Oppenheimer Main Street Income & Growth Fund
Semi-Annual Report December 31, 1993
(FRONT COVER PHOTO: YOUNG GIRL RIDING ON A WOMAN'S SHOULDERS IN SNOW)
(OPPENHEIMER FUNDS(R) LOGO)
"We have ambitious long-term goals, so we want to take advantage of the
stock market's growth opportunities. But we want income from our
investments, too.
"We chose this Fund because it invests in stocks and bonds.
"The stocks in the Fund's portfolio have given us the growth that we want,
while the bonds have helped us earn the level of income that we need."
<PAGE>
Fund Facts
In this report:
Answers to two timely questions you should ask your Fund's managers.
* With the U.S. economy growing at a moderate pace, where is the Fund
seeking growth opportunities?
* What steps have you taken to protect the portfolio against price
volatility?
Six Facts Every Shareholder Should Know About
Oppenheimer Main Street Income & Growth Fund
1 The Fund seeks high total return, including current income and
capital appreciation in the value of its shares, from equity and
debt securities.
2 For the 6 and 12 months ended December 31, 1993, the Fund produced
total returns at net asset value for Class A shares of 20.93% and
35.38%, respectively.(1)
3 The Fund is ranked in the top 1% of all growth and income funds
tracked by Lipper Analytical Services for the 1-, 3-, and 5-year
periods ended December 31, 1993.(2)
4 The Fund earned the highest ranking of (five stars) from
Morningstar, Inc.(3)
5 On December 31, 1993, the Fund's top five stock holdings were.(4)
Iwerks Entertainment, Inc. A developer of multimedia, interactive
entertainment systems and rides.
Millicom, Inc. A telecommunications company operating cellular
telephone networks in 15 countries.
Avid Technology, Inc. A developer of video editing software,
digital news-gathering systems, and other film, video, and audio
products.
Union Electric Co. A major regional electric utility serving 1.2
million customers throughout Missouri and portions of Illinois.
Texas Utilities Co. One of the largest electric utilities in the
United States.
6 "With the U.S. stock market now being driven by corporate profits
rather than declining interest rates, we are concentrating greater
attention on economically sensitive stocks. We believe that small-
and mid-capitalization companies will outperform the market in the
current moderate-growth environment."
Portfolio Manager, John Wallace, December 31, 1993
1. Based on the changes in net asset value per Class A share from 6/30/93
and 12/31/92 to 12/31/93. The Fund's average annual total returns after
deducting the current maximum sales charge of 5.75%, for 1-, 3-, and 5-year
periods ended 12/31/93 were 27.60%, 40.65%, and 26.73%, respectively. All
total returns include reinvestment of dividends and capital gains
distributions. Certain Class C performance data is not yet available, as
Class C shares were first publicly offered on 12/1/93.
2. Source of data: Lipper Analytical Services, Inc., an independent monitor
of mutual funds, 12/31/93. Lipper total return averages were for 269, 201,
and 176 growth and income funds for the 1-, 3-, and 5-year periods ended
12/31/93. These averages are shown for comparative purposes only. Lipper
performance rankings do not take sales charges into consideration.
3. Source: Morningstar Mutual Funds 1/7/94, an independent mutual fund
monitoring service, which ranks funds in specific investment categories
monthly by a quantitative system that uses investment performance, risk
assessment factors and adjusts returns for fees and sales loads. One star is
the lowest ranking, five stars the highest. Of the 1,022 equity funds ranked
by Morningstar in that period, 102 received a 5-star ranking. Risk
assessment reflects fund performance relative to three-month Treasury bill
returns.
4. The Fund's portfolio is subject to change.
Past performance is not indicative of future results. 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.
2 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Report to Shareholders
It gives us great pleasure to welcome shareholders of Main Street Income &
Growth Fund to the Oppenheimer family of mutual funds, and to report that
your Fund has provided an impressive total return at net asset value of
35.38% for Class A shares for the 12 months ended December 31, 1993.(5) As the
chart shows, this return was substantially higher than that of the S&P 500
Index.(6)
U.S. interest rates appear to have stabilized after a two-year decline, and
the domestic economy is recovering at a moderate pace. In this environment,
we believe that earnings growth will be the dominant force behind stock
prices, and therefore have invested in a number of economically sensitive
companies, which stand to increase profits in a recovery. For example, we
invested in National Gypsum, a leading wallboard manufacturer, which should
be able to expand volume and increase prices with an increase in U.S.
housing starts. We also favor Methode Electronics, a developer of electronic
components used in automobile air bag systems, which is benefiting from
strong U.S. auto sales.
