Oppenheimer Main Street Income & Growth Fund
Semiannual Report December 31, 1995
[COVER PHOTO]
"We want high
long-term
growth
and current
income, too."
[LOGO--OPPENHEIMER FUNDS(R)]
<PAGE>
This Fund is for people who are looking for high total return, from both the
potential for capital appreciation and current income.
News
Outstanding Total Return
Cumulative Total Return for the
5-Year Period Ended 12/31/95:
Oppenheimer Main Street
Income & Growth Fund
Class A (at net asset value)1
280.17%
Lipper Growth & Income Funds Average 3
105.28%
The Fund's Class A shares are ranked (FIVE STARS) among 1,371 equity funds as
of 12/31/95 by Morningstar Mutual Funds.(4)
How Your Fund Is Managed
Oppenheimer Main Street Income & Growth Fund offers long-term investors the
opportunity for high total return. This strategy offers the potential for
long-term growth plus the added advantage of income by investing in the stocks
of fast-growing companies as well as income-producing stocks and bonds.
This disciplined approach helps to reduce risk through diversification and
enables the Fund to take advantage of a wide variety of market conditions. It
has also helped the Fund to earn top rankings for achieving its objective of
high total return on a frequent basis since inception of the Fund.
Performance
Total return at net asset value for the six months ended 12/31/95 was 13.00% for
Class A shares, 12.56% for Class B shares and 12.54% for Class C shares.1
Your Fund's average annual total returns at maximum offering price for Class A
shares for the 1- and 5-year periods ended 12/31/95 and since inception of the
Class on 2/3/88 were 23.25%, 29.08% and 21.10%, respectively. For Class B
shares, average annual total returns for the 1-year period ended 1 2/31/95 and
since inception of the Class on 10/1/94 were 24.66% and 18.29%, respectively.
For Class C shares, average annual total returns for the 1-year period ended
12/31/95 and since inception of the Class on 12/1/93 were 28.76% and 14.54%,
respectively.2
Outlook
"We think the key to next year's market will be careful stock selection. The
combination of our hands-on research and strict buy and sell disciplines will
lead us to investments with strong growth potential."
Robert Milnamow, Portfolio Manager
December 31, 1995
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 12/31/94,
12/31/90 and 2/3/88 (inception of class), after deducting the current maximum
initial sales charge of 5.75%. Class B returns show results of hypothetical
investments on 12/31/94 and 10/1/94 (inception of class), and with the deduction
of the applicable contingent deferred sales charge of 5% (1-year) and 4% (since
inception). Class C returns show results of hypothetical investments on 12/31/94
and 12/1/93 (inception of class), with the 1% contingent deferred sales charge
deducted for the 1-year result. An explanation of the different performance
calculations is in the Fund's prospectus.
3. Source: Lipper Analytical Services. The Lipper total return average for the
5-year period was for 193 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.
4. Source: Morningstar Mutual Funds, 12/31/95. 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 returns, 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 rank ings, reflecting performance
relative to the average fund in a fund's category. Five stars is the "highest"
ranking (top 10%), 4 stars is "above average" 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%, respectively.
There were 1,371 and 936 funds ranked in those respective periods. Rankings are
subject to change. The Fund's Class A, B and C shares have the same portfolio.
2 Oppenheimer Main Street Income & Growth Fund
<PAGE>
[PHOTO OF JAMES C. SWAIN]
James C. Swain
Chairman
Oppenheimer
Main Street Income
& Growth Fund
[PHOTO OF BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer
Main Street Income
& Growth Fund
Dear OppenheimerFunds Shareholder,
The U.S. stock market put on quite a show in 1995 with the Dow Jones Industrial
Average breaking the 5000 barrier. During 1995, conditions were ideal for rising
stock prices. The economy grew fast enough to generate strong corporate
profits--but not so fast as to rekindle inflation. And intermediate- and
long-term interest rates fell sharply, as investors anticipated that the Federal
Reserve Board had shifted from its restrictive monetary policy of the prior
year.
Leading the rally on Wall Street for much of the year were technology
stocks. Even after a bumpy Fall, many stocks in semiconductors, computers,
software and telecommunications doubled during the year. The global demand for
these products--developed and manufactured by American companies--continued
unabated.
The reduction in the rate of growth of health care expenditures is just one
reason why inflation remains moderate. Another reason is the plentiful supply of
inexpensive energy. In addition, the emergence of capitalism throughout the
world has created a global economy of new markets and new competi tors,
dampening prices and labor costs. And after many years of promise, technology
has finally created efficiencies in the business environment.
But the primary fuel to stock prices came from corporate profits, which
have been surging in the past few years, due in large part to a rise in U.S.
corporate productivity. The determination of Corporate America to be successful
in today's highly competitive markets has led to a strategy of tight cost
control with an emphasis on efficiency. With a global boom in technology and a
weak dollar in the first half of the year--which made U.S. goods more attractive
overseas--corporate earnings and profitability have remained very strong,
growing about 20% between 1994 and 1995.
With the Dow less than 1000 just 15 years ago and only 2500 five years ago,
it's clear that the stock market's advance has been tremendous. So the question
remains, "Is the case for stocks still strong?"
Certainly, market volatility would be expected at this point in a five year
bull market, especially since there hasn't been a "normal correction" of 10% or
more since 1990. And the slowdown in the economy is likely to translate into
soft profit growth this year.
But the underlying economic conditions that have driven stocks thus
far--moderate growth with low inflation, falling interest rates, and a Corporate
America that's committed to increased efficiency--remain in place. Additionally,
there is increasing demand for U.S. exports in light of expanding international
economies, as well as the increasing belief that U.S. technologies lead the
world. As a result, we believe that the stock market continues to offer a good
value for investors. But, realistically, we don't expect another year like 1995
any time soon.
Your portfolio manager discusses the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment goals
in the future.
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
January 22, 1996
3 Oppenheimer Main Street Income & Growth Fund
<PAGE>
(PHOTOS OF ROBERT MILNAMOW AND MICHAEL LEVINE)
Q + A
Q How
has the Fund
Performed?
An interview with your Fund's managers.
How has the Fund performed over the past six months?
The Fund has performed very well over the period. While the stock market as a
whole has done extremely well this year, we also benefited from being in the
right industry sectors and the right stocks within those sectors at the right
times.
