-------------------------------
Semiannual Report June 30, 1999
-------------------------------
OPPENHEIMER
Total Return
Fund, Inc.
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
5 An Interview with Your Fund's Managers
11 Financial Statements
34 Officers and Directors
40 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o In a volatile investment environment, the Fund showed gains from both its
growth-oriented and value-oriented holdings.
o Our strongest gains among growth-oriented stocks came from holdings in the
financial, technology and retail sectors.
o Value-oriented holdings among such industries as manufacturing and energy also
contributed to the Fund's performance.
Cumulative Total Returns
For the 6-Month Period
Ended 6/30/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- --------------------------------
9.76% 3.45%
- --------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- --------------------------------
9.34% 4.34%
- --------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- --------------------------------
9.34% 8.34%
- --------------------------------
Class Y
Without With
Sales Chg.(1) Sales Chg.(2)
- --------------------------------
9.85% 9.85%
- --------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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. Because the stock market can be volatile, the Fund's
performance may be subject to substantial short-term changes. For updates on the
Fund's performance, please contact your financial advisor, call us at
1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
(1). Includes changes in net asset value per share without deducting any sales
charges.
(2). Class A returns include the current maximum initial sales charge of 5.75%.
Class B returns include the applicable contingent deferred sales charge of 5%.
Class C returns include the contingent deferred sales charge of 1%. Class Y
shares are offered only to certain institutional investors under special
agreements with the Distributor. Class B and C shares are subject to an annual
0.75% asset-based sales charge. An explanation of the different performance
calculations is in the Fund's prospectus.
2 Oppenheimer Total Return Fund, Inc.
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Total Return Fund, Inc.
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Total Return Fund, Inc.
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities.(1)
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified port folio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most analysts'
expectations and the breadth of the market's positive performance has begun to
widen. This has raised concerns that inflationary pressures may re-emerge.
Looking outside of the United States, many foreign economies also appear to be
on the mend. The impact of these changes, as it applies to your fund, is
discussed more fully inside by your portfolio manager.
(over, please)
(1). Foreign investing entails higher expenses and risks, such as foreign
currency fluctuations, economic and political instability, and differences in
accounting standards.
3 Oppenheimer Total Return Fund, Inc.
<PAGE>
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1999
4 Oppenheimer Total Return Fund, Inc.
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
[PHOTO]
Portfolio Management
Team (l to r)
John Doney
Bruce Bartlett
How did Oppenheimer Total Return Fund, Inc. perform during the first half of
1999?
We are very pleased with the performance of the Fund, especially during the
transitional and volatile six-month period that ended June 30, 1999. Performance
continued to be driven by our growth-oriented approach, which was supported by
improving performance for our value-oriented approach.
What made this such a transitional and volatile period?
The year began with the U.S. economy growing at a robust rate, fueled by high
levels of consumer confidence and consumer spending. However, most corporate
earnings failed to keep pace with domestic economic growth because of weakness
in international markets. Investors paid increasingly high prices for the
handful of large-cap stocks that offered the promise of continued real earnings
growth. Meanwhile, most other stocks languished.
In early April, reassured by evidence that the U.S. economy was continuing
to grow, investors abruptly began to look beyond large-cap growth stocks for new
opportunities among smaller-cap and value-oriented stocks. Value indices
performed strongly for several weeks. By mid-May, however, the advance of value
stocks had slowed. Through the remainder of the period, neither growth stocks
nor value stocks proved able to sustain the market's overall advance in the face
of rising concerns over the potential for inflation.
5 Oppenheimer Total Return Fund, Inc.
<PAGE>
"...we believe the events of the last six months underscore the importance of a
diversified, long-term investment strategy that includes both value and growth
components."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How did you manage the Fund in light of these conditions?
We generally don't invest from the perspective of macroeconomic conditions.
Rather, we seek individual companies that exhibit the growth or value
characteristics that meet our investment criteria. During the most recent
six-month period, we found many of these opportunities among companies in the
financial, technology and consumer cyclical sectors.
Financial stocks performed well early in the period, buoyed by the healthy
U.S. economy and signs of financial strength among worldwide emerging markets.
Some of the Fund's holdings were among the sector's better performers.(1) Stocks
of Citigroup, Inc., for example, benefited from the company's progress in
transforming itself into a global financial services powerhouse through a
combination of internal growth and acquisitions. Charles Schwab Corp. succeeded
in enhancing revenue and earnings growth by increasing its Internet-based
business.
In the technology sector, we anticipated a slowdown in spending on
computer hardware and software as many companies prepared existing computer
systems for the year 2000. Accordingly, we reduced our positions among the
companies we believed were most likely to be affected.
(1). The Fund's portfolio is subject to change.
6 Oppenheimer Total Return Fund, Inc.
<PAGE>
At the same time, we added to our positions among other companies, such as
Uniphase Corp., that are helping to build today's high-speed, high-capacity data
communications and telecommunications networks. Overall, our technology exposure
increased during the period, and proved to be a strong contributor to
performance.
Among consumer cyclicals, stocks of several specialty retailers performed
well for the Fund. Our holdings included retailers that are benefiting from
strong consumer demand for the latest generation of digital cameras, disc
players and other digital media. Other holdings in the retail sector included
stocks of companies that are using the Internet to reach new customers.
Did any investment sectors exhibit weakness during the period?
Yes. Healthcare stocks, already weakened by the impact of regulatory and
competitive pressures on company revenues, were hit particularly hard by the
market's transition away from growth-oriented businesses in April. Declines
occurred among stocks of pharmaceutical and medical product companies, as well
as wholesale and retail drug distribution companies such as CVS Corp. Overall,
our healthcare industry exposure dropped from approximately 10.5% on Jan. 1 to
6.9% of the Fund's portfolio on June 30, as we found more attractive investment
opportunities in other sectors, particularly technology.
7 Oppenheimer Total Return Fund, Inc.
<PAGE>
Avg Annual Total Returns
For the Periods Ended 6/30/99(2)
Class A
1 year 5 year 10 year
- ------------------------------------
9.14% 20.21% 16.14%
- ------------------------------------
Class B
Since
1 year 5 year Inception
- ------------------------------------
9.88% 20.45% 16.98%
- ------------------------------------
Class C
Since
1 year 5 year Inception
- ------------------------------------
13.87% N/A 21.97%
- ------------------------------------
Class Y
Since
1 year 5 year Inception
- ------------------------------------
15.90% 21.80% 20.42%
- ------------------------------------
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How did the Fund's value-oriented investments perform?
