UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-102588
OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: AUGUST 31
Date of reporting period: SEPTEMBER 1, 2004 - FEBRUARY 28, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND(R) PORTFOLIO ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Equity 83.7%
Fixed-Income 16.2
Cash Equivalents 0.1
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005 and are based on total investments.
- --------------------------------------------------------------------------------
OPPENHEIMER MAIN STREET FUND(R) (UNDERLYING FUND) SECTOR ALLOCATION
- --------------------------------------------------------------------------------
Financials 21.9%
- --------------------------------------------------------------------------------
Information Technology 17.0
- --------------------------------------------------------------------------------
Consumer Discretionary 12.1
- --------------------------------------------------------------------------------
Health Care 11.9
- --------------------------------------------------------------------------------
Energy 10.9
- --------------------------------------------------------------------------------
Industrials 10.3
- --------------------------------------------------------------------------------
Consumer Staples 8.2
- --------------------------------------------------------------------------------
Telecommunication Services 3.8
- --------------------------------------------------------------------------------
Materials 3.2
- --------------------------------------------------------------------------------
Utilities 0.7
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on total market value of common stocks.
11 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
OPPENHEIMER MAIN STREET FUND(R) (UNDERLYING FUND)
TOP TEN COMMON STOCK INDUSTRIES
- --------------------------------------------------------------------------------
Oil & Gas 10.1%
- --------------------------------------------------------------------------------
Diversified Financial Services 8.4
- --------------------------------------------------------------------------------
Commercial Banks 7.3
- --------------------------------------------------------------------------------
Pharmaceuticals 6.9
- --------------------------------------------------------------------------------
Computers & Peripherals 5.2
- --------------------------------------------------------------------------------
Industrial Conglomerates 4.7
- --------------------------------------------------------------------------------
Insurance 4.1
- --------------------------------------------------------------------------------
Software 3.9
- --------------------------------------------------------------------------------
Media 3.9
- --------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment 3.6
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on net assets.
OPPENHEIMER MAIN STREET FUND(R) (UNDERLYING FUND)
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 4.4%
- --------------------------------------------------------------------------------
General Electric Co. 3.9
- --------------------------------------------------------------------------------
Citigroup, Inc. 2.7
- --------------------------------------------------------------------------------
Microsoft Corp. 2.7
- --------------------------------------------------------------------------------
Bank of America Corp. 2.4
- --------------------------------------------------------------------------------
Pfizer, Inc. 2.2
- --------------------------------------------------------------------------------
Johnson & Johnson 2.0
- --------------------------------------------------------------------------------
International Business Machines Corp. 1.8
- --------------------------------------------------------------------------------
Intel Corp. 1.8
- --------------------------------------------------------------------------------
American International Group, Inc. 1.7
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com
12 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE
FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US
AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
The Fund has entered into a warranty agreement with Merrill Lynch Bank USA, "the
warranty provider" to make sure that the value of each shareholder's account on
the maturity date (August 5, 2010) will be at least equal to a shareholder's
original investment (reduced by any adjustments to the warranty amount permitted
by the Warranty Agreement, and less any redemptions of Fund shares or
distributions taken in cash, sales charges, and extraordinary Fund expenses).
The warranty is solely the obligation of the warranty provider to the Fund, not
to shareholders. The warranty does not guarantee performance of the Fund. The
ability of the Fund to maintain the value of your original investment is
dependent on the ability of the warranty provider to make a payment to the Fund
on the maturity date.
The principal risks of an investment in the Fund during the Warranty Period and
the Post-Warranty Period are those generally attributable to investing in stocks
and debt securities. Because the Fund invests in both stocks and debt securities
during the Warranty Period, the Fund may underperform stock funds when stocks
are in favor and underperform bond funds when debt securities are in favor.
13 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES
- --------------------------------------------------------------------------------
Shareholders could lose money by investing in this Fund. A shareholder's
warranted amount will be reduced, as more fully described in the prospectus, if
the shareholder takes any dividends or distributions in cash instead of
reinvesting them in additional shares of the Fund, redeems any shares before the
Maturity Date, if there are extraordinary expenses incurred by the Fund (as such
expenses are not covered by the Warranty Agreement), if the Fund or the Manager
fails to perform certain obligations under the Warranty Agreement, or if the
Warranty Provider fails to or is unable to meet its obligations under the
Warranty Agreement.
The warranty is solely the obligation of the warranty provider. It is possible
that the financial position of the warranty provider may deteriorate.
Shareholders could lose money if the warranty provider fails to or is unable to
perform its obligations under the warranty. The Fund's assets and the
obligations of the warranty provider are not guaranteed by Merrill Lynch & Co.,
Inc. (the warranty provider's parent company), the United States Government, the
Manager or any other entity or person. The lack of a guarantee of the warranty
provider's obligations under the warranty presents some risks to shareholders if
the warranty provider fails or is unable to honor its obligations to the Fund on
the Maturity Date under the warranty.
Distributions from the Fund are taxable whether or not you reinvest them in
additional shares of the Fund. The warranty provider's obligation to make
payment to the Fund is not guaranteed by any entity and the Fund is not
obligated to replace the warranty provider should it be unable to make the
payments necessary to support the warranted amount. The warranty agreement fees
increase the Fund's expenses that you pay and therefore the expenses of this
Fund will be higher than the expenses of a Fund that does not offer principal
protection.
The Fund offered its shares to the public from May 30, 2003 through July 31,
2003. From August 5, 2003, and until August 5, 2010, shares of the Fund will
only be issued upon reinvestment of dividends and distributions.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
14 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments,
contingent deferred sales charges on redemptions; and redemption fees, if any;
and (2) ongoing costs, including management fees; distribution and service fees;
and other Fund expenses. The following examples are intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended February 28, 2005.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), or a $12.00 fee imposed annually
on accounts valued at less than $500.00 (subject to exceptions
15 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(9/1/04) (2/28/05) FEBRUARY 28, 2005
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,057.70 $5.22
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,019.74 5.12
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,054.60 9.11
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,015.97 8.94
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,054.10 9.10
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,015.97 8.94
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,057.30 6.19
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.79 6.07
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended February 28, 2005 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------
Class A 1.02%
- ----------------------------
Class B 1.78
- ----------------------------
Class C 1.78
- ----------------------------
Class N 1.21
The expense ratios reflect voluntary waivers or reimbursements of expenses by
the Fund's Manager that can be terminated at any time, without advance notice.
The "Financial Highlights" tables in the Fund's financial statements, included
in this report, also show the gross expense ratios, without such waivers or
reimbursements.
- --------------------------------------------------------------------------------
16 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF INVESTMENTS February 28, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES EQUITY FUNDS--83.9%
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Fund, Cl. Y (Cost $169,436,583) 5,755,536 $ 204,091,300
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--16.2%
U.S. Treasury Bonds, STRIPS, 4.03%, 5/15/10 1 (Cost $39,327,805) $ 48,400,000 39,463,424
- -------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.2%
- -------------------------------------------------------------------------------------------------------------------
Undivided interest of 0.08% in joint repurchase agreement (Principal Amount/
Value $447,079,000, with a maturity value of $447,111,289) with UBS Warburg
LLC, 2.60%, dated 2/28/05, to be repurchased at $366,026 on 3/1/05,
collateralized by Federal National Mortgage Assn., 6%, 2/1/34, with
a value of $456,527,652 (Cost $366,000) 366,000 366,000
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $209,130,388) 100.3% 243,920,724
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.3) (634,960)
----------------------------------
NET ASSETS 100.0% $ 243,285,764
==================================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Zero coupon bond reflects effective yield on the date of purchase.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 28, 2005
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value (cost $209,130,388)--see accompanying statement of investments $ 243,920,724
- -------------------------------------------------------------------------------------------------------
Cash 732,271
- -------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest 26
Other 5,847
--------------
Total assets 244,658,868
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 952,816
Warranty agreement fees 233,051
Distribution and service plan fees 98,655
Transfer and shareholder servicing agent fees 14,626
Shareholder communications 11,883
Trustees' compensation 4,271
Other 57,802
--------------
Total liabilities 1,373,104
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 243,285,764
==============
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 21,483
- -------------------------------------------------------------------------------------------------------
Additional paid-in capital 209,481,236
- -------------------------------------------------------------------------------------------------------
Accumulated net investment income 867,505
- -------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (1,874,796)
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 34,790,336
--------------
NET ASSETS $ 243,285,764
==============
18 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $69,637,916 and
6,145,077 shares of beneficial interest outstanding) $11.33
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $12.02
- ----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $122,654,066 and 10,838,542 shares
of beneficial interest outstanding) $11.32
- ----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $46,280,677 and 4,083,358 shares
of beneficial interest outstanding) $11.33
- ----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $4,713,105 and 415,858 shares of
beneficial interest outstanding) $11.33
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends $ 3,084,370
- --------------------------------------------------------------------------------
Interest 1,090,600
-------------
Total investment income 4,174,970
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 188,035
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 87,778
Class B 610,075
Class C 243,772
Class N 11,929
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 24,809
Class B 49,835
Class C 18,004
Class N 442
- --------------------------------------------------------------------------------
Shareholder communications:
Class A 4,772
Class B 9,117
Class C 3,475
Class N 132
- --------------------------------------------------------------------------------
Warranty agreement fees 739,118
- --------------------------------------------------------------------------------
Trustees' compensation 4,332
- --------------------------------------------------------------------------------
Custodian fees and expenses 993
- --------------------------------------------------------------------------------
Other 23,058
-------------
Total expenses 2,019,676
Less reduction to custodian expenses (551)
Less payments and waivers of expenses (104,068)
-------------
Net expenses 1,915,057
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,259,913
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized loss on investments (21,297)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 11,240,146
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,478,762
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
(UNAUDITED) 2004
- ---------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------
Net investment income $ 2,259,913 $ 298,549
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) (21,297) 733,006
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 11,240,146 16,062,701
---------------------------------
Net increase in net assets resulting from operations 13,478,762 17,094,256
- ---------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (766,847) (483,371)
Class B (379,981) (459,193)
Class C (77,727) (225,058)
Class N (39,435) (28,161)
- ---------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (360,095) (132,440)
Class B (623,916) (206,129)
Class C (240,802) (99,883)
Class N (23,470) (9,001)
- ---------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A -- (138,125)
Class B -- (223,202)
Class C -- (104,341)
Class N -- (9,493)
- ---------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from beneficial interest
transactions:
Class A (4,955,286) (11,842,886)
Class B (5,257,092) (7,092,628)
Class C (7,789,393) (11,893,836)
Class N (606,074) (647,857)
- ---------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------
Total decrease (7,641,356) (16,501,348)
- ---------------------------------------------------------------------------------------------------
Beginning of period 250,927,120 267,428,468
---------------------------------
End of period (including accumulated net investment income
(loss) of $867,505 and $(128,418), respectively) $ 243,285,764 $ 250,927,120
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS A (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.88 $ 10.28 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment gain .13 2 .07 -- 3
Net realized and unrealized gain .50 .64 .28
-----------------------------------------
Total from investment operations .63 .71 .28
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12) (.07) --
Dividends from net realized gain (.06) (.02) --
Tax return of capital distribution -- (.02) --
-----------------------------------------
Total dividends and/or distributions to shareholders (.18) (.11) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.33 $ 10.88 $ 10.28
=========================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 5.77% 6.87% 2.80%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 69,638 $ 71,666 $ 78,758
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 71,522 $ 78,668 $ 39,416
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 2.37% 0.65% 0.35%
Total expenses 1.11% 6 1.14% 6 1.13% 6
Less reimbursement of management fees during offering period -- -- (0.32)%
Payments and waivers and reduction to custodian expenses (0.09)% (0.12)% --
-----------------------------------------
Net expenses 1.02% 1.02% 0.81% 7
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 61% 179% 12%
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Expenses paid including all underlying fund expenses was 1.55% for February
28, 2005, 1.60% and 1.38% for August 31, 2004 and 2003, respectively.