The Fund's managers also seek out companies that are benefiting from new
forces driving growth, such as new management, new products, or new markets.
We are invested in Atlantic Southeast Airlines, a regional air carrier that
has just opened its second hub location, capitalizing on the departure of
Delta Airlines from Dallas/Fort Worth. With a superb balance sheet,
conservative management, and a lower cost structure than the major carriers,
Atlantic Southeast appears to be positioned for substantial growth in the
years ahead.
In the entertainment arena, we're building a position in a newly public
company called Iwerks Entertainment. Founded by entrepreneurs from the Walt
Disney Company, Iwerks has developed an impressive portfolio of interactive
rides and entertainment products, and could be a leader in this emerging
industry.
To enhance the portfolio's income, we have maintained substantial
investments in convertible bonds. These securities provide attractive
yields; they also help to insulate the portfolio from volatility--an
important concern with U.S. stock market near record highs.
We believe that the coming year will provide excellent opportunities for the
Fund, with little prospect of accelerating inflation and a strong likelihood
that interest rates will remain near their present levels.
We are pleased that Oppenheimer Main Street Income & Growth Fund has
consistently provided superior total returns, and we thank you for your
continuing trust.
(James C. Swain signature) (Jon S. Fossel signature)
James C. Swain Jon S. Fossel
Chairman, Oppenheimer President, Oppenheimer
Main Street Funds, Inc. Main Street Funds, Inc.
January 21, 1994
Superior Total Return
For the 12 months ended 12/31/93
Oppenheimer Main Street
Income & Growth Fund A(5)
(at net asset value) 35.38%
S&P500 Index(6) 10.06%
Lipper growth & income
funds' average(7) 11.47%
5. See footnote 1, page 2.
6. The Standard & Poor's 500 Index is an unmanaged index of common stocks
that is widely recognized as an indicator of overall market performance. The
S&P 500 Index does not take sales charges or taxes into consideration.
7. See footnote 2, page 2.
3 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments December 31, 1993 (Unaudited)
Face Market Value
Amount See Note 1
<S> <C> <C>
Repurchase Agreements--10.8%
Repurchase agreement with First Chicago Capital Markets, 3.125%,
dated 12/31/93 and maturing 1/3/94, collateralized by U.S. Treasury Nts.,
8.875%, 2/15/99, with a value of $18,891,508 (Cost $18,500,000) $18,500,000 $18,500,000
Corporate Bonds and Notes--7.2%
Air Wisconsin Services, Inc., 7.75% Cv. Sub. Debs., 6/15/10 500,000 462,500
Aspect Telecommunications Corp., 5% Cv. Sub. Debs., 10/15/03(2) 750,000 911,250
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(2) 250,000 311,250
Compania de Telefonos de Chile SA, 4.50% Cv. Sub. Debs., 1/15/03(2) 300,000 406,500
Genesis Health Ventures, Inc., 6% Cv. Sr. Sub. Debs., 11/30/03 750,000 900,000
Greenwich Air Services, Inc., 8% Cv. Sub. Debs., 11/15/00 700,000 710,500
Interpool, Inc., 5.25% Cv. Sub. Exch. Nts., 12/15/18 1,000,000 1,012,500
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(2) 500,000 540,000
Michigan National Corp., 8% Sub. Debs., 11/10/98 500,000 542,500
Novacare, Inc., 5.50% Cv. Sub. Debs., 1/15/00 500,000 463,750