Several of the Fund's investments benefited from the April shift in market
sentiment in favor of value-oriented stocks. For example, the stock of Tyco
International Ltd., a diversified manufacturing company and one of the Fund's
largest holdings, rose between early April and mid-May, before declining
slightly. Similarly, many of the Fund's investments in the energy sector rose in
value between March and the end of the period in response to growing global
demand for energy and production restraints announced by several oil producing
nations.
(2). 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), 1% (5-year and since inception
on 5/3/93). 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 offered only to
certain institutional investors under special agreements with the Distributor.
Class B and C shares are subject to an annual 0.75% asset-based sales charge. An
explanation of the different performance calculations is in the Fund's
prospectus.
(3). Portfolio is subject to change. Percentages are as of June 30, 1999, and
are based on market value of investment.
(4). Portfolio is subject to change. Percentages are as of June 30, 1999, and
are based on net assets.
8 Oppenheimer Total Return Fund, Inc.
<PAGE>
Asset Allocation(3)
[The following table was originally a pie chart in the printed material]
Stocks 82.8%
Cash Equivalents 10.5
Bonds 4.2
Convertible Securities 2.5
What is your outlook for the Fund?
Only time will tell whether and for how long the market's current tilt toward
value-oriented stocks will continue. But regardless of the direction the economy
and markets take, we believe the events of the last six months underscore the
importance of a diversified, long-term investment strategy that includes both
value and growth components. That's why we strive to continue to maintain our
value-and-growth investment strategy, and why Oppenheimer Total Return Fund,
Inc. remains part of The Right Way to Invest.
Top 10 Common Stock Holdings(4)
- --------------------------------------------------------------------------------
Tyco International Ltd. 3.8%
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.3
- --------------------------------------------------------------------------------
Home Depot, Inc. 2.2
- --------------------------------------------------------------------------------
Microsoft Corp. 2.1
- --------------------------------------------------------------------------------
Uniphase Corp. 1.9
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 1.6
- --------------------------------------------------------------------------------
Charles Schwab Corp. 1.5
- --------------------------------------------------------------------------------
Amgen, Inc. 1.5
- --------------------------------------------------------------------------------
Enron Corp. 1.5
- --------------------------------------------------------------------------------
CVS Corp. 1.5
- --------------------------------------------------------------------------------
Common Stocks--Top 5 Industries(4)
- --------------------------------------------------------------------------------
Retail/Specialty 8.2%
- --------------------------------------------------------------------------------
Diversified Financial 6.8
- --------------------------------------------------------------------------------
Banks 6.3
- --------------------------------------------------------------------------------
Manufacturing 5.1
- --------------------------------------------------------------------------------
Insurance 4.0
- --------------------------------------------------------------------------------
9 Oppenheimer Total Return Fund, Inc.
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--78.7%
- --------------------------------------------------------------------------------
Basic Materials--1.6%
- --------------------------------------------------------------------------------
Chemicals--0.5%
Goodrich (B.F.) Co. 200,000 $ 8,500,000
- --------------------------------------------------------------------------------
International Flavors & Fragrances, Inc. 260,000 11,537,500
-----------
20,037,500
- --------------------------------------------------------------------------------
Paper--1.1%
International Paper Co. 460,412 23,250,806
- --------------------------------------------------------------------------------
Sonoco Products Co. 330,000 9,879,375
- --------------------------------------------------------------------------------
Weyerhaeuser Co. 200,000 13,750,000
-----------
46,880,181
- --------------------------------------------------------------------------------
Capital Goods--6.2%
- --------------------------------------------------------------------------------
Aerospace/Defense--0.2%
Precision Castparts Corp. 200,000 8,500,000
- --------------------------------------------------------------------------------
Raytheon Co., Cl. A 12,754 878,432
-----------
9,378,432
- --------------------------------------------------------------------------------
Electrical Equipment--0.3%
Honeywell, Inc. 100,000 11,587,500
- --------------------------------------------------------------------------------
Industrial Services--0.6%
Republic Services, Inc.(1) 1,000,000 24,750,000
- --------------------------------------------------------------------------------
Manufacturing--5.1%
AlliedSignal, Inc. 200,000 12,600,000
- --------------------------------------------------------------------------------
American Standard Cos., Inc.(1) 285,300 13,694,400
- --------------------------------------------------------------------------------
Hillenbrand Industries, Inc. 400,000 17,300,000
- --------------------------------------------------------------------------------
Tenneco, Inc. 300,000 7,162,500
- --------------------------------------------------------------------------------
Tyco International Ltd. 1,688,288 159,965,288
- --------------------------------------------------------------------------------
Wyman-Gordon Co.(1) 265,000 5,117,812
-----------
215,840,000
- --------------------------------------------------------------------------------
Communications Services--6.3%
- --------------------------------------------------------------------------------
Telecommunications: Long Distance--2.7%
AT&T Corp. 1,026,555 57,294,601
- --------------------------------------------------------------------------------
MCI WorldCom, Inc.(1) 445,500 38,340,844
- --------------------------------------------------------------------------------
Qwest Communications International, Inc.(1) 536,406 17,734,923
-----------
113,370,368
- --------------------------------------------------------------------------------
Telephone Utilities--3.6%
Bell Atlantic Corp. 896,800 58,628,300
- --------------------------------------------------------------------------------
BellSouth Corp. 400,000 18,750,000
- --------------------------------------------------------------------------------
GTE Corp. 500,000 37,875,000
- --------------------------------------------------------------------------------
SBC Communications, Inc. 600,000 34,800,000
-----------
150,053,300
11 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Consumer Cyclicals--14.1%
- --------------------------------------------------------------------------------
Autos & Housing--0.5%
Delphi Automotive Systems Corp.(1) 293,500 $ 5,448,094
- --------------------------------------------------------------------------------
Lear Corp.(1) 271,800 13,522,050
-----------
18,970,144
- --------------------------------------------------------------------------------
