<PAGE> 1
OPPENHEIMER MAIN STREET INCOME & GROWTH FUND
Semiannual Report December 31, 1994
[FIGURE NUMBER 1]
Parents attending soccer game
"We want
to go after
the highest
long-term
growth
available."
[LOGO]
<PAGE> 2
This Fund is for people who want high total return, from
both the potential for capital appreciation and from
current income.
HOW YOUR FUND IS MANAGED
Oppenheimer Main Street Income & Growth Fund offers long-term investors the
opportunity for capital appreciation. That's because the Fund invests in stocks
of companies that have the potential for growth. Plus, the Fund aims to provide
current income.
Of course, the value of the kinds of growth stocks the Fund now focuses
on--primarily small and mid-sized companies--can fluctuate over short periods of
time. The Fund's manager seeks to cushion this volatility by investing a portion
of the Fund's assets in income-producing securities. The income from these
investments can help moderate the risk to principal inherent in investing in
stocks. So shareholders get the potential for capital appreciation with less
risk.
PERFORMANCE
Total return at net asset value for the 6-month period ended 12/31/94 was 4.15%
for Class A shares and 3.75% for Class C shares.(4)
The financial markets had a difficult year and, like many mutual funds,
your Fund felt the effects. While difficult years are hard to accept, they're an
inevitable part of investing. That's why keeping a long-term perspective is
crucial to getting the most from your investment.
As of 12/31/94, your Fund's average annual total returns at maximum
offering price for Class A shares for the 1- and 5-year periods and since
inception of the Class on 2/3/88 were -7.19%, 20.79% and 19.76%, respectively.
For Class C shares, average annual total returns for the 1-year period and since
inception of the Class on 12/1/93 were -3.27% and 2.08%, respectively.(5)
NEWS
"MAIN STREET INCOME & GROWTH FUND [CLASS A SHARES] HAS TROUNCED THE MARKETS AND
ITS RIVALS SINCE ITS 1988 LAUNCH..."
- --Money magazine
June 1993
OUTSTANDING TOTAL RETURN
Cumulative Total Return for the
5-Year Period Ended 12/31/94:
Oppenheimer Main Street
Income &Growth Fund
Class A(1)
157.15%
Lipper Growth & Income Funds
Average(2)
49.79%
THE FUND'S CLASS A SHARES ARE RANKED *****
AMONG 1,132 EQUITY FUNDS.(3)
--Morningstar Mutual Funds
12/31/94
OUTLOOK
"Over the past year, interest rates have overshadowed corporate earnings as the
factor driving stock prices. In 1995, we think the market will focus more on
profits, and as that happens, stock prices should once again start to rise. In
our view, the Fund is well-positioned to benefit as the market resumes its
advance."
John Wallace, Portfolio Manager
December 31, 1994
1. Based on total return for the period shown, after deducting the current
maximum sales charge of 5.75%.
2. Source: Lipper Analytical Services. The Lipper
total return average for the 5-year period was for 348 growth and income funds.
The average is shown for comparative purposes only. Oppenheimer Main Street
Income & Growth Fund is characterized by Lipper as a growth and income fund.
Lipper performance does not take sales charges into consideration.
3. Source:
Morningstar Mutual Funds, 12/31/94. Morningstar, Inc., an independent mutual
fund monitoring service, produces proprietary monthly rankings of funds in broad
investment categories (equity, taxable bond, tax-exempt bond, or "hybrid") based
on risk-adjusted investment return, after considering sales charges and
expenses. Investment return measures a fund's (or class's) 3-, 5-, and 10-year
(depending on the inception of the class or fund) average annual total returns
in excess of 90-day U.S. Treasury bill returns. Risk measures a fund's (or
class's) performance below 90-day U.S. Treasury bill returns. Risk and returns
are combined to produce star rankings, reflecting performance relative to the
average fund in a fund's category. Five stars is the "highest" ranking (top
10%), and 1 star is the lowest (bottom 1%). The 5-star current ranking is a
weighted average of the 3- and 5-year rankings for the class, which were both 5
stars, weighted 40%/60%. The Fund was ranked among 1,132 equity funds. Rankings
are subject to change. The Fund's Class A, Class B and Class C shares have the
same portfolio.
4. Based on the change in net asset value per share from 6/30/94
to 12/31/94, without deducting any sales charges. Such performance would have
been lower if sales charges were taken into account.
5. Average annual total
returns are based on a hypothetical investment held until 12/31/94, after
deducting the current maximum initial sales charge of 5.75% for Class A shares
and the contingent deferred sales charge of 5% (1 year) and 4% (since inception)
for Class B shares. The Fund's maximum sales charge rate for Class A shares was
lower during a portion of some of the periods shown, and actual investment
results will be different as a result of the change. Class A and Class C shares
were first publicly offered on 2/3/88 and 12/1/93, respectively. Certain Class B
share performance data is not yet available because Class B shares were first
publicly offered on 10/1/94. All figures assume reinvestment of dividends and
capital gains distributions. Past performance is not indicative of future
results. Investment and principal value on 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> 3
Dear OppenheimerFunds Shareholder,
The past year has been a difficult period for the stock market, one marked above
all by one of the most aggressive series of moves to raise interest rates in the
U.S. Federal Reserve's history. As interest rates moved up, bond prices fell and
the stock market followed, while investors looked everywhere for answers to
questions about directions in inflation, interest rates, and the economy. These
questions all concerned one basic issue: Is the bull market in stocks coming to
an end?
In our view, it is not. While we are not expecting major gains in stock
prices in the very near term, we believe that the uncertainties which held the
market back in 1994 will recede in 1995 as the fundamental positives in the
economy are recognized. The most important of these positives is our belief that
the Fed's attempt to preempt possible inflation, while temporarily
disconcerting, will likely have its desired effect in 1995. We believe that the
economy will begin to slow, and although short-term rates may move up modestly
from their present levels, long-term interest rates--the ones that most affect
securities prices--should stabilize in their current range. Long-term rates may
even begin to decline as overblown concerns about inflation abate.
Those concerns are, in fact, already fading. While the prices of some
commodities have risen over the past year and U.S. manufacturing capacity
utilization and employment rose to their highest levels in years, in today's
globally competitive environment, price increases are difficult to pass on to
either consumers or businesses. The inflation rate--as measured by the Consumer
Price Index-- continues to run at less than 3% a year, and there's nothing on
the horizon to suggest to us that it will increase substantially anytime soon.
Even at their current levels, interest rates remain low relative to recent
periods, and in our view, pose no real threat to most companies' earnings or
cash flows. During the most recent recession, many businesses learned to operate
much more efficiently and took advantage of the extended decline in interest
rates to work down their debt loads and strengthen their financial positions. As
a result, corporate profits have soared despite higher interest rates. And we
believe that business earnings should grow even more as economies in Europe and
elsewhere emerge from their recessions, stimulating demand for U.S. companies'
goods and services. As profits rise, we expect stocks to become more valuable.
Finally, the changing political landscape reflected in results of the
mid-term election bodes well for the stock market over time. In addition to
limiting the expectation that Congress will pass potentially inflationary
government spending proposals, the realignment in Washington has raised the
possibility of tax relief in the form of an expanded deduction for individual
retirement savings or possibly a reduction in the capital gains tax rate. What
specific action, if any, Congress will take on these proposals remains to be
seen. But any action to reduce the federal deficit, cut spending, and reduce
taxes should be good news for the stock market overall.