What investments contributed to the Fund's strong performance?
[PHOTO OF ROBERT DOLL]
The technology sector contributed significantly to the Fund's strong
performance. Our technology weighting was higher than that of most of our
competitors, and higher than technology's representation in the market indices,
and the emphasis paid off nicely. Specifically, we were rewarded for our
emphasis on semiconductor makers, who've profited as micro-processors have
become prevalent in all types of consumer products.1
Healthcare and financial services are other areas where we did well. And
finally, we profited by avoiding investments in foreign stocks during this
period, where performance in many cases significantly lagged the U.S. market
this year.
Were any of your investments disappointing?
Overall, not really. While we didn't have many investments we'd classify as
disappointing this year, we would like to have owned even more consumer growth
stocks such as household-name drug, food, and beverage companies. This group of
stocks performed better than we'd expected--but even so, our heavy technology
exposure more than made up for any missed opportunities there.
What areas of the market are you currently targeting?
As always, we need a catalyst in order to buy a stock. In other words, we look
for
1. The Fund's portfolio is subject to change.
4 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Facing page
Top left: Robert Milnamow, Portfolio Manager
Top right: Michael Levine, Member of Equity Investments Team
Bottom: Robert Doll, Executive VP, Director of Equity Investments
This page
Top: Robert Milnamow
Bottom: Diane Sobin and Bruce Bartlett, Members of Equity Investments Team
A The Fund has performed very well.
companies that have either a new product, new management, or new opportunities
for growth. We'e currently using this approach in tandem with disciplined
selling to increase the quality of the companies in our portfolio as well as the
weightings of our core positions. Our belief is that, with the stock market as a
whole having moved up so much in 1995, in 1996 performance will be more
selective. In our opinion, a portfolio with an increased concentration in
quality companies with strong market positions should outperform an extremely
broad portfolio going forward.
We've been reinvesting proceeds from selected sales into energy and
financial services stocks. Energy stocks have underperformed for some time now,
so we consider them a defensive investment, and they also offer good yields.
Financials performed well for us over the past six months, especially stocks of
banking companies, where we still find strong balance sheets, good yields and
continued con-solidation potential. In addition, atypical of today's
fully-priced market, many bank stocks are still selling at what we consider to
be fair valuations.
[Photo of Bruce Bartlett and Diane Sobin]
In terms of market capitalizations, we continue to hold small-, medium-,
and large-sized companies in the portfolio, a strategy that allows us to
diversify our investments while taking advantage of growth opportunities across
a variety of companies and industry sectors.
[Photo of Robert Milnamow]
What is your outlook for the Fund?
While the market has reached new highs over the past year, we're still
optimistic, though with a defensive slant. Toward the end of 1995, we allowed
our cash position to build up, and are actively looking for opportunities to
bring that percentage down in the coming months. While prices have increased
across the board, companies' fundamentals and earnings are still solid. As a
result, we think the key to next year's market will be careful stock selection.
In that type of market environment, we believe the combination of our hands-on
research and strict buy and sell disciplines will lead us to investments with
strong growth potential. (Solid Box)
5 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Financials
Contents
Statement of Investments 7
Statement of Assets & Liabilities 15
Statement of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
Notes to Financial Statements 20
6 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
=================================================================================================================================
<S> <C> <C>
Short-Term Notes--5.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.95%, 1/4/96 $50,000,000 $ 49,975,208
--------------------------------------------------------------------------------------------------
General Electric Capital Corp., 6%, 1/3/96 60,000,000 59,980,000
--------------------------------------------------------------------------------------------------
Hertz Corp. (The), 5.91%, 1/5/96 60,000,000 59,960,600
--------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 5.95%, 1/12/96 42,600,000 42,522,551
------------
Total Short-Term Notes (Cost $212,438,359) 212,438,359
=================================================================================================================================
Non-Convertible Corporate Bonds and Notes--0.2%
- ---------------------------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Zero Coupon
Sr. Sec. Disc. Nts., Series B, 14%, 11/15/99 (Cost $7,107,380)(1) 12,000,000 7,500,000
=================================================================================================================================
Convertible Corporate Bonds and Notes--4.9%
- ---------------------------------------------------------------------------------------------------------------------------------
ADT Operations, Inc., Zero Coupon Cv. Sub. Nts., 11.85%, 7/6/10(1) 15,000,000 7,125,000
--------------------------------------------------------------------------------------------------
Altera Corp., 5.75% Cv. Sub. Nts., 6/15/02(2) 7,000,000 8,155,000
--------------------------------------------------------------------------------------------------
AMR Corp., 6.125% Cv. Sub. Debs., 11/1/24 15,000,000 15,600,000
--------------------------------------------------------------------------------------------------
Banco de Galicia y Buenos Aires SA, 7% Cv.