Consumer Services--0.9%
Dun & Bradstreet Corp. 600,000 21,262,500
- --------------------------------------------------------------------------------
Young & Rubicam, Inc.(1) 357,000 16,221,187
-----------
37,483,687
- --------------------------------------------------------------------------------
Leisure & Entertainment--0.8%
Carnival Corp. 400,000 19,400,000
- --------------------------------------------------------------------------------
Hasbro, Inc. 300,000 8,381,250
- --------------------------------------------------------------------------------
Mirage Resorts, Inc.(1) 300,000 5,025,000
-----------
32,806,250
- --------------------------------------------------------------------------------
Media--0.1%
R.H. Donnelley Corp. 100,000 1,956,250
- --------------------------------------------------------------------------------
Retail: General--3.6%
Federated Department Stores, Inc.(1) 300,000 15,881,250
- --------------------------------------------------------------------------------
Kohl's Corp.(1) 540,000 41,681,250
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 1,990,000 96,017,500
-----------
153,580,000
- --------------------------------------------------------------------------------
Retail: Specialty--8.2%
Abercrombie & Fitch Co., Cl. A(1) 820,024 39,361,152
- --------------------------------------------------------------------------------
AutoNation, Inc.(1) 1,900,000 33,843,750
- --------------------------------------------------------------------------------
AutoZone, Inc.(1) 500,000 15,062,500
- --------------------------------------------------------------------------------
Best Buy Co., Inc. 660,000 44,550,000
- --------------------------------------------------------------------------------
General Nutrition Cos., Inc.(1) 400,000 9,325,000
- --------------------------------------------------------------------------------
Home Depot, Inc. 1,457,000 93,885,437
- --------------------------------------------------------------------------------
Intimate Brands, Inc., Cl. A 420,000 19,897,500
- --------------------------------------------------------------------------------
Linens 'N Things, Inc.(1) 555,800 24,316,250
- --------------------------------------------------------------------------------
OfficeMax, Inc.(1) 1,900,000 22,800,000
- --------------------------------------------------------------------------------
Sherwin-Williams Co. 302,200 8,386,050
- --------------------------------------------------------------------------------
Tandy Corp. 740,000 36,167,500
-----------
347,595,139
- --------------------------------------------------------------------------------
Consumer Staples--7.1%
- --------------------------------------------------------------------------------
Beverages--0.5%
Anheuser-Busch Cos., Inc. 300,000 21,281,250
12 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Broadcasting--0.5%
Adelphia Communications Corp.(1) 50,000 $ 3,181,250
- --------------------------------------------------------------------------------
Fox Entertainment Group, Inc., A Shares(1) 200,000 5,387,500
- --------------------------------------------------------------------------------
Infinity Broadcasting Corp., Cl. A(1) 462,400 13,756,400
-----------
22,325,150
- --------------------------------------------------------------------------------
Entertainment--0.9%
Brinker International, Inc.(1) 500,000 13,593,750
- --------------------------------------------------------------------------------
Starbucks Corp.(1) 660,000 24,791,250
-----------
38,385,000
- --------------------------------------------------------------------------------
Food--0.5%
General Mills, Inc. 100,000 8,037,500
- --------------------------------------------------------------------------------
Nabisco Group Holdings Corp. 700,000 13,693,750
-----------
21,731,250
- --------------------------------------------------------------------------------
Food & Drug Retailers--2.5%
CVS Corp. 1,228,000 62,321,000
- --------------------------------------------------------------------------------
Kroger Co.(1) 200,000 5,587,500
- --------------------------------------------------------------------------------
U.S. Foodservice, Inc.(1) 322,500 13,746,562
- --------------------------------------------------------------------------------
Walgreen Co. 770,000 22,618,750
-----------
104,273,812
- --------------------------------------------------------------------------------
Household Goods--1.3%
Dial Corp. (The) 1,000,000 37,187,500
- --------------------------------------------------------------------------------
Newell Rubbermaid, Inc. 400,000 18,600,000
-----------
55,787,500
- --------------------------------------------------------------------------------
Tobacco--0.9%
Philip Morris Cos., Inc. 800,000 32,150,000
- --------------------------------------------------------------------------------
R.J. Reynolds Tobacco Holdings, Inc.(1) 233,333 7,349,989
-----------
39,499,989
- --------------------------------------------------------------------------------
Energy--2.8%
- --------------------------------------------------------------------------------
Energy Services--0.4%
Schlumberger Ltd. 253,600 16,151,150
- --------------------------------------------------------------------------------
Oil: Domestic--2.3%
Atlantic Richfield Co. 150,000 12,534,375
- --------------------------------------------------------------------------------
Conoco, Inc., Cl.A 624,600 17,410,725
- --------------------------------------------------------------------------------
Exxon Corp. 300,000 23,137,500
- --------------------------------------------------------------------------------
Mobil Corp. 200,000 19,800,000
- --------------------------------------------------------------------------------
Unocal Corp. 300,000 11,887,500
- --------------------------------------------------------------------------------
USX-Marathon Group 400,000 13,025,000
-----------
97,795,100
13 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Oil: International--0.1%
Royal Dutch Petroleum Co., NY Shares 100,000 $ 6,025,000
- --------------------------------------------------------------------------------
Financial--17.4%
- --------------------------------------------------------------------------------
Banks--6.3%
Bank of America Corp. 582,900 42,733,856
- --------------------------------------------------------------------------------
Bank One Corp. 330,000 19,655,625
- --------------------------------------------------------------------------------
Chase Manhattan Corp. 350,000 30,318,750
- --------------------------------------------------------------------------------
East West Bancorp, Inc.(2) 1,000,000 10,062,500
- --------------------------------------------------------------------------------
Fifth Third Bancorp 375,000 24,960,937
- --------------------------------------------------------------------------------
First Tennessee National Corp. 627,000 24,021,937
- --------------------------------------------------------------------------------
First Union Corp. 400,000 18,800,000
- --------------------------------------------------------------------------------
Firstar Corp. 750,000 21,000,000
- --------------------------------------------------------------------------------
Fleet Financial Group, Inc. 200,600 8,901,625
- --------------------------------------------------------------------------------
KeyCorp 400,000 12,850,000
- --------------------------------------------------------------------------------
National City Corp. 360,000 23,580,000
