-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bYueyv/sZd9HZKYMSxn/hihhGnMkFrZ3CSEtoLDWbZdpZVXViQbWXtkp7xEcMFlb q5nqRzF+sZdqTgCRGHYRrQ== 0000912057-94-000840.txt : 19940310 0000912057-94-000840.hdr.sgml : 19940310 ACCESSION NUMBER: 0000912057-94-000840 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER EQUITY INCOME FUND INC CENTRAL INDEX KEY: 0000045156 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 840578481 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 40 SEC FILE NUMBER: 811-01512 FILM NUMBER: 94515276 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 FORMER COMPANY: FORMER CONFORMED NAME: CENTENNIAL EQUITY INCOME FUND INC DATE OF NAME CHANGE: 19830428 FORMER COMPANY: FORMER CONFORMED NAME: HAMILTON INCOME FUND INC DATE OF NAME CHANGE: 19811115 FORMER COMPANY: FORMER CONFORMED NAME: HAMILTON MILE HI FUND INC DATE OF NAME CHANGE: 19701016 N-30D 1 N-30D Oppenheimer Equity Income Fund Semi-Annual Report December 31, 1993 [Logo] [Graphic] "SURE, I HAVE AMBITIOUS GOALS. BUT I DON'T WANT UNNECESSARY RISK. "THIS FUND HAS GIVEN ME RELIABLE INCOME, PLUS CAPITAL GROWTH. "I CALL THAT A WINNING COMBINATION." ----------------------------------------------------------------- Fund Facts - -------------------------------------------------------------------------------- Six Facts Every Shareholder Should Know About Oppenheimer Equity Income Fund ------------------------------------------------------------ 1 The Fund's objectives are primarily to seek as much current income as prudent investing will allow, and secondarily to preserve capital while providing an In this report: opportunity for capital appreciation. Answers to ------------------------------------------------------------ three timely 2 The Fund's dividends and capital gains distributions questions you paid per Class A share for the six months ended should ask your December 31, 1993, totaled $0.4121. Fund's managers. ------------------------------------------------------------ 3 The Fund's total return at net asset value for Class A / / With the shares for the six months ended December 31, 1993, was U.S. stock 4.23%.(1) market near record highs, ------------------------------------------------------------ what steps have 4 The Fund was recently awarded a **** ranking from been taken to Morningstar, Inc.(2) insulate the Fund's ------------------------------------------------------------ portfolio 5 The Fund's managers pursue a conservative investment against a strategy, using common stocks and convertible possible securities to generate capital gains, and government correction in and corporate bonds and convertible securities to stock prices? produce current income. Asset allocation at December 31, 1993, was:(3) / / Why is the Fund emphasizing COMMON STOCKS 42.6% convertible BONDS AND PREFERRED STOCKS 34.7% securities? U.S. GOVERNMENT SECURITIES 11.6% [Graphic] NON-DOLLAR (FOREIGN BONDS) 6.7% / / Where is CASH EQUIVALENTS 4.4% the Fund seeking opportunities ------------------------------------------------------------ for capital 6 "With the belief that the stock market is reaching its appreciation? peak, we have begun to adopt a more defensive posture in recent months. Our investments in convertible securities have performed extremely well. These investments provided substantial capital gains, while at the same time offered high yields and lowered the volatility of the overall portfolio." PORTFOLIO MANAGER, JOHN DONEY, DECEMBER 31, 1993 1. Based on the change in net asset value per Class A share from 6/30/93 and 12/31/92 to 12/31/93. The Fund's average annual total returns after deducting the current maximum sales charge of 5.75% per Class A share for the 1-, 5-, and 10-year periods ended 12/31/93 were 7.98%, 9.65% and 11.93%, respectively. The Fund's maximum initial sales charge on Class A shares was higher during a portion of the period shown and actual performance would be different as a result. Cumulative total return for Class B shares from 8/17/93 (inception of the class) to 12/31/93 was -3.39%. Class B performance information reflects the change in value of a hypothetical investment made on 8/17/93 and held until 12/31/93, with all dividends and capital gains distributions reinvested and after applying the contingent deferred sales charge of 5%. All total return calculations include reinvestment of dividends and capital gains distributions. 2. MORNINGSTAR MUTUAL FUNDS, 1/7/94, an independent mutual fund monitoring service, which ranks funds in specific investment categories monthly by a quantitative system that uses investment performance, risk assessment factors and adjusts returns for fees and sales loads. 1-star is the lowest ranking, 5-stars the highest. Of 1,002 equity funds ranked by Morningstar in that period, 10% received a 5-star ranking and 22.5% received a 4-star ranking. Risk assessment reflects fund performance relative to 3-month Treasury bill returns. 3. The Fund's portfolio is subject to change. Past performance is no guarantee of future results. The principal value and return 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. 2 Oppenheimer Equity Income Fund ------------------------------------------------ REPORT TO SHAREHOLDERS Oppenheimer Equity Income Fund provided a total return at net asset value of 4.23% per Class A share during the six months ended December 31, - ---------------------------- 1993.(4) That figure for the twelve-month period COMPETITIVE TOTAL RETURNS ended December 31 was 14.57%.(4) This was higher than the return of the S&P 500(5) and the Lipper For the 12 months ended average for equity income funds.(6) In addition, December 31, 1993 the Fund was awarded a **** ranking by - ---------------------------- Morningstar, Inc.(7) Oppenheimer Equity 14.57% The U.S. economy is growing moderately Income Fund A(4) and interest rates have stabilized after an (at net asset value) extended period of decline. In this environment, - ---------------------------- and with the stock market at record highs, the S&P 500(5) 10.06% Fund's managers have adopted a more conservative - ---------------------------- investment posture. We have maintained a large Lipper equity 13.38% position in convertible securities, which tend income funds average(6) to hold their value better than common stocks during market corrections, while providing relatively substantial yield in this low-interest-rate economy. The Fund's convertible securities have provided impressive capital gains, as well as boosted the yield and lowered the volatility of the portfolio. For instance, our investments in Fordand Chrysler are performing well, as U.S. automotive companies continue to gain market share at the expense of their Japanese competitors. In the common stock portion of the portfolio, we continue to favor financial services companies, which have appreciated considerably, despite periods of volatility. We are also emphasizing companies that are positioned to benefit from the U.S. economic recovery. For example, we are invested in John Deere and Tenneco, farm equipment manufacturers that are enjoying a substantial increase in equipment sales after several years of lackluster demand. We believe that 1994 will provide a relatively stable investment environment, with interest rates holding near current levels and inflation remaining under control. We will continue to monitor economic developments closely, to seek the best investment opportunities for the Fund. We are pleased that Oppenheimer Equity Income Fund has produced both high income and capital growth, and we look forward to serving your investment needs. -------------- "THE FUND WAS AWARDED **** BY MORNINGSTAR." James C. Swain Jon S. Fossel Chairman President Oppenheimer Equity Oppenheimer Equity Income Fund Income Fund January 21, 1994 4. See footnote 1, page 2. 