7. For this period reduction to custodian expenses was zero.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS B (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.82 $ 10.28 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment gain (loss) .09 2 (.02) -- 3
Net realized and unrealized gain .50 .63 .28
-----------------------------------------
Total from investment operations .59 .61 .28
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.03) (.03) --
Dividends from net realized gain (.06) (.02) --
Tax return of capital distribution -- (.02) --
-----------------------------------------
Total dividends and/or distributions to shareholders (.09) (.07) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.32 $ 10.82 $ 10.28
=========================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 5.46% 5.94% 2.80%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $122,654 $122,411 $122,968
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $123,263 $127,128 $ 64,461
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 1.60% (0.14)% (0.20)%
Total expenses 1.87% 6 1.89% 6 1.88% 6
Less reimbursement of management fees during offering period -- -- (0.32)%
Less reimbursement to maintain yield -- -- (0.31)%
Payments and waivers and reduction to custodian expenses (0.09)% (0.12)% --
-----------------------------------------
Net expenses 1.78% 1.77% 1.25% 7
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 61% 179% 12%
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Expenses paid including all underlying fund expenses was 2.31% for February
28, 2005, 2.35% and 2.13% for August 31, 2004 and 2003, respectively.
7. For this period reduction to custodian expenses was zero.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS C (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.82 $ 10.28 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment gain (loss) .09 2 (.02) -- 3
Net realized and unrealized gain .50 .64 .28
-----------------------------------------
Total from investment operations .59 .62 .28
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.04) --
Dividends from net realized gain (.06) (.02) --
Tax return of capital distribution -- (.02) --
-----------------------------------------
Total dividends and/or distributions to shareholders (.08) (.08) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.33 $ 10.82 $ 10.28
=========================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 5.41% 5.95% 2.80%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 46,281 $ 51,741 $ 60,271
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 49,226 $ 59,429 $ 31,946
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 1.59% (0.10)% (0.20)%
Total expenses 1.86% 6 1.88% 6 1.88% 6
Less reimbursement of management fees during offering period -- -- (0.32)%
Less reimbursement to maintain yield -- -- (0.32)%
Payments and waivers and reduction to custodian expenses (0.09)% (0.12)% --
-----------------------------------------
Net expenses 1.78% 1.76% 1.24% 7
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 61% 179% 12%
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Expenses paid including all underlying fund expenses was 2.30% for February
28, 2005, 2.34% and 2.13% for August 31, 2004 and 2003, respectively.
7. For this period reduction to custodian expenses was zero.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS N (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.86 $ 10.28 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment gain .11 2 .05 -- 3
Net realized and unrealized gain .51 .63 .28
-----------------------------------------
Total from investment operations .62 .68 .28
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.09) (.06) --
Dividends from net realized gain (.06) (.02) --
Tax return of capital distribution -- (.02) --
-----------------------------------------
Total dividends and/or distributions to shareholders (.15) (.10) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.33 $ 10.86 $ 10.28
=========================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 5.73% 6.55% 2.80%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 4,713 $ 5,109 $ 5,432
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 4,825 $ 5,408 $ 3,713
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 2.07% 0.46% 0.06%
Total expenses 1.30% 6 1.34% 6 1.38% 6
Less reimbursement of management fees during offering period -- -- (0.32)%
Payments and waivers and reduction to custodian expenses (0.09)% (0.12)% --
-----------------------------------------
Net expenses 1.21% 1.22% 1.06% 7
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 61% 179% 12%
1. For the period from June 2, 2003 (commencement of operations) to August 31,
2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Expenses paid including all underlying fund expenses was 1.74% for February
28, 2005, 1.80% and 1.63% for August 31, 2004 and 2003, respectively.
7. For this period reduction to custodian expenses was zero.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Principal Protected Main Street Fund (the Fund), a series of
Oppenheimer Principal Protected Trust, is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
During the Warranty Period, the Fund will seek capital preservation in order to
have a net asset value on the Maturity Date at least equal to the Warranty
Amount. The Fund seeks high total return as a secondary objective. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
Shares of the Fund were offered during the Offering Period (May 30, 2003
to July 31, 2003). Shares are not offered during the Warranty Period (August 5,
2003 to August 5, 2010) to the Maturity Date (August 5, 2010) except in
connection with reinvestment of dividends and distributions. During the Warranty
Period, the Fund will allocate its assets between Oppenheimer Main Street Fund
(the Underlying Fund) and certain U.S. government securities.
The Fund offered Class A, Class B, Class C and Class N shares. Class A
shares were sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B, Class C and Class N shares were sold without
a front-end sales charge but may be subject to a contingent deferred sales
charge (CDSC). Class N shares were sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those accounts.
All classes of shares have identical rights and voting privileges with respect
to the Fund in general and exclusive voting rights on matters that affect that
class alone. Earnings, net assets and net asset value per share may differ due
to each class having its own expenses, such as transfer and shareholder
servicing agent fees and shareholder communications, directly attributable to
that class. Class A, B, C and N have separate distribution and/or service plans.
Class B shares will automatically convert to Class A shares 88 months after the
date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
WARRANTY AGREEMENT. The Fund has entered into a Financial Warranty Agreement
with Merrill Lynch Bank USA (the Warranty Provider) to ensure that on the
Maturity Date each shareholder's account will be no less than the value of that
shareholder's account on the second business day after the end of the Offering
Period (the Warranty Amount). This value will include net income, if any, earned
by the Fund during the offering period and be reduced by adjustments permitted
under the Warranty Agreement, sales charges, applicable share of extraordinary
expenses and proportionately reduced for dividends and distributions paid in
cash and redemptions of Fund shares. To avoid a reduced Warranty Amount,
shareholders must reinvest all dividends and distributions received from the
Fund to purchase additional shares of the Fund and must not redeem any shares of
the Fund during the Warranty Period. If the value of the Fund's assets on the
Maturity Date is insufficient to result in the value of each shareholder's
account being at least equal to the shareholder's Warranty Amount, the Warranty
Provider will pay the Fund an amount equal to the excess of his or her Warranty
Amount over his or her account value.
26 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
The Financial Warranty is solely the obligation of the Warranty Provider.
It is possible that the financial position of the Warranty Provider may
deteriorate and it would be unable to satisfy its obligations under the
Financial Warranty. The Fund's assets and the obligations of the Warranty
Provider under the Warranty Agreement are not guaranteed by Merrill Lynch & Co.,
Inc. (the Warranty Provider's parent company), the United States Government, the
Manager, or any other entity or person. The Warranty Agreement requires the
Manager, on behalf of the Fund, to comply with certain agreed upon investment
parameters in an attempt to limit the Fund's risk. If the Manager fails to
comply with the agreed-upon investment parameters or otherwise fails to comply
with certain requirements set forth in the Warranty Agreement, the Warranty
Provider may terminate its Financial Warranty in certain limited circumstances.
The Warranty Provider may monitor the Fund's compliance with the Warranty
Agreement solely to protect the interests of the Warranty Provider and not the
Fund's shareholders.
The fee paid to the Warranty Provider is an annual fee of 0.60% of the
average daily net assets of the Fund. If the Fund is required to make a complete
and irreversible allocation of its assets to the debt portfolio, the Warranty
Fee will thereafter be reduced to 0.35% of the average daily net assets of the
Fund. For the six months ended February 28, 2005, the amount paid for Warranty
Agreement fees was $761,350.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The allocation of the Fund's assets between the debt
portfolio and the equity portfolio will vary over time based upon the Warranty
Formula. The formula is intended to allow the Fund to have a net asset value on
the Maturity Date at least equal to the Warranty Amount.
During the Warranty Period, the Fund will invest a portion of its assets,
and in certain circumstances, the Fund may invest all of its assets, in U.S.
government securities having maturities approximately equal to the period
remaining in the Warranty Period. Long term debt securities having a remaining
maturity in excess of 60 days will be valued at the mean between the "bid" and
"asked" prices. Long-term and short-term "non-money market" debt securities are
valued by a portfolio pricing service approved by the Board of Trustees.
Short-term "money market type" debt securities with remaining maturities of
sixty days or less are valued at amortized cost (which approximates market
value).
The Fund invests the equity portfolio in Class Y shares of Oppenheimer
Main Street Fund (the Underlying Fund). The net asset value of the Underlying
Fund is determined as of the close of The New York Stock Exchange (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. The net asset value per share is determined by dividing the value of
the Fund's net assets attributable to a class by the number of shares of that
class that are outstanding.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the
27 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis 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 comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal 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 dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of February 28, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $21,297 expiring by 2013.