- --------------------------------------------------------------------------------
PNC Bank Corp. 270,000 15,558,750
- --------------------------------------------------------------------------------
Summit Bancorp 360,000 15,052,500
-----------
267,496,480
- --------------------------------------------------------------------------------
Diversified Financial--6.8%
American Express Co. 50,000 6,506,250
- --------------------------------------------------------------------------------
Anthracite Capital, Inc. 400,000 2,625,000
- --------------------------------------------------------------------------------
Associates First Capital Corp., Cl. A 618,000 27,385,125
- --------------------------------------------------------------------------------
Citigroup, Inc. 1,274,998 60,562,405
- --------------------------------------------------------------------------------
Freddie Mac 460,000 26,680,000
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The)(1) 108,200 7,817,450
- --------------------------------------------------------------------------------
Household International, Inc. 759,990 36,004,526
- --------------------------------------------------------------------------------
Imperial Credit Commercial Mortgage Investment Corp. 500,000 5,406,250
- --------------------------------------------------------------------------------
Providian Financial Corp. 535,000 50,022,500
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 590,700 64,903,163
-----------
287,912,669
- --------------------------------------------------------------------------------
Insurance--4.0%
Aetna, Inc. 200,000 17,887,500
- --------------------------------------------------------------------------------
AFLAC, Inc. 305,000 14,601,875
- --------------------------------------------------------------------------------
Allstate Corp. 250,000 8,968,750
- --------------------------------------------------------------------------------
American General Corp. 300,000 22,612,500
- --------------------------------------------------------------------------------
American International Group, Inc. 501,992 58,764,439
- --------------------------------------------------------------------------------
Enhance Financial Services Group, Inc. 600,000 11,850,000
- --------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. 400,000 23,325,000
- --------------------------------------------------------------------------------
St. Paul Cos., Inc. 400,000 12,725,000
-----------
170,735,064
14 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Savings & Loans--0.3%
Local Financial Corp.(1) 400,000 $ 4,000,000
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 300,000 10,612,500
-----------
14,612,500
- --------------------------------------------------------------------------------
Healthcare--6.9%
- --------------------------------------------------------------------------------
Healthcare/Drugs--4.5%
Abbott Laboratories 200,000 9,100,000
- --------------------------------------------------------------------------------
American Home Products Corp. 300,000 17,250,000
- --------------------------------------------------------------------------------
Amgen, Inc.(1) 1,050,000 63,918,750
- --------------------------------------------------------------------------------
Biogen, Inc.(1) 727,800 46,806,638
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 300,000 21,131,250
- --------------------------------------------------------------------------------
Lynx Therapeutics, Inc.(1)(3) 15,390 174,099
- --------------------------------------------------------------------------------
Pharmacia & Upjohn, Inc. 560,000 31,815,000
-----------
190,195,737
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--2.4%
Bausch & Lomb, Inc. 200,000 15,300,000
- --------------------------------------------------------------------------------
Cardinal Health, Inc. 645,300 41,379,863
- --------------------------------------------------------------------------------
Guidant Corp. 538,400 27,693,950
- --------------------------------------------------------------------------------
HEALTHSOUTH Corp.(1) 430,000 6,423,125
- --------------------------------------------------------------------------------
Medtronic, Inc. 114,500 8,916,688
-----------
99,713,626
- --------------------------------------------------------------------------------
Technology--13.3%
- --------------------------------------------------------------------------------
Computer Hardware--3.3%
Dell Computer Corp.(1) 790,000 29,230,000
- --------------------------------------------------------------------------------
EMC Corp.(1) 920,000 50,600,000
- --------------------------------------------------------------------------------
International Business Machines Corp. 200,000 25,850,000
- --------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(1) 527,500 34,847,969
-----------
140,527,969
- --------------------------------------------------------------------------------
Computer Services--0.5%
Ceridian Corp.(1) 600,000 19,612,500
- --------------------------------------------------------------------------------
Computer Software--3.1%
Compuware Corp.(1) 1,485,000 47,241,563
- --------------------------------------------------------------------------------
Microsoft Corp.(1) 708,400 63,888,825
- --------------------------------------------------------------------------------
Unisys Corp.(1) 475,000 18,495,313
-----------
129,625,701
- --------------------------------------------------------------------------------
Communications Equipment--2.6%
Cisco Systems, Inc.(1) 1,044,000 67,272,750
- --------------------------------------------------------------------------------
General Instrument Corp.(1) 955,000 40,587,500
-----------
107,860,250
15 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Electronics--3.8%
Intel Corp. 290,000 $ 17,255,000
- ---------------------------------------------------------------------------------------------
JDS Fitel, Inc.(1) 135,000 11,264,837
- ---------------------------------------------------------------------------------------------
Motorola, Inc. 275,000 26,056,250
- ---------------------------------------------------------------------------------------------
Uniphase Corp.(1) 483,800 80,310,800
- ---------------------------------------------------------------------------------------------
Waters Corp.(1) 500,000 26,562,500
-------------
161,449,387
- ---------------------------------------------------------------------------------------------
Utilities--3.0%
- ---------------------------------------------------------------------------------------------
Electric Utilities--1.5%
Allegheny Energy, Inc. 210,000 6,733,125
- ---------------------------------------------------------------------------------------------
Carolina Power & Light Co. 110,000 4,709,375
- ---------------------------------------------------------------------------------------------
CINergy Corp. 134,800 4,313,600
- ---------------------------------------------------------------------------------------------
DQE, Inc. 144,100 5,782,013
- ---------------------------------------------------------------------------------------------
Illinova Corp. 300,000 8,175,000
- ---------------------------------------------------------------------------------------------
New Century Energies, Inc. 200,000 7,762,500
- ---------------------------------------------------------------------------------------------
Southern Co. 298,500 7,910,250
- ---------------------------------------------------------------------------------------------