5. The Standard & Poor's 500 Index is an unmanaged index of common stocks that is widely recognized as an indicator of overall market performance. The S&P 500 Index does not take taxes or sales charges into consideration. 6. Source of data: Lipper Analytical Services, Inc., an independent mutual fund monitoring service, 12/31/93. Lipper total return averages for the 12 months ended 12/31/93 were for 75 equity income funds. These averages are shown for comparative purposes only. Lipper performance rankings do not take sales charges into consideration. 7. See footnote 2, page 2. 3 Oppenheimer Equity Income Fund
--------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS December 31, 1993 (Unaudited) FACE MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--4.3% - ---------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 3.125%, dated 12/31/93 and maturing 1/3/94, collateralized by U.S. Treasury Nts.: 9.125%, 5/15/99, with a value of $59,525,050 $58,300,000 $58,300,000 4.25%, 1/31/95, with a value of $25,212,661 24,700,000 24,700,000 ------------ Total Repurchase Agreements (Cost $83,000,000) 83,000,000 - ---------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT OBLIGATIONS--18.2% - ---------------------------------------------------------------------------------------------------------------------------------- Argentina (Republic of): Bonds, Bonos de Consolidacion de Deudas, Series 1, 3.1875%, 4/1/01(3) (6) 4,197,375 3,647,443 Par Bonds, 4%, 3/31/23(5) 8,648,500 6,886,105 ------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds: Series H62, 10.50%, 6/1/95 24,000,000(4) 19,615,684 Series H62, 9.25%, 10/1/96 55,800,000(4) 46,563,184 ------------------------------------------------------------------------------------------------------- Ontario Hydro (Province of) Canada Gtd. Debs., 10.875%, 1/8/96 16,000,000(4) 13,406,739 ------------------------------------------------------------------------------------------------------- Quebec, Canada (Province of) Debs., 10.25%, 4/7/98 10,000,000(4) 8,732,886 ------------------------------------------------------------------------------------------------------- South Australia (Government of) Bonds, 9%, 9/2/23 3,000,000(4) 2,254,679 ------------------------------------------------------------------------------------------------------- Student Loan Marketing Assn. Indexed Currency Opt. Nts., 10.50%, 11/1/95 6,400,000 2,688,000 ------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Sr. Nts., 8.25%, 10/15/03 35,000,000(4) 25,656,478 ------------------------------------------------------------------------------------------------------- U.S. Treasury Nts: 13.125%, 5/15/94 21,000,000 21,761,039 7.875%, 6/30/96 14,200,000 15,437,954 7.875%, 7/31/96 82,000,000 88,790,413 7.875%, 4/15/98 82,000,000 90,814,174 ------------ Total Government Obligations (Cost $354,145,726) 342,607,335 - ---------------------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE BONDS AND NOTES--0.2% - ---------------------------------------------------------------------------------------------------------------------------------- Citibank 17.30% CD, 7/29/94(7) (Cost $3,516,663) 1,420,300,000(4) 3,314,584 - ---------------------------------------------------------------------------------------------------------------------------------- LONG-TERM CORPORATE BONDS AND NOTES--15.1% - ---------------------------------------------------------------------------------------------------------------------------------- American Medical International, Inc., 11% Sr. Nts., 10/15/00 4,000,000 4,440,000 ------------------------------------------------------------------------------------------------------- Armco, Inc., 13.50% Sr. Nts., 6/15/94 2,813,000 2,886,841 ------------------------------------------------------------------------------------------------------- Auburn Hills Trust, 12.375% Gtd. Exch. Ctfs., 5/1/20(3) 5,000,000 7,687,500 ------------------------------------------------------------------------------------------------------- Banco Nacional de Comercio Exterior SNC International Finance BV, 8% Gtd. Matador Bonds, 8/5/03(2) 2,000,000 2,060,000 ------------------------------------------------------------------------------------------------------- Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(2) 15,000,000 18,675,000 ------------------------------------------------------------------------------------------------------- Bank of Boston Corp., 7.75% Cv. Sub. Debs., 6/15/11 9,500,000 10,723,125 ------------------------------------------------------------------------------------------------------- Bank of New York Co., Inc. (The), 7.50% Cv. Sub. Debs., 8/15/01 5,000,000 7,912,500 ------------------------------------------------------------------------------------------------------- Box Energy Corp., 8.25% Cv. Sub. Nts., 12/1/02 5,000,000 6,587,500
4 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- FACE MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- LONG-TERM CORPORATE Carter Hawley Hale Stores, Inc., 6.25% Sr. Sub. Nts., 12/31/00(2) $7,800,000 $7,975,500 BONDS AND NOTES ------------------------------------------------------------------------------------------------------- (CONTINUED) Chrysler Financial Corp., 9% Nts., 10/15/94 2,000,000 2,090,000 ------------------------------------------------------------------------------------------------------- Coastal Corp., 11.75% Sr. Debs., 6/15/06 8,946,000 10,377,360 ------------------------------------------------------------------------------------------------------- Comcast Corp., 10.25% Sr. Sub. Debs., 10/15/01 8,000,000 9,080,000 ------------------------------------------------------------------------------------------------------- Delta Airlines, Inc., 3.23% Cv. Sub. Nts., 6/15/03 11,000,000 9,088,750 ------------------------------------------------------------------------------------------------------- Freeport-McMoRan, Inc., 6.55% Cv. Sub. Nts., 1/15/01 10,120,000 9,373,650 ------------------------------------------------------------------------------------------------------- IMC Fertilizer Group, Inc., 6.25% Cv. Sub. Nts., 12/1/01 5,500,000 5,341,875 ------------------------------------------------------------------------------------------------------- Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97 9,684,000 9,805,050 ------------------------------------------------------------------------------------------------------- Inco Ltd., 7.75% Cv. Debs., 3/15/16 9,800,000 10,486,000 ------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98(2) 5,000,000 4,278,120 ------------------------------------------------------------------------------------------------------- Kroger Co. (The): 6.375% Cv. Jr. Sub. Nts., 12/1/99 10,000,000 12,600,000 8.25% Cv. Jr. Sub. Debs., 4/15/11(2) 14,750,000 15,635,000 ------------------------------------------------------------------------------------------------------- Lend Lease Finance International Ltd., 4.75% Gtd. Cv. Bonds, 6/1/03(2) 4,000,000 4,607,500 ------------------------------------------------------------------------------------------------------- MagneTek, Inc., 10.75% Sr. Sub. Debs., 11/15/98 3,000,000 3,255,000 ------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 3.06% Debs., 6/30/99 10,000,000 10,200,000 ------------------------------------------------------------------------------------------------------- New South Wales State Bank, 9.25% Bonds, 2/3/18 9,900,000(4) 7,615,819 ------------------------------------------------------------------------------------------------------- Oryx Energy Co., 7.50% Cv. Sub. Debs., 5/15/14 3,000,000 2,895,000 ------------------------------------------------------------------------------------------------------- Playtex Family Products Corp., 11.50% Sr. Sec. Nts., 6/15/97 9,500,000 9,690,000 ------------------------------------------------------------------------------------------------------- Reliance Group Holdings, Inc., 9.75% Sr. Sub. Debs., 11/15/03 4,250,000 4,388,125 ------------------------------------------------------------------------------------------------------- RJR Nabisco, Inc., 10.50% Sr. Nts., 4/15/98 14,000,000 15,470,000 ------------------------------------------------------------------------------------------------------- Rowan Cos., Inc., 11.875% Sr. Nts., 12/1/01 7,000,000 7,822,500 ------------------------------------------------------------------------------------------------------- Stone Container Corp., 8.875% Cv. Sr. Sub. Nts., 7/15/00(2) 5,000,000 5,775,000 ------------------------------------------------------------------------------------------------------- Thomas Nelson, Inc., 5.75% Cv. Nts., 11/30/99(2) 5,000,000 6,350,000 ------------------------------------------------------------------------------------------------------- Time Warner, Inc.: 0% Liq. Yld. Opt. Nts., 12/17/12 30,000,000 9,975,000 8.75% Cv. Sub. Debs., 1/10/15 3,179,000 3,345,898 ------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(2) 2,500,000 2,578,125 ------------------------------------------------------------------------------------------------------- Turner Broadcasting System, Inc., 12% Sr. Sub. Debs., 10/15/01 8,000,000 8,670,000 ------------------------------------------------------------------------------------------------------- U.S. Home Corp., 4.875% Cv. Sub. Debs., 11/1/05 4,350,000 4,235,813 ------------------------------------------------------------------------------------------------------- Viacom International, Inc., 10.25% Sr. Sub. Nts., 9/15/01 12,000,000 13,590,000 ------------ Total Long-Term Corporate Bonds and Notes (Cost $257,110,429) 287,567,551
5 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (Unaudited) (Continued) MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--42.3% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS--1.9% - ---------------------------------------------------------------------------------------------------------------------------------- ALUMINUM--0.3% Reynolds Metals Co. 150,000 $6,806,250 - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS--1.3% Goodrich (B.F.) Co. (The) 145,000 5,836,250 ------------------------------------------------------------------------------------------------------- Imperial Chemical Industries PLC, ADS 225,000 10,631,250 ------------------------------------------------------------------------------------------------------- Lyondell Petrochemical Co. 420,600 8,937,750 ------------ 25,405,250 - ---------------------------------------------------------------------------------------------------------------------------------- GOLD--0.1% Aviall, Inc. 125,000 1,906,250 - ---------------------------------------------------------------------------------------------------------------------------------- STEEL--0.2% Armco, Inc.(1) 500,600 3,003,600 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS--2.6% - ---------------------------------------------------------------------------------------------------------------------------------- AUTOMOBILES--0.6% General Motors Corp. 200,000 10,975,000 - ---------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD FURNISHINGS Maytag Corp. 700,000 12,600,000 AND APPLIANCES--0.7% - ---------------------------------------------------------------------------------------------------------------------------------- PUBLISHING--0.5% Dun & Bradstreet Corp. (The) 151,000 9,305,375 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL STORES: GENERAL Sears, Roebuck and Co. 300,000 15,825,000 MERCHANDISE CHAINS--0.8% - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS--2.4% - ---------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE: Johnson & Johnson 100,000 4,475,000 DIVERSIFIED--0.9% ------------------------------------------------------------------------------------------------------- Warner-Lambert Co. 202,000 13,635,000 ------------ 18,110,000 - ---------------------------------------------------------------------------------------------------------------------------------- TOBACCO--1.5% Philip Morris Cos., Inc. 500,000 27,875,000 - ---------------------------------------------------------------------------------------------------------------------------------- ENERGY--4.4% - ---------------------------------------------------------------------------------------------------------------------------------- OIL: EXPLORATION AND Oryx Energy Co. 185,500 3,199,875 PRODUCTION--0.2% - ---------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED Atlantic Richfield Co. 100,500 10,577,625 DOMESTIC--0.6% - ---------------------------------------------------------------------------------------------------------------------------------- OIL: INTEGRATED Mobil Corp. 176,500 13,943,500 INTERNATIONAL--3.2% ------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 201,500 21,031,563 ------------------------------------------------------------------------------------------------------- Texaco, Inc. 251,500 16,253,187 ------------------------------------------------------------------------------------------------------- YPF Sociedad Anonima, Sponsored ADR 400,000 10,400,000 ------------- 61,628,250 - ---------------------------------------------------------------------------------------------------------------------------------- OIL WELL SERVICES AND Baker Hughes, Inc. 389,000 7,780,000 EQUIPMENT--0.4% - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL--18.3% - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES: American Express Co. 700,000 21,612,500 MISCELLANEOUS--2.4% ------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc. (The) 672,583 14,712,753 ------------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co. 156,124 5,405,794 ------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 111,000 4,662,000 ------------ 46,393,047