This estimated capital loss carryforward represents carryforward as of the end
of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
28 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. 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. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
CLASS A
Dividends and/or
distributions reinvested 89,131 $ 1,017,884 66,031 $ 746,580
Redeemed (532,552) (5,973,170) (1,135,729) (12,589,466)
------------------------------------------------------------
Net decrease (443,421) $ (4,955,286) (1,069,698) $(11,842,886)
============================================================
29 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------
CLASS B
Dividends and/or
distributions reinvested 74,866 $ 854,980 65,445 $ 719,894
Redeemed (547,947) (6,112,072) (719,209) (7,812,522)
------------------------------------------------------------
Net decrease (473,081) $ (5,257,092) (653,764) $ (7,092,628)
============================================================
- ---------------------------------------------------------------------------------------------------
CLASS C
Dividends and/or
distributions reinvested 20,066 $ 229,564 25,625 $ 451,966
Redeemed (717,568) (8,018,957) (1,109,424) (12,345,802)
------------------------------------------------------------
Net decrease (697,502) $ (7,789,393) (1,083,799) $(11,893,836)
============================================================
- ---------------------------------------------------------------------------------------------------
CLASS N
Dividends and/or
distributions reinvested 5,502 $ 62,890 4,395 $ 48,349
Redeemed (59,916) (668,964) (62,448) (696,206)
------------------------------------------------------------
Net decrease (54,414) $ (606,074) (58,053) $ (647,857)
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended February 28, 2005, were $89,626,741 and $70,480,911, respectively. There
were purchases of $61,883,064 and sales of $99,955,537 of U.S. government and
government agency obligations for the six months ended February 28, 2005.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.50% of the average annual net assets of the Fund reduced by the
amount of advisory fees paid to the Manager by the Underlying Fund relating to
the Fund's assets invested in the Underlying Fund. However, the management fees
shall not be reduced below zero. Management fees will apply during the Warranty
Period and the Post-Warranty Period.
If during the Warranty Period 100% of the Fund's assets are completely and
irreversibly invested in the debt portfolio, the management fee will be at an
annual rate of 0.25% of the average annual net assets of the Fund, and if that
occurs the Manager will further reduce its management fee to the extent
necessary so that total annual operating expenses of the Fund (other than
Extraordinary Expenses such as litigation costs) do not exceed 1.30% for Class A
shares, 2.05% for Class B shares, 2.05% for Class C shares and 1.55% for Class N
shares. However, if this reduction in the management fee is not
30 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
sufficient to reduce total annual operating expenses to these limits, the
Manager is not required to subsidize Fund expenses to assure that expenses do
not exceed those limits. Furthermore, if expenses exceed these expense limits,
the Warranty Amount will be reduced by any expenses that exceed those limits.
The Manager voluntarily waived its management fee during the Offering Period. In
addition, during the Warranty Period the Manager has voluntarily agreed to
reduce the management fee payable by the Fund by 0.00833% per month in any month
following a month where the Fund's average daily equity allocation was less than
10%. Those voluntary undertakings may be amended or eliminated at any time.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended February 28, 2005, the Fund paid
$95,703 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at February 28,
2005 for Class C and Class N shares were
31 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
$621,321 and $92,922, respectively. Fees incurred by the Fund under the plans
are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------------------
February 28, 2005 $ 72,016 $ 1,195 $180,920 $ -- $ 209
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily undertaken
to reimburse the Fund for expenses equal to the Underlying Fund expenses, other
than Underlying Fund management fees, paid by the Fund as a shareholder of the
Underlying Fund. That expense reimbursement will fluctuate as the Fund's
allocation between the Underlying Fund and the debt portfolio changes. During
the six months ended February 28, 2005, the Manager reimbursed the Fund
$104,068. This voluntary undertaking may be amended or eliminated at any time.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class. This
undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor (collectively, the
"Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal
Defendants") including the Fund, 30 present and former Directors or Trustees and
8 present and former officers of the funds. This complaint, initially filed in
the U.S. District Court for the Southern District of New York on January 10,
2005 and amended on March 4, 2005, consolidates into a single action and amends
six individual previously-filed putative derivative and class action complaints.
Like those prior complaints, the complaint alleges that the Manager charged
excessive fees for distribution and other costs, improperly used assets of the
funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the funds, and failed to properly disclose the use
of assets of the funds to make those payments in violation of the Investment
Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those
prior complaints, the complaint further alleges that
32 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
by permitting and/or participating in those actions, the Directors/Trustees and
the Officers breached their fiduciary duties to shareholders of the funds under
the Investment Company Act of 1940 and at common law. The complaint seeks
unspecified compensatory and punitive damages, rescission of the funds'
investment advisory agreements, an accounting of all fees paid, and an award of
attorneys' fees and litigation expenses.
The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the funds named as Nominal
Defendants, and the Directors/Trustees of those funds have meritorious defenses
against the claims asserted. The Oppenheimer defendants intend to defend these
lawsuits vigorously and to contest any claimed liability. The Oppenheimer
defendants believe that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to them and that no estimate can yet be
made with any degree of certainty as to the amount or range of any potential
loss.
33 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
34 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
FINANCIAL STATEMENTS FOR OPPENHEIMER MAIN STREET FUND
(UNDERLYING FUND)
37 Statement of Investments
50 Statement of Assets and Liabilities
52 Statement of Operations
54 Statements of Changes in Net of Changes Assets
55 Financial Highlights
60 Notes to Financial Statements
36 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS February 28, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.0%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.3%
Aftermarket
Technology Corp. 1 3,601 $ 52,251
- --------------------------------------------------------------------------------
American Axle &
Manufacturing
Holdings, Inc. 48,300 1,276,086
- --------------------------------------------------------------------------------
ArvinMeritor, Inc. 58,100 979,566
- --------------------------------------------------------------------------------
Autoliv, Inc. 169,500 8,464,830
- --------------------------------------------------------------------------------
Borg-Warner
Automotive, Inc. 15,700 828,175
- --------------------------------------------------------------------------------
Dana Corp. 307,700 4,437,034
- --------------------------------------------------------------------------------
Delphi Corp. 192,600 1,323,162
- --------------------------------------------------------------------------------
Goodyear Tire &
Rubber Co. 1 686,800 9,931,128
- --------------------------------------------------------------------------------
Visteon Corp. 409,100 2,745,061
----------------
30,037,293
- --------------------------------------------------------------------------------
AUTOMOBILES--0.5%
Ford Motor Co. 2,229,826 28,207,299
- --------------------------------------------------------------------------------
General Motors Corp. 373,100 13,308,477
- --------------------------------------------------------------------------------
Harley-Davidson, Inc. 328,700 20,339,956
- --------------------------------------------------------------------------------
Winnebago
Industries, Inc. 77,700 2,746,695
----------------
64,602,427
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
Genuine Parts Co. 78,400 3,393,152
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.2%
Caesars
Entertainment, Inc. 1 371,900 7,460,314
- --------------------------------------------------------------------------------
CBRL Group, Inc. 24,500 1,048,845
- --------------------------------------------------------------------------------
CEC Entertainment, Inc. 1 173,200 6,702,840
- --------------------------------------------------------------------------------
Choice Hotels
International, Inc. 34,200 2,022,246
- --------------------------------------------------------------------------------
Darden Restaurants, Inc. 250,900 6,724,120
- --------------------------------------------------------------------------------
Hilton Hotels Corp. 187,900 3,957,174
- --------------------------------------------------------------------------------
International Game
Technology 384,300 11,705,778
- --------------------------------------------------------------------------------
Isle of Capri
Casinos, Inc. 1 11,500 321,885
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Jack in the Box, Inc. 1 21,000 $ 753,900
- --------------------------------------------------------------------------------
Mandalay Resort Group 163,000 11,551,810
- --------------------------------------------------------------------------------
Marriott International,
Inc., Cl. A 255,300 16,364,730
- --------------------------------------------------------------------------------
McDonald's Corp. 987,500 32,666,500
- --------------------------------------------------------------------------------
MGM Mirage, Inc. 1 249,300 18,490,581
- --------------------------------------------------------------------------------
Royal Caribbean
Cruises Ltd. 53,200 2,513,700
- --------------------------------------------------------------------------------
Starbucks Corp. 1 132,500 6,864,825
- --------------------------------------------------------------------------------
Starwood Hotels &
Resorts Worldwide, Inc. 62,500 3,577,500
- --------------------------------------------------------------------------------
Yum! Brands, Inc. 325,700 15,887,646
----------------
148,614,394
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.5%
American Greetings
Corp., Cl. A 105,000 2,586,150
- --------------------------------------------------------------------------------
Beazer Homes USA, Inc. 700 120,344
- --------------------------------------------------------------------------------
Cavco Industries, Inc. 1 26,340 706,702
- --------------------------------------------------------------------------------
D.R. Horton, Inc. 162,700 7,119,752
- --------------------------------------------------------------------------------
Ethan Allen
Interiors, Inc. 65,100 2,287,614
- --------------------------------------------------------------------------------
Furniture Brands
International, Inc. 50,300 1,168,469
- --------------------------------------------------------------------------------
Harman International
Industries, Inc. 31,000 3,477,270
- --------------------------------------------------------------------------------
KB Home 103,600 12,929,280
- --------------------------------------------------------------------------------
Leggett & Platt, Inc. 12,000 332,040
- --------------------------------------------------------------------------------
Meritage Homes Corp. 1 42,600 3,119,598
- --------------------------------------------------------------------------------
Newell Rubbermaid, Inc. 462,300 10,304,667
- --------------------------------------------------------------------------------
NVR, Inc. 1 5,800 4,595,050
- --------------------------------------------------------------------------------
Ryland Group, Inc. (The) 58,400 4,061,720
- --------------------------------------------------------------------------------
Stanley Works (The) 34,500 1,595,625
- --------------------------------------------------------------------------------
Whirlpool Corp. 65,100 4,150,125
----------------
58,554,406
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.5%
Amazon.com, Inc. 1 77,300 2,719,414
- --------------------------------------------------------------------------------
eBay, Inc. 1 1,068,500 45,774,540
37 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL Continued
IAC/InterActiveCorp 1 631,200 $ 14,202,000
----------------
62,695,954
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.3%
Action Performance
Cos., Inc. 327,000 4,748,040
- --------------------------------------------------------------------------------
Eastman Kodak Co. 484,000 16,451,160
- --------------------------------------------------------------------------------
Hasbro, Inc. 141,500 2,988,480
- --------------------------------------------------------------------------------
Marvel Enterprises, Inc. 1 337,100 5,939,702
- --------------------------------------------------------------------------------
Nautilus Group, Inc.
(The) 87,500 1,939,000
- --------------------------------------------------------------------------------
SCP Pool Corp. 13,600 462,944
----------------
32,529,326
- --------------------------------------------------------------------------------
MEDIA--3.9%
Charter
Communications,
Inc., Cl. A 1 1,105,100 2,022,333
- --------------------------------------------------------------------------------
Clear Channel
Communications, Inc. 817,400 27,203,072
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A 1 3,907,155 127,177,895
- --------------------------------------------------------------------------------
DirecTV Group, Inc.