In light of all these factors, we remain bullish on stocks. As we have
noted in previous reports, we're expecting moderate gains in the short-term, in
line with increasing corporate earnings. Over time, however, we expect stocks to
perform well in both the U.S. and foreign markets. Your portfolio manager
discusses the outlook for your Fund on the following pages. We appreciate your
confidence, and we look forward to helping you continue to reach your investment
goals.
[FIGURE NUMBER 2]
Photo of James C. Swain
James C. Swain
Chairman
Oppenheimer
Main Street Income
&Growth Fund
[FIGURE NUMBER 3]
Photo of Jon S. Fossel
Jon S. Fossel
President
Oppenheimer
Main Street Income
&Growth Fund
James C.Swain Jon S. Fossel
_____________ _____________
James C. Swain Jon S. Fossel
January 23, 1995
3 Oppenheimer Main Street Income &Growth Fund
<PAGE> 4
[FIGURE NUMBER 4]
Photo of John Wallace
[FIGURE NUMBER 5]
Photo of person at equity trading desk
An interview with your Fund's manager.
GIVEN ITS GROWTH STOCK EMPHASIS, THE FUND FACED SIGNIFICANT HURDLES IN ONE OF
THE MOST CHALLENGING MARKETS GROWTH STOCKS HAVE SEEN IN YEARS. WHAT FACTORS
CONTRIBUTED TO THE FUND'S 1994 RESULTS?
The fact that we were able to hold our ground and not give back much of the
tremendous gains we've experienced in previous years stems from our basic
investment strategy-- a strategy that, by the way, has earned the Fund a *****
Morningstar ranking.(1)
[FIGURE NUMBER 6]
Photo of Mark Binning and Lawrence Apolito
Basically, we take a "barbell" approach to the portfolio's structure, investing
about 75% of the Fund's net assets in small- and medium-sized growth stocks and
25% in convertible securities and high-yielding stocks, which provide an income
cushion designed to temper fluctuations in stock prices.
This approach, combined with our buying flexibility and our strong selling
discipline, helped the Fund this year, despite changes in the economic
environment and the challenges we faced in the utilities and smaller
capitalization growth stock sectors.(2)
WHAT ISSUES AFFECTED UTILITIES
AND SMALL-CAP STOCKS?
To put it simply, rising interest rates. We held a significant
amount of utilities issues in 1993 and early 1994, and the prices of these
stocks declined sharply as interest rates rose. We reduced our utility position
dramatically, but our position affected the Fund's performance for the year
nonetheless. Small-cap stocks also had a tough year. We expect these stocks to
help the Fund in 1995, but they held our performance back somewhat last year.
THE FUND EXPERIENCED A TENFOLD INCREASE IN ASSETS IN 1994. DID YOU HAVE TROUBLE
INVESTING THAT MONEY?
Not really. As interest rates moved up and the small-
to mid-size growth stocks
Q+A
Q How did small-cap stocks perform in 1994?
1. See footnote 3, page 2.
2. The Fund's portfolio is subject to change.
4 Oppenheimer Main Street Income & Growth Fund
<PAGE> 5
we focus on moved temporarily out of favor, we found solid buy-ing
opportunities. The growth in assets helped us to take advantage of those
opportunities.
WHERE DO YOU THINK THE BEST GROWTH PROSPECTS ARE TODAY?
One area is technology. We reduced our exposure to this sector last spring, as
share prices began to peak. We began adding to our positions as prices declined,
investing in companies like Compuware, a software developer that should benefit
from strong mainframe and personal computer sales. We also own Cisco Systems and
Bay Networks, network providers positioned for growth in business-systems
integration.
We're also investing in what I call "new age" utilities, companies like
Philip Morris and Bristol-Myers. These stocks are delivering good earnings and
dividend growth at valuations considered reasonable.
We've also found some interesting opportunities in consumer and industrial
cyclical stocks, both in the U.S. and offshore. One is Unifi, a major
manufacturer of fibers and fab-rics used in the auto, household, and clothing
industries that is well-positioned for growth.
SEVERAL INTERNATIONAL MARKETS NOW SEEM POISED TO OUTPERFORM THE U.S. MARKET. ARE
YOU CAPITALIZING ON THESE OPPORTUNITIES?
We are, both in Europe and in emerging markets in Latin America and Asia. Many
European economies have come out of their recessions, and we've added to our
holdings of European auto-makers. We also have positions in several
international telecommunication and technology firms that will benefit from
global economic growth. Of course, foreign investments may subject the Fund to
greater expenses and risks, such as currency fluctuations. However, because of
the portfolio's diversification, we've been able to reduce those risks while
delivering excellent returns over the long term.
HOW ARE YOU MANAGING THE INCOME PORTION OF THE PORTFOLIO?
We believe that short-term interest rates will rise some-what in the near term
and that long-term rates will stabilize or even come down. Given that view,
we're investing in U.S. Government bonds, both 5- and 10-year bonds, and
long-term zero coupon bonds, which should benefit most from any rally in
long-term rates.
We're also finding opportunities in convertible bonds and preferred
stocks. Convertible securities can be converted at any time into common stock.
For example, we recently bought the ICN Pharmaceutical convertible bonds that
yield 8.5% and mature in 1999. If the company performs as we think it will over
the next few years, we should benefit from significant capital appreciation. In
the meantime, we're earning attractive income.
WHAT'S YOUR OUTLOOK FOR THE FUND?
Inflation today is under control, interest rates have largely stabilized, and
the economy is growing at a reasonable pace. We think that in 1995 earnings will
replace interest rates as the force driving stock prices. []
FACING PAGE
Top left: John Wallace,
Portfolio Manager
Top right: The equity trading desk
Bottom: Mark Binning, Securities Coordinator, consults with Lawrence Apolito, VP
Equity Trading
THIS PAGE
John Wallace
A Small caps had a tough year, but we believe their outlook to be brighter for
1995.
5 Oppenheimer Main Street Income & Growth Fund
<PAGE> 6
STATEMENT OF INVESTMENTS December 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
--------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS--6.1%
Repurchase agreement with First Chicago Capital Markets, 6%,
dated 12/30/94, to be repurchased at $103,569,000 on 1/3/95,
collateralized by U.S. Treasury Nts., 3.875%--8.875%,
5/31/95--8/31/05, with a value of $98,427,306 and U.S.