Pacific Physician Services, 5.50% Cv. Sub. Debs., 12/15/03 1,000,000 1,093,750
Pioneer Financial Services, Inc., 8% Cv. Sub. Debs., 7/15/00 500,000 602,500
RHI Entertainment, Inc., 6.50% Cv. Sub. Debs., 6/1/03 750,000 986,250
Roadmaster Industries, Inc., 8% Cv. Sub. Debs., 8/15/03 500,000 592,500
Seagate Technology, 6.75% Cv. Sub. Debs., 5/1/12 1,000,000 910,000
Shangri-La Asia Ltd., 2.875% Cv. Sub. Debs., 6/16/00(2) 1,500,000 1,411,875
Swift Energy Co., 6.50% Cv. Sub. Debs., 6/30/93 450,000 463,500
Total Corporate Bonds and Notes (Cost $11,028,865) 12,321,125
Units
Rights, Warrants and Certificates--0.4%
Chase Manhattan Corp. Wts., Exp. 6/96 198 1,609
Societa Finanziara Telefonica SPA Wts., Exp. 9/94 80,000 675,233
Total Rights, Warrants and Certificates (Cost $609,848) 676,842
Shares
Preferred Stocks--4.0%
Arkansas Best Corp., $2.875 Cv. Exch., Series A 25,000 1,256,250
Freeport-McMoRan Copper & Gold, Inc., $1.875 Cv. Exch. Depositary Shares 50,000 1,256,250
Noble Drilling Corp., $2.25 Cv. Exch., Series A 20,000 995,000
RJR Nabisco Holdings Corp., $8.35 Cum. Cv., Series A 125,000 875,000
Roosevelt Financial Group, Inc., $3.25 Cv. 12,000 733,500
Standish Care Co., $4.50 Cv., Series A(3) 60,000 705,000
USAir Group, Inc., $4.375 Cv. Depositary Shares, Series B 20,000 1,027,500
Total Preferred Stocks (Cost $6,225,245) 6,848,500
4 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Market Value
Shares See Note 1
Common Stocks--79.6%
Basic Materials--2.2%
Chemicals--0.7% Geon Co. (The) 50,000 $1,181,250
Gold--1.1% MK Gold Co.(1) 150,000 900,000
Venezuelan Goldfields Ltd.(1) 100,000 944,137
1,844,137
Metals: Miscellaneous--0.4% Custom Chrome, Inc.(1) 35,000 778,750
Consumer Cyclicals--16.1%
Airlines--0.7% Atlantic Southeast Airlines, Inc. 35,000 1,198,750
Automobiles--0.8% Volvo AB, Series B Free 20,000 1,293,303
Auto Parts:
After Market--0.6% Cummins Engine Co., Inc. 20,000 1,075,000
Entertainment--2.0% Carnival Cruise Lines, Inc., Cl. A 20,000 947,500
Iwerks Entertainment, Inc.(1) 90,000 2,407,500
3,355,000
Homebuilding--0.5% Schuler Homes, Inc.(1) 30,000 840,000
Household Furnishings and
Appliances--0.9% Battery Technologies, Inc.(1) 100,000 585,365
Rival Manufacturing Co. 50,000 1,006,250
1,591,615
Leisure Time--1.8% Bally Gaming International, Inc.(1) 85,000 1,466,250
Innovative Gaming Corp. of America(1) 100,000 1,662,500
3,128,750
Manufactured Housing--0.7% Shelter Components Corp. 65,000 1,129,375
Publishing--0.1% Scientific Games Holdings Corp.(1) 10,000 227,500
Restaurants--0.4% Buffets, Inc.(1) 25,000 643,750
Retail: Specialty--3.9% CellStar Corp.(1) 30,500 510,875
Musicland Stores Corp.(1) 30,500 632,875
Regis Corp.(1) 50,000 525,000
Rexall Sundown, Inc.(1) 100,000 1,500,000
Spiegel, Inc., Cl.A 85,000 1,912,500
Talbots, Inc. (The)(1) 60,200 1,595,300
6,676,550
Retail: Specialty
Apparel--0.1% Urban Outfitters, Inc.(1) 8,000 214,000
Retail Stores: General
Merchandise Chains--1.6% Amway Asia Pacific Ltd.(1) 13,500 480,937
Damark International, Inc.(1) 50,000 1,137,500
Grupo Casa Autrey SA(1) 50,000 1,218,750
2,837,187
5 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
Market Value
Shares See Note 1
Shoes--1.0% Baker (J.), Inc. 100,000 $1,750,000
Textiles: Apparel
Manufacturers--1.0% Charter Golf, Inc.(1) 75,000 806,250
Kellwood Co. 22,000 882,750