Texas Utilities Co. 200,000 8,250,000
- ---------------------------------------------------------------------------------------------
Unicom Corp. 300,000 11,568,750
-------------
65,204,613
- ---------------------------------------------------------------------------------------------
Gas Utilities--1.5%
Enron Corp. 775,000 63,356,250
-------------
Total Common Stocks (Cost $2,062,626,489) 3,325,846,698
=============================================================================================
Preferred Stocks--0.6%
- ---------------------------------------------------------------------------------------------
Microsoft Corp., $2.75 Cum. Cv., Series A, Non-Vtg
(Cost $21,453,319) 255,000 25,484,063
=============================================================================================
Other Securities--3.7%
- ---------------------------------------------------------------------------------------------
Dollar General Corp., 8.50% Cv. Structured Yield
Product Exchangeable for Stock 271,100 11,623,412
- ---------------------------------------------------------------------------------------------
EMC Corp., 3.25% Cv. Sub. Nts., 3/15/02(2) 4,500,000 21,948,750
- ---------------------------------------------------------------------------------------------
Houston Industries, Inc., 7% Automatic Common Exchange
Securities for Time Warner, Inc. Common Stock 211,000 25,161,750
- ---------------------------------------------------------------------------------------------
IRSA-Inversiones y Representaciones SA, 4.50% Puttable
& Redeemable Cv. Knockout Securities, 8/2/03(2) 7,758,000 8,708,355
- ---------------------------------------------------------------------------------------------
MediaOne Group, Inc., 6.25% Cv. Premium Income Exchangeable
Securities for Airtouch Communications, Inc. Common 258,000 23,349,000
- ---------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.25% Structured Yield Product
Exchangeable for Stock of IMC Global, Inc. 90,900 1,857,769
- ---------------------------------------------------------------------------------------------
Newell Financial Trust I, 5.25% Cv. Preferred Stock(2) 163,000 9,189,125
- ---------------------------------------------------------------------------------------------
Premier Parks, Inc., 7.50% Cum. Cv. Premium Income Equity
Securities, Non-Vtg 232,000 15,776,000
- ---------------------------------------------------------------------------------------------
Qwest Trends Trust, 5.75% Cv.(2) 50,000 2,862,500
</TABLE>
16 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Other Securities (continued)
Scandinavian Broadcasting System SA, 7.25% Cv
Sub. Debs., 8/1/05 3,000,000 $ 3,352,500
- ---------------------------------------------------------------------------------------------------
St. George Bank, ADR 9% Cv. Structured Yield Product
Exchangeable for Common Stock of St. George Bank(2) 90,000 4,545,000
- ---------------------------------------------------------------------------------------------------
TCI Pacific Communications, Inc., 5% Cv. Cum
Sr. Preferred, Cl. A 50,000 17,083,100
- ---------------------------------------------------------------------------------------------------
Texas Utilities Co., 9.25% Cv. Preferred Redeemable Increased
Dividend Equity Securities, Non-Vtg 117,600 6,468,000
- ---------------------------------------------------------------------------------------------------
Union Pacific Capital Trust, 6.25% Cum. Term Income Deferrable
Equity Securities, Non-Vtg 87,600 4,653,750
------------
Total Other Securities (Cost $97,713,646) 156,579,011
Face
Amount(4)
===================================================================================================
U.S. Government Obligations--4.2%
- ---------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
6.625%, 2/15/27 $ 25,675,000 27,038,984
STRIPS, 6.17%, 2/15/20(5) 100,000,000 27,381,600
STRIPS, 6.51%, 8/15/19(5) 100,000,000 28,200,900
STRIPS, 6.92%, 11/15/18(5) 54,000,000 15,936,102
- ---------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
6.25%, 2/15/07 31,200,000 31,794,766
6.625%, 3/31/02 30,050,000 30,810,656
7.75%, 11/30/99 10,000,000 10,112,500
7.75%, 12/31/99 5,000,000 5,064,065
------------
Total U.S. Government Obligations (Cost $170,765,246) 176,339,573
===================================================================================================
Non-Convertible Corporate Bonds and Notes--0.0%
- ---------------------------------------------------------------------------------------------------
Dresdner Finance BV, 5.50% Gtd. Nts., 4/30/04 DEM (Cost $279,377) 417,000 334,212
===================================================================================================
Convertible Corporate Bonds and Notes--1.7%
- ---------------------------------------------------------------------------------------------------
Affiliated Computer Services, Inc., 4% Cv. Sub. Nts., 3/15/05(2) 5,000,000 6,681,250
- ---------------------------------------------------------------------------------------------------
Home Depot, Inc., 3.25% Cv. Sub. Nts., 10/1/01 18,600,000 51,963,750
- ---------------------------------------------------------------------------------------------------
Level One Communications, Inc., 4% Cv. Sub. Nts., 9/1/04(2) 3,500,000 6,829,375
- ---------------------------------------------------------------------------------------------------
Offshore Logistics, Inc., 6% Cv. Sub. Nts., 12/15/03(2) 5,000,000 4,287,500
- ---------------------------------------------------------------------------------------------------
Sunrise Assisted Living, Inc., 5.50% Cv. Nts., 6/15/02(2) 3,409,000 3,788,251
------------
Total Convertible Corporate Bonds and Notes (Cost $38,824,375) 73,550,126
</TABLE>
17 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(4) See Note 1
===================================================================================================
<S> <C> <C>
Short-Term Notes--10.0%(6)
- ---------------------------------------------------------------------------------------------------
CIT Group Holdings, Inc., 4.90%, 7/22/99 $ 50,000,000 $ 49,857,083
- ---------------------------------------------------------------------------------------------------
Countrywide Home Loans, 4.92%, 7/14/99 50,000,000 49,911,167
- ---------------------------------------------------------------------------------------------------
Equilon Enterprises LLC, 4.84%, 7/12/99 50,000,000 49,926,056
- ---------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.32%, 7/1/99 50,000,000 50,000,000
- ---------------------------------------------------------------------------------------------------
General Electric Capital Corp., 5.70%, 7/1/99 50,000,000 49,992,083
- ---------------------------------------------------------------------------------------------------
Homeside Lending, Inc.:
5%, 7/15/99 50,000,000 49,904,528
5.08%, 8/4/99 50,000,000 49,760,111
- ---------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, 5.18%, 8/9/99 25,000,000 24,859,708
- ---------------------------------------------------------------------------------------------------
Prudential Funding Corp., 4.90%, 7/23/99 50,000,000 49,850,278
--------------
Total Short-Term Notes (Cost $424,061,014) 424,061,014
===================================================================================================
Repurchase Agreements--0.4%
- ---------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital
Markets, 4.80%, dated 6/30/99, to be repurchased
at $15,702,093 on 7/1/99, collateralized by U.S.