(The) 1 122,100 1,832,721
- --------------------------------------------------------------------------------
EchoStar
Communications
Corp., Cl. A 675,500 20,096,125
- --------------------------------------------------------------------------------
Gannett Co., Inc. 43,100 3,394,125
- --------------------------------------------------------------------------------
Lamar Advertising
Co., Cl. A 1 42,800 1,681,612
- --------------------------------------------------------------------------------
Liberty Media
Corp., Cl. A 1 2,137,400 21,673,236
- --------------------------------------------------------------------------------
Liberty Media
International, Inc.,
Cl. A 1 24,300 1,050,489
- --------------------------------------------------------------------------------
Martha Stewart
Living Omnimedia,
Inc., Cl. A 1 117,900 4,167,765
- --------------------------------------------------------------------------------
McGraw-Hill Cos.,
Inc. (The) 235,600 21,639,860
- --------------------------------------------------------------------------------
News Corp., Cl. A 572,600 9,528,064
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 33,400 3,041,738
- --------------------------------------------------------------------------------
Pixar, Inc. 1 7,500 670,725
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Time Warner, Inc. 1 4,704,600 $ 81,060,258
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 2,399,876 83,755,672
- --------------------------------------------------------------------------------
Walt Disney Co. (The) 2,436,200 68,067,428
----------------
478,063,118
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.1%
Dillard's, Inc., Cl. A 316,600 7,376,780
- --------------------------------------------------------------------------------
Federated Department
Stores, Inc. 396,000 22,354,200
- --------------------------------------------------------------------------------
J.C. Penney Co., Inc.
(Holding Co.) 673,100 29,946,219
- --------------------------------------------------------------------------------
Kmart Holding Corp. 1 77,100 7,514,937
- --------------------------------------------------------------------------------
Kohl's Corp. 1 108,200 5,179,534
- --------------------------------------------------------------------------------
Nordstrom, Inc. 100,000 5,376,000
- --------------------------------------------------------------------------------
Sears Roebuck & Co. 255,400 12,752,122
- --------------------------------------------------------------------------------
Target Corp. 816,400 41,489,448
----------------
131,989,240
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--3.3%
Abercrombie &
Fitch Co., Cl. A 221,800 11,910,660
- --------------------------------------------------------------------------------
Aeropostale, Inc. 1 112,600 3,591,940
- --------------------------------------------------------------------------------
American Eagle
Outfitters, Inc. 218,000 11,800,340
- --------------------------------------------------------------------------------
AutoNation, Inc. 1 160,900 3,142,377
- --------------------------------------------------------------------------------
Barnes & Noble, Inc. 1 189,800 6,483,568
- --------------------------------------------------------------------------------
bebe stores, inc 9,200 258,980
- --------------------------------------------------------------------------------
Bed Bath & Beyond, Inc. 1 281,400 10,558,128
- --------------------------------------------------------------------------------
Best Buy Co., Inc. 497,700 26,885,754
- --------------------------------------------------------------------------------
Blockbuster, Inc., Cl. B 381,737 3,286,756
- --------------------------------------------------------------------------------
Borders Group, Inc. 279,600 7,194,108
- --------------------------------------------------------------------------------
Children's Place Retail
Stores, Inc. 1 23,900 955,761
- --------------------------------------------------------------------------------
Circuit City Stores,
Inc./Circuit City Group 759,000 11,863,170
- --------------------------------------------------------------------------------
Claire's Stores, Inc. 142,600 3,281,226
- --------------------------------------------------------------------------------
Electronics Boutique
Holdings Corp. 1 51,800 1,959,594
- --------------------------------------------------------------------------------
Finish Line, Inc.
(The), Cl. A 21,600 441,936
- --------------------------------------------------------------------------------
Gap, Inc. (The) 1,158,100 24,702,273
38 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SPECIALTY RETAIL Continued
Hollywood
Entertainment Corp. 1 99,000 $ 1,353,330
- --------------------------------------------------------------------------------
Home Depot, Inc. 2,620,300 104,864,406
- --------------------------------------------------------------------------------
Limited Brands, Inc. 674,100 16,030,098
- --------------------------------------------------------------------------------
Lowe's Cos., Inc. 621,000 36,502,380
- --------------------------------------------------------------------------------
Men's Wearhouse,
Inc. (The) 1 39,800 1,399,766
- --------------------------------------------------------------------------------
Michaels Stores, Inc. 365,700 11,662,173
- --------------------------------------------------------------------------------
Office Depot, Inc. 1 685,500 13,195,875
- --------------------------------------------------------------------------------
Pacific Sunwear of
California, Inc. 1 338,600 8,722,336
- --------------------------------------------------------------------------------
Petco Animal
Supplies, Inc. 1 34,100 1,208,504
- --------------------------------------------------------------------------------
PETsMART, Inc. 196,100 5,981,050
- --------------------------------------------------------------------------------
Rent-A-Center, Inc. 1 45,200 1,172,940
- --------------------------------------------------------------------------------
Sherwin-Williams Co. 94,900 4,204,070
- --------------------------------------------------------------------------------
Staples, Inc. 822,500 25,925,200
- --------------------------------------------------------------------------------
Talbots, Inc. (The) 33,400 930,858
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 791,700 19,333,314
- --------------------------------------------------------------------------------
Too, Inc. 1 85,700 2,276,192
- --------------------------------------------------------------------------------
Toys R Us, Inc. 1 551,700 12,617,379
- --------------------------------------------------------------------------------
Zale Corp. 1 83,900 2,496,025
----------------
398,192,467
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.4%
Coach, Inc. 1 299,400 16,625,682
- --------------------------------------------------------------------------------
Nike, Inc., Cl. B 145,800 12,677,310
- --------------------------------------------------------------------------------
Timberland Co., Cl. A 1 146,500 10,202,260
- --------------------------------------------------------------------------------
VF Corp. 206,900 12,364,344
----------------
51,869,596
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.2%
- --------------------------------------------------------------------------------
BEVERAGES--1.9%
Anheuser-Busch
Cos., Inc. 178,700 8,479,315
- --------------------------------------------------------------------------------
Coca-Cola Co. (The) 2,325,600 99,535,680
- --------------------------------------------------------------------------------
Pepsi Bottling Group,
Inc. (The) 407,800 11,100,316
- --------------------------------------------------------------------------------
PepsiAmericas, Inc. 14,300 325,325
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BEVERAGES Continued
PepsiCo, Inc. 2,156,130 $ 116,129,162
----------------
235,569,798
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.1%
BJ's Wholesale
Club, Inc. 1 291,000 8,895,870
- --------------------------------------------------------------------------------
Costco Wholesale Corp. 363,500 16,935,465
- --------------------------------------------------------------------------------
Kroger Co. (The) 1 558,600 10,049,214
- --------------------------------------------------------------------------------
Rite Aid Corp. 1 1,101,000 3,853,500
- --------------------------------------------------------------------------------
Safeway, Inc. 1 347,200 6,388,480
- --------------------------------------------------------------------------------
SUPERVALU, Inc. 184,200 5,852,034
- --------------------------------------------------------------------------------
Sysco Corp. 406,900 14,005,498
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 3,374,400 174,152,784
- --------------------------------------------------------------------------------
Walgreen Co. 304,000 13,020,320
----------------
253,153,165
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.6%
Archer-Daniels-
Midland Co. 220,000 5,302,000
- --------------------------------------------------------------------------------
Corn Products
International, Inc. 127,200 3,557,784
- --------------------------------------------------------------------------------
General Mills, Inc. 112,700 5,902,099
- --------------------------------------------------------------------------------
Heinz (H.J.) Co. 489,400 18,421,016
- --------------------------------------------------------------------------------
Hershey Foods Corp. 44,800 2,822,400
- --------------------------------------------------------------------------------
Kraft Foods, Inc., Cl. A 354,400 11,854,680
- --------------------------------------------------------------------------------
Pilgrim's Pride Corp.,
Cl. B 128,100 4,865,238
- --------------------------------------------------------------------------------
Sara Lee Corp. 509,900 11,421,760
- --------------------------------------------------------------------------------
Tyson Foods, Inc., Cl. A 122,900 2,091,758
----------------
66,238,735
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.5%
Clorox Co. (The) 54,300 3,260,172
- --------------------------------------------------------------------------------
Energizer Holdings, Inc. 1 103,700 6,142,151
- --------------------------------------------------------------------------------
Kimberly-Clark Corp. 172,900 11,407,942
- --------------------------------------------------------------------------------
Nu Skin Asia Pacific,
Inc., Cl. A 100,100 2,235,233
- --------------------------------------------------------------------------------
Procter & Gamble
Co. (The) 2,889,500 153,403,555
- --------------------------------------------------------------------------------
Rayovac Corp. 1 123,100 5,293,300
----------------
181,742,353
39 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.5%
Avon Products, Inc. 172,100 $ 7,360,717
- --------------------------------------------------------------------------------
Estee Lauder Cos.,
Inc. (The), Cl. A 347,900 15,300,642
- --------------------------------------------------------------------------------
Gillette Co. 866,100 43,521,525
----------------
66,182,884
- --------------------------------------------------------------------------------
TOBACCO--1.6%
Altria Group, Inc. 2,690,200 176,611,630
- --------------------------------------------------------------------------------
Reynolds American, Inc. 187,400 15,357,430
- --------------------------------------------------------------------------------
UST, Inc. 40,100 2,191,465
----------------
194,160,525
- --------------------------------------------------------------------------------
ENERGY--10.8%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.7%
Baker Hughes, Inc. 42,600 2,014,128
- --------------------------------------------------------------------------------
Cal Dive
International, Inc. 1 146,800 7,454,504
- --------------------------------------------------------------------------------
Diamond Offshore
Drilling, Inc. 240,700 11,914,650
- --------------------------------------------------------------------------------
Halliburton Co. 594,900 26,157,753
- --------------------------------------------------------------------------------
Lone Star
Technologies, Inc. 1 109,100 4,943,321
- --------------------------------------------------------------------------------
Maverick Tube Corp. 1 110,200 3,918,712
- --------------------------------------------------------------------------------
Oil States
International, Inc. 1 140,300 2,951,912
- --------------------------------------------------------------------------------
Precision Drilling Corp. 1 49,200 3,768,383
- --------------------------------------------------------------------------------
Pride International, Inc. 1 296,800 7,307,216
- --------------------------------------------------------------------------------
Transocean, Inc. 1 291,400 14,127,072
- --------------------------------------------------------------------------------
Universal Compression
Holdings, Inc. 1 75,200 2,857,600
----------------
87,415,251
- --------------------------------------------------------------------------------
OIL & GAS--10.1%
Amerada Hess Corp. 141,700 14,226,680
- --------------------------------------------------------------------------------
Anadarko Petroleum
Corp. 367,400 28,238,364
- --------------------------------------------------------------------------------