6 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE BROKERS--0.7% Marsh & McLennan Cos., Inc. $151,500 $12,309,375 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: LIFE--0.6% Reliance Group Holdings, Inc. 1,500,000 12,000,000 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: Allstate Corp. 230,000 6,785,000 MULTI-LINE--0.4% - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE: PROPERTY AND Continental Corp. 500,000 13,812,500 CASUALTY--2.3% ------------------------------------------------------------------------------------------------------- General Re Corp. 101,000 10,807,000 ------------------------------------------------------------------------------------------------------- SAFECO Corp. 200,000 11,000,000 ------------------------------------------------------------------------------------------------------- St. Paul Cos., Inc. (The) 100,000 8,987,500 ------------ 44,607,000 - ---------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: OTHER--2.6% BankAmerica Corp. 500,000 23,187,500 ------------------------------------------------------------------------------------------------------- Magna Group, Inc. 400,000 7,700,000 ------------------------------------------------------------------------------------------------------- Mellon Bank Corp. 350,000 18,550,000 ------------ 49,437,500 - ---------------------------------------------------------------------------------------------------------------------------------- MAJOR BANKS: Crestar Financial Corp. 275,000 11,515,625 REGIONAL--5.9% ------------------------------------------------------------------------------------------------------- First America Bank Corp. 72,700 2,853,475 ------------------------------------------------------------------------------------------------------- First Bank System, Inc. 200,000 6,150,000 ------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation 450,000 20,475,000 ------------------------------------------------------------------------------------------------------- First Union Corp. 300,000 12,375,000 ------------------------------------------------------------------------------------------------------- Huntington Bancshares, Inc. 419,375 9,907,734 ------------------------------------------------------------------------------------------------------- NBD Bancorp, Inc. 186,450 5,500,275 ------------------------------------------------------------------------------------------------------- National City Corp. 700,000 17,150,000 ------------------------------------------------------------------------------------------------------- Signet Banking Corp. 181,000 6,289,750 ------------------------------------------------------------------------------------------------------- Society Corp. 230,000 6,842,500 ------------------------------------------------------------------------------------------------------- U.S. Bancorp, Inc. 500,000 12,500,000 ------------ 111,559,359 - ---------------------------------------------------------------------------------------------------------------------------------- MONEY CENTER BANKS--3.0% Bankers Trust New York Corp. 114,200 9,036,075 ------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 600,000 20,325,000 ------------------------------------------------------------------------------------------------------- Chemical Banking Corp. 700,000 28,087,500 ------------ 57,448,575 - ---------------------------------------------------------------------------------------------------------------------------------- SAVINGS AND Fleet Financial Group, Inc. 250,000 8,343,750 LOANS/HOLDING COS.--0.4% - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL--4.7% - ---------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES--1.4% Tenneco, Inc. 500,000 26,312,500 - ---------------------------------------------------------------------------------------------------------------------------------- MACHINERY: Deere & Co. 262,000 19,388,000 DIVERSIFIED--1.0% - ---------------------------------------------------------------------------------------------------------------------------------- POLLUTION CONTROL--0.6% Browning-Ferris Industries, Inc. 417,500 10,750,625 - ---------------------------------------------------------------------------------------------------------------------------------- RAILROADS--1.0% Santa Fe Pacific Corp. 450,000 10,012,500 ------------------------------------------------------------------------------------------------------- Union Pacific Corp. 150,000 9,393,750 ------------ 19,406,250
7 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (Unaudited)(Continued) MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION: Ryder Systems, Inc. 500,000 $13,250,000 MISCELLANEOUS--0.7% - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY--2.8% - ---------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE--1.0% United Technologies Corp. 300,000 18,600,000 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: DEFENSE--0.7% General Motors Corp., Cl. H. 360,000 13,995,000 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS: Tektronix, Inc. 400,000 9,400,000 INSTRUMENTATION--0.5% - ---------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS--0.6% MCI Communications Corp. 150,000 4,237,500 ------------------------------------------------------------------------------------------------------- Sprint Corp. 200,000 6,950,000 ------------ 11,187,500 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES--5.2% - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRIC COS.