Negotiable Obligation Bonds, 8/1/02 6,000,000 5,595,000
--------------------------------------------------------------------------------------------------
Conner Peripherals, Inc., 6.50% Cv. Debs., 3/1/02 6,000,000 6,150,000
--------------------------------------------------------------------------------------------------
Continental Homes Holding Corp., 6.875% Cv. Sub. Nts., 11/1/02 3,500,000 4,125,625
--------------------------------------------------------------------------------------------------
Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 8,000,000 11,220,000
--------------------------------------------------------------------------------------------------
Data General Corp., 7.75% Cv. Sub. Debs., 6/1/01 8,000,000 7,870,000
--------------------------------------------------------------------------------------------------
Delta Air Lines, Inc., 3.23% Cv. Sub. Nts., 6/15/03 6,000,000 5,715,000
--------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 5% Cv. Sub. Nts., 10/1/03 5,000,000 5,056,250
--------------------------------------------------------------------------------------------------
First Financial Management Corp., 5% Cv. Debs., 12/15/99 5,000,000 7,806,250
--------------------------------------------------------------------------------------------------
ICN Pharmaceuticals, Inc., 8.50% Cv. Sub. Debs., 11/15/99 7,400,000 8,019,750
--------------------------------------------------------------------------------------------------
IMC Global, Inc., 6.25% Cv. Sub. Debs., 12/1/01 6,000,000 7,672,500
--------------------------------------------------------------------------------------------------
NovaCare, Inc., 5.50% Cv. Sub. Debs., 1/15/00 6,500,000 5,305,625
--------------------------------------------------------------------------------------------------
PHP Healthcare Corp., 6.50% Cv. Sub. Debs., 12/15/02(2) 5,000,000 5,375,000
--------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.50%
Cv. Sub. Debs., 8/15/00(2)(3) 1,000,000 285,000
--------------------------------------------------------------------------------------------------
Roche Holdings, Inc., Zero Coupon Cv. Nts., 7%, 4/20/10(1)(2) 48,000,000 21,300,000
--------------------------------------------------------------------------------------------------
Seagate Technology, Inc., 6.75% Cv. Sub. Debs., 5/1/12 3,000,000 3,517,500
--------------------------------------------------------------------------------------------------
Sports & Recreation, Inc., 4.25% Cv. Sub. Nts., 11/1/00 7,500,000 5,156,250
--------------------------------------------------------------------------------------------------
Staples, Inc., 4.50% Cv. Nts., 10/1/00(2) 5,000,000 5,025,000
--------------------------------------------------------------------------------------------------
Synoptics Communications, Inc., 5.25% Cv. Sub. Debs., 5/15/03(2) 3,500,000 3,758,125
--------------------------------------------------------------------------------------------------
Theratx, Inc., 8% Cv. Sub. Debs., 2/1/02 6,000,000 5,475,000
--------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Nts., 1/1/03(2) 4,800,000 5,166,000
--------------------------------------------------------------------------------------------------
Time Warner, Inc., 8.75% Cv. Sr. Nts., 1/10/15 13,197,750 13,659,672
--------------------------------------------------------------------------------------------------
U.S. Cellular Corp., Zero Coupon Cv. Liquid Yield Option Nts.,
7.90%, 6/15/15(1) 16,250,000 5,768,750
--------------------------------------------------------------------------------------------------
Unifi, Inc., 6% Cv. Sub. Nts., 3/15/02 10,000,000 10,075,000
--------------------------------------------------------------------------------------------------
WMX Technologies, Inc., 2% Cv. Sub. Nts., 1/24/05 10,000,000 8,650,000
--------------------------------------------------------------------------------------------------
WorldCom, Inc., 5% Cv. Sub. Nts., 8/15/03 4,000,000 4,220,000
------------
Total Convertible Corporate Bonds and Notes (Cost $178,126,083) 202,847,297
</TABLE>
7 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
=================================================================================================================================
Common Stocks--72.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Basic Materials--3.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals--3.2% Du Pont (E.I.) De Nemours & Co. 500,000 $ 34,937,500
---------------------------------------------------------------------------------------------------
Hercules, Inc. 370,000 20,858,750
---------------------------------------------------------------------------------------------------
IMC Global, Inc. 700,000 28,612,500
---------------------------------------------------------------------------------------------------
Monsanto Co. 131,600 16,121,000
---------------------------------------------------------------------------------------------------
Morton International, Inc. 300,000 10,762,500
---------------------------------------------------------------------------------------------------
W.R. Grace & Co. 350,000 20,693,750
------------
131,986,000
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--14.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--1.4% ITI Technologies, Inc.(4) 250,000 7,437,500
---------------------------------------------------------------------------------------------------
Oakwood Homes Corp. 350,000 13,431,250
---------------------------------------------------------------------------------------------------
Toyota Motor Corp. 1,750,000 37,154,024
------------
58,022,774
- ---------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--5.4% Applebee's International, Inc. 417,500 9,498,125
---------------------------------------------------------------------------------------------------
Atlantic Southeast Airlines, Inc. 1,000,000 21,500,000
---------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 355,000 8,653,125
---------------------------------------------------------------------------------------------------
Circus Circus Enterprises, Inc.(4) 1,050,000 29,268,750
---------------------------------------------------------------------------------------------------
Continental Airlines, Inc., Cl. B(4) 600,000 26,100,000
---------------------------------------------------------------------------------------------------
Eastman Kodak Co. 550,000 36,850,000
---------------------------------------------------------------------------------------------------
ITT Corp. (New) 500,000 26,500,000
---------------------------------------------------------------------------------------------------
McDonald's Corp. 450,000 20,306,250
---------------------------------------------------------------------------------------------------
Southwest Airlines Co. 425,000 9,881,250
---------------------------------------------------------------------------------------------------
US West Media Group(4) 1,000,000 19,000,000
---------------------------------------------------------------------------------------------------
Walt Disney Co. 275,000 16,225,000
------------
223,782,500
- ---------------------------------------------------------------------------------------------------------------------------------
Media--2.6% Capital Cities/ABC, Inc. 175,000 21,590,625
---------------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 750,000 13,640,625
---------------------------------------------------------------------------------------------------
Cox Communications, Inc.(4) 600,000 11,700,000
---------------------------------------------------------------------------------------------------
Infinity Broadcasting Corp., Cl. A 300,000 11,175,000
---------------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A(4) 390,000 5,752,500
---------------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B(4) 900,000 42,637,500
-------------
106,496,250
- ---------------------------------------------------------------------------------------------------------------------------------
Retail: General--2.5% Dillard Department Stores, Inc., Cl. A 750,000 21,375,000
---------------------------------------------------------------------------------------------------
Eckerd Corp.(4) 700,000 31,237,500
---------------------------------------------------------------------------------------------------
Ito-Yokado Co., Ltd. 250,000 15,414,194
---------------------------------------------------------------------------------------------------
Kohl's Corp.(4) 300,000 15,750,000
---------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A 775,000 19,375,000
------------
103,151,694
</TABLE>
8 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail: Specialty--2.5% Alco Standard Corp. 350,000 $ 15,968,750
----------------------------------------------------------------------------------------------------
Nike, Inc., Cl. B(5) 450,000 31,331,250
----------------------------------------------------------------------------------------------------
Nine West Group, Inc.(4) 325,000 12,187,500
----------------------------------------------------------------------------------------------------
Rite Aid Corp. 575,000 19,693,750
----------------------------------------------------------------------------------------------------