Apache Corp. 441,100 27,736,368
- --------------------------------------------------------------------------------
Burlington
Resources, Inc. 323,700 16,065,231
- --------------------------------------------------------------------------------
Canadian Natural
Resources Ltd. 469,770 26,695,459
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 648,700 14,070,303
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
- --------------------------------------------------------------------------------
ChevronTexaco Corp. 2,462,508 $ 152,872,497
- --------------------------------------------------------------------------------
ConocoPhillips 788,391 87,424,678
- --------------------------------------------------------------------------------
Devon Energy Corp. 774,800 36,252,892
- --------------------------------------------------------------------------------
El Paso Corp. 853,300 10,521,189
- --------------------------------------------------------------------------------
Enbridge Energy
Management LLC 1 54
- --------------------------------------------------------------------------------
EOG Resources, Inc. 131,700 12,000,504
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 8,499,696 538,115,754
- --------------------------------------------------------------------------------
Forest Oil Corp. 1 172,000 6,880,000
- --------------------------------------------------------------------------------
Frontier Oil Corp. 991,700 31,793,902
- --------------------------------------------------------------------------------
General Maritime
Corp. 1 96,600 4,973,934
- --------------------------------------------------------------------------------
Houston
Exploration Co. 1 57,500 3,329,250
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 233,800 18,156,908
- --------------------------------------------------------------------------------
Murphy Oil Corp. 14,300 1,430,572
- --------------------------------------------------------------------------------
Newfield
Exploration Co. 1 122,000 9,058,500
- --------------------------------------------------------------------------------
Noble Energy, Inc. 134,600 9,104,344
- --------------------------------------------------------------------------------
Occidental Petroleum
Corp. 343,300 24,123,691
- --------------------------------------------------------------------------------
OMI Corp. 127,600 2,670,668
- --------------------------------------------------------------------------------
Paramount
Resources Ltd. 1 1,379,200 34,105,400
- --------------------------------------------------------------------------------
Patina Oil & Gas Corp. 53,500 2,153,910
- --------------------------------------------------------------------------------
Petroleum
Development Corp. 1 31,000 1,359,040
- --------------------------------------------------------------------------------
Pioneer Natural
Resources Co. 132,600 5,591,742
- --------------------------------------------------------------------------------
Plains Exploration
& Production Co. 1 177,500 6,036,775
- --------------------------------------------------------------------------------
Pogo Producing Co. 91,300 4,438,093
- --------------------------------------------------------------------------------
Premcor, Inc. 19,000 1,042,720
- --------------------------------------------------------------------------------
Sunoco, Inc. 139,800 13,854,180
- --------------------------------------------------------------------------------
Talisman Energy, Inc. 718,900 24,684,137
- --------------------------------------------------------------------------------
Teekay Shipping Corp. 62,000 3,073,340
- --------------------------------------------------------------------------------
Tesoro Corp. 1 325,800 12,031,794
- --------------------------------------------------------------------------------
Unocal Corp. 521,500 28,213,150
- --------------------------------------------------------------------------------
Valero Energy Corp. 81,900 5,834,556
- --------------------------------------------------------------------------------
Vintage Petroleum, Inc. 28,100 834,289
40 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Williams Cos., Inc. (The) 467,000 $ 8,793,610
- --------------------------------------------------------------------------------
XTO Energy, Inc. 142,900 6,504,808
----------------
1,234,293,286
- --------------------------------------------------------------------------------
FINANCIALS--21.7%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.2%
Bank of New York Co.,
Inc. (The) 817,300 24,723,325
- --------------------------------------------------------------------------------
Northern Trust Corp. 110,500 4,668,625
----------------
29,391,950
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--7.3%
- --------------------------------------------------------------------------------
AmSouth Bancorp 25,000 624,500
- --------------------------------------------------------------------------------
Associated Banc-Corp 25,900 830,354
- --------------------------------------------------------------------------------
Astoria Financial Corp. 116,700 4,385,586
- --------------------------------------------------------------------------------
Bank of America Corp. 6,221,212 290,219,540
- --------------------------------------------------------------------------------
Banknorth Group, Inc. 280,600 10,126,854
- --------------------------------------------------------------------------------
BB&T Corp. 343,800 13,459,770
- --------------------------------------------------------------------------------
Comerica, Inc. 278,400 15,891,072
- --------------------------------------------------------------------------------
Compass Bancshares,
Inc. 111,700 5,072,297
- --------------------------------------------------------------------------------
Golden West
Financial Corp. 198,000 12,254,220
- --------------------------------------------------------------------------------
Hibernia Corp., Cl. A 203,100 5,213,577
- --------------------------------------------------------------------------------
Huntington
Bancshares, Inc. 119,000 2,679,880
- --------------------------------------------------------------------------------
Independence
Community Bank Corp. 22,100 879,801
- --------------------------------------------------------------------------------
Indymac Mortgage
Holdings, Inc. 77,900 2,803,621
- --------------------------------------------------------------------------------
KeyCorp 606,900 20,027,700
- --------------------------------------------------------------------------------
M&T Bank Corp. 104,300 10,326,743
- --------------------------------------------------------------------------------
National City Corp. 417,300 14,926,821
- --------------------------------------------------------------------------------
North Fork
Bancorporation, Inc. 160,063 4,611,415
- --------------------------------------------------------------------------------
PNC Financial
Services Group, Inc. 314,100 16,534,224
- --------------------------------------------------------------------------------
R&G Financial
Corp., Cl. B 10,700 388,624
- --------------------------------------------------------------------------------
Regions Financial Corp. 327,725 10,572,409
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Silicon Valley
Bancshares 1 55,400 $ 2,427,628
- --------------------------------------------------------------------------------
Sterling Financial Corp. 8,700 331,644
- --------------------------------------------------------------------------------
SunTrust Banks, Inc. 277,000 20,065,880
- --------------------------------------------------------------------------------
U.S. Bancorp 3,895,770 115,899,158
- --------------------------------------------------------------------------------
UnionBanCal Corp. 298,800 18,495,720
- --------------------------------------------------------------------------------
Wachovia Corp. 2,779,900 147,362,499
- --------------------------------------------------------------------------------
Washington
Mutual, Inc. 283,800 11,908,248
- --------------------------------------------------------------------------------
Wells Fargo & Co. 2,302,800 136,740,264
- --------------------------------------------------------------------------------
Zions Bancorp 21,300 1,407,930
----------------
896,467,979
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--8.4%
Affiliated Managers
Group, Inc. 1 94,300 6,106,868
- --------------------------------------------------------------------------------
American Capital
Strategies Ltd. 96,200 3,338,140
- --------------------------------------------------------------------------------
American Express Co. 1,169,700 63,339,255
- --------------------------------------------------------------------------------
AmeriCredit Corp. 1 210,400 4,957,024
- --------------------------------------------------------------------------------
Ameritrade
Holding Corp. 1 257,000 2,731,910
- --------------------------------------------------------------------------------
Bear Stearns Cos.,
Inc. (The) 268,100 26,675,950
- --------------------------------------------------------------------------------
Capital One
Financial Corp. 398,400 30,549,312
- --------------------------------------------------------------------------------
CIT Group, Inc. 380,100 15,337,035
- --------------------------------------------------------------------------------
Citigroup, Inc. 6,995,546 333,827,455
- --------------------------------------------------------------------------------
E*TRADE Financial
Corp. 1 616,300 8,178,301
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 46,900 3,291,911
- --------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The) 138,700 15,090,560
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 5,518,596 201,704,684
- --------------------------------------------------------------------------------
Legg Mason, Inc. 51,300 4,136,832
- --------------------------------------------------------------------------------
Lehman Brothers
Holdings, Inc. 406,200 37,037,316
- --------------------------------------------------------------------------------
MBNA Corp. 1,170,500 29,695,585
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 1,723,900 100,986,062
- --------------------------------------------------------------------------------
Morgan Stanley 1,635,500 92,356,685
41 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Principal Financial
Group, Inc. (The) 525,600 $ 20,508,912
- --------------------------------------------------------------------------------
Providian Financial
Corp. 1 85,300 1,462,895
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 1,230,900 12,924,450
- --------------------------------------------------------------------------------
SEI Investments Co. 12,400 458,304
- --------------------------------------------------------------------------------
SLM Corp. 266,000 12,980,800
- --------------------------------------------------------------------------------
State Street Corp. 53,800 2,359,130
----------------
1,030,035,376
- --------------------------------------------------------------------------------
INSURANCE--4.1%
ACE Ltd. 214,600 9,541,116
- --------------------------------------------------------------------------------
AFLAC, Inc. 412,300 15,803,459
- --------------------------------------------------------------------------------
Allstate Corp. 729,600 39,164,928
- --------------------------------------------------------------------------------
AMBAC Financial
Group, Inc. 50,900 3,959,002
- --------------------------------------------------------------------------------
American Financial
Group, Inc. 142,100 4,332,629
- --------------------------------------------------------------------------------
American International
Group, Inc. 3,173,405 211,983,454
- --------------------------------------------------------------------------------
AmerUs Group Co. 77,100 3,710,823
- --------------------------------------------------------------------------------
Aon Corp. 108,000 2,647,080
- --------------------------------------------------------------------------------
Assurant, Inc. 163,800 5,634,720
- --------------------------------------------------------------------------------
Chubb Corp. 210,800 16,676,388
- --------------------------------------------------------------------------------
Cincinnati Financial
Corp. 66,900 2,992,437
- --------------------------------------------------------------------------------
Fidelity National
Financial, Inc. 210,684 9,320,660
- --------------------------------------------------------------------------------
First American
Corp. (The) 131,700 4,813,635
- --------------------------------------------------------------------------------
Hartford Financial
Services Group,
Inc. (The) 461,800 33,226,510
- --------------------------------------------------------------------------------
LandAmerica Financial
Group, Inc. 61,200 3,350,088
- --------------------------------------------------------------------------------
Lincoln National Corp. 227,100 10,639,635
- --------------------------------------------------------------------------------
Loews Corp. 308,600 21,997,008
- --------------------------------------------------------------------------------
Marsh & McLennan
Cos., Inc. 214,900 7,016,485
- --------------------------------------------------------------------------------
MBIA, Inc. 133,000 7,793,800