1,689,000
Consumer Non-Cyclicals--10.1%
Drugs--1.5% Jones Medical Industries, Inc. 50,000 675,000
Nature's Bounty, Inc.(1) 60,000 1,245,000
Neurogen Corp.(1) 100,000 662,500
2,582,500
Food: Grain and
Agriculture--0.4% Ralston-Continental Baking Group 90,000 753,750
Food Processing--0.9% McCormick & Co., Inc., Non-Vtg. 60,000 1,477,500
Food Wholesalers--0.7% Food Lion, Inc., Cl. A 200,000 1,300,000
Healthcare:
Diversified--1.4% Bristol-Myers Squibb Co. 30,000 1,743,750
ICN Pharmaceuticals, Inc.(1) 65,000 576,875
2,320,625
Healthcare:
Miscellaneous--3.0%
COR Therapeutics, Inc.(1) 70,000 1,058,750
DNX Corp.(1) 60,000 243,750
Dentsply International, Inc.(1) 27,500 1,210,000
Isis Pharmaceuticals, Inc.(1) 50,000 337,500
Mentor Corp. 50,000 662,500
Scios-Nova, Inc.(1) 60,000 615,000
Vertex Pharmaceuticals, Inc.(1) 55,000 1,017,500
5,145,000
Hospital Management--1.6% American Medical Response, Inc.(1) 15,000 375,000
Arbor Health Care Co.(1) 25,000 425,000
Homedco Group, Inc.(1) 25,000 768,750
Novacare, Inc.(1) 25,000 381,250
Qualmed, Inc.(1) 50,000 843,750
2,793,750
Medical Products--0.6% Sybron Corp. of Delaware(1) 30,000 960,000
Energy--3.1%
Coal--0.4% Pittston Co. 25,000 721,875
Oil: Integrated
International--1.0%
Repsol SA, ADR 25,000 771,875
Societe Nationale Elf Acquitaine 25,000 881,250
1,653,125
6 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Market Value
Shares See Note 1
Oil and Gas Drilling--0.7% Basin Exploration, Inc.(1) 100,000 $1,137,500
Oil Well Services and Equipment--1.0%
McDermott International, Inc. 30,800 816,200
Weatherford International, Inc.(1) 90,000 956,250
1,772,450
Financial--6.9%
Financial Services:
Miscellaneous--3.8% First Financial Caribbean Corp. 70,000 1,172,500
Korea Equity Fund, Inc.(1) 100,000 1,437,500
Resource Bancshares Mortgage Group, Inc.(1) 80,000 850,000
Southwest Securities Group, Inc. 45,000 506,250
Sturge Holdings 300,000 301,818
Taiwan Fund, Inc. 40,000 1,565,000
Vallicorp Holdings, Inc. 60,000 750,000
6,583,068
Insurance: Life--0.4% Amvestors Financial Corp.(1) 60,000 660,000
Insurance: Multi-line--0.8% CCP Insurance, Inc. 50,000 1,393,750
Major Banks: Other--1.1% C.S. Holdings 1,500 744,430
National Westminster Bank
PLC, ADR 10,000 557,500
Westpac Banking Corp., Sponsored ADR 35,000 555,625
1,857,555
Major Banks: Regional--0.8% Midlantic Corp.(1) 35,000 892,500
Summit Bancorporation (The) 25,000 531,250
1,423,750
Industrial--9.8%
Building Materials
Group--1.4% National Gypsum Co.(1) 50,000 1,556,250
TJ International, Inc. 30,000 907,500
2,463,750
Commercial Services--0.7% Learmonth and Burch Management System 70,000 150,169
Manitowoc Co., Inc. 15,000 483,750
Wallace Computer Services, Inc. 15,000 508,125
1,142,044
Electrical Equipment--0.8% Methode Electronics, Inc., Cl. A 100,000 1,437,500
Machine Tools--0.3% Acme-Cleveland Corp. 50,000 475,000
Machinery:
Diversified--0.9% Atchison Casting Corp.(1) 20,000 357,500
FSI International, Inc.(1) 50,000 600,000
JLG Industries, Inc. 15,000 371,250
Quickturn Design System, Inc.(1) 20,500 256,250
1,585,000
7 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
Market Value
Shares See Note 1
Manufacturing:
Diversified
Industrials--1.0%
Johnstown America Industries, Inc.(1) 30,000 $735,000
Watts Industries, Inc., Cl. A 20,000 990,000
1,725,000