Treasury Nts., 5.50%-8%, 11/30/99-7/15/06, with a
value of $13,253,959, U.S. Treasury Bonds, 6%-9.25%,
2/15/16-2/15/26, with a value of $2,775,487
(Cost $15,700,000) 15,700,000 15,700,000
- ---------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $2,831,423,466) 99.3% 4,197,894,697
- ---------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.7 29,839,638
============ ==============
Net Assets 100.0% $4,227,734,335
============ ==============
</TABLE>
(1). Non-income-producing security.
(2). 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 $78,902,606 or 1.87% of the Fund's net
assets as of June 30, 1999.
(3). Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
(4). Face amount is reported in U.S. Dollars, except for those denoted in the
following currency: DEM--German Mark
(5). For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
(6). Short-term notes are generally traded on a discount basis; the interest
rate is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
18 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
==========================================================================================
<S> <C>
Assets
Investments, at value (cost $2,831,423,466)--see accompanying statement $4,197,894,697
- ------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 33,118,908
Interest and dividends 5,877,969
Shares of capital stock sold 2,735,107
Other 77,694
--------------
Total assets 4,239,704,375
==========================================================================================
Liabilities
Bank overdraft 5,799,360
- ------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of capital stock redeemed 3,096,857
Distribution and service plan fees 2,109,090
Shareholder reports 392,959
Transfer and shareholder servicing agent fees 353,856
Custodian fees 43,676
Directors' compensation 3,230
Other 171,012
--------------
Total liabilities 11,970,040
==========================================================================================
Net Assets $4,227,734,335
==============
==========================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 31,752,359
- ------------------------------------------------------------------------------------------
Additional paid-in capital 2,668,958,300
- ------------------------------------------------------------------------------------------
Undistributed net investment income 4,357,065
- ------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 156,195,421
- ------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 1,366,471,190
--------------
Net assets $4,227,734,335
==============
</TABLE>
19 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $2,815,620,773 and 210,740,220 shares of capital
stock outstanding) $13.36
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $14.18
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $1,292,050,014 and 97,753,423 shares of capital stock
outstanding) $13.22
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $69,793,449 and 5,269,104 shares of capital stock
outstanding) $13.25
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $50,270,099 and 3,760,838 shares of
capital stock outstanding) $13.37
See accompanying Notes to Financial Statements.
20 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $13,500) $ 20,420,166
- --------------------------------------------------------------------------------
Interest 19,671,932
-------------
Total income 40,092,098
================================================================================
Expenses
Management fees--Note 4 10,305,312
- --------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,533,011
Class B 6,141,443
Class C 312,523
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 1,681,163
Class B 782,762
Class C 39,682
Class Y 20,619
- --------------------------------------------------------------------------------
Shareholder reports 534,359
- --------------------------------------------------------------------------------
Registration and filing fees:
Class A 40,853
Class B 11,499
Class C 4,101
Class Y 5,618
- --------------------------------------------------------------------------------
Custodian fees and expenses 53,429
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 46,472
- --------------------------------------------------------------------------------
Directors' compensation 39,263
- --------------------------------------------------------------------------------
Insurance expenses 7,118
- --------------------------------------------------------------------------------
Other 130,495
-------------
Total expenses 22,689,722
Less expenses paid indirectly--Note 1 (8,508)
-------------
Net expenses 22,681,214
================================================================================
Net Investment Income 17,410,884
================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 154,802,716
Closing and expiration of option contracts written--Note 6 1,712,442
Foreign currency transactions (2,806)
-------------
Net realized gain 156,512,352
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 197,093,635
Translation of assets and liabilities denominated in
foreign currencies (3,677)
-------------
Net change 197,089,958
-------------
Net realized and unrealized gain 353,602,310
================================================================================
Net Increase in Net Assets Resulting from Operations $ 371,013,194
=============
See accompanying Notes to Financial Statements.
21 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
====================================================================================
<S> <C> <C>
Operations
Net investment income $ 17,410,884 $ 37,480,042
- ------------------------------------------------------------------------------------
Net realized gain 156,512,352 243,431,853
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation 197,089,958 397,047,043
--------------- ---------------
Net increase in net assets resulting from
operations 371,013,194 677,958,938
====================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (12,585,882) (30,566,836)
Class B (992,055) (5,719,175)
Class C (65,350) (263,905)
Class Y (257,392) (455,751)
- ------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (172,164,137)
Class B -- (80,057,166)
Class C -- (3,815,686)
Class Y -- (2,532,986)
====================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets
resulting from capital stock
transactions--Note 2:
Class A (16,456,631) 96,918,666
Class B (19,334,374) 100,622,566
Class C 6,027,285 16,796,414
Class Y 7,363,953 8,780,891
====================================================================================
Net Assets
Total increase 334,712,748 605,501,833
- ------------------------------------------------------------------------------------
Beginning of period 3,893,021,587 3,287,519,754
--------------- ---------------
End of period (including undistributed net
investment income of $4,357,065 and
$846,860, respectively) $ 4,227,734,335 $ 3,893,021,587
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
22 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------------
Six Months
Ended
June 30,
1999 Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 12.23 $ 11.00 $ 9.77 $ 9.35 $ 7.80 $ 8.69
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .16 .16 .20 .23 .23
Net realized and
unrealized gain (loss) 1.12 2.09 2.49 1.63 2.09 (.91)
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations 1.19 2.25 2.65 1.83 2.32 (.68)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.06) (.15) (.14) (.20) (.22) (.21)
Distributions from net realized gain -- (.87) (1.28) (1.21) (.55) --
--------- --------- --------- --------- --------- ---------
Total dividends and distributions
to shareholders (.06) (1.02) (1.42) (1.41) (.77) (.21)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.36 $ 12.23 $ 11.00 $ 9.77 $ 9.35 $ 7.80
========= ========= ========= ========= ========= =========
==================================================================================================================================
Total Return, at Net Asset Value(1) 9.76% 21.16% 27.39% 19.73% 30.12% (7.86)%
==================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in millions) $ 2,816 $ 2,594 $ 2,238 $ 1,827 $ 1,551 $ 1,236
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 2,662 $ 2,388 $ 2,045 $ 1,685 $ 1,394 $ 1,262
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 1.14% 1.31% 1.43% 1.96% 2.53% 2.88%
Expenses(3) 0.88% 0.86% 0.89% 0.90% 0.92% 1.01%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 19% 38% 92% 118% 85% 117%
</TABLE>
(1). Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of operations), 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 less than one full year.