Tandy Corp. 600,000 24,900,000
------------
104,081,250
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--14.6%
- ---------------------------------------------------------------------------------------------------------------------------------
Beverages--0.8% LVMH Moet Hennessy Louis Vuitton 150,000 31,285,931
- ---------------------------------------------------------------------------------------------------------------------------------
Food--0.8% Groupe Danone 190,000 31,392,263
----------------------------------------------------------------------------------------------------
Penn Traffic Co.(4) 227,500 3,412,500
-----------
34,804,763
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.8% American Home Products Corp. 450,000 43,650,000
----------------------------------------------------------------------------------------------------
Amgen, Inc. 700,000 41,562,500
----------------------------------------------------------------------------------------------------
Astra AB Free, Series A 800,000 31,989,348
----------------------------------------------------------------------------------------------------
Bergen Brunswig Corp., Cl. A 625,000 15,546,875
----------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 200,000 17,175,000
----------------------------------------------------------------------------------------------------
Genzyme Corp.(4) 300,000 18,712,500
----------------------------------------------------------------------------------------------------
Merck & Co., Inc. 250,000 16,437,500
----------------------------------------------------------------------------------------------------
Warner-Lambert Co. 150,000 14,568,750
------------
199,642,473
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies & Baxter International, Inc. 750,000 31,406,250
Services--5.9% ----------------------------------------------------------------------------------------------------
Boston Scientific Corp.(4) 400,000 19,600,000
----------------------------------------------------------------------------------------------------
Columbia/HCA Healthcare Corp. 400,000 20,300,000
----------------------------------------------------------------------------------------------------
Guidant Corp. 275,000 11,618,750
----------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp. 550,000 16,018,750
----------------------------------------------------------------------------------------------------
Heart Technology, Inc.(4) 450,000 14,793,750
----------------------------------------------------------------------------------------------------
Humana, Inc.(4) 500,000 13,687,500
----------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.(4) 1,100,000 22,825,000
----------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc. 900,000 41,850,000
----------------------------------------------------------------------------------------------------
United Healthcare Corp. 800,000 52,400,000
------------
244,500,000
- ---------------------------------------------------------------------------------------------------------------------------------
Household Goods--1.0% Kao Corp. 1,225,000 15,200,916
----------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 331,500 27,431,625
-----------
42,632,541
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco--1.3% Philip Morris Cos., Inc. 575,000 52,037,500
</TABLE>
9 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Energy--6.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Energy Services & Apache Corp. 500,000 $ 14,750,000
Producers--2.4% ----------------------------------------------------------------------------------------------------
Baker Hughes, Inc. 750,000 18,281,250
----------------------------------------------------------------------------------------------------
BJ Services Co.(4) 600,000 17,400,000
----------------------------------------------------------------------------------------------------
Schlumberger Ltd. 450,000 31,162,500
----------------------------------------------------------------------------------------------------
Weatherford Enterra, Inc.(4) 600,000 17,325,000
-----------
98,918,750
- ---------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--3.9% Ashland, Inc. 475,000 16,684,375
----------------------------------------------------------------------------------------------------
Atlantic Richfield Co. 325,000 35,993,750
----------------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 1,350,000 28,856,250
----------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 185,000 26,108,125
----------------------------------------------------------------------------------------------------
Texaco, Inc. 375,000 29,437,500
----------------------------------------------------------------------------------------------------
Unocal Corp. 825,000 24,028,125
-----------
161,108,125
- ---------------------------------------------------------------------------------------------------------------------------------
Financial--10.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Banks--7.5% Ahmanson (H.F.) & Co. 750,000 19,875,000
----------------------------------------------------------------------------------------------------
Bank of Boston Corp. 500,000 23,125,000
----------------------------------------------------------------------------------------------------
BankAmerica Corp. 450,000 29,137,500
----------------------------------------------------------------------------------------------------
Bankers Trust New York Corp. 285,000 18,952,500
----------------------------------------------------------------------------------------------------
Chase Manhattan Corp. 650,000 39,406,250
----------------------------------------------------------------------------------------------------
Coast Savings Financial, Inc.(4) 325,000 11,253,125
----------------------------------------------------------------------------------------------------
Commercial Federal Corp. 400,000 15,100,000
----------------------------------------------------------------------------------------------------
CoreStates Financial Corp. 640,000 24,240,000
----------------------------------------------------------------------------------------------------
Great Western Financial Corp. 1,125,000 28,687,500
----------------------------------------------------------------------------------------------------
Mellon Bank Corp. 300,000 16,125,000
----------------------------------------------------------------------------------------------------
Meridian Bancorp, Inc. 735,000 34,177,500
----------------------------------------------------------------------------------------------------
Midlantic Corp. 425,000 27,890,625
----------------------------------------------------------------------------------------------------
Summit Bancorporation (The) 50,000 1,575,000
----------------------------------------------------------------------------------------------------
UJB Financial Corp. 600,000 21,450,000
------------
310,995,000
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--3.1% Federal National Mortgage Assn. 150,000 18,618,750
----------------------------------------------------------------------------------------------------
H & R Block, Inc. 225,000 9,112,500
----------------------------------------------------------------------------------------------------
MBNA Corp. 225,000 8,296,875
----------------------------------------------------------------------------------------------------
Nomura Securities Co. Ltd. 1,700,000 37,081,315
----------------------------------------------------------------------------------------------------
The PMI Group, Inc. 175,000 7,918,750
----------------------------------------------------------------------------------------------------
Travelers Group, Inc. 725,000 45,584,375
------------
126,612,565
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance--0.1% Prudential Reinsurance Holdings, Inc. 249,600 5,834,400
</TABLE>
10 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial--6.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--2.1% General Electric Co. 370,000 $ 26,640,000
----------------------------------------------------------------------------------------------------
Honeywell, Inc. 575,000 27,959,375
----------------------------------------------------------------------------------------------------
Murata Mfg. Co. Ltd. 420,000 15,472,360
----------------------------------------------------------------------------------------------------
Raychem Corp. 300,000 17,062,500
------------
87,134,235
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--0.3% Centex Construction Products, Inc.(4) 600,000 8,625,000
----------------------------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 235,100 4,848,937
------------
13,473,937
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.7% Reynolds & Reynolds Co., Cl. A 350,000 13,606,250
----------------------------------------------------------------------------------------------------
WMX Technologies, Inc. 500,000 14,937,500
------------
28,543,750
- ---------------------------------------------------------------------------------------------------------------------------------
Manufacturing--3.0% American Standard Cos., Inc.(4) 800,000 22,400,000