Treasury Bonds, 10.75%--14.25%, 2/15/02--8/15/05,
with a value of $7,230,519 (Cost $103,500,000) $103,500,000 $103,500,000
MORTGAGE-BACKED OBLIGATIONS--5.9%
GOVERNMENT AGENCY--5.9%
FHLMC/FNMA/ Federal National Mortgage Assn., 5.82%, 1/6/95 (Cost $99,919,167) 100,000,000 99,919,167
SPONSORED--5.9%
U.S. GOVERNMENT OBLIGATIONS--7.3%
TREASURY--7.3% U.S. Treasury Nts.:
7.25%, 11/30/96 10,000,000 9,925,000
7.25%, 5/15/04 10,000,000 9,606,250
7.25%, 8/15/04 5,100,000 4,896,000
7.50%, 12/31/96 8,130,000 8,102,048
7.75%, 11/30/99 7,500,000 7,474,214
7.75%, 12/31/99 12,000,000 11,962,500
7.875%, 11/15/04 30,000,000 30,093,750
U.S. Treasury STRIPS:
0%, 5/15/14 46,878,000 10,130,472
0%, 5/15/18 200,000,000 31,708,199
-----------
Total U.S. Government Obligations (Cost $121,907,684) 123,898,433
CONVERTIBLE CORPORATE BONDS AND NOTES--6.5%
BASIC MATERIALS--0.3%
CONSUMER GOODS AND L.A. Gear, Inc., 7.75% Cv. Sub. Debs., 11/30/02 2,400,000 1,500,000
SERVICES--0.1%
METALS--0.1% Agnico Eagle Mines, 3.50% Cv. Sr. Nts., 1/27/04 2,000,000 1,420,000
PAPER AND FOREST IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(3) 2,000,000 1,755,000
PRODUCTS--0.1%
CONSUMER CYCLICALS--1.2%
MEDIA--1.1% Time Warner, Inc., 8.75% Cv. Sr. Nts., 1/10/15 20,000,000 18,850,000
RETAIL--0.1% Hechinger Co., 5.50% Cv. Sub. Debs., 4/1/12 2,800,000 1,739,500
CONSUMER NON-CYCLICALS--1.0%
HEALTHCARE--1.0% ICN Pharmaceuticals, Inc., 8.50% Cv. Sub. Debs., 11/15/99 7,400,000 7,085,500
McKesson Corp., 4.50% Cv. Sub. Debs., 3/1/04 3,000,000 2,820,000
Novacare, Inc., 5.50% Cv. Sub. Debs., 1/15/00 4,500,000 3,408,750
Pacific Physician Services, Inc., 5.50% Cv. Sub. Debs., 12/15/03 2,500,000 1,965,625
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(3) 1,000,000 948,750
-----------
16,228,625
FINANCIAL--0.5%
FINANCIAL--0.5% Banco de Galicia y Buenos Aires SA, 7% Cv. Negotiable
Obligation Bonds, 8/1/02 3,500,000 2,730,000
First Financial Management Corp., 5% Cv. Debs., 12/15/99 5,000,000 5,187,500
-----------
7,917,500
</TABLE>
6 Oppenheimer Main Street Income & Growth Fund
<PAGE> 7
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
--------- ------------
<S> <C> <C>
INDUSTRIAL--1.7%
TRANSPORTATION--1.7% Alaska Air Group, Inc., 0% Cv. Sub. Liq. Yld. Opt. Nts., 4/18/06 $ 12,000,000 $ 5,055,000
AMR Corp., 6.125% Cv. Sub. Debs., 11/1/24 15,000,000 12,075,000
Delta Airlines, Inc., 3.23% Cv. Sub. Nts., 6/15/03 15,000,000 10,462,500
Softe SA, 4.25% Gtd. Exch. Nts., 7/30/98(3) ITL 2,350,000,000 1,499,306
----------
29,091,806
TECHNOLOGY--1.8%
AEROSPACE Noble Affiliates, Inc., 4.25% Cv. Sub. Nts., 11/1/03 3,500,000 2,979,375
/DEFENSE--0.2%
COMMUNICATIONS--0.5% Arch Communications Group, Inc., 6.75% Cv. Sub. Debs., 12/1/03(3) 1,000,000 1,057,500
Seagate Technology, 5% Cv. Sub. Debs., 11/1/03(3) 2,000,000 2,045,000
Seagate Technology, 6.75% Cv. Sub. Debs., 5/1/12 4,000,000 3,305,000
Telekom Malaysia Berhad, 4% Cv. Debs., 10/3/04(3) 3,250,000 2,892,500
----------
9,300,000
TECHNOLOGY--1.1% Convex Computer Corp., 6% Cv. Sub. Debs., 3/1/12 2,000,000 1,235,000
Cypress Semiconductor Corp., 3.15% Cv. Sub. Nts., 3/15/01(3) 7,000,000 6,405,000
Data General Corp., 7.75% Cv. Sub. Debs., 6/1/01 7,500,000 6,506,250
Fisher Scientific International, Inc., 4.75% Cv. Sub. Nts., 3/1/03 3,000,000 2,718,750
Synoptics Communications, Inc., 5.25% Cv. Sub. Debs., 5/15/03(3) 3,500,000 2,651,250
----------
19,516,250
----------
Total Convertible Corporate Bonds and Notes (Cost $114,272,639) 110,298,056
SHARES
COMMON STOCKS--71.9%
BASIC MATERIALS--3.2%
CHEMICALS--2.6% Bush Boake Allen, Inc.(2) 390,000 10,530,000
Great Lakes Chemical Corp. 175,000 9,975,000
Hercules, Inc. 47,200 5,445,700
Imperial Chemical Industries PLC, ADS 150,000 6,975,000
Methanex Corp.(2) 275,000 3,575,000
Mississippi Chemical Corp.(2) 300,000 5,212,500
Sterling Chemicals, Inc.(2) 150,000 1,968,750
----------
43,681,950
GOLD--0.2% Santa Fe Pacific Gold Corp.(2) 277,362 3,571,036
METAL: Zemex Corp.(2) 244,990 2,113,039
MISCELLANEOUS--0.1%
STEEL--0.3% Birmingham Steel Corp. 225,000 4,500,000
CONSUMER CYCLICALS--10.5%
AIRLINES--0.8% Atlantic Southeast Airlines, Inc. 625,000 9,687,500
Continental Airlines, Inc., Cl. B(2) 350,000 3,237,500
----------
12,925,000
AUTO PARTS: Edelbrock Corp.(2) 250,000 3,312,500
AFTER MARKET--0.4% Lund International Holdings, Inc.(2) 175,000 2,887,500
----------
6,200,000
</TABLE>
7 Oppenheimer Main Street Income & Growth Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
AUTOMOBILES--0.2% Volvo AB, Series B Free 150,000 $ 2,824,833
BROADCAST MEDIA--2.8% CBS Inc. 175,000 9,690,625
Comcast Corp. Special, Cl. A 425,000 6,667,188
Lin Broadcasting Corp.(2) 30,000 4,005,000
Lin Television Corp. 15,000 341,250
TeleCommunications, Inc., Cl. A(2) 300,000 6,525,000
United International Holdings, Inc., Cl. A(2) 400,000 7,000,000
Viacom, Inc., Cl. A(2) 32,000 1,332,000
Viacom, Inc., Cl. B(2) 317,460 12,896,812
-----------
48,457,875
ENTERTAINMENT--0.2% Imax Corp.(2) 200,000 1,700,000
Iwerks Entertainment, Inc.(2) 225,000 1,068,750
----------
2,768,750
HOMEBUILDING--0.4% Oakwood Homes Corp. 300,000 7,312,500
HOTELS/MOTELS--0.1% Innkeepers USA Trust 200,000 1,450,000
HOUSEHOLD FURNISHINGS Newell Co. 200,000 4,200,000
AND APPLIANCES--0.2%
LEISURE TIME--0.8% Bally Gaming International, Inc.(2) 250,000 2,656,250
Brunswick Corp. 400,000 7,550,000
Outboard Marine Corp. 150,000 2,943,750
----------
13,150,000
RESTAURANTS--0.2% Buffets, Inc.(2) 350,000 3,456,250