- --------------------------------------------------------------------------------
MetLife, Inc. 564,600 23,171,184
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Nationwide Financial
Services, Inc., Cl. A 67,400 $ 2,480,320
- --------------------------------------------------------------------------------
Old Republic
International Corp. 173,700 4,167,063
- --------------------------------------------------------------------------------
Partnerre Holdings Ltd. 19,100 1,196,615
- --------------------------------------------------------------------------------
Progressive Corp. 161,800 14,092,780
- --------------------------------------------------------------------------------
Protective Life Corp. 20,100 803,196
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 15,700 894,900
- --------------------------------------------------------------------------------
Reinsurance Group
of America, Inc. 138,100 6,304,265
- --------------------------------------------------------------------------------
Safeco Corp. 206,500 9,847,985
- --------------------------------------------------------------------------------
StanCorp Financial
Group, Inc. 44,100 3,840,669
- --------------------------------------------------------------------------------
Torchmark Corp. 54,500 2,839,995
- --------------------------------------------------------------------------------
UICI 33,500 918,570
- --------------------------------------------------------------------------------
Universal American
Financial Corp. 1 8,000 125,840
- --------------------------------------------------------------------------------
UnumProvident Corp. 495,500 8,383,860
----------------
493,671,099
- --------------------------------------------------------------------------------
REAL ESTATE--0.0%
CB Richard Ellis
Group, Inc., Cl. A 1 52,300 1,886,984
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.7%
Accredited Home
Lenders Holding Co. 1 42,000 1,680,840
- --------------------------------------------------------------------------------
Countrywide
Financial Corp. 907,100 31,521,725
- --------------------------------------------------------------------------------
Fannie Mae 1,369,800 80,078,508
- --------------------------------------------------------------------------------
Freddie Mac 1,153,900 71,541,800
- --------------------------------------------------------------------------------
Fremont General Corp. 131,200 3,298,368
- --------------------------------------------------------------------------------
MGIC Investment Corp. 148,300 9,304,342
- --------------------------------------------------------------------------------
PMI Group, Inc. (The) 37,300 1,501,325
- --------------------------------------------------------------------------------
Radian Group, Inc. 91,000 4,398,030
----------------
203,324,938
- --------------------------------------------------------------------------------
HEALTH CARE--11.8%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.4%
Amgen, Inc. 1 1,116,400 68,781,404
- --------------------------------------------------------------------------------
Applera Corp./Applied
Biosystems Group 402,700 8,271,458
42 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BIOTECHNOLOGY Continued
Genentech, Inc. 1 501,200 $ 23,656,640
- --------------------------------------------------------------------------------
United Therapeutics
Corp. 1 50,600 2,298,758
- --------------------------------------------------------------------------------
Wyeth 1,587,800 64,813,996
----------------
167,822,256
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.0%
Becton, Dickinson
& Co. 276,500 16,554,055
- --------------------------------------------------------------------------------
Boston Scientific Corp. 1 143,200 4,676,912
- --------------------------------------------------------------------------------
Dade Behring
Holdings, Inc. 1 24,800 1,555,208
- --------------------------------------------------------------------------------
Edwards Lifesciences
Corp. 1 26,900 1,156,969
- --------------------------------------------------------------------------------
Hospira, Inc. 1 109,580 3,243,568
- --------------------------------------------------------------------------------
Medtronic, Inc. 1,466,500 76,433,980
- --------------------------------------------------------------------------------
PerkinElmer, Inc. 318,700 7,068,766
- --------------------------------------------------------------------------------
Thermo Electron Corp. 1 407,100 11,178,966
- --------------------------------------------------------------------------------
VISX, Inc. 1 86,600 2,092,256
----------------
123,960,680
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.5%
Advisory Board
Co. (The) 1 13,700 548,411
- --------------------------------------------------------------------------------
Aetna, Inc. 243,900 35,614,278
- --------------------------------------------------------------------------------
AmerisourceBergen
Corp. 52,600 3,150,740
- --------------------------------------------------------------------------------
Apria Healthcare
Group, Inc. 1 34,100 1,106,886
- --------------------------------------------------------------------------------
Caremark Rx, Inc. 1 269,000 10,297,320
- --------------------------------------------------------------------------------
Cerner Corp. 1 63,800 3,323,980
- --------------------------------------------------------------------------------
CIGNA Corp. 222,200 20,175,760
- --------------------------------------------------------------------------------
Covance, Inc. 1 10,200 445,842
- --------------------------------------------------------------------------------
Coventry Health
Care, Inc. 1 153,900 9,711,090
- --------------------------------------------------------------------------------
Gentiva Health
Services, Inc. 1 5,000 84,200
- --------------------------------------------------------------------------------
HCA, Inc. 190,800 9,007,668
- --------------------------------------------------------------------------------
Humana, Inc. 1 278,900 9,279,003
- --------------------------------------------------------------------------------
Laboratory Corp. of
America Holdings 1 8,700 416,643
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
LCA-Vision, Inc. 103,450 $ 2,991,774
- --------------------------------------------------------------------------------
Lincare Holdings, Inc. 1 84,300 3,420,894
- --------------------------------------------------------------------------------
McKesson Corp. 312,100 11,653,814
- --------------------------------------------------------------------------------
Medco Health
Solutions, Inc. 1 424,929 18,875,346
- --------------------------------------------------------------------------------
PacifiCare Health
Systems, Inc. 1 9,300 590,364
- --------------------------------------------------------------------------------
Pediatrix Medical
Group, Inc. 1 80,600 5,523,518
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 145,100 14,422,940
- --------------------------------------------------------------------------------
Sierra Health
Services, Inc. 1 66,600 4,099,896
- --------------------------------------------------------------------------------
UnitedHealth
Group, Inc. 994,342 90,644,217
- --------------------------------------------------------------------------------
WellChoice, Inc. 1 93,500 4,829,275
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 434,900 53,083,894
----------------
313,297,753
- --------------------------------------------------------------------------------
PHARMACEUTICALS--6.9%
Abbott Laboratories 1,677,900 77,166,621
- --------------------------------------------------------------------------------
Allergan, Inc. 133,300 10,021,494
- --------------------------------------------------------------------------------
Barr Pharmaceuticals,
Inc. 1 161,100 7,690,914
- --------------------------------------------------------------------------------
Bristol-Myers
Squibb Co. 1,225,100 30,664,253
- --------------------------------------------------------------------------------
Eli Lilly & Co. 1,127,900 63,162,400
- --------------------------------------------------------------------------------
Endo Pharmaceuticals
Holdings, Inc. 1 142,800 3,217,284
- --------------------------------------------------------------------------------
Forest Laboratories,
Inc. 1 407,500 17,400,250
- --------------------------------------------------------------------------------
Johnson & Johnson 3,694,544 242,362,086
- --------------------------------------------------------------------------------
Merck & Co., Inc. 3,894,700 123,461,990
- --------------------------------------------------------------------------------
Pfizer, Inc. 10,183,045 267,712,253
----------------
842,859,545
- --------------------------------------------------------------------------------
INDUSTRIALS--10.2%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.8%
Boeing Co. 663,500 36,472,595
- --------------------------------------------------------------------------------
General Dynamics Corp. 127,500 13,432,125
- --------------------------------------------------------------------------------
Honeywell
International, Inc. 367,000 13,934,990
43 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
Lockheed Martin Corp. 263,100 $ 15,580,782
- --------------------------------------------------------------------------------
Northrop Grumman
Corp. 476,500 25,206,850
- --------------------------------------------------------------------------------
Raytheon Co. 578,500 22,121,840
- --------------------------------------------------------------------------------
United Defense
Industries, Inc. 1 62,000 3,392,640
- --------------------------------------------------------------------------------
United Technologies
Corp. 854,900 85,387,412
----------------
215,529,234
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.5%
EGL, Inc. 1 72,100 2,289,175
- --------------------------------------------------------------------------------
FedEx Corp. 308,700 30,184,686
- --------------------------------------------------------------------------------
United Parcel Service,
Inc., Cl. B 430,100 33,328,449
----------------
65,802,310
- --------------------------------------------------------------------------------
AIRLINES--0.1%
Alaska Air Group, Inc. 1 117,400 3,329,464
- --------------------------------------------------------------------------------
AMR Corp. 1 460,700 3,911,343
- --------------------------------------------------------------------------------
Continental Airlines,
Inc., Cl. B 1 355,200 3,804,192
- --------------------------------------------------------------------------------
Delta Air Lines, Inc. 1 616,500 2,860,560
- --------------------------------------------------------------------------------
Northwest Airlines
Corp., Cl. A 1 131,200 922,336
----------------
14,827,895
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.2%
Masco Corp. 549,700 18,535,884
- --------------------------------------------------------------------------------
USG Corp. 1 167,100 5,278,689
----------------
23,814,573
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.5%
Brink's Co. (The) 46,800 1,622,088
- --------------------------------------------------------------------------------
Cendant Corp. 1,086,000 24,022,320
- --------------------------------------------------------------------------------
Copart, Inc. 1 87,500 2,038,750
- --------------------------------------------------------------------------------
Corporate Executive
Board Co. 38,700 2,420,685
- --------------------------------------------------------------------------------
Deluxe Corp. 67,200 2,623,488
- --------------------------------------------------------------------------------
Dun & Bradstreet Corp. 1 56,600 3,478,636
- --------------------------------------------------------------------------------
Equifax, Inc. 143,000 4,345,770
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
ITT Educational
Services, Inc. 1 58,200 $ 2,833,758
- --------------------------------------------------------------------------------
Korn-Ferry
International 1 42,900 822,822
- --------------------------------------------------------------------------------
PHH Corp. 1 43,930 922,530
- --------------------------------------------------------------------------------
Republic Services, Inc. 175,900 5,577,789
- --------------------------------------------------------------------------------
Robert Half
International, Inc. 144,500 4,215,065
- --------------------------------------------------------------------------------
Sotheby's Holdings,
Inc., Cl. A 1 148,000 2,637,360
- --------------------------------------------------------------------------------
Waste Management, Inc. 63,600 1,859,664
----------------
59,420,725
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.0%
Shaw Group, Inc. (The) 1 277,100 5,763,680
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.4%
Cooper Industries
Ltd., Cl. A 48,200 3,343,634
- --------------------------------------------------------------------------------
Emerson Electric Co. 291,500 19,332,280
- --------------------------------------------------------------------------------
Molex, Inc., Cl. A 267,509 6,128,631
- --------------------------------------------------------------------------------
Rockwell
Automation, Inc. 220,900 13,728,935
- --------------------------------------------------------------------------------
Thomas & Betts Corp. 1 42,200 1,311,576