Railroads--0.1% RailTex, Inc.(1) 9,000 249,750
Transportation:
Miscellaneous--2.0%
Airborne Freight Corp. 50,000 1,756,250
Kirby Corp.(1) 75,000 1,603,125
3,359,375
Truckers--0.8% Roadway Services, Inc. 10,000 600,000
TNT Freightways Corp. 30,000 810,000
1,410,000
Pollution Control--1.8% Asyst Technologies, Inc.(1) 45,500 500,500
Omega Environmental, Inc.(1) 150,000 1,537,500
Tetra Technologies, Inc.(1) 50,000 975,000
3,013,000
Technology--24.8%
Communication: Equipment/
Manufacturers--1.7%
Antec Corp.(1) 18,000 450,000
Confertech International, Inc.(1) 125,000
875,000
Newbridge Networks Corp.(1) 30,000 1,642,500
2,967,500
Computer Software
and Services--7.5%
Adobe Systems, Inc. 25,000 556,250
Bolt Beranek and Newman, Inc.(1) 75,000 900,000
Cornerstone Imaging, Inc.(1) 75,000 1,106,250
Danka Business System PLC, Sponsored ADR 25,000 1,000,000
Exabyte Corp.(1) 60,000 1,057,500
FTP Software, Inc.(1) 13,000 344,500
Fourth Shift Corp.(1) 60,000 506,250
Informix Corp.(1) 25,000 531,250
Mercury Interactive Corp.(1) 16,400 282,900
Shared Medical Systems Corp. 35,000 870,625
SHL Systemhouse, Inc.(1) 155,000 1,123,750
Sierra On-Line, Inc.(1) 65,000 1,194,375
Sligos SA 8,100 757,254
Software Toolworks, Inc.(1) 100,000 1,012,500
Veritas Software Corp.(1) 25,000 431,250
Virtuality Group PLC(1) 230,000 1,126,343
12,800,997
8 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Market Value
Shares See Note 1
Computer Systems--5.0% Apple Computer, Inc. 25,000 $731,250
Golden Systems, Inc.(1) 32,000 274,000
International Business Machines Corp. 25,000 1,412,500
Madge, NV(1) 90,000 1,350,000
Radius, Inc.(1) 140,000 1,067,500
Standard Microsystems Corp.(1) 50,000 1,075,000
Union Switch & Signal, Inc.(1) 56,000 882,000
Wang Laboratories, Inc.(1) 50,000 850,000
Western Digital Corp.(1) 100,000 912,500
8,554,750
Electronics--1.2% Avid Technology, Inc.(1) 100,000 2,137,500
Electronics:
Instrumentation--0.8%
BI, Inc.(1) 120,000 690,000
IEC Electronics Corp.(1) 50,000 675,000
1,365,000
Electronics:
Semiconductors--0.5%
International Rectifier Corp.(1) 65,000 910,000
Office Equipment
and Supplies--1.5%
Moore Corp. Ltd. 80,000 1,530,000
New England Business Service, Inc. 50,000 1,012,500
2,542,500
Telecommunications--6.6% A+ Communications, Inc.(1) 60,000 780,000
ADC Telecommunications, Inc.(1) 50,000 1,781,250
American Mobile Systems, Inc.(1) 65,000 975,000
Atlantic Tele-Network, Inc. 40,000 570,000
British Telecom PLC, Sponsored ADR 35,000 1,124,375
Dial Page, Inc.(1) 13,000 516,750
LCI International, Inc.(1) 30,000 1,110,000
Millicom, Inc.(1) 95,556 2,245,566
PacTel Corp.(1) 25,000 621,875
Paging Network, Inc.(1) 30,000 915,000
Pittencrieff Communications, Inc.(1) 25,000 612,500
11,252,316
9 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
Market Value
Shares See Note 1
Utilities--6.6%
Electric Cos.--6.6% Entergy Corp. 20,000 $720,000
FPL Group, Inc. 20,000 782,500
Houston Industries, Inc. 25,000 1,190,625
Montana Power Co. 50,000 1,287,500
Oklahoma Gas & Electric Co. 50,000 1,850,000
Public Service Enterprise Group, Inc. 50,000 1,600,000
Texas Utilities Co. 45,000 1,946,250
Union Electric Co. 50,000 1,962,500
11,339,375
Total Common Stocks (Cost $119,379,786) 136,720,472
Total Investments, at Value (Cost $155,743,744) 102.0% 175,066,939
Liabilities in Excess of Other Assets (2.0) (3,481,042)