--4.3% American Electric Power Co., Inc. 454,000 16,854,750 ------------------------------------------------------------------------------------------------------- Houston Industries, Inc. 378,500 18,026,063 ------------------------------------------------------------------------------------------------------- Public Service Co. of Colorado 200,000 6,425,000 ------------------------------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 604,000 19,328,000 ------------------------------------------------------------------------------------------------------- Texas Utilities Co. 504,000 21,798,000 ------------ 82,431,813 - ---------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS--0.2% Sonat, Inc. 100,000 2,887,500 - ---------------------------------------------------------------------------------------------------------------------------------- TELEPHONE (NEW)--0.7% BCE, Inc. 403,900 14,086,011 ------------ Total Common Stocks (Cost $662,186,524) 805,576,280 - ---------------------------------------------------------------------------------------------------------------------------------- DERIVATIVE SECURITIES--1.7% - ---------------------------------------------------------------------------------------------------------------------------------- American Express Co., 6.25% First Data Corp. DECS 557,000 22,140,750 ------------------------------------------------------------------------------------------------------- Salomon, Inc., 5.25% Hewlett-Packard Co. ELKS 125,000 9,671,875 ------------ Total Derivative Securities (Cost $30,016,625) 31,812,625 - ---------------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS--17.4% - ---------------------------------------------------------------------------------------------------------------------------------- Ahmanson (H.F.) & Co., $3.00 Cv., Series D 170,100 8,675,100 ------------------------------------------------------------------------------------------------------- Alco Standard Corp., $2.375 Cv. Depositary Shares, Series AA 114,300 7,929,563 ------------------------------------------------------------------------------------------------------- Alumax, Inc., $19.50 Cv., Series A 100,000 9,850,000 ------------------------------------------------------------------------------------------------------- AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A(2) 350,000 18,375,000 ------------------------------------------------------------------------------------------------------- Armco, Inc., $3.625 Cum. Cv. 200,000 11,100,000 ------------------------------------------------------------------------------------------------------- BANC ONE CORP., $3.50 Cum. Cv., Series C 77,000 5,293,750 ------------------------------------------------------------------------------------------------------- Bethlehem Steel Corp., $3.50 Cv.(2) 100,000 5,950,000 ------------------------------------------------------------------------------------------------------- Boise Cascade Corp., $1.58 Cum. Cv., Series G 460,000 10,925,000 ------------------------------------------------------------------------------------------------------- Ceridian Corp., $18.50 Cv. Depositary Shares 271,000 13,685,500 ------------------------------------------------------------------------------------------------------- Chiles Offshore Corp., $1.50 Cv. 122,000 2,775,500 ------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., $4.625 Cv. Depositary Shares, Series A(2) 100,000 14,900,000
8 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 ------------------------------------------------------------------------------------------------------- PREFERRED STOCKS Citicorp: (continued) $1.217 Cv. Depositary Shares, Series 15 500,000 $9,937,500 Cv. Depositary Shares, Series 13(2) 200,000 21,850,000 ------------------------------------------------------------------------------------------------------- Cooper Industries, Inc., $1.60 Cv. Exch. 297,000 8,575,875 ------------------------------------------------------------------------------------------------------- Cyprus Amax Minerals Co., $4.00 Cv., Series A 200,000 13,000,000 ------------------------------------------------------------------------------------------------------- Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 182,000 9,737,000 ------------------------------------------------------------------------------------------------------- First Chicago Corp., $2.875 Cum. Cv. Depositary Shares, Series B 135,000 6,952,500 ------------------------------------------------------------------------------------------------------- Ford Motor Co., $4.20 Cum. Cv., Series A 150,000 16,275,000 ------------------------------------------------------------------------------------------------------- Freeport-McMoRan, Inc., $4.375 Cv. Exch.(2) 200,000 9,700,000 ------------------------------------------------------------------------------------------------------- General Motors Corp., $3.31 Cum., Series C 340,200 17,350,200 ------------------------------------------------------------------------------------------------------- Inland Steel Industries, Inc., $4.625 Cum. Cv. Exch., Series G 196,800 13,087,200 ------------------------------------------------------------------------------------------------------- K Mart Corp., $3.41 Cum. Cv. Depositary Shares, Series A 348,000 15,442,500 ------------------------------------------------------------------------------------------------------- LCI International, Inc., $1.25 Cv. 80,000 2,300,000 ------------------------------------------------------------------------------------------------------- Occidental Petroleum Corp., $3.875 Cum. Cv.(2) 400,000 20,500,000 ------------------------------------------------------------------------------------------------------- Reading & Bates Corp., $1.625 Cv. 72,000 1,836,000 ------------------------------------------------------------------------------------------------------- RJR Nabisco Holdings Corp., $.835 Cum. Cv., Series A 1,200,000 8,400,000 ------------------------------------------------------------------------------------------------------- Sears, Roebuck and Co., $3.75 Exch., Series A 275,000 15,468,750 ------------------------------------------------------------------------------------------------------- Transco Energy Co., $3.00 Cum. Cv., Series E(2) 147,000 7,129,500 ------------------------------------------------------------------------------------------------------- UAL Corp., $6.25 Cv., Series A(2) 175,000 19,250,000 ------------------------------------------------------------------------------------------------------- Washington Mutual Savings Bank, $6.00 Cv., Series D 46,800 5,288,400 -------------- Total Preferred Stocks (Cost $274,643,825) 331,539,838 - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,664,619,792) 99.2% 1,889,065,656 - ---------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES .8 15,379,659 ------------ -------------- NET ASSETS 100.0% $1,904,445,315 ------------ -------------- ------------ -------------- 1. Non-income producing security. 2. Restricted security--See Note 6 of Notes to Financial Statements. 3. Represents the current interest rate for a variable rate security. 4. Face amount is reported in foreign currency. 5. Represents the current interest rate for an increasing rate security. 6. Interest is paid in kind. 7. Indexed instrument for which the principal amount due at maturity is affected by the relative value of a foreign currency.