----------------
43,845,056
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--4.7%
3M Co. 960,900 80,657,946
- --------------------------------------------------------------------------------
General Electric Co. 13,612,600 479,163,520
- --------------------------------------------------------------------------------
Textron, Inc. 170,200 13,164,970
----------------
572,986,436
- --------------------------------------------------------------------------------
MACHINERY--1.3%
Actuant Corp., Cl. A 1 31,700 1,713,385
- --------------------------------------------------------------------------------
Caterpillar, Inc. 413,800 39,331,690
- --------------------------------------------------------------------------------
Cummins, Inc. 139,800 10,262,718
- --------------------------------------------------------------------------------
Danaher Corp. 78,300 4,241,511
- --------------------------------------------------------------------------------
Deere & Co. 345,400 24,561,394
- --------------------------------------------------------------------------------
Dover Corp. 36,600 1,415,322
- --------------------------------------------------------------------------------
Harsco Corp. 4,800 280,368
- --------------------------------------------------------------------------------
Illinois Tool Works, Inc. 199,200 17,878,200
- --------------------------------------------------------------------------------
Ingersoll-Rand Co., Cl. A 107,000 9,014,750
44 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY Continued
Kennametal, Inc. 17,900 $ 878,532
- --------------------------------------------------------------------------------
Mueller Industries, Inc. 104,500 3,289,660
- --------------------------------------------------------------------------------
Navistar International
Corp. 1 141,000 5,563,860
- --------------------------------------------------------------------------------
Paccar, Inc. 192,150 14,461,209
- --------------------------------------------------------------------------------
Pall Corp. 74,300 2,011,301
- --------------------------------------------------------------------------------
SPX Corp. 261,000 11,619,720
- --------------------------------------------------------------------------------
Terex Corp. 1 85,200 3,851,040
- --------------------------------------------------------------------------------
Toro Co. (The) 92,800 8,046,688
- --------------------------------------------------------------------------------
Wabash National Corp. 1 97,700 2,634,969
----------------
161,056,317
- --------------------------------------------------------------------------------
ROAD & RAIL--0.6%
Burlington Northern
Santa Fe Corp. 592,700 29,795,029
- --------------------------------------------------------------------------------
CNF Transportation, Inc. 138,300 6,343,821
- --------------------------------------------------------------------------------
CSX Corp. 118,600 4,899,366
- --------------------------------------------------------------------------------
Genesee & Wyoming,
Inc., Cl. A 1 8,400 202,524
- --------------------------------------------------------------------------------
Hunt (J.B.) Transport
Services, Inc. 68,200 3,218,358
- --------------------------------------------------------------------------------
Laidlaw International,
Inc. 1 74,600 1,715,800
- --------------------------------------------------------------------------------
Norfolk Southern Corp. 302,200 10,845,958
- --------------------------------------------------------------------------------
Ryder Systems, Inc. 228,100 9,685,126
- --------------------------------------------------------------------------------
Swift Transportation
Co., Inc. 1 180,600 4,283,832
- --------------------------------------------------------------------------------
Yellow Roadway Corp. 1 41,200 2,379,300
----------------
73,369,114
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.1%
W.W. Grainger, Inc. 114,300 7,175,754
- --------------------------------------------------------------------------------
WESCO International,
Inc. 1 33,600 1,207,248
----------------
8,383,002
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--16.9%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.6%
3Com Corp. 1 1,254,200 4,490,036
- --------------------------------------------------------------------------------
ADTRAN, Inc. 141,800 2,653,078
- --------------------------------------------------------------------------------
Avaya, Inc. 1 387,700 5,427,800
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Cisco Systems, Inc. 1 8,167,400 $ 142,276,108
- --------------------------------------------------------------------------------
CommScope, Inc. 1 64,900 982,586
- --------------------------------------------------------------------------------
Comverse
Technology, Inc. 1 403,100 9,355,951
- --------------------------------------------------------------------------------
Extreme Networks, Inc. 1 206,600 1,202,412
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1 1,098,000 23,650,920
- --------------------------------------------------------------------------------
Motorola, Inc. 3,075,600 48,163,896
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 2,113,675 76,324,804
- --------------------------------------------------------------------------------
Tellabs, Inc. 1 649,100 4,602,119
----------------
319,129,710
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--5.2%
Apple Computer, Inc. 1 704,800 31,617,328
- --------------------------------------------------------------------------------
Dell, Inc. 1 4,053,800 162,516,842
- --------------------------------------------------------------------------------
EMC Corp. 1 2,526,700 31,988,022
- --------------------------------------------------------------------------------
Hewlett-Packard Co. 5,092,900 105,932,320
- --------------------------------------------------------------------------------
International Business
Machines Corp. 2,418,000 223,858,440
- --------------------------------------------------------------------------------
Lexmark International,
Inc., Cl. A 1 219,800 17,612,574
- --------------------------------------------------------------------------------
Maxtor Corp. 1 933,900 5,173,806
- --------------------------------------------------------------------------------
NCR Corp. 1 351,800 13,716,682
- --------------------------------------------------------------------------------
PalmOne, Inc. 1 103,500 2,465,370
- --------------------------------------------------------------------------------
Storage Technology
Corp. 1 234,900 7,469,820
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 1 6,327,000 26,699,940
- --------------------------------------------------------------------------------
Western Digital Corp. 1 587,000 6,609,620
----------------
635,660,764
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Agilent Technologies,
Inc. 1 474,300 11,383,200
- --------------------------------------------------------------------------------
Amphenol Corp., Cl. A 1 272,600 10,876,740
- --------------------------------------------------------------------------------
Electro Scientific
Industries, Inc. 1 2,300 51,980
- --------------------------------------------------------------------------------
Ingram Micro, Inc., Cl. A 1 355,400 6,368,768
- --------------------------------------------------------------------------------
Jabil Circuit, Inc. 1 227,300 5,843,883
- --------------------------------------------------------------------------------
Molex, Inc. 88,600 2,226,518
- --------------------------------------------------------------------------------
MTS Systems Corp. 8,700 262,740
- --------------------------------------------------------------------------------
Sanmina-SCI Corp. 1 163,500 907,425
45 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS Continued
Tech Data Corp. 1 154,400 $ 6,328,856
- --------------------------------------------------------------------------------
UNOVA, Inc. 1 26,400 614,592
----------------
44,864,702
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.4%
EarthLink, Inc. 1 402,000 3,509,460
- --------------------------------------------------------------------------------
Internet Security
Systems, Inc. 1 160,900 3,230,872
- --------------------------------------------------------------------------------
Openwave Systems, Inc. 1 17,900 228,404
- --------------------------------------------------------------------------------
United Online, Inc. 1 317,900 3,449,215
- --------------------------------------------------------------------------------
VeriSign, Inc. 1 30,600 839,052
- --------------------------------------------------------------------------------
Websense, Inc. 1 49,600 2,968,560
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 1,184,900 38,236,723
----------------
52,462,286
- --------------------------------------------------------------------------------
IT SERVICES--0.8%
Acxiom Corp. 215,900 4,857,750
- --------------------------------------------------------------------------------
Affiliated Computer
Services, Inc., Cl. A 1 36,500 1,887,050
- --------------------------------------------------------------------------------
Automatic Data
Processing, Inc. 197,300 8,476,008
- --------------------------------------------------------------------------------
CheckFree Corp. 1 200,300 7,719,562
- --------------------------------------------------------------------------------
Computer Sciences
Corp. 1 439,000 20,294,970
- --------------------------------------------------------------------------------
Convergys Corp. 1 177,000 2,653,230
- --------------------------------------------------------------------------------
CSG Systems
International, Inc. 1 10,400 177,840
- --------------------------------------------------------------------------------
Electronic Data
Systems Corp. 847,700 18,056,010
- --------------------------------------------------------------------------------
First Data Corp. 438,700 17,995,474
- --------------------------------------------------------------------------------
Sabre Holdings Corp. 329,900 6,954,292
- --------------------------------------------------------------------------------
Unisys Corp. 1 109,600 841,728
----------------
89,913,914
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.6%
Advanced Micro
Devices, Inc. 1 711,000 12,406,950
- --------------------------------------------------------------------------------
Agere Systems, Inc.,
Cl. A 1 89,000 145,960
- --------------------------------------------------------------------------------
Analog Devices, Inc. 448,300 16,461,576
- --------------------------------------------------------------------------------
Applied Materials, Inc. 1 2,027,900 35,488,250
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Continued
Atmel Corp. 1 2,512,400 $ 7,914,060
- --------------------------------------------------------------------------------
Cabot
Microelectronics Corp. 1 34,300 1,114,407
- --------------------------------------------------------------------------------
Conexant Systems, Inc. 1 43,900 79,020
- --------------------------------------------------------------------------------
Cree, Inc. 1 383,800 9,026,976
- --------------------------------------------------------------------------------
Cymer, Inc. 1 78,600 2,271,933
- --------------------------------------------------------------------------------
Fairchild Semiconductor
International, Inc., Cl. A 1 58,400 964,768
- --------------------------------------------------------------------------------
Freescale Semiconductor,
Inc., Cl. A 1 461,100 8,714,790
- --------------------------------------------------------------------------------
Freescale Semiconductor,
Inc., Cl. B 1 219,166 4,203,604
- --------------------------------------------------------------------------------
Intel Corp. 9,102,500 218,277,950
- --------------------------------------------------------------------------------
Intersil Corp., Cl. A 437,500 7,376,250
- --------------------------------------------------------------------------------
KLA-Tencor Corp. 1 2,800 138,348
- --------------------------------------------------------------------------------
Lam Research Corp. 1 274,100 8,617,704
- --------------------------------------------------------------------------------
Linear Technology Corp. 380,700 14,870,142
- --------------------------------------------------------------------------------
LSI Logic Corp. 1 1,152,700 7,354,226
- --------------------------------------------------------------------------------
Maxim Integrated
Products, Inc. 132,400 5,695,848
- --------------------------------------------------------------------------------
Micrel, Inc. 1 117,100 1,104,253
- --------------------------------------------------------------------------------
Microchip
Technology, Inc. 9,100 249,886
- --------------------------------------------------------------------------------
Micron Technology, Inc. 1 942,200 10,835,300
- --------------------------------------------------------------------------------
National
Semiconductor Corp. 494,900 9,873,255
- --------------------------------------------------------------------------------
Teradyne, Inc. 1 48,800 752,496
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 2,161,100 57,204,317
----------------
441,142,269
- --------------------------------------------------------------------------------
SOFTWARE--3.9%
Adobe Systems, Inc. 107,000 6,607,250
- --------------------------------------------------------------------------------