RETAIL STORES: Dayton Hudson Corp. 150,000 10,612,500
DEPARTMENT Duckwall-ALCO Stores, Inc.(2) (4) 325,000 2,925,000
STORES--1.1%
Kohl's Corp.(2) 150,000 5,962,500
----------
19,500,000
RETAIL: CML Group, Inc. 225,000 2,278,125
SPECIALTY--1.2%
Ellett Brothers, Inc. 225,000 3,375,000
Rite Aid Corp. 641,000 14,983,375
-----------
20,636,500
RETAIL: SPECIALTY Cato Corp., Cl. A 275,000 1,993,750
APPAREL--0.2%
Goody's Family Clothing, Inc.(2) 150,000 1,350,000
----------
3,343,750
SHOES--1.0% Nike, Inc., Cl. B 225,000 16,790,625
TEXTILES: APPAREL Unifi, Inc. 600,000 15,300,000
MANUFACTURERS--0.9%
CONSUMER NON-CYCLICALS--10.7%
BEVERAGES: Canandaigua Wine Co., Inc., Cl. A(2) 250,000 9,500,000
ALCOHOLIC--0.6%
</TABLE>
8 Oppenheimer Main Street Income & Growth Fund
<PAGE> 9
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
DRUGS--1.8% Bergen Brunswig Corp., Cl. A 250,000 $ 5,218,750
Centocor, Inc.(2) 100,000 1,625,000
Lilly (Eli) & Co. 200,000 13,125,000
Merck & Co., Inc. 250,000 9,531,250
Neurogen Corp.(2) 200,000 1,300,000
----------
30,800,000
FOOD PROCESSING--1.1% IBP, Inc. 350,000 10,587,500
Pet, Inc. 400,000 7,900,000
----------
18,487,500
FOOD Food Lion, Inc., Cl. A 750,000 3,843,750
WHOLESALERS--0.2%
HEALTHCARE: Bristol-Myers Squibb Co. 125,000 7,234,375
DIVERSIFIED--0.4%
HEALTHCARE: Alpha Beta Technology, Inc.(2) 115,000 1,006,250
MISCELLANEOUS--4.0% Amgen, Inc.(2) 225,000 13,275,000
COR Therapeutics, Inc.(2) 220,000 2,420,000
Coram Healthcare Corp.(2) 400,000 6,600,000
CytoTherapeutics, Inc.(2) 100,000 450,000
Dentsply International, Inc. 300,000 9,450,000
Genentech, Inc.(2) 325,000 14,746,875
Mariner Health Group, Inc.(2) 200,000 4,325,000
Matrix Pharmaceutical, Inc.(2) 220,000 3,025,000
Oxford Health Plans Inc.(2) 65,000 5,151,250
United Healthcare Corp. 175,000 7,896,875
----------
68,346,250
HOSPITAL Beverly Enterprises, Inc.(2) 350,000 5,031,250
MANAGEMENT--0.5%
Summit Care Corp.(2) 177,500 3,372,500
----------
8,403,750
MEDICAL St. Jude Medical, Inc. 275,000 10,931,250
PRODUCTS--0.8%
Ventritex, Inc.(2) 125,000 3,375,000
----------
14,306,250
TOBACCO--1.3% Philip Morris Cos., Inc. 375,000 21,562,500
ENERGY--2.8%
OIL WELL Pride Petroleum Services, Inc.(2) 225,000 1,125,000
SERVICES AND
EQUIPMENT--0.2% Weatherford International, Inc.(2) 290,000 2,827,500
----------
3,952,500
OIL: EXPLORATION AND Apache Corp. 200,000 5,000,000
PRODUCTION--0.3%
OIL: INTEGRATED Atlantic Richfield Co. 100,000 10,175,000
DOMESTIC--2.0%
Occidental Petroleum Corp. 700,000 13,475,000
Sun Co., Inc. 375,000 10,781,250
-----------
34,431,250
</TABLE>
9 Oppenheimer Main Street Income & Growth Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
OIL: INTEGRATED Total SA, Sponsored ADR 175,000 $ 5,162,500
INTERNATIONAL--0.3%
INDUSTRIAL--5.8%
BUILDING MATERIALS Centex Construction Products, Inc.(2) 200,000 2,475,000
GROUP--0.5%
Martin Marietta Materials, Inc. 350,000 6,212,500
----------
8,687,500
COMMERCIAL Future Healthcare, Inc.(2) 100,000 2,062,500
SERVICES--0.8%
Patterson Dental Co.(2) 150,000 3,112,500
Reynolds & Reynolds Co., Cl. A 350,000 8,750,000
----------
13,925,000
CONGLOMERATES--0.5% Hanson PLC, ADR 500,000 9,000,000
CONTAINERS: METAL U.S. Can Corp.(2) 149,200 2,834,800
AND GLASS--0.2%
ELECTRICAL Methode Electronics, Inc., Cl. A 200,000 3,400,000
EQUIPMENT--0.8%
Raychem Corp. 225,000 8,015,625
S3 Incorporated(2) 125,000 1,968,750
----------
13,384,375
MACHINE TOOLS--0.1% Acme-Cleveland Corp. 200,000 2,100,000
MANUFACTURING: Cyrk International, Inc.(2) 395,500 16,363,813
DIVERSIFIED Harmon Industries, Inc. 150,000 2,925,000
INDUSTRIALS--2.3%
Harsco Corp. 175,000 7,153,125
Parker-Hannifin Corp. 225,000 10,237,500
Watts Industries, Inc., Cl. A 150,000 3,168,750
----------
39,848,188
TRANSPORTATION: Airborne Freight Corp. 350,000 7,175,000
MISCELLANEOUS--0.6% Kirby Corp.(2) 170,000 3,357,500
----------
10,532,500
FINANCIAL--7.9%
COMMERCIAL Cole Taylor Financial Group, Inc. 115,000 2,415,000
FINANCE--0.1%
FINANCIAL SERVICES: Argentina Fund, Inc. 110,000 1,333,750
MISCELLANEOUS--2.4% Chile Fund, Inc. 50,000 2,306,250
Duke Realty Investments, Inc. 115,000 3,248,750
H & R Block, Inc. 540,000 20,047,500
Korea Equity Fund, Inc. 100,000 875,000
Piper Jaffray Cos., Inc. 210,000 2,178,750
Student Loan Marketing Assn. 200,000 6,500,000
The Foreign & Colonial Emerging Middle East Fund, Inc.(2) 100,000 1,250,000
Vallicorp Holdings, Inc. 171,000 2,693,250
----------
40,433,250
</TABLE>
10 Oppenheimer Main Street Income & Growth Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
INSURANCE: LIFE--0.1% Southwestern Life Corp.(2) 425,000 $ 1,089,063
INSURANCE: PROPERTY St. Paul Cos., Inc. (The) 200,000 8,950,000
AND CASUALTY--0.5%
MAJOR BANKS: BankAmerica Corp. 250,000 9,875,000
REGIONAL--3.1% CoreStates Financial Corp. 550,000 14,300,000
First Bank System, Inc. 300,000 9,975,000
First Interstate Bancorp 175,000 11,834,375
U.S. Bancorp, Inc. 100,000 2,262,500
West One Bancorp 200,000 5,300,000
----------
53,546,875
MONEY CENTER First Chicago Corp. 325,000 15,518,750
BANKS--0.9%
SAVINGS AND LOANS/ Charter One Financial, Inc. 190,000 3,610,000
HOLDING COS.--0.8% Coast Savings Financial, Inc.(2) 325,000 4,712,500
Commercial Federal Corp.(2) 250,000 5,281,250
----------
13,603,750
TECHNOLOGY--20.5%
AEROSPACE Alliant Techsystems, Inc.(2) 125,000 5,078,125
/DEFENSE--0.6%
Martin Marietta Corp. 100,000 4,437,500
----------
9,515,625
COMMUNICATION: DSC Communications Corp.(2) 150,000 5,381,250