(2). Annualized for periods of less than one full year.
(3). Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
23 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------------------------------------
Six Months
Ended
June 30,
1999 Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 12.10 $ 10.89 $ 9.70 $ 9.29 $ 7.76 $ 8.66
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .06 .07 .12 .15 .17
Net realized and
unrealized gain (loss) 1.11 2.08 2.45 1.62 2.08 (.91)
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations 1.13 2.14 2.52 1.74 2.23 (.74)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.01) (.06) (.05) (.12) (.15) (.16)
Distributions from net realized gain -- (.87) (1.28) (1.21) (.55) --
--------- --------- --------- --------- --------- ---------
Total dividends and distributions
to shareholders (.01) (.93) (1.33) (1.33) (.70) (.16)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.22 $ 12.10 $ 10.89 $ 9.70 $ 9.29 $ 7.76
========= ========= ========= ========= ========= =========
==================================================================================================================================
Total Return, at Net Asset Value(1) 9.34% 20.25% 26.17% 18.78% 29.03% (8.64)%
==================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in millions) $ 1,292 $ 1,202 $ 987 $ 755 $ 590 $ 429
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 1,239 $ 1,080 $ 878 $ 672 $ 511 $ 361
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 0.33% 0.50% 0.62% 1.15% 1.70% 2.11%
Expenses(3) 1.69% 1.67% 1.71% 1.71% 1.75% 1.87%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 19% 38% 92% 118% 85% 117%
</TABLE>
(4). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999 were $675,431,045 and $672,790,206, respectively.
(5). For the period from August 29, 1995 (inception of offering) to December 31,
1995.
(6). For the period from June 1, 1994 (inception of offering) to December 31,
1994.
(7). Less than $500,000.
24 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
---------------------------------------------------------
Six Months
Ended
June 30,
1999 Year Ended December 31,
(Unaudited) 1998 1997 1996 1995(5)
=====================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 12.13 $ 10.92 $ 9.72 $ 9.33 $ 9.19
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .06 .07 .16 .07
Net realized and
unrealized gain (loss) 1.11 2.08 2.46 1.57 .73
------- ------- ------- ------- -------
Total income (loss) from
investment operations 1.13 2.14 2.53 1.73 .80
- -----------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.01) (.06) (.05) (.13) (.11)
Distributions from net realized gain -- (.87) (1.28) (1.21) (.55)
------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (.01) (.93) (1.33) (1.34) (.66)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.25 $ 12.13 $ 10.92 $ 9.72 $ 9.33
======= ======= ======= ======= =======
=====================================================================================================
Total Return, at Net Asset Value(1) 9.34% 20.20% 26.23% 18.67% 8.82%
=====================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in millions) $ 70 $ 58 $ 37 $ 18 $ 2
- -----------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 63 $ 47 $ 27 $ 8 $ 1
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 0.33% 0.50% 0.63% 1.05% 1.42%
Expenses(3) 1.69% 1.67% 1.72% 1.76% 1.77%
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 19% 38% 92% 118% 84%
</TABLE>
(1). Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of operations), 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 less than one full year.
(2). Annualized for periods of less than one full year.
(3). Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
25 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class Y
-------------------------------------------------------------------------------------
Six Months
Ended
June 30,
1999 Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994(6)
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 12.24 $ 11.00 $ 9.77 $ 9.35 $ 7.80 $ 8.23
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .08 .17 .18 .23 .20 .15
Net realized and
unrealized gain (loss) 1.12 2.10 2.48 1.61 2.13 (.41)
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations 1.20 2.27 2.66 1.84 2.33 (.26)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.07) (.16) (.15) (.21) (.23) (.17)
Distributions from net realized gain -- (.87) (1.28) (1.21) (.55) --
--------- --------- --------- --------- --------- ---------
Total dividends and distributions
to shareholders (.07) (1.03) (1.43) (1.42) (.78) (.17)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.37 $ 12.24 $ 11.00 $ 9.77 $ 9.35 $ 7.80
========= ========= ========= ========= ========= =========
==================================================================================================================================
Total Return, at Net Asset Value(1) 9.85% 21.33% 27.53% 19.88% 30.23% (3.15)%
==================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in millions) $ 50 $ 39 $ 27 $ 18 $ 7 $ 1
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 44 $ 34 $ 22 $ 13 $ 4 $ 0(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 1.36% 1.39% 1.60% 2.08% 2.51% 4.07%
Expenses(3) 0.66% 0.80% 0.74% 0.77% 0.87% 0.96%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 19% 38% 92% 118% 85% 117%
</TABLE>
(4). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999 were $675,431,045 and $672,790,206, respectively.
(5). For the period from August 29, 1995 (inception of offering) to December 31,
1995.
(6). For the period from June 1, 1994 (inception of offering) to December 31,
1994.
(7). Less than $500,000.
See accompanying Notes to Financial Statements.
26 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'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, on investments up to $1 million.
Class B and Class C shares may be subject to a contingent deferred sales charge
(CDSC). Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. 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.
- --------------------------------------------------------------------------------
Securities Valuation. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at values based
on the closing bid or the last sale price on the prior trading day. Securities
(including restricted securities) for which quotations are not readily available
are valued primarily using dealer-supplied valuations, a portfolio pricing
service authorized by the Board of Directors, or at their fair value. Fair value
is determined in good faith under consistently applied procedures under the
supervision of the Board of Directors. Short-term "money market type" debt
securities with remaining maturities of sixty days or less for which quotations
are not readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate market value.