----------------------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 400,000 26,500,000
----------------------------------------------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. 4,200,000 33,509,876
----------------------------------------------------------------------------------------------------
Parker-Hannifin Corp. 600,000 20,550,000
----------------------------------------------------------------------------------------------------
Tyco International Ltd. 602,200 21,453,375
------------
124,413,251
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation--0.7% Airborne Freight Corp. 425,000 11,315,625
----------------------------------------------------------------------------------------------------
Canadian National Railway Co.(4) 199,000 2,985,000
----------------------------------------------------------------------------------------------------
Consolidated Freightways, Inc.(5) 625,000 16,562,500
------------
30,863,125
- ---------------------------------------------------------------------------------------------------------------------------------
Technology--15.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--1.4% Boeing Co. 300,000 23,512,500
----------------------------------------------------------------------------------------------------
Lockheed Martin Corp. 425,000 33,575,000
------------
57,087,500
- ---------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--4.1% Adaptec, Inc.(4) 375,000 15,375,000
----------------------------------------------------------------------------------------------------
Bay Networks, Inc.(4) 475,000 19,534,375
----------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(4) 59,000 4,779,000
----------------------------------------------------------------------------------------------------
Cisco Systems, Inc.(4) 425,000 31,715,625
----------------------------------------------------------------------------------------------------
International Business Machines Corp. 630,000 57,802,500
----------------------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(4) 500,000 9,125,000
----------------------------------------------------------------------------------------------------
Sun Microsystems, Inc.(4) 700,000 31,937,500
------------
170,269,000
</TABLE>
11 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Computer Software--4.3% Adobe Systems, Inc. 500,000 $ 31,000,000
----------------------------------------------------------------------------------------------------
Autodesk, Inc. 430,000 14,727,500
----------------------------------------------------------------------------------------------------
Black Box Corp.(4) 350,000 5,731,250
----------------------------------------------------------------------------------------------------
First Data Corp. 300,000 20,062,500
----------------------------------------------------------------------------------------------------
Informix Corp.(4) 375,000 11,250,000
----------------------------------------------------------------------------------------------------
McAfee Associates, Inc. 395,000 17,330,625
----------------------------------------------------------------------------------------------------
NetManage, Inc. 500,000 11,625,000
----------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 315,000 23,971,980
----------------------------------------------------------------------------------------------------
Oracle Corp.(4) 250,000 10,593,750
----------------------------------------------------------------------------------------------------
Platinum Technology, Inc.(4) 400,000 7,350,000
----------------------------------------------------------------------------------------------------
Structural Dynamics Research Corp.(4) 325,000 9,546,875
----------------------------------------------------------------------------------------------------
Sybase, Inc.(4) 400,000 14,400,000
--------------
177,589,480
- ---------------------------------------------------------------------------------------------------------------------------------
Electronics--2.4% Hewlett-Packard Co. 255,000 21,356,250
----------------------------------------------------------------------------------------------------
Intel Corp. 325,000 18,443,750
----------------------------------------------------------------------------------------------------
Loral Corp. 500,000 17,687,500
----------------------------------------------------------------------------------------------------
Motorola, Inc. 200,000 11,400,000
----------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 200,000 10,350,000
----------------------------------------------------------------------------------------------------
Thermo Electron Corp. 425,000 22,100,000
--------------
101,337,500
- ---------------------------------------------------------------------------------------------------------------------------------
Telecommunications- AT&T Corp. 675,000 43,706,250
Technology--3.5% ----------------------------------------------------------------------------------------------------
DSC Communications Corp.(4) 350,000 12,906,250
----------------------------------------------------------------------------------------------------
Millicom International Cellular SA(4) 750,000 22,875,000
----------------------------------------------------------------------------------------------------
Millicom, Inc.(4) 75,000 --
----------------------------------------------------------------------------------------------------
Pairgain Technologies, Inc.(4) 200,000 10,950,000
----------------------------------------------------------------------------------------------------
VTEL Corp.(4) 500,000 9,250,000
----------------------------------------------------------------------------------------------------
WorldCom, Inc.(4) 1,237,400 43,618,350
--------------
143,305,850
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities--1.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--0.4% Sonat, Inc. 500,000 17,812,500
- ---------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--0.6% US West Communications Group 700,000 25,025,000
--------------
Total Common Stocks (Cost $2,457,595,408) 3,012,747,644
</TABLE>
12 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
=================================================================================================================================
Preferred Stocks--5.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Advanta Corp., Stock Appreciation Income Linked Securities
(each representing a one-hundredth interest in a share of 6.75%
Cv. Cl. B Preferred Stock, Series 1995) 150,000 $ 5,812,500
-----------------------------------------------------------------------------------------------------
AK Steel Holding Corp., 7% Cv. Stock Appreciation Income
Linked Securities 325,000 10,887,500
-----------------------------------------------------------------------------------------------------
Atlantic Richfield Co., 9% Exchangeable Notes for
Common Stock of Lyondell Petrochemical Co., 9/15/97 425,000 9,987,500
-----------------------------------------------------------------------------------------------------
Bally Entertainment Corp., 8% Cv. Preferred Redeemable
Increased Dividend Equity Securities 650,000 8,856,250
-----------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8.50% Cum. Cv., Series I 439,000 11,962,750
-----------------------------------------------------------------------------------------------------
Compania de Inversiones en Telecomunicaciones SA,
Provisionally Redeemable Income Debt Exchangeable for Stock,
7%, 3/3/98(2) 225,000 12,684,375
-----------------------------------------------------------------------------------------------------
Continental Airlines Finance Trust, 8.50% Cv.
Trust Originated Preferred Securities(2) 400,000 21,400,000
-----------------------------------------------------------------------------------------------------
Cooper Industries, Inc., Debt Exchangeable for
Common Stock, 6% Exchangeable Nts., 1/1/99(4) 845,000 11,618,750
-----------------------------------------------------------------------------------------------------
Delta Air Lines, Inc., $3.50 Cv. Depositary Shares, Series C 475,000 28,203,125
-----------------------------------------------------------------------------------------------------
Elsag Bailey Financing Trust, 5.50% Cv. Trust Originated
Preferred Securities(2) 224,500 11,309,187
-----------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cv. Depositary Shares 500,000 13,625,000
-----------------------------------------------------------------------------------------------------
James River Corp. of Virginia, Depositary Shares each
representing a one-hundredth interest in a share of Series P,
9% Cum. Cv. Preferred Stock, Dividend Enhanced Convertible Stock 300,000 7,012,500
-----------------------------------------------------------------------------------------------------
LCI International, Inc., 5% Cum. Cv. Exchangeable Preferred Stock 250,000 13,375,000
-----------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.50% Cv. Structured Yield
Enhanced Product Exchangeable for Stock due 8/15/98 200,000 10,375,000
-----------------------------------------------------------------------------------------------------
MFS Communications Company, Inc., 8% Depositary Cv.