EQUIPMENT/
MANUFACTURERS--0.9% Newbridge Networks Corp.(2) 175,000 6,693,750
Tellabs, Inc.(2) 65,000 3,623,750
----------
15,698,750
COMPUTER SOFTWARE Adobe Systems, Inc. 327,500 9,743,125
AND SERVICES--8.7% America Online, Inc. 55,000 3,080,000
Bay Networks, Inc.(2) 505,000 14,897,500
Cadence Design Systems, Inc.(2) 125,000 2,578,125
Compuware Corp.(2) 715,000 25,740,000
Comverse Technology, Inc. 49,700 590,188
First Financial Management Corp. 50,000 3,081,250
Frame Technology Corp.(2) 100,000 1,637,500
Hummingbird Communications Ltd.(2) 75,000 1,528,125
Information Resources, Inc.(2) 300,000 4,125,000
Informix Corp.(2) 345,000 11,083,125
Intersolv, Inc.(2) 240,000 4,350,000
Keane, Inc.(2) 170,000 4,037,500
Lotus Development Corp.(2) 360,000 14,760,000
Micro Linear Corp.(2) 225,000 1,912,500
Micrografx, Inc.(2) 420,000 2,835,000
Microsoft Corp.(2) 115,000 7,029,375
</TABLE>
11 Oppenheimer Main Street Income & Growth Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
COMPUTER SOFTWARE National Data Corp. 85,000 $ 2,188,750
AND SERVICES Olicom A/S(2) 250,000 2,562,500
(CONTINUED)
Pairgain Technologies, Inc.(2) 165,000 2,351,250
Platinum Software Corp.(2) 575,000 7,475,000
QuickResponse Services, Inc.(2) 100,000 1,262,500
Softkey International, Inc.(2) 250,000 6,375,000
Sybase, Inc.(2) 145,000 7,540,000
Synquest Technology, Inc.(2) 100,000 1,775,000
Virtuality Group PLC(2) 325,000 1,123,702
Wavefront Technologies, Inc.(2) 215,000 2,714,374
----------
148,376,389
COMPUTER SYSTEMS--3.4% Adaptec, Inc.(2) 430,000 10,158,750
ADFlex Solutions, Inc.(2) 160,000 2,680,000
Alantec Corp.(2) 57,500 1,840,000
Apple Computer, Inc. 80,000 3,120,000
Auspex Systems, Inc.(2) 250,000 1,687,500
Cabletron Systems, Inc.(2) 120,000 5,580,000
Cisco Systems, Inc.(2) 450,000 15,806,250
Compaq Computer Corp.(2) 275,000 10,862,500
Digital Link Corp. 20,000 537,500
Hutchinson Technology, Inc.(2) 160,000 3,960,000
Radius, Inc.(2) 250,000 2,125,000
----------
58,357,500
ELECTRONICS--0.2% ITI Technologies, Inc.(2) 165,000 3,743,438
ELECTRONICS: Recoton Corp.(2) 180,000 3,375,000
INSTRUMENTATION--0.2%
ELECTRONICS: Altera Corp.(2) 150,000 6,281,250
SEMICONDUCTORS--1.9% Micron Technology, Inc. 150,000 6,618,750
National Semiconductor Corp.(2) 100,000 1,950,000
Texas Instruments, Inc. 225,000 16,846,875
-----------
31,696,875
OFFICE EQUIPMENT AND Moore Corp. Ltd. 362,300 6,838,413
SUPPLIES--0.5% Tele-Matic Corp.(2) 100,000 750,000
----------
7,588,413
</TABLE>
12 Oppenheimer Main Street Income & Growth Fund
<PAGE> 13
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
TELECOMMUNICATIONS A+ Communications, Inc.(2) 245,000 $ 3,307,500
- --4.1%
Airtouch Communications, Inc.(2) 150,000 4,368,750
AT&T Corp. 300,000 15,075,000
Atlantic Tele-Network, Inc. 240,000 2,055,000
Comcast UK Cable Partners Ltd.(2) 180,000 2,880,000
Executive Telecard Ltd.(2) 140,000 717,500
IDB Communications Group, Inc.(2) 1,300,000 11,943,750
Intelcom Group, Inc.(2) 325,000 4,306,250
Intervoice, Inc.(2) 200,000 2,750,000
LCI International, Inc.(2) 114,100 2,966,600
MFS Communications Co., Inc.(2) 100,000 3,275,000
Millicom International Cellular SA(2) 514,100 15,487,263
-----------
69,132,613
UTILITIES--10.5%
ELECTRIC American Electric Power Co., Inc. 250,000 8,218,750
COMPANIES--8.2%
Detroit Edison Co. 487,500 12,735,938
Empresa Nacional de Electricidad SA, Sponsored ADR 245,000 9,922,500
FPL Group, Inc. 350,000 12,293,750
Houston Industries, Inc. 550,000 19,593,750
Montana Power Co. 200,000 4,600,000
Pacific Gas & Electric Co. 750,000 18,281,250
Peco Energy Co. 350,000 8,575,000
Public Service Enterprise Group, Inc. 750,000 19,875,000
Texas Utilities Co. 525,000 16,800,000
Union Electric Co. 225,000 7,959,371
-----------
138,855,309
NATURAL GAS--0.6% Sonat, Inc. 350,000 9,800,000
TELEPHONE--1.7% GTE Corp. 600,000 18,225,000
US West, Inc. 300,000 10,687,500
-----------
28,912,500
-----------
Total Common Stocks (Cost $1,205,433,555) 1,224,134,196
</TABLE>
13 Oppenheimer Main Street Income & Growth Fund
<PAGE> 14
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
------ ------------
<S> <C> <C>
PREFERRED STOCKS--3.5%
AK Steel Holding Corp., 7% Cv. Stock Appreciation Income Linked Securities 150,000 $ 4,687,500
Atlantic Richfield Co., 9% Exchangeable Notes for Common Stock of
Lyondell Petrochemical Co., 9/15/97 380,000 9,927,500
Compania de Inversiones en Telecomunicaciones SA, Provisionally
Redeemable Income Debt Exchangeable for Stock, 7%, 3/3/98(3) 150,000 7,575,000
Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 175,000 7,656,250
Fiat SpA(2) 2,000,000 4,598,551
Freeport-McMoRan Copper & Gold, Inc., Cv. Depositary Shares 300,000 6,225,000
James River Corp. of Virginia, Dividend Enhanced Convertible Stock,
9% Cv. Exch. Depositary Shares, Series P 400,000 8,100,000
Kaiser Aluminum Corp., 8.255% Provisionally Redeemable Income Debt
Exchangeable for Stock 125,000 1,328,125
Santa Fe Energy Resources, Inc., Dividend Enhanced Convertible Stock,
$.732 Cv. Exch., Series A 325,000 2,803,125
Unisys Corp., $3.75 Cv., Series A 200,000 6,350,000
Total Preferred Stocks (Cost $61,348,661) 59,251,051
TOTAL INVESTMENTS, AT VALUE (COST $1,706,381,705) 101.2% 1,721,000,903
LIABILITIES IN EXCESS OF OTHER ASSETS (1.2) (19,759,291)
---------- ---------------
NET ASSETS 100.0% $ 1,701,241,612
======== ===============
</TABLE>
1. Face amount is reported in local currency. Foreign
currency abbreviation is as follows:
ITL--Italian Lira
2. Non-income producing security.
3. Restricted security--See Note 5 of Notes to Financial
Statements.
4. 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,
1994. The aggregate fair value of all securities of
affiliated companies as of December 31, 1994 amounted to
$2,925,000. Transactions during the period in which the
issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE JUNE 30, 1994 GROSS ADDITIONS GROSS REDUCTIONS
--------------------- --------------- ----------------
SHARES COST SHARES COST SHARES COST
<S> <C> <C> <C> <C> <C> <C>
Standish Care Co.,
$4.50 Cv., Series A 60,000 $ 649,995 -- $ -- 60,000 $ 649,995
CMG Information SVS Inc. 234,000 1,967,000 -- -- 234,000 1,967,000
Duckwall--ALCO Stores, Inc. -- -- 325,000 2,942,188 -- --
------ ------ ------ ------ ------ ------
294,000 $2,616,995 325,000 $2,942,188 294,000 $2,616,995
</TABLE>
<TABLE>
<CAPTION>
BALANCE DECEMBER 31, 1994
-------------------------
SHARES COST
<S> <C> <C>
Standish Care Co.,
$4.50 Cv., Series A -- $ --
CMG Information SVS Inc. -- --
Duckwall--ALCO Stores, Inc. 325,000 2,942,188
------ ----------
325,000 $2,942,188
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Main Street Income & Growth Fund
<PAGE> 15
STATEMENT OF ASSETS AND LIABILITIES December 31, 1994
(Unaudited)
<TABLE>
<S> <C>
ASSETS Investments, at value (cost $1,706,381,705)--see accompanying statement $ 1,721,000,903
Cash 1,988,427
Receivables:
Shares of capital stock sold 30,844,145
Investments sold 7,282,679
Dividends and interest 6,559,728
Other 298,556
-------------
Total assets 1,767,974,438
LIABILITIES Payables and other liabilities:
Investments purchased 58,463,909
Shares of capital stock redeemed 6,796,105
Distribution and service plan fees--Note 4 920,263
Other 552,549
---------------
Total liabilities 66,732,826
NET ASSETS $ 1,701,241,612
===============
COMPOSITION OF Par value of shares of capital stock $ 811,419
NET ASSETS Additional paid-in capital 1,724,797,651
Undistributed (overdistributed) net investment income (190,912)
Accumulated net realized gain (loss) from investment and foreign currency transactions (38,794,990)
Net unrealized appreciation (depreciation) on investments and translation of assets
and liabilities denominated in foreign currencies 14,618,444
---------------
Net assets $ 1,701,241,612
===============
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on
net assets of $1,271,451,243 and 60,594,140 shares of
capital stock outstanding) $20.98
Maximum offering price
per share (net asset value plus sales charge of 5.75% of
offering price) $22.26
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $111,187,351 and 5,305,977 shares of capital stock outstanding) $20.96
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $318,603,018 and 15,241,780 shares of capital stock outstanding) $20.90
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Main Street Income & Growth Fund
<PAGE> 16
STATEMENT OF OPERATIONS For The Six Months Ended
December 31, 1994 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME Interest $ 9,348,468
Dividends 15,645,527
-----------
Total income 24,993,995
EXPENSES Management fees--Note 4 3,382,625
Distribution and service plan fees:
Class A--Note 4 1,250,644
Class B--Note 4 122,964
Class C--Note 4 1,284,174
Transfer and shareholder servicing agent fees--Note 4 1,558,166
Shareholder reports 203,886
Directors' fees and expenses 14,871
Legal and auditing fees 8,053
Registration and filing fees:
Class A 224,085
Class B 40,207
Class C 61,645
Other 106,564
----------
Total expenses 8,257,884
NET INVESTMENT INCOME (LOSS) 16,736,111
REALIZED AND Net realized gain (loss) on:
UNREALIZED
GAIN (LOSS) ON Investments (22,027,461)
INVESTMENTS,
OPTIONS WRITTEN AND Expiration and closing of options written (2,269,356)
FOREIGN CURRENCY Foreign currency transactions 1,334,642
TRANSACTIONS -----------
Net realized gain (loss) (22,962,175)
Net change in unrealized appreciation or depreciation on investments 43,416,899
------------
Net realized and unrealized gain (loss) on investments, options written and
foreign currency transactions 20,454,724
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $37,190,835
============
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Main Street Income & Growth Fund
<PAGE> 17
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1994 YEAR ENDED
(UNAUDITED) JUNE 30, 1994
----------------- -------------
<S> <C> <C> <C>
OPERATIONS Net investment income (loss) $ 16,736,111 $ 7,435,686
Net realized gain (loss) on investments, options written
and foreign currency transactions (22,962,175) (12,425,245)
Net change in unrealized appreciation or depreciation on investments 43,416,899 (36,662,021)
------------- ---------------
Net increase (decrease) in net assets resulting from operations 37,190,835 (41,651,580)
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.261 and $.356 per share, respectively) (14,359,954) (5,859,657)
SHAREHOLDERS Class B ($.144 per share) (627,744) --
Class C ($.188 and $.136 per share, respectively) (2,645,336) (815,401)
Distributions from net realized gain on investments,
options written and foreign currency transactions:
Class A ($.002 per share) (140,708) --
Class B ($.002 per share) (30,232) --
Class C ($.002 per share) (16,511) --
Distributions in excess of gain on investments, options written
and foreign currency transactions:
Class A ($1.989 per share) -- (9,339,980)
CAPITAL STOCK Net increase (decrease) in net assets resulting from Class A
TRANSACTIONS capital stock transactions--Note 2 515,469,977 727,055,604
Net increase (decrease) in net assets resulting from Class B
capital stock transactions--Note 2 111,571,514 --
Net increase (decrease) in net assets resulting from Class C
capital stock transactions--Note 2 144,961,419 182,249,457
NET ASSETS Total increase (decrease) 791,373,260 851,638,443
Beginning of period 909,868,352 58,229,909
--------------- ---------------
End of period [including undistributed (overdistributed) net
investment income of $(190,912) and $706,011, respectively] $ 1,701,241,612 $ 909,868,352
=============== ===============
See accompanying Notes to Financial Statements.