See accompanying Notes to Financial Statements. 9 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 1993 (Unaudited) - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $1,664,619,792)--see accompanying statement $1,889,065,656 ------------------------------------------------------------------------------------------------------- Cash 790,765 ------------------------------------------------------------------------------------------------------- Receivables: Dividends and interest 15,003,211 Investments sold 9,831,309 Shares of beneficial interest sold 2,372,177 ------------------------------------------------------------------------------------------------------- Other 267,637 -------------- Total assets 1,917,330,755 - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Unrealized depreciation on forward foreign currency exchange contracts--Note 5 385,926 ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 4,943,116 Investments purchased 4,152,292 Dividends and distributions 1,975,369 Distribution assistance--Note 4 1,019,363 Other 409,374 -------------- Total liabilities 12,885,440 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $1,904,445,315 -------------- -------------- - ---------------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Paid-in capital $1,650,884,337 ------------------------------------------------------------------------------------------------------- Undistributed net investment income 16,864,741 ------------------------------------------------------------------------------------------------------- Accumulated net realized gain from investment transactions 12,683,020 ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies--Note 3 224,013,217 -------------- NET ASSETS $1,904,445,315 -------------- -------------- - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE Class A Shares: Net asset value and redemption price per share (based on net assets of $1,860,917,707 and 185,786,866 shares of beneficial interest outstanding) $10.02 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $10.63 ------------------------------------------------------------------------------------------------------- Class B shares: Net asset value, redemption price and offering price per share (based on net assets of $43,527,608 and 4,357,898 shares of beneficial interest outstanding) $ 9.99
See accompanying Notes to Financial Statements. 10 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- STATEMENT OF OPERATIONS For the Six Months Ended December 31, 1993 (Unaudited) - ---------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $27,007,649 ------------------------------------------------------------------------------------------------------- Dividends (net of withholding taxes of $279,187) 23,489,343 -------------- Total income 50,496,992 - ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fees--Note 4 5,049,981 ------------------------------------------------------------------------------------------------------- Distribution assistance: Class A--Note 4 1,488,024 Class B--Note 4 78,090 ------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 1,286,859 ------------------------------------------------------------------------------------------------------- Shareholder reports 208,122 ------------------------------------------------------------------------------------------------------- Custodian fees and expenses 92,000 ------------------------------------------------------------------------------------------------------- Trustees' fees and expenses 36,046 ------------------------------------------------------------------------------------------------------- Legal and auditing fees 28,032 ------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 708 Class B 13,597 ------------------------------------------------------------------------------------------------------- Other 119,347 -------------- Total expenses 8,400,806 - ---------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 42,096,186 ------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED Net realized gain (loss) from: GAIN (LOSS) ON INVESTMENTS Investments 17,888,385 AND FOREIGN CURRENCY Foreign currency transactions 841,720 TRANSACTIONS ------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 25,367,951 Translation of assets and liabilities denominated in foreign currencies (11,205,819) -------------- Net realized and unrealized gain on investments and foreign currency transactions 32,892,237 - ---------------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $74,988,423 -------------- --------------
See accompanying Notes to Financial Statements. 11 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS SIX MONTHS ENDED YEAR ENDED DECEMBER 31, 1993 JUNE 30, (UNAUDITED) 1993 - ---------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $42,096,186 $84,853,288 ------------------------------------------------------------------------------------------------------- Net realized gain on investments and foreign currency transactions 18,730,105 52,518,543 ------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments and translation of assets and liabilities denominated in foreign currencies 14,162,132 122,260,203 -------------- -------------- Net increase in net assets resulting from operations 74,988,423 259,632,034 - ---------------------------------------------------------------------------------------------------------------------------------- EQUALIZATION Net change 546,821 2,468,327 - ---------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND Dividends from net investment income: DISTRIBUTIONS TO Class A ($.24 and $.48 per share, respectively) (43,177,338) (83,156,753) SHAREHOLDERS Class B ($.221 per share) (543,016) -- ------------------------------------------------------------------------------------------------------- Distributions from net realized gain on investments: Class A ($.1721 and $.145 per share, respectively) (31,163,261) (24,974,899) Class B ($.1721 per share) (711,551) -- - ---------------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST Net increase in net assets resulting from Class A TRANSACTIONS beneficial interest transactions--Note 2 69,677,916 80,452,974 ------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from Class B beneficial interest transactions--Note 2 44,481,529 -- - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase 114,099,523 234,421,683 ------------------------------------------------------------------------------------------------------- Beginning of period 1,790,345,792 1,555,924,109 -------------- -------------- End of period (including undistributed net investment income of $16,864,741 and $29,426,684, respectively) $1,904,445,315 $1,790,345,792 -------------- -------------- -------------- --------------
See accompanying Notes to Financial Statements. 12 Oppenheimer Equity Income Fund
------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS CLASS A CLASS B ----------------------------------------------------------------------------- ------------ SIX MONTHS ENDED PERIOD ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1993 JUNE 30, 1993(1) (UNAUDITED) 1993 1992 1991 1990 1989 (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $10.01 $9.15 $8.86 $9.18 $9.11 $8.51 $10.22 - ------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .17 .50 .50 .48 .48 .52 .16 Net realized and unrealized gain (loss) on investments, options written and foreign currency transactions .25 .99 .39 (.17) .33 .58 -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total income from investment operations .42 1.49 .89 .31 .81 1.10 .16 - ------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.24) (.48) (.48) (.48) (.50) (.48) (.22) Distributions from net realized gain on investments, options written and foreign currency transactions (.17) (.15) (.12) (.15) (.24) (.02) (.17) ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total dividends and distributions to shareholders (.41) (.63) (.60) (.63) (.74) (.50) (.39) - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $10.02 $10.01 $9.15 $8.86 $9.18 $9.11 $9.99 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ - ------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 4.23% 16.76% 10.26% 3.68% 9.07% 13.30% 1.61% - ------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $1,860,918 $1,790,346 $1,555,924 $1,393,303 $1,329,830 $1,017,074 $43,528 - ------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,837,918 $1,657,692 $1,525,599 $1,323,858 $1,179,704 $885,179 $21,124 - ------------------------------------------------------------------------------------------------------------------------------- Number of shares outstanding at end of period (in thousands) 185,787 178,819 170,117 157,239 144,921 111,613 4,358 - ------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 4.51%(3) 5.12% 5.33% 5.31% 5.10% 5.89% 2.56%(3) Expenses .89%(3) .79% .82% .79% .79% .85% 1.44%(3) - ------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 9.6% 59.0% 37.0% 64.0% 122.0% 91.4% 9.6% 1. For the period from August 17, 1993 (inception of offering) to December 31, 1993. 2. 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the six months ended December 31, 1993 were $200,473,502 and $164,310,948, respectively. See accompanying Notes to Financial Statements.