Shares Representing 1 Share of Dividend Enhanced Convertible Stock 515,000 25,074,063
-----------------------------------------------------------------------------------------------------
SunAmerica, Inc., $3.10 Cum. Cv. Depositary Shares 199,500 13,067,250
-----------------------------------------------------------------------------------------------------
Westinghouse Electric Corp., Participating
Equity Preferred Shares, $12.125 Cv., Series C(2) 1,000,000 15,750,000
-----------------------------------------------------------------------------------------------------
WHX Corp., $3.75 Cv., Series B 175,000 7,437,500
------------
Total Preferred Stocks (Cost $213,916,781) 238,438,250
Units
=================================================================================================================================
Rights, Warrants and Certificates--0.0%
- ---------------------------------------------------------------------------------------------------------------------------------
American Satelite Network, Inc. Wts., Exp. 6/99 (Cost $0) 18,750 --
</TABLE>
13 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
=================================================================================================================================
Repurchase Agreement--10.9%
- ---------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.90%, dated 12/29/95, to be repurchased at $453,096,836 on
1/2/96, collateralized by U.S. Treasury Nts., 5.125%--8.75%,
12/31/96--11/5/04, with a value of $245,783,120, U.S.
Treasury Bonds, 6.25%--11.25%, 8/15/03--8/15/23, with a value
of $148,950,480, and U.S. Treasury Bills maturing 11/14/96,
with a value of $67,546,904 (Cost $452,800,000) $452,800,000 $ 452,800,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $3,521,984,011) 99.6% 4,126,771,550
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.4 14,578,904
------------ --------------
Net Assets 100.0% $4,141,350,454
============ ==============
</TABLE>
1. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
2. Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended. This security has been determined
to be liquid under guidelines established by the Board of Directors. These
securities amount to $110,207,687 or 2.66% of the Fund's net assets, at December
31, 1995.
3. Non-income producing--issuer is in default of interest payment.
4. Non-income producing security.
5. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
Shares Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Consolidated Freightways,
Inc. 120,000 1/96 $27.50 $176,244 $ 157,500
- ---------------------------------------------------------------------------------------------------------------------------------
Nike, Inc., Cl.B 150,000 1/96 $57.50 745,475 1,743,750
-------- -----------
$921,719 $ 1,901,250
======== ===========
</TABLE>
6. 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, 1995.
There were no affiliate securities held as of December 31, 1995.
Transactions during the period in which the issuer was an affiliate are as
follows:
<TABLE>
<CAPTION>
Balance June 30, 1995 Gross Additions Gross Reductions Balance December 31, 1995
--------------------- ----------------- ------------------ -------------------------
Shares Cost Shares Cost Shares Cost Shares Cost
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Duckwall-ALCO Stores, Inc. 300,000 $ 2,710,938 -- $ -- 300,000 $ 2,710,938 -- $ --
- ---------------------------------------------------------------------------------------------------------------------------------
Globalstar
Telecommunications Ltd. 500,000 9,968,750 -- -- 500,000 9,968,750 -- --
----------- --------- ----------- --------
$12,679,688 $ -- $12,679,688 $ --
=========== ========= =========== ========
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Assets and Liabilities December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================================
<S> <C> <C>
Assets Investments, at value (including repurchase agreement of $452,800,000)
(cost $3,521,984,011)--see accompanying statement $4,126,771,550
------------------------------------------------------------------------------------------------------
Cash 91,637
------------------------------------------------------------------------------------------------------
Receivables:
Shares of capital stock sold 21,982,772
Interest and dividends 7,285,016
Investments sold 1,214,077
------------------------------------------------------------------------------------------------------
Other 72,723
--------------
Total assets 4,157,417,775
==================================================================================================================================
Liabilities Options written, at value (premiums received $921,719)--see accompanying statement 1,901,250
------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of capital stock redeemed 6,012,915
Investments purchased 4,800,567
Distribution and service plan fees 2,394,403
Shareholder reports 325,178
Transfer agent and accounting services fees 154,671
Other 478,337
--------------
Total liabilities 16,067,321
==================================================================================================================================
Net Assets $4,141,350,454
==============
==================================================================================================================================
Composition of Par value of shares of capital stock $ 1,542,838
Net Assets ------------------------------------------------------------------------------------------------------
Additional paid-in capital 3,460,777,750
------------------------------------------------------------------------------------------------------
Undistributed net investment income 555,009
------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 74,666,817
------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 603,808,040
--------------
Net assets $4,141,350,454
==============
==================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets
of $2,468,379,670 and 91,810,063 shares of capital stock outstanding) $26.89
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $28.53
------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $1,101,140,232 and 41,105,695 shares of capital stock outstanding) $26.79
------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $571,830,552 and 21,368,030 shares of capital stock outstanding) $26.76
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statement of Operations For the Six Months Ended
December 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================================
<S> <C>
Investment Income Dividends (net of foreign withholding taxes of $239,117) $ 27,842,101
------------------------------------------------------------------------------------------------------
Interest 22,855,347
------------
Total income 50,697,448
==================================================================================================================================
Expenses Distribution and service plan fees--Note 4:
Class A 2,674,438
Class B 4,354,261
Class C 2,600,672
------------------------------------------------------------------------------------------------------
Management fees--Note 4 8,515,990
------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 3,830,195
------------------------------------------------------------------------------------------------------
Shareholder reports 732,146
------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 114,952
Class B 143,996
Class C 24,714
------------------------------------------------------------------------------------------------------
Legal and auditing fees 35,269
------------------------------------------------------------------------------------------------------