Net Assets 100.0% $171,585,897
<FN>
1. Non-income producing security.
2. Restricted security--See Note 6 of Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer and is
or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended
December 31, 1993. The aggregate fair value of all securities of affiliated companies as of December 31,
1993 amounted to $705,000. Transactions during the period in which the issuer was an affiliate are as
follows:
</TABLE>
<TABLE>
<CAPTION>
Balance Balance
June 30, 1993 Gross Additions Gross Reductions December 31, 1993
Shares Cost Shares Cost Shares Cost Shares Cost
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Standish Care Co., $4.50 Cv.,
Series A -- $ -- 120,000 $649,995 -- $-- 120,000 $649,995
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities December 31, 1993 (Unaudited)
<S> <S> <C>
Assets Investments, at value (cost $155,743,744)--see accompanying statement $175,066,939
Cash 290,651
Receivables:
Shares of capital stock sold 13,820,357
Investments sold 2,327,991
Dividends and interest 312,857
Other 71,602
Total assets 191,890,397
Liabilities Payables and other liabilities:
Investments purchased 14,228,840
Shares of capital stock redeemed 5,962,509
Distribution assistance--Note 4 66,905
Dividends and distributions 20,295
Other 25,951
Total liabilities 20,304,500
Net Assets $171,585,897
Composition of Par value of shares of capital stock $78,860
Net Assets Additional paid-in capital 151,139,979
Undistributed net investment income 60,367
Accumulated net realized gain from investment and written
option transactions 983,496
Net unrealized appreciation on investments--Note 3 19,323,195
Net assets $171,585,897
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on $165,521,649
and 7,606,995 shares of capital stock outstanding) $21.76
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $23.09
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $6,064,248 and 279,010 shares of capital stock outstanding) $21.73
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations For the Six Months Ended December 31, 1993 (Unaudited)
<S> <S> <C>
Investment Income Dividends $1,055,054
Interest 245,673
Total income 1,300,727
Expenses Management fees--Note 4 283,299
Distribution assistance:
Class A--Note 4 106,560
Class C--Note 4 1,777
Transfer and shareholder servicing agent fees--Note 4 64,037
Registration and filing fees:
Class A 33,255
Class C 1,044
Shareholder reports 26,084
Legal and auditing fees 11,745
Custodian fees and expenses 8,322
Directors' fees and expenses 1,349
Other 7,999
Total expenses 545,471
Net Investment Income 755,256
Realized and Unrealized Net realized gain on investments 4,270,582
Gain on Investments Net change in unrealized appreciation
on investments 11,459,629
Net realized and unrealized gain on investments 15,730,211
Net Increase in Net Assets Resulting From Operations $16,485,467
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Six Months Ended Year Ended
December 31, 1993 June 30,
(Unaudited) 1993
<S> <S> <C> <C>
Operations Net investment income $ 755,256 $ 398,115
Net realized gain on investments 4,270,582 6,992,957
Net change in unrealized appreciation
or depreciation on investments 11,459,629 6,820,214
Net increase in net assets resulting from operations 16,485,467 14,211,286
Dividends and Dividends from net investment income:
Distributions to Class A ($.176 and $.192 per share, respectively) (726,642) (434,312)
Shareholders
Distributions from net realized gain on investments:
Class A ($1.989 and $2.202 per share, respectively) (9,342,148) (4,252,038)
Captial Stock Net increase in net assets resulting from Class A
Transactions capital stock transactions--Note 2 101,051,925 21,779,236
Net increase in net assets resulting
from Class C capital stock
transactions--Note 2 5,887,386 --
Net Assets Total increase 113,355,988 31,304,172
Beginning of period 58,229,909 26,925,737
End of period (including undistributed
net investment income of $60,367 and $31,753, respectively) $171,585,897 $58,229,909
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A Class C
Six Months Ended Period Ended
Dec. 31, 1993 Year Ended June 30, Dec. 31, 1993(1)
(Unaudited) 1993 1992 1991 1990 1989 (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning
of period $19.88 $15.46 $13.22 $12.38 $11.67 $10.13 $20.76
Income from investment operations:
Net investment income .17 .16 .25 .38 .17 .24(3) --(2)
Net realized and unrealized gain
on investments and options written 3.88 6.65 4.72 .87 .88 1.62 .97
Total income from investment
operations 4.05 6.81 4.97 1.25 1.05 1.86 .97
Dividends and distributions to shareholders:
Dividends from net investment income (.18) (.19) (.22) (.41) (.19) (.19) --
Distributions from net realized gain
on investments and options written (1.99) (2.20) (2.51) -- (.15) (.13) --
Total dividends and distributions to
shareholders (2.17) (2.39) (2.73) (.41) (.34) (.32) --
Net asset value, end of period $21.76 $19.88 $15.46 $13.22 $12.38 $11.67 $21.73
Total Return, at Net Asset Value(4) 20.93% 46.38% 39.48% 10.60% 9.07% 18.77% 5.18%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $165,522 $58,230 $26,926 $15,968 $13,851 $1,256 $6,064
Average net assets (in thousands) $86,686 $38,974 $23,018 $14,563 $7,520 $788 $2,283
Number of shares outstanding
at end of period (in thousands) 7,607 2,929 1,742 1,208 1,119 108 279
Ratios to average net assets:
Net investment income (loss) 1.72%(5) 1.02% 1.63% 3.15% 2.33% 2.67% (.35)%(5)
Expenses 1.23%(5) 1.46% 1.66% 1.84% 2.21% 2.12%(3) 2.41%(5)
Portfolio turnover rate(6) 144.9% 283.0% 290.1% 208.9% 214.3% 136.8% 144.9%
<FN>
1. For the period from December 1, 1993 (inception of offering) to December 31, 1993.
2. Less than $.005 per share.
3. Net investment income would have been $.20 per share absent the voluntary expense reimbursement, resulting in an expense ratio
of 2.46%.
4. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last
business day of the fiscal period. Sales charges are not reflected in the total returns.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of
portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year
or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the
six months ended December 31, 1993 were $210,641,996 and $127,760,515, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited)
1. Significant Accounting Poliies
Oppenheimer Main Street Income & Growth Fund (the Fund), formerly named Main
Street Funds, Inc.-Income & Growth Fund, is a separate series of Oppenheimer
Main Street Funds, Inc., an open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Fund's investment
dvisor is Oppenheimer Management Corporation (the Manager). The Fund offers
both Class A and Class C shares. Class A shares are sold with a front-end sales
charge. Class C shares may be subject to a contingent deferred sales charge.
Both classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution plan, expenses
directly attributable to a particular class and exclusive voting rights with
respect to matters affecting a single class. The following is a summary of
significant accounting policies consistentlyfollowed by the Fund.
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the closing bid or asked price
or the last sale price on the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the Board of Directors.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities. Short-term
debt securities having a remaining maturity of 60 days or less are valued at
cost (or last determined market value) adjusted for amortization to maturity
of any premium or discount. Securities for which market quotes are not readily
available are valued under procedures established by the Board of Directors to
determine fair value in good faith. A call option is valued based upon the last
sales price on the principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based upon the last sale on
the prior trading date if it is within the spread between the closing bid and
asked prices. If the last sale price is outside the spread, the closing bid or
asked price closest to the last reported sale price is used.
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. If the seller of the agreement defaults and the value
of the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
Allocation of Income, Expenses and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
Federal Income 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 tax provision is required.
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
Other. Investment transactions are accounted for on the date the investments
are purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life
of the respective securities, in accordance with federal income tax
requirements. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
15 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
2. Capital Stock
The Fund has authorized 26,250,000 shares of $.01 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended December 31, 1993(1) Year Ended June 30, 1993
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class A:
Sold 4,428,400 $96,131,296 1,080,758 $20,104,977
Dividends and distributions reinvested 473,777 9,809,554 264,954 4,627,593
Issued in connection with the acquisition
of Main Street Funds, Inc.- Asset
Allocation Fund--Note 5 -- -- 72,926 1,179,937
Redeemed (224,226) (4,888,925) (231,352) (4,133,271)
Net increase 4,677,951 $101,051,925 1,187,286 $21,779,236
Class C:
Sold 279,068 $5,888,624 -- $--
Redeemed (58) (1,238) -- --
Net increase 279,010 $5,887,386 -- $--
<FN>
1. For the six months ended December 31, 1993 for Class A shares and for the period from December 1, 1993 (inception of offering)
to December 31, 1993 for Class C shares.
</TABLE>
3. Unrealized Gains and
Losses on Investments
At December 31, 1993, net unrealized appreciation oninvestments of $19,323,195
was composed of gross appreciation of $21,392,483, and gross depreciation of
$2,069,288.
4. Management Fees And Other Transactions With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreementon the first $200 million of with the Fund which provides for
an annual fee ofnet assets with a reduction of .05% on each $150 million
thereafter to $500 million and .45% on net assets in excess of $500 million.
The Manager has agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable regulatory limit on
Fund expenses.
For the six months ended December 31, 1993, commissions (sales charges paid
by investors) on sales of Class A shares totaled $2,832,128, of which $809,989
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is
the transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such services
are allocated ratably to these companies.
Under separate approved plans of distribution, each class may expend
up to .25% of its net assets annually to reimburse OFDI for costs incurred in
distributing shares of the Fund, including amounts paid to brokers, dealers,
banks and other institutions. In addition, Class C shares are subject to an
asset-based sales charge of .75% of net assets annually, to reimburse OFDI for
sales commissions paid from its own resources at the time of sale and
associated financing costs. In the event of termination or discontinuance of
the Class C plan of distribution, the Fund would be contractually obligated to
pay OFDI for any expenses not previously reimbursed or recovered through
contingent deferred sales charges.