13 Oppenheimer Equity Income Fund ------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- 1. SIGNIFICANT Oppenheimer Equity Income Fund (the Fund) is ACCOUNTING POLICIES registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund's investment advisor is Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class B shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent deferred sales charge. Both classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. 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 Trustees. Long-term debt securities which cannot be valued by the approved portfolio pricing service are valued by averaging the mean between the bid and asked prices obtained from two active market makers in such securities. Short-term debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Securities for which market quotes are not readily available are valued under procedures established by the Board of Trustees to determine fair value in good faith. Forward foreign currency contracts are valued at the forward rate on a daily basis. ------------------------------------------------------ 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 Fund generally enters into forward currency exchange contracts as a hedge, upon the purchase or sale of a security denominated in a foreign currency. In addition, the Fund may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. A forward exchange contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. Risks may arise from the potential inability of the counterparty to meet the terms of the contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. 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 results 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. 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. 14 Oppenheimer Equity Income Fund - ------------------------------------------------------------------------------- EQUALIZATION. Prior to September 24, 1993, the Fund followed the accounting practice of equalization, by which a portion of the proceeds from sales and costs of redemptions of Fund shares equivalent on a per share basis to the amount of undistributed net investment income were credited or charged to undistributed income. The cumulative effect of the change in accounting practice resulted in a reclassification of $11,484,596 from undistributed net investment income to paid-in capital. ------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. ------------------------------------------------------ OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate and a market adjustment is made on the ex-date. - -------------------------------------------------------------------------------- 2. SHARES OF The Fund has authorized an unlimited number of no par BENEFICIAL INTEREST value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
PERIOD ENDED DECEMBER 31, 1993(1) YEAR ENDED JUNE 30, 1993 -------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------------------------------------------------------------------------------------------------- Class A: Sold 13,086,026 $132,384,093 29,572,911 $276,573,097 Dividends and distributions reinvested 6,904,415 68,952,844 10,613,035 97,981,463 Redeemed (13,022,913) (131,659,021) (31,483,466) (294,101,586) ------------ ------------ ------------ ------------ Net increase 6,967,528 $69,677,916 8,702,480 $80,452,974 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ---------------------------------------------------------------------------------------------------- Class B: Sold 4,307,456 $ 43,989,574 -- $ -- Dividends and distributions reinvested 115,847 1,158,717 -- -- Redeemed (65,405) (666,762) -- -- ------------ ------------ ------------ ------------ Net increase 4,357,898 $44,481,529 -- $ -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1. For the six months ended December 31, 1993 for Class A shares and for the period from August 17, 1993 (inception of offering) to December 31, 1993 for Class B shares.
- -------------------------------------------------------------------------------- 3. UNREALIZED GAINS At December 31, 1993, net unrealized appreciation on AND LOSSES ON investments of $224,445,864 was composed of INVESTMENTS gross appreciation of $260,933,127, and gross depreciation of $36,487,263. 15 Oppenheimer Equity Income Fund ------------------------------------------------------ Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- 4. MANAGEMENT FEES AND Management fees paid to the Manager were in accordance OTHER TRANSACTIONS with the investment advisory agreement with the Fund WITH AFFILIATES which provides for an annual fee of .75% on the first $100 million of net assets with a reduction of .05% on each $100 million thereafter, to .50% on net assets in excess of $500 million. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed 1.5% of the first $30 million of average annual net assets of the Fund, plus 1% of average annual net assets in excess of $30 million. For the six months ended December 31, 1993, commissions (sales charges paid by investors) on sales of Class A shares totaled $4,105,890, of which $1,314,246 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, 1993, OFDI received contingent deferred sales charges of $6,901 upon redemption of Class B 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. Under separate approved plans of distribution, each class may expend up to .25% of its net assets annually to reimburse OFDI for costs incurred in distributing shares of the Fund (prior to October 1, 1993, Class A reimbursements were made with respect to shares sold subsequent to March 31, 1991), including amounts paid to brokers, dealers, banks and other institutions. In addition, Class B 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 plan of distribution, the Fund would be contractually obligated to pay OFDI for any expenses not previously reimbursed or recovered through contingent deferred sales charges. During the six months ended December 31, 1993, OFDI paid $89,881 to an affiliated broker/dealer as reimbursement for Class A distribution-related expenses and retained $78,090 as reimbursement for Class B distribution-related expenses and sales commissions. - -------------------------------------------------------------------------------- 5. FORWARD FOREIGN At December 31, 1993, the Fund had outstanding forward CURRENCY EXCHANGE exchange currency contracts to sell foreign currencies CONTRACTS as follows:
EXPIRATION CONTRACT VALUATION AS OF UNREALIZED DATE AMOUNT DECEMBER 31, 1993 DEPRECIATION - ----------------------------------------------------------------------------------------------- Canadian Dollar 1/10/94 $87,518,797 $87,904,723 $385,926
16 Oppenheimer Equity Income Fund - -------------------------------------------------------------------------------- 6. RESTRICTED SECURITIES The Fund owns securities purchased in private placement transactions, without registration under the Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of Trustees 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 Trustees or by the Manager under Board-approved guidelines. Restricted and illiquid securities amount to $10,628,120, or .56% of the Fund's net assets, at December 31, 1993.