</TABLE>
17 Oppenheimer Main Street Income & Growth Fund
<PAGE> 18
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX MONTHS
ENDED
DEC. 31, 1994 YEAR ENDED JUNE 30,
(UNAUDITED) 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 20.40 $ 19.88 $ 15.46 $ 13.22 $ 12.38 $ 11.67
Income from investment operations:
Net investment income (loss) .25 .37 .16 .25 .38 .17
Net realized and unrealized gain (loss)
on investments and options written .59 2.50 6.65 4.72 .87 .88
------ ------ ------ ------ ------ ------
Total income (loss) from investment
operations .84 2.87 6.81 4.97 1.25 1.05
Dividends and distributions to shareholders:
Dividends from net investment income (.26) (.36) (.19) (.22) (.41) (.19)
Distributions from net realized gain
on investments and options written --(6) -- (2.20) (2.51) -- (.15)
Distributions in excess of gains -- (1.99) -- -- -- --
------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.26) (2.35) (2.39) (2.73) (.41) (.34)
Net asset value, end of period $ 20.98 $ 20.40 $ 19.88 $ 15.46 $ 13.22 $ 12.38
======= ======= ======= ======= ======= =======
TOTAL RETURN, AT NET ASSET VALUE(3) 4.15% 14.34% 46.38% 39.48% 10.60% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $1,271,499 $739,552 $58,230 $26,926 $15,968 $13,851
Average net assets (in thousands) $1,041,651 $270,417 $38,974 $23,018 $14,563 $7,520
Number of shares outstanding
at end of period (in thousands) 60,594 36,251 2,929 1,742 1,208 1,119
Ratios to average net assets:
Net investment income 2.66%(4) 2.46% 1.02% 1.63% 3.15% 2.33%
Expenses 1.07%(4) 1.28% 1.46% 1.66% 1.84% 2.21%
Portfolio turnover rate(5) 58.1% 199.4% 283.0% 290.1% 208.9% 214.3%
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS C
------- ------------------------------
PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED
DEC. 31, 1994(2) DEC. 31, 1994 JUNE 30,
(UNAUDITED) (UNAUDITED) 1994(1)
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 20.44 $ 20.33 $ 20.76
Income from investment operations:
Net investment income (loss) .07 .18 .13
Net realized and unrealized gain (loss)
on investments and options written .59 .58 (.42)
------ ------ ------
Total income (loss) from investment
operations .66 .76 (.29)
Dividends and distributions to shareholders:
Dividends from net investment income (.14) (.19) (.14)
Distributions from net realized gain
on investments and options written --(6) --(6) --
Distributions in excess of gains -- -- --
------ ------ ------
Total dividends and distributions
to shareholders (.14) (.19) (.14)
Net asset value, end of period $ 20.96 $ 20.90 $ 20.33
======= ======= =======
TOTAL RETURN, AT NET ASSET VALUE(3) (1.77)% 3.75% (.97)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $111,140 $318,603 $170,316
Average net assets (in thousands) $51,657 $256,564 $71,924
Number of shares outstanding
at end of period (in thousands) 5,306 15,242 8,377
Ratios to average net assets:
Net investment income 2.25%(4) 1.91%(4) 1.86%
Expenses 2.08%(4) 1.83%(4) 2.11%
Portfolio turnover rate(5) 58.1% 58.1% 199.4%
</TABLE>
1. For the period from December 1, 1993 (inception of
offering) to June 30, 1994.
2. For the period from October 1, 1994 (inception of
offering) to December 31, 1994.
3. 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.
4. Annualized.
5. 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, 1994 were
$1,429,110,670 and $665,219,132, respectively.
6. Less than $.005 per share.
See accompanying Notes to Financial Statements.
18 Oppenheimer Main Street Income & Growth Fund
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT Oppenheimer Main Street Income & Growth Fund (the Fund),
ACCOUNTING POLICIES 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 advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers
Class A, Class B and Class C shares. Class B and Class C
shares may be subject to a contingent deferred sales
charge. All three classes of shares have identical
rights to earnings, assets and voting privileges, except
that each class has its own distribution and/or service
plan, expenses directly attributable to a particular
class and exclusive voting rights with respect to
matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after
the date of purchase. The following is a summary of
significant accounting policies consistently followed by
the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at
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 using dealer-supplied valuations
provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes
reflect current market value, or under consistently
applied procedures established by the Board of Directors
to determine fair value in good faith. 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. Options are valued based upon the
last sale price on the principal exchange on which the
option is traded or, in the absence of any transactions
that day, the value is based upon the last sale 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. The market value
of the underlying securities is required to be at least
102% of the resale price at the time of purchase. If the
seller of the agreement defaults and the value of the
collateral declines, or if the seller enters an
insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated daily
to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a specific
class are charged against the operations of that class.
FEDERAL 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.
CHANGE IN ACCOUNTING 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 premium
amortization, paydown gains and losses and the
recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from
net investment income or net realized gains may differ
from their ultimate characterization for federal income
tax purposes. Also, due to timing of dividend
distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or
realized gain (loss) was recorded by the Fund. Effective
July 1, 1993, the Fund adopted Statement of Position
93-2: Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of
distributions to shareholders to better disclose the
differences between financial statement amounts and
distributions determined in accordance with income tax
regulations. Accordingly, amounts have been reclassified
to reflect an increase in paid-in capital of $21,571, an
increase in accumulated net realized gain on investments
of $64,799, and a decrease in undistributed net
investment income of $86,370.
19 Oppenheimer Main Street Income & Growth Fund
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
1. SIGNIFICANT OTHER. Investment transactions are accounted for on the
ACCOUNTING POLICIES date the investments are purchased or sold (trade date) and
(CONTINUED) 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.
2. Capital Stock The Fund has authorized 147,500,000 shares of $.01 par
value capital stock (76,250,000 for Class A and
45,000,000 for Class B, and 26,250,000 for Class C).
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1994(2) JUNE 30, 1994(1)
------------------------ ----------------
SHARES AMOUNT SHARES
---------- ------------ ----------
<S> <C> <C> <C>
Class A:
Sold 27,586,786 $ 584,079,818 34,877,614
Dividends and distributions reinvested 657,226 13,674,717 704,717
Redeemed (3,900,409) (82,284,558) (2,260,838)
----------- -------------- -----------
Net increase 24,343,603 $ 515,469,977 33,321,493
========== ============= ===========
Class B:
Sold 5,332,856 $ 112,143,228 --
Dividends and distributions reinvested 29,433 604,330 --
Redeemed (56,312) (1,176,044) --
------------- ------------- -------------
Net increase 5,305,977 $ 111,571,514 --
========= ============= ==============
Class C:
Sold 7,419,925 $ 156,653,163 8,563,107
Dividends and distributions reinvested 118,202 2,448,012 35,985
Redeemed (673,505) (14,139,756) (221,934)
------------- ------------- ----------
Net increase 6,864,622 $ 144,961,419 8,377,158
========= ============= ==========
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
-------------
<S> <C>
Class A:
Sold $ 761,137,297
Dividends and distributions reinvested 14,641,214
Redeemed (48,722,907)
--------------
Net increase $ 727,055,604
==============
Class B:
Sold $ --
Dividends and distributions reinvested --
Redeemed --
-------------
Net increase $ --
==============
Class C:
Sold $ 186,240,396
Dividends and distributions reinvested 747,590
Redeemed (4,738,529)
-------------
Net increase $ 182,249,457
=============
</TABLE>
1. For the year ended June 30, 1994 for Class A shares
and for the period from December 1, 1993 (inception of
offering) to June 30, 1994 for Class C shares.