5. Acquisition
On October 16, 1992, the Fund acquired all of the net assets of Main
Street Funds, Inc.-Asset Allocation Fund (AAF), pursuant to an Agreement and
Plan of Reorganization approved by the AAF shareholders on October 9, 1992. The
Fund issued 72,926 shares of capital stock, valued at $1,179,937, in exchange
for the net assets, resulting in combined net assets of $30,151,286 on October
16, 1992. The net assets acquired included net unrealized appreciation of
$145,867 and capital loss carryovers for federal income tax purposes of
$25,921. The exchange was tax-free.
16 Oppenheimer Main Street Income & Growth Fund
<PAGE>
6. Restricted Securities
The Fund owns securities purchased in private placement transactions, without
registration under the Securities Act of 1933 (the Act). The securities are
valued under methods approved by the Board of Directors as reflecting fair
value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act that
are determined to be liquid by the Board of Directors or by the Manager under
Board-approved guidelines.
<TABLE>
Valuation
Acquisition Cost Per Per Unit as of
Security Date Unit Dec. 31, 1993
<S> <C> <C> <C>
Aspect Telecommunications Corp., 5% Cv. Sub. Debs., 10/15/03(1) 9/16/93 $100.00 $121.50
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(1) 12/1/92 $100.00 $124.50
Compania de Telefonos de Chile SA, 4.50% Cv. Sub. Debs., 1/15/03(1) 4/8/93 $100.00 $135.50
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(1) 9/22/92 $ 97.73 $108.00
Shangri-La Asia Ltd., 2.875% Cv. Sub. Debs., 6/16/00(1) 12/13/93 $ 86.24 $ 94.125
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
17 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Oppenheimer Main Street Income & Growth Fund
A Series of Oppenheimer Main Street Funds, Inc.
<TABLE>
<S> <S>
Officers and Directors James C. Swain, Chairman and Chief Executive Officer
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director and President
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Andrew J. Donohue, Vice President
John L. Wallace, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Lynn M. Coluccy, Assistant Treasurer
Robert G. Zack, Assistant Secretary
Investment Advisor Oppenheimer Management Corporation
Distributor Oppenheimer Funds Distributor, Inc.
Transfer and Shareholder Oppenheimer Shareholder Services
Servicing Agent
Custodian of The Bank of New York
Portfolio Securities
Independent Auditors Deloitte & Touche
Legal Counsel Myer, Swanson & Adams, P.C.
</TABLE>
The financial statements included herein have been taken from the records of
the Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer Main Street Income
& Growth Fund. This report must be preceded or accompanied by a Prospectus
of Oppenheimer Main Street Income & Growth Fund. For material information
concerning the Fund, see the Prospectus.
18 Oppenheimer Main Street Income & Growth Fund
<PAGE>
The Family of OppenheimerFunds
OppenheimerFunds offers over 30 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your children's
education, or tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that
you are investing with a respected financial institution with over 30 years
of experience in helping people just like you reach their financial goals.
And you're investing with a leader in global, growth stock, and flexible
fixed income investments--with over 1.7 million shareholder accounts and more
than $25 billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.(1) For more information on OppenheimerFunds, please
contact your financial advisor or call us at 1-800-525-7048 for a
prospectus. You may also write us at the address shown on the back cover.
As always, please read the prospectus carefully before you invest.
<TABLE>
<S> <C> <C>
Specialty Stock Funds Global Bio-Tech Fund Gold & Special Minerals Fund
Global Environment Fund
Stock Funds Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
Stock and Bond Funds Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
Bond Funds High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund(3)
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Government Securities Fund
Strategic Investment Grade Bond Fund
Tax-Exempt Funds New York Tax-Exempt Fund(2) Tax-Free Bond Fund
Main Street California Tax-Exempt Fund(2) Insured Tax-Exempt Bond Fund
Pennsylvania Tax-Exempt Fund(2) Intermediate Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(2)
Money Market Funds Money Market Fund Tax-Exempt Cash Reserves
Cash Reserves
<FN>
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange privileges are subject to change or termination.
2. Available only to residents of those states.
3. Formerly GNMA Fund.
</TABLE>
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203. (C) Copyright 1994 Oppenheimer
Management Corporation. All rights reserved.
19 Oppenheimer Main Street Income & Growth Fund
<PAGE>
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"Whatever your needs, we're ready to assist you."
1993
AWARD OF
EXCELLENCE
INTERNATIONAL
CUSTOMER
SERVICE
ASSOCIATION
(PHOTO OF BARBARA HENNIGAR)
Barbara Hennigar
President
Oppenheimer Shareholder Services
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(OPPENHEIMER FUNDS(R) LOGO)
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