VALUATION PER UNIT AS OF SECURITY ACQUISITION DATE COST PER UNIT DEC. 31, 1993 ----------------------------------------------------------------------------------------------------------- AMR Corp., $3.00 Cum. Cv. Depositary Shares, Series A Preferred Stock(1) 1/28/93--2/25/93 $ 49.82 $ 52.50 ----------------------------------------------------------------------------------------------------------- Banco Nacional de Comercio Exterior SNC International Finance BV, 8% Gtd. Matador Bonds, 8/5/03(1) 11/12/93 $ 97.88 $103.00 ----------------------------------------------------------------------------------------------------------- Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(1) 12/1/92 $100.00 $124.50 ----------------------------------------------------------------------------------------------------------- Bethlehem Steel Corp., $3.50 Cv. Preferred Stock(1) 10/19/93--10/22/93 $ 49.51 $ 59.50 ----------------------------------------------------------------------------------------------------------- Carter Hawley Hale Stores, Inc., 6.25% Sr. Sub. Nts., 12/31/00(1) 12/16/93 $100.00 $102.25 ----------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., $4.625 Cv. Depositary Shares, Series A Preferred Stock(1) 2/12/92 $ 50.00 $149.00 ----------------------------------------------------------------------------------------------------------- Citicorp, Cv. Depositary Shares, Series 13 Preferred Stock(1) 9/4/92--9/25/92 $ 62.94 $109.25 ----------------------------------------------------------------------------------------------------------- Freeport-McMoRan, Inc., $4.375 Cv. Exch. Preferred Stock(1) 2/26/92 $ 50.00 $ 48.50 ----------------------------------------------------------------------------------------------------------- Intelcom Group, Inc., 7% Cv. Sub. Nts., 10/30/98 10/26/93 $100.00 $ 85.56 ----------------------------------------------------------------------------------------------------------- Kroger Co. (The), 8.25% Cv. Jr. Sub. Debs., 4/15/11(1) 3/6/91 $100.00 $106.00 ----------------------------------------------------------------------------------------------------------- Lend Lease Finance International Ltd., 4.75% Gtd. Cv. Bonds, 6/1/03(1) 6/10/93 $100.00 $115.19 ----------------------------------------------------------------------------------------------------------- Occidental Petroleum Corp., $3.875 Cum. Cv. Preferred Stock(1) 2/10/93 $ 50.00 $ 51.25 ----------------------------------------------------------------------------------------------------------- Stone Container Corp., 8.875% Cv. Sr. Sub. Nts., 7/15/00(1) 6/24/93 $ 99.36 $115.50 ----------------------------------------------------------------------------------------------------------- Thomas Nelson, Inc., 5.75% Cv. Nts., 11/30/99 11/11/92 $100.00 $127.00 ----------------------------------------------------------------------------------------------------------- Transco Energy Co., $3.00 Cum. Cv., Series E Preferred Stock(1) 10/29/93 $ 50.00 $ 48.50 ----------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/15/93 $100.00 $103.13 ----------------------------------------------------------------------------------------------------------- UAL Corp., $6.25 Cv., Series A Preferred Stock(1) 2/5/93--2/25/93 $ 99.55 $110.00 1. Transferable under Rule 144A of the Act.
17 Oppenheimer Equity Income Fund ----------------------------------------------------------- OPPENHEIMER EQUITY INCOME FUND - -------------------------------------------------------------------------------- OFFICERS AND James C. Swain, Chairman and Chief TRUSTEES Executive Officer William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee and President Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee Andrew J. Donohue, Vice President John P. Doney, Vice President George C. Bowen, Vice President, Secretary and Treasurer Lynn M. Coluccy, Assistant Treasurer Robert G. Zack, Assistant Secretary ----------------------------------------------------------- INVESTMENT ADVISOR Oppenheimer Management Corporation ----------------------------------------------------------- DISTRIBUTOR Oppenheimer Funds Distributor, Inc. ----------------------------------------------------------- TRANSFER AND Oppenheimer Shareholder Services SHAREHOLDER SERVICING AGENT ----------------------------------------------------------- CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES ----------------------------------------------------------- INDEPENDENT Deloitte & Touche AUDITORS ----------------------------------------------------------- LEGAL COUNSEL Myer, Swanson & Adams, 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 shareholders of Oppenheimer Equity Income Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Equity Income Fund. For material information concerning the Fund, see the Prospectus. 18 Oppenheimer Equity Income Fund ---------------------------------------------------------- THE FAMILY OF OPPENHEIMERFUNDS - -------------------------------------------------------------------------------- OppenheimerFunds offers over 30 funds designed to fit virtually every investment goal. Whether you're investing for retirement, your children's education, or tax-free income, we have the funds to help you seek your objective. When you invest with OppenheimerFunds, you can feel comfortable knowing that you are investing with a respected financial institution with over 30 years of experience in helping people just like you reach their financial goals. 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