B and $434,402 for Class C.
================================================================================
5. 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.
32 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
================================================================================
================================================================================
Written option activity for the six months ended June 30, 1998 was as follows:
<TABLE>
<CAPTION>
Call Options
-------------------------
Number of Amount of
Options Premiums
- --------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1997 -- $ --
Options written 4,550 757,249
Options closed or expired (4,050) (696,251)
Options exercised (500) (60,998)
--------- ---------
Options outstanding at June 30, 1998 -- $ --
========= =========
</TABLE>
================================================================================
6. Illiquid and Restricted Securities
At June 30, 1998, 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
periodically) 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 June 30, 1998 was $13,792,281, which represents
0.37% of the Fund's net assets.
================================================================================
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended June 30,
1998.
33 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
Oppenheimer Total Return Fund, Inc.
================================================================================
================================================================================
Officers and Directors James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Director and President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Director, Vice President, Treasurer
and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Bruce Bartlett, Vice President
John P. Doney, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have
been taken from the records of the Fund
without examination of the independent
auditors. This is a copy of a report to
shareholders of Oppenheimer Total Return Fund,
Inc. This report must be preceded or
accompanied by a Prospectus of Oppenheimer
Total Return Fund, Inc. For material
information concerning the Fund, see the
Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
34 Oppenheimer Total Return Fund, Inc.
<PAGE>
================================================================================
OppenheimerFunds Family
================================================================================
<TABLE>
============================================================================================================
<S> <C> <C>
Real Asset Funds
- ------------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
============================================================================================================
Global Stock Funds
- ------------------------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
============================================================================================================
Stock Funds
- ------------------------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
============================================================================================================
Stock & Bond Funds
- ------------------------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
============================================================================================================
Taxable Bond Funds
- ------------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
============================================================================================================
Municipal Funds
- ------------------------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
============================================================================================================
Money Market Funds(4)
- ------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although these funds may seek to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
35 Oppenheimer Total Return Fund, Inc.
<PAGE>
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
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 or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
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 to 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, or visit us at our website at www.oppenheimerfunds.com
- --we're here to help.
Internet
24-hr access to account
information. Online
transactions now available
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
Account Transactions
Mon-Fri 8:30am-8pm ET
1-800-852-8457
PhoneLink
24-hr automated information
and automated transactions
1-800-533-3310
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for the Deaf (TDD)
Mon-Fri 8:30am-2pm 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
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RS0420.001.0698 August 28, 1998