Insurance expenses 24,780
------------------------------------------------------------------------------------------------------
Directors' fees and expenses 21,358
------------------------------------------------------------------------------------------------------
Custodian fees and expenses 12,269
------------------------------------------------------------------------------------------------------
Other 319,070
------------
Total expenses 23,404,110
==================================================================================================================================
Net Investment Income 27,293,338
==================================================================================================================================
Realized and Unrealized Net realized gain (loss) on:
Gain (Loss) Investments:
Unaffiliated companies 92,809,626
Affiliated companies (2,265,939)
Closing and expiration of option contracts written--Note 5 (629,349)
Foreign currency transactions (696,879)
-------------
Net realized gain 89,217,459
-------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 307,352,451
Translation of assets and liabilities denominated in foreign currencies (3,911,410)
------------
Net change 303,441,041
------------
Net realized and unrealized gain 392,658,500
==================================================================================================================================
Net Increase in Net Assets Resulting From Operations $419,951,838
============
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1995 Year Ended
(Unaudited) June 30, 1995
=================================================================================================================================
<S> <C> <C>
Operations Net investment income $ 27,293,338 $ 37,933,945
-----------------------------------------------------------------------------------------------------
Net realized gain 89,217,459 13,180,181
-----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 303,441,041 329,165,454
-------------- --------------
Net increase in net assets resulting from operations 419,951,838 380,279,580
=================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A (19,831,845) (29,280,412)
Shareholders Class B (5,282,880) (3,312,668)
Class C (2,768,778) (4,868,193)
-----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (7,115,143) (140,642)
Class B (3,162,384) (10,803)
Class C (1,654,241) (35,755)
=================================================================================================================================
Capital Stock Net increase in net assets resulting from capital stock
Transactions transactions--Note 2:
Class A 308,399,429 947,214,116
Class B 384,192,110 580,665,761
Class C 54,594,961 233,648,051
=================================================================================================================================
Net Assets Total increase 1,127,323,067 2,104,159,035
-----------------------------------------------------------------------------------------------------
Beginning of period 3,014,027,387 909,868,352
-------------- --------------
End of period (including undistributed net investment
income of $555,009 and $1,145,174, respectively) $4,141,350,454 $3,014,027,387
============== ==============
See accompanying Notes to Financial Statements.
</TABLE>
17 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------
Six Months
Ended
Dec. 31, 1995 Year Ended June 30,
(Unaudited) 1995 1994
<S> <C> <C> <C>
=======================================================================================================
Per Share Operating Data:
Net asset value, beginning of period $24.07 $20.40 $19.88
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .22 .47 .37
Net realized and unrealized gain (loss) 2.90 3.66 2.50
---------- ---------- -------
Total income (loss) from investment
operations 3.12 4.13 2.87
- -------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.46) (.36)
Distributions from net realized gain (.08) --(3) --
Distributions in excess of gains -- -- (1.99)
---------- ---------- --------
Total dividends and distributions
to shareholders (.30) (.46) (2.35)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.89 $24.07 $20.40
========== ========== ========
=======================================================================================================
Total Return, at Net Asset Value(4) 13.00% 20.52% 14.34%
========================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $2,468,380 $1,923,951 $739,552
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,204,524 $1,319,271 $270,417
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.80%(5) 2.31% 2.46%
Expenses 1.00%(5) 1.07% 1.28%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 41.5% 101.3% 199.4%
Average brokerage commission rate(7) $0.09 -- --
</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 June 30, 1995.
3. Less than $.005 per share.
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. Total returns are not annualized for
periods of less than one full year.
18 Oppenheimer Main Street Income & Growth Fund
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- ----------------------------------------- -------------------------------- ----------------------------------------
Six Months Period Six Months
Ended Ended Ended
Dec. 31, 1995 June 30, Dec. 31, 1995 Year Ended June 30,
1993 1992 1991 (Unaudited) 1995(2) (Unaudited) 1995 1994(1)
<C> <C> <C> <C> <C> <C> <C> <C>
=============================================================================================================================
$15.46 $13.22 $12.38 $24.00 $21.49 $23.97 $20.33 $20.76
- -----------------------------------------------------------------------------------------------------------------------------
.16 .25 .38 .10 .25 .12 .33 .13
6.65 4.72 .87 2.91 2.54 2.88 3.62 (.42)
- ------- ------ ------ ------ ------ ------ ------ ------
6.81 4.97 1.25 3.01 2.79 3.00 3.95 (.29)
- -----------------------------------------------------------------------------------------------------------------------------
(.19) (.22) (.41) (.14) (.28) (.13) (.31) (.14)
(2.20) (2.51) -- (.08) --(3) (.08) --(3) --
-- -- -- -- -- -- -- --
- ------- ------ ------ ------ ------ ------ ------ ------
(2.39) (2.73) (.41) (.22) (.28) (.21) (.31) (.14)
- ----------------------------------------------- -----------------------------------------------------------------------------
$19.88 $15.46 $13.22 $26.79 $24.00 $26.76 $23.97 $20.33
======= ====== ====== ====== ====== ====== ====== ======
=============================================================================================================================
46.38% 39.48% 10.60% 12.56% 13.15% 12.54% 19.63% (.97)%
=============================================================================================================================
$58,230 $26,926 $15,968 $1,101,140 $628,499 $571,831 $461,578 $170,316
- -----------------------------------------------------------------------------------------------------------------------------
$38,974 $23,018 $14,563 $865,387 $248,775 $517,993 $325,025 $71,924
- -----------------------------------------------------------------------------------------------------------------------------
1.02% 1.63% 3.15% 1.03%(5) 1.25%(5) 1.05%(5) 1.57% 1.86%(5)
1.46% 1.66% 1.84% 1.78%(5) 1.89%(5) 1.75%(5) 1.82% 2.11%(5)
- -----------------------------------------------------------------------------------------------------------------------------
283.0% 290.1% 208.9% 41.5% 101.3% 41.5% 101.3% 199.4%
-- -- -- $0.09 -- $0.09 -- --
</TABLE>
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended December 31, 1995 were $533,202,400 and $388,852,829,
respectively.