- --------------------------------------------------------------------------------
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.
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.
27 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
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. Distributions to shareholders, which are
determined in accordance with income tax regulations, 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 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.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
28 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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, 1999 Year Ended December 31, 1998
------------------------------ ------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 13,000,203 $ 164,336,473 20,090,100 $ 238,366,108
Dividends and
distributions reinvested 920,203 11,651,992 16,639,080 191,036,172
Redeemed (15,239,042) (192,445,096) (28,120,324) (332,483,614)
---------- ------------- ---------- -------------
Net increase (decrease) (1,318,636) $ (16,456,631) 8,608,856 $ 96,918,666
========== ============= ========== =============
- ---------------------------------------------------------------------------------------------------
Class B:
Sold 7,963,995 $ 99,397,860 13,699,912 $ 160,764,683
Dividends and
distributions reinvested 74,972 941,007 7,233,729 82,019,204
Redeemed (9,575,786) (119,673,241) (12,211,618) (142,161,321)
---------- ------------- ---------- -------------
Net increase (decrease) (1,536,819) $ (19,334,374) 8,722,023 $ 100,622,566
========== ============= ========== =============
- ---------------------------------------------------------------------------------------------------
Class C:
Sold 1,428,185 $ 17,866,696 2,117,847 $ 24,988,182
Dividends and
distributions reinvested 4,666 58,626 344,352 3,914,027
Redeemed (951,865) (11,898,037) (1,031,386) (12,105,795)
---------- ------------- ---------- -------------
Net increase 480,986 $ 6,027,285 1,430,813 $ 16,796,414
========== ============= ========== =============
- ---------------------------------------------------------------------------------------------------
Class Y:
Sold 1,200,681 $ 15,146,234 1,821,738 $ 21,338,887
Dividends and
distributions reinvested 20,306 257,001 260,255 2,988,737
Redeemed (636,861) (8,039,282) (1,318,484) (15,546,733)
---------- ------------- ---------- -------------
Net increase 584,126 $ 7,363,953 763,509 $ 8,780,891
========== ============= ========== =============
</TABLE>
29 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized appreciation on investments of
$1,366,471,231 was composed of gross appreciation of $1,423,508,774, and gross
depreciation of $57,037,543.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. 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 average annual net assets, 0.70% of the next $100
million, 0.65% of the next $100 million, 0.60% of the next $100 million, 0.55%
of the next $100 million, and 0.50% of average annual net assets in excess of
$500 million. The Fund's annualized management fee for the six months ended June
30, 1999 was 0.52% of the average annual net assets for each class of shares.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the
sale of shares or on the redemption of shares is shown in the table below for
the period indicated.
<TABLE>
<CAPTION>
Aggregate Class A
Front-End Front-End Commissions on Commissions on Commissions on
Sales Charges Sales Charges Class A Shares Class B Shares Class C Shares
Six Months on Class A Retained by Advanced by Advanced by Advanced by
Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 30, 1999 $1,994,506 $693,624 $43,671 $2,506,801 $123,478
</TABLE>
(1). The Distributor advances commission payments to dealers for certain sales
of Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
June 30, 1999 $ -- $679,174 $11,713
</TABLE>
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares under Rule 12b-1
of the Investment Company Act. Under those plans the Fund pays the Distributor
for all or a portion of its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
30 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased on or after April 1, 1988. The rate is 0.15% for shares
purchased before that date. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net assets
consisting of Class A shares of the Fund. For the six months ended June 30,
1999, payments under the Class A Plan totaled $2,533,011, all of which was paid
by the Distributor to recipients. That included $210,139 paid to an affiliate of
the Distributor's parent company. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate,whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B
shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. The asset-based sales charges
on Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C
shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Directors may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the distributor for the six months ended June 30, 1999
were as follows:
<TABLE>
<CAPTION>
Distributor's
Distributor's Aggregate Unreimbursed
Total Payments Amount Retained Unreimbursed Expenses Expenses as % of
Class Under Plan By Distributor Under Plan Net Assets of Class
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $6,141,443 $4,767,827 $11,137,626 0.86%
- -----------------------------------------------------------------------------------------------------
Class C Plan $ 312,523 $ 103,286 $ 625,681 0.90%
</TABLE>
31 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuation. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement
of the foreign currency transactions. Realized gains and losses are reported
with all other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
================================================================================
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call
options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to
sell or purchase the underlying security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in
the Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are detailed
in a note 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.
32 Oppenheimer Total Return Fund, Inc.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended June 30, 1999, was as follows:
Call Options
---------------------------
Number of Amount of
Options Premiums
- --------------------------------------------------------------------------------
Options outstanding as of December 31, 1998 3,412 $ 671,969
Options written 9,412 2,310,164
Options closed or expired (12,412) (2,878,395)
Options exercised (412) (103,738)
------ -----------
Options outstanding as of June 30, 1999 -- $ --
====== ===========
================================================================================
7. Illiquid or Restricted Securities
As of June 30, 1999, investments in securities included issues that are
illiquid. 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 periodically) in illiquid securities. Certain
restricted securities, eligible for resale to qualified institutional investors,
are not subject ot that limit.The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 1999, was $174,099, which
represents 0.00% of the Fund's net assets.
================================================================================
8. 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, 1999.
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
George C. Bowen, Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Vice President and Treasurer
Bruce L. Bartlett, Vice President
John P. Doney, Vice President
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================
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, are not insured by the FDIC or any other agency,
and involve investment risks, including the 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 Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
==============================================================================================
Stock Funds
- ----------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
==============================================================================================
Stock & Bond Funds
- ----------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Multiple Strategies Fund
Income Fund(1) Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund(2)
==============================================================================================
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 Bond 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 12/22/98, the Fund's name was changed from "Oppenheimer Main Street
Income & Growth Fund."
(2). On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
(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 1999 OppenheimerFunds, Inc. All rights reserved.
35 Oppenheimer Total Return Fund, Inc.
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----------------------------------------------------
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access, you can count on us whenever you need assistance. So call us
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----------------------------------------------------
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OppenheimerFunds Services,
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
OppenheimerFunds(SM)
Distributor, Inc.
RS0420.001.0699 August 27, 1999