2. For the six months ended December 31, 1994 for Class
A and Class C shares and for the period from October 1,
1994 (inception of offering) to December 31, 1994 for
Class B shares.
3. UNREALIZED GAINS At December 31, 1994, net unrealized appreciation on
AND investments of $14,619,198 was composed of gross
LOSSES ON appreciation of $89,808,369, and gross depreciation of
INVESTMENTS $75,189,171.
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER with the investment advisory agreement with the Fund
TRANSACTIONS which provides for an annual fee of .65% on the first
WITH AFFILIATES $200 million of net 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, 1994,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $19,128,884, of which
$4,734,327 was retained by Oppenheimer Funds
Distributor, Inc. (OFDI), a subsidiary of the Manager,
as general distributor, and by an affiliated
broker/dealer. During the six months ended December 31,
1994, OFDI received contingent deferred sales charges of
$17,869 upon redemption of Class B shares and $70,512
upon redemption of Class C shares.
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.
20 Oppenheimer Main Street Income & Growth Fund
<PAGE> 21
4. MANAGEMENT FEES Under separate approved plans, each class may
AND OTHER expend up to .25% of average net assets annually to
TRANSACTIONS reimburse OFDI for costs incurred in connection with the
WITH AFFILIATES personal service and maintenance of accounts that hold
(CONTINUED) shares of the Fund, including amounts paid to brokers,
dealers, banks and other institutions. In addition,
Class B and 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 B or Class C plan, the Board of Directors may
allow the Fund to continue payment of the asset-based
sales charge to OFDI for distribution expenses incurred
on Class B or Class C shares sold prior to termination
or discontinuance of the plan. During the six months
ended December 31, 1994, OFDI paid $48,783 to an
affiliated broker/dealer as reimbursement for Class A
personal service and maintenance expenses and retained
$107,992 and $1,261,864 as reimbursement for Class B and
Class C sales commissions and service fee advances, as
well as financing costs, respectively.
5. RESTRICTED The Fund owns securities purchased in private
SECURITIES 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. Illiquid and/or restricted
securities, all of which are transferable under Rule
144A of the Act are listed below.
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE
-------- ----------------
<S> <C>
Arch Communications Group, Inc., 6.75% Cv. Sub. Debs., 12/1/03(1) 6/20/94
Compania de Inversiones en Telecomunicaciones SA,
Provisionally Redeemable Income Debt Exchangeable
for Stock, 7%, 3/3/98(1) 9/7/94--12/30/94
Cypress Semiconductor Corp., 3.15% Cv. Sub. Nts., 3/15/01(1) 3/23/94--5/12/94
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(1) 5/17/94--6/28/94
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(1) 1/12/94
Seagate Technology, 5% Cv. Sub. Debs., 11/1/03(1) 6/30/94--7/1/94
Softe SA, 4.25% Gtd. Exch. Nts., 7/30/98(1) 6/1/94--6/14/94
Synoptics Communications, Inc., 5.25% Cv. Sub. Debs., 5/15/03(1) 9/29/94
Telekom Malaysia Berhad, 4% Cv. Debs., 10/3/94(1) 9/22/94--10/10/94
</TABLE>
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY COST PER UNIT DEC. 31, 1994
-------- ------------- --------------
<S> <C> <C>
Arch Communications Group, Inc., 6.75% Cv. Sub. Debs., 12/1/03(1) $ 102.50 $ 105.75
Compania de Inversiones en Telecomunicaciones SA,
Provisionally Redeemable Income Debt Exchangeable
for Stock, 7%, 3/3/98(1) $ 61.61 $ 50.50
Cypress Semiconductor Corp., 3.15% Cv. Sub. Nts., 3/15/01(1) $ 79.79 $ 91.50
IVAX Corp., 6.50% Cv. Sub. Nts., 11/15/01(1) $ 85.13 $ 87.75
Physicians Clinical Laboratory, Inc., 7.50% Cv. Sub. Debs., 8/15/00(1) $ 104.00 $ 94.88
Seagate Technology, 5% Cv. Sub. Debs., 11/1/03(1) $ 92.13 $ 102.25
Softe SA, 4.25% Gtd. Exch. Nts., 7/30/98(1) $ 117.75 $ 103.50
Synoptics Communications, Inc., 5.25% Cv. Sub. Debs., 5/15/03(1) $ 71.25 $ 75.75
Telekom Malaysia Berhad, 4% Cv. Debs., 10/3/94(1) $ 99.97 $ 89.00
</TABLE>
1. Transferable under Rule 144A of the Act.
6. OPTION ACTIVITY The Fund may buy and sell put and call options, or write
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.
The Fund segregates assets to cover its obligations
under option contracts.
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.
21 Oppenheimer Main Street Income & Growth Fund
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
6. OPTION ACTIVITY In this report, securities segregated to cover
(CONTINUED) outstanding call options are noted in the Statement of
Investments. Shares subject to call, expiration date,
exercise price, premium received and market value are
detailed in a footnote to the Statement of Investments.
Options written are reported as a liability in the
Statement of Assets and Liabilities. Gains and losses
are reported in the Statement of Operations.
The risk in writing a call option is that the
Fund gives up the opportunity for profit if the market
price of the security increases and the option is
exercised. The risk in writing a put option is that the
Fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium
whether or not the option is exercised. The Fund also
has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does
not exist.
Call option activity for the six months ended December
31, 1994 was as follows:
<TABLE>
<CAPTION>
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
--------- ---------
<S> <C> <C>
Options outstanding at June 30, 1994 1,250 $239,992
Options written 2,030 458,020
Options expired prior to exercise (730) (143,805)
Options exercised (750) (147,745)
Options canceled in closing purchase transactions (1,800) (406,462)
Options outstanding at December 31, 1994 -- $ --
===== ========
</TABLE>
22 Oppenheimer Main Street Income & Growth Fund
<PAGE> 23
OPPENHEIMER MAIN STREET INCOME & GROWTH FUND
A Series of Oppenheimer Main Street Funds, Inc.
OFFICERS AND James C. Swain, Chairman and Chief Executive Officer
DIRECTORS Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, President and Director
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
Robert J. Bishop, Assistant Treasurer
Scott Farrar, 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 LLP
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken
from the records of the Fund without examination by the
independent auditors.
This is a copy of a report to shareholders of
Oppenheimer 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.
23 Oppenheimer Main Street Income & Growth Fund
<PAGE> 24
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[FIGURE NUMBER 7]
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Jennifer Leonard, Customer Service Representative
Oppenheimer Shareholder Services
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