7. Total brokerage commissions paid on purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
19 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited)
================================================================================
1. Significant
Accounting Policies
Oppenheimer Main Street Income & Growth Fund (the 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 objective is to seek high total return (which includes current income
and capital appreciation in the value of its shares) from equity and debt
securities. The Fund's investment advisor is OppenheimerFunds, Inc. (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 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 the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
asked price or the last sale price on the prior trading day. Long-term and
short-term "non-money market" debt securities are valued by a portfolio pricing
service approved by the Board of Directors. Such securities which cannot be
valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or under consistently applied procedures established by the Board of
Directors to determine fair value in good faith. Short-term "money market type"
debt securities having a remaining maturity of 60 days or less are valued at
cost (or last determined market value) adjusted for amortization to maturity of
any premium or discount. Options are valued based upon the last sale price on
the principal exchange on which the option is traded or, in the absence of any
transactions that day, the value is based upon the last sale price on the prior
trading date if it is within the spread between the closing bid and asked
prices. If the last sale price is outside the spread, the closing bid or asked
price closest to the last reported sale price is used.
- -------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- -------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- -------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- -------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- -------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
20 Oppenheimer Main Street Income & Growth Fund
<PAGE>
================================================================================
1. Significant
Accounting Policies
(continued)
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes The character of the distributions
made during the year from net investment income or net realized gains may differ
from 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.
- --------------------------------------------------------------------------------
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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Capital Stock
The Fund has authorized 350,000,000 shares of $.01 par value capital stock
(200,000,000 for Class A, 100,000,000 for Class B, and 50,000,000 for Class C).
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended December 31, 1995 Year Ended June 30, 1995(1)
------------------------------------ ------------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 19,650,480 $507,428,857 55,373,867 $1,208,049,807
Dividends and
distributions reinvested 970,996 25,611,725 1,265,292 27,814,867
Redeemed (8,745,247) (224,641,153) (12,955,862) (288,650,558)
---------- ------------ ----------- --------------
Net increase 11,876,229 $308,399,429 43,683,297 $ 947,214,116
========== ============ =========== ==============
- ------------------------------------------------------------------------------------------------------
Class B:
Sold 16,505,963 $424,947,837 27,077,516 $ 600,973,013
Dividends and
distributions reinvested 302,757 7,978,247 136,393 3,097,456
Redeemed (1,892,126) (48,733,974) (1,024,808) (23,404,708)
---------- ------------ ----------- --------------
Net increase 14,916,594 $384,192,110 26,189,101 $ 580,665,761
========== ============ =========== ==============
- ------------------------------------------------------------------------------------------------------
Class C:
Sold 4,167,339 $107,120,416 13,345,163 $ 288,841,445
Dividends and
distributions reinvested 155,912 4,102,217 208,621 4,536,885
Redeemed (2,214,856) (56,627,672) (2,671,307) (59,730,279)
---------- ------------ ----------- --------------
Net increase 2,108,395 $ 54,594,961 10,882,477 $ 233,648,051
========== ============ =========== ==============
</TABLE>
1. For the year ended June 30, 1995 for Class A and Class C shares and for
the period from October 1, 1994 (inception of offering) to June 30, 1995 for
Class B shares.
================================================================================
3. Unrealized Gains and
Losses on Investments
At December 31, 1995, net unrealized appreciation on investments of
$603,808,009 was composed of gross appreciation of $643,382,067, and
gross depreciation of $39,574,058.
21 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of .65% on the first
$200 million of average annual 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 state regulatory limit on
Fund expenses.
For the six months ended December 31, 1995, commissions (sales charges paid
by investors) on sales of Class A shares totaled $14,522,720, of which
$3,626,825 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a
subsidiary of the Manager as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the
Fund's Class B and Class C shares totaled $15,595,390 and $952,933,
respectively, of which $257,547 and $14,298 was paid to an affiliated
broker/dealer. During the six months ended December 31, 1995, OFDI received
contingent deferred sales charges of $934,794 and $123,128 upon redemption of
Class B and Class C shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
Under separate approved plans, each class may expend up to .25% of average
net assets annually to compensate OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other institutions. In
addition, Class B and Class C shares are subject to an asset-based sales charge
of .75% of net assets annually, to compensate 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. At December 31,
1995, OFDI had incurred unreimbursed expenses of $40,713,933 for Class B and
$4,858,181 for Class C. During the six months ended December 31, 1995, OFDI paid
$103,567, $1,891 and $31,884 to an affiliated broker/dealer as compensation for
Class A, Class B and Class C personal service and maintenance expenses,
respectively, and retained $4,260,673 and $1,356,712 as compensation for Class B
and Class C sales commissions and service fee advances, as well financing costs,
respectively.
================================================================================
5. Option Activity
The Fund may buy and sell put and call options, or write covered put and
call options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended December 31, 1995 was as
follows:
<TABLE>
<CAPTION>
Call Options
----------------------------------
Number of Amount of
Options Premiums
<S> <C> <C>
- --------------------------------------------------------------------------------
Options outstanding at June 30, 1995 400 $ 38,799
- --------------------------------------------------------------------------------
Options written 6,200 1,400,402
- --------------------------------------------------------------------------------
Options closed or expired (3,900) (517,482)
------ ----------
Options outstanding at December 31, 1995 2,700 $ 921,719
====== ==========
</TABLE>
22 Oppenheimer Main Street Income & Growth Fund
<PAGE>
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, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Bridget A. Macaskill, Director and President
Ned M. Steel, Director
Andrew J. Donohue, Vice President
Robert J. Milnamow, 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 OppenheimerFunds, Inc.
=============================================================================
Distributor OppenheimerFunds Distributor, Inc.
=============================================================================
Transfer and
Shareholder OppenheimerFunds Services
Sevicing Agent
=============================================================================
Custodian of The Bank of New York
Portfolio
Securities
=============================================================================
Independent Deloitte & Touche LLP
Auditors
=============================================================================
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.
Shares of Oppenheimer funds are not deposits or obligations
of any bank, are not guaranteed by any bank, and are not
insured by the FDIC or any other agency, and involve
investment risks, including possible loss of the principal
amount invested.
23 Oppenheimer Main Street Income & Growth Fund
<PAGE>
Information
General Information
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PhoneLink
24 hours a day, automated
information and transactions
1-800-533-3310
Telecommunications Device
for the Deaf (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RS0700.001.1295 February 28, 1996
(Picture of Jennifer Leonard)
(Caption) Jennifer Leonard, Customer Service Representative
OppenheimerFunds Service
"How may I help you?"
As an Oppenheimer funds shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
- -------------------------------------------------------------------------------
(Oppenheimer Logo (R))
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
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PAID Permit No. 469
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