Autodesk, Inc. 197,400 5,866,728
- --------------------------------------------------------------------------------
BEA Systems, Inc. 1 404,600 3,358,180
- --------------------------------------------------------------------------------
BMC Software, Inc. 1 596,100 8,911,695
- --------------------------------------------------------------------------------
Cadence Design
Systems, Inc. 1 103,400 1,424,852
- --------------------------------------------------------------------------------
Computer Associates
International, Inc. 37,113 1,005,391
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 130,300 8,403,047
46 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
Hyperion Solutions
Corp. 1 68,600 $ 3,462,928
- --------------------------------------------------------------------------------
McAfee, Inc. 1 60,200 1,392,426
- --------------------------------------------------------------------------------
MICROS Systems, Inc. 1 12,100 392,403
- --------------------------------------------------------------------------------
Microsoft Corp. 12,892,500 324,633,150
- --------------------------------------------------------------------------------
Oracle Corp. 1 6,131,400 79,156,374
- --------------------------------------------------------------------------------
RSA Security, Inc. 1 21,800 356,212
- --------------------------------------------------------------------------------
Sybase, Inc. 1 445,200 8,387,568
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 477,700 8,646,370
- --------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1 86,500 3,171,955
- --------------------------------------------------------------------------------
THQ, Inc. 1 66,300 1,812,642
- --------------------------------------------------------------------------------
TIBCO Software, Inc. 1 581,900 5,679,344
- --------------------------------------------------------------------------------
Veritas Software Corp. 1 304,500 7,374,990
----------------
480,043,505
- --------------------------------------------------------------------------------
MATERIALS--3.2%
- --------------------------------------------------------------------------------
CHEMICALS--1.6%
Agrium, Inc. 74,900 1,355,690
- --------------------------------------------------------------------------------
Cabot Corp. 42,500 1,479,000
- --------------------------------------------------------------------------------
Dow Chemical Co. 956,500 52,750,975
- --------------------------------------------------------------------------------
E.I. DuPont de
Nemours & Co. 1,170,100 62,366,330
- --------------------------------------------------------------------------------
Eastman Chemical Co. 215,000 12,414,100
- --------------------------------------------------------------------------------
FMC Corp. 1 43,500 2,147,160
- --------------------------------------------------------------------------------
Georgia Gulf Corp. 69,600 3,675,576
- --------------------------------------------------------------------------------
Lyondell Chemical Co. 303,500 10,273,475
- --------------------------------------------------------------------------------
Monsanto Co. 375,400 22,066,012
- --------------------------------------------------------------------------------
Mosaic Co. (The) 1 136,400 2,245,144
- --------------------------------------------------------------------------------
OM Group, Inc. 1 124,000 3,953,120
- --------------------------------------------------------------------------------
PPG Industries, Inc. 128,300 9,231,185
- --------------------------------------------------------------------------------
Praxair, Inc. 116,300 5,213,729
- --------------------------------------------------------------------------------
Rohm & Haas Co. 140,500 6,767,885
- --------------------------------------------------------------------------------
W.R. Grace & Co. 1 296,700 2,919,528
----------------
198,858,909
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.1%
Eagle Materials, Inc., Cl. B 58,396 4,718,397
- --------------------------------------------------------------------------------
Florida Rock
Industries, Inc. 5,400 346,518
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS Continued
Martin Marietta
Materials, Inc. 10,300 $ 594,104
- --------------------------------------------------------------------------------
Texas Industries, Inc. 55,300 3,688,510
- --------------------------------------------------------------------------------
Vulcan Materials Co. 6,700 387,662
----------------
9,735,191
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.2%
Ball Corp. 70,600 3,134,640
- --------------------------------------------------------------------------------
Crown Holdings, Inc. 1 238,200 3,918,390
- --------------------------------------------------------------------------------
Owens-Illinois, Inc. 1 378,800 9,428,332
- --------------------------------------------------------------------------------
Pactiv Corp. 1 123,700 2,796,857
- --------------------------------------------------------------------------------
Smurfit-Stone
Container Corp. 246,000 4,090,980
----------------
23,369,199
- --------------------------------------------------------------------------------
METALS & MINING--0.9%
AK Steel Holding Corp. 1 354,600 6,223,230
- --------------------------------------------------------------------------------
Alcoa, Inc. 1,021,500 32,810,580
- --------------------------------------------------------------------------------
Carpenter Technology
Corp. 48,000 3,245,760
- --------------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 44,000 3,535,400
- --------------------------------------------------------------------------------
Massey Energy Co. 192,300 8,380,434
- --------------------------------------------------------------------------------
Nucor Corp. 77,400 4,825,116
- --------------------------------------------------------------------------------
Oregon Steel Mills, Inc. 1 120,200 3,499,022
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 150,200 15,988,790
- --------------------------------------------------------------------------------
Quanex Corp. 30,700 1,806,695
- --------------------------------------------------------------------------------
Schnitzer Steel
Industries, Inc. 6,100 247,782
- --------------------------------------------------------------------------------
Southern Peru
Copper Corp. 102,400 6,441,984
- --------------------------------------------------------------------------------
United States Steel
Corp. 240,000 14,966,400
- --------------------------------------------------------------------------------
Worthington
Industries, Inc. 218,700 4,581,765
----------------
106,552,958
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.4%
Georgia-Pacific Corp. 568,800 20,368,728
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 404,400 10,623,588
- --------------------------------------------------------------------------------
MeadWestvaco Corp. 408,100 12,798,016
- --------------------------------------------------------------------------------
Neenah Paper, Inc. 1 15,618 549,129
47 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS Continued
Potlatch Corp. 66,000 $ 3,045,900
----------------
47,385,361
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.8%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.1%
BellSouth Corp. 1,696,200 43,761,960
- --------------------------------------------------------------------------------
CenturyTel, Inc. 348,100 11,710,084
- --------------------------------------------------------------------------------
Citizens
Communications Co. 638,600 8,518,924
- --------------------------------------------------------------------------------
Crown Castle
International Corp. 1 248,800 4,065,392
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc. 1 1,300,200 5,070,780
- --------------------------------------------------------------------------------
SBC Communications,
Inc. 5,928,000 142,568,400
- --------------------------------------------------------------------------------
Sprint Corp. 365,200 8,647,936
- --------------------------------------------------------------------------------
Verizon
Communications, Inc. 4,409,910 158,624,463
----------------
382,967,939
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.7%
AT&T Corp. 557,500 10,832,225
- --------------------------------------------------------------------------------
Nextel Communications,
Inc., Cl. A 1 2,248,700 66,179,241
- --------------------------------------------------------------------------------
Telephone & Data
Systems, Inc. 57,200 5,005,000
----------------
82,016,466
- --------------------------------------------------------------------------------
UTILITIES--0.6%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
American Electric
Power Co., Inc. 451,700 15,086,780
- --------------------------------------------------------------------------------
CMS Energy Corp. 1 257,000 3,119,980
- --------------------------------------------------------------------------------
Duke Energy Corp. 244,700 6,604,453
- --------------------------------------------------------------------------------
Edison International, Inc. 210,500 6,837,040
- --------------------------------------------------------------------------------
FPL Group, Inc. 15,400 1,221,990
- --------------------------------------------------------------------------------
NRG Energy, Inc. 1 148,000 5,699,480
- --------------------------------------------------------------------------------
PG&E Corp. 1 446,200 15,697,316
- --------------------------------------------------------------------------------
Progress Energy, Inc. 53,400 2,314,356
- --------------------------------------------------------------------------------
Progress Energy, Inc.,
Contingent Value
Obligation 1,2 680,100 91,814
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES Continued
Public Service
Enterprise Group, Inc. 64,600 $ 3,523,930
- --------------------------------------------------------------------------------
Reliant Energy, Inc. 1 116,000 1,390,840
- --------------------------------------------------------------------------------
TXU Corp. 187,000 14,258,750
----------------
75,846,729
- --------------------------------------------------------------------------------
GAS UTILITIES--0.0%
Atmos Energy Corp. 88,800 2,448,216
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.0%
Dynegy, Inc. 1 280,600 1,167,294
----------------
Total Common Stocks
(Cost $10,083,304,831) 12,120,379,684
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Wachovia Corp.,
Dividend Equalization
Preferred Shares 1,2
(Cost $0) 100,000 100
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Dime Bancorp, Inc.
Wts., Exp. 1/2/10 1 485,800 68,012
- --------------------------------------------------------------------------------
Lucent Technologies,
Inc. Wts., Exp. 12/10/07 1 68,554 61,013
----------------
Total Rights, Warrants
and Certificates (Cost $0) 129,025
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--0.2%
- --------------------------------------------------------------------------------
Victory Receivables
Corp., 2.55%, 3/1/05 3
(Cost $25,000,000) $25,000,000 25,000,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.4%
- --------------------------------------------------------------------------------
Undivided interest of 2.62% in joint
repurchase agreement (Principal Amount/
Value $1,752,409,000, with a maturity
value of $1,752,535,563) with UBS
Warburg LLC, 2.60%, dated 2/28/05, to be
repurchased at $45,933,317 on 3/1/05,
collateralized by Federal National
Mortgage Assn., 6%, 2/1/34, with
a value of $1,789,443,338
(Cost $45,930,000) 45,930,000 45,930,000
48 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
VALUE
SEE NOTE 1
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
Investments Purchased with Cash
Collateral from Securities Loaned)
(Cost $10,154,234,831) $12,191,438,809
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED--0.8%
- --------------------------------------------------------------------------------
COMMERCIAL PAPER--0.1%
Lexington Parker
Capital Co. LLC,
2.828%, 5/17/05 4 $ 6,954,650 6,954,650
- --------------------------------------------------------------------------------
FUNDING AGREEMENT/GIC--0.0%
Allstate Life Insurance,
2.78%, 3/1/05 4 1,000,000 1,000,000
- --------------------------------------------------------------------------------
MASTER FLOATING NOTES--0.0%
Bear Stearns, 2.805%,
3/1/05 4 500,000 500,000
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--0.0%
Countrywide Home
Loans, 2.935% Unsec
Unsub. Nts., Series M,
5/20/05 4 1,040,743 1,040,743
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.7%
Undivided interest of 3.38% in joint
repurchase agreement (Principal Amount
/Value $2,550,000,000, with a maturity
value of $2,550,190,542) with Nomura
Securities, 2.69%, dated 2/28/05, to
be repurchased at $86,116,010 on 3/1/05,
collateralized by U.S. Government
Mortgage Agencies, 2.88%-10.25%,
7/15/05-2/15/47, with a value
of $2,640,231,121 4 $86,109,576 $ 86,109,576
----------------
Total Investments Purchased with
Cash Collateral from Securities
Loaned (Cost $95,604,969) 95,604,969
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $10,249,839,800) 100.6% 12,287,043,778
- --------------------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS (0.6) (77,624,590)
-------------------------------
NET ASSETS 100.0% $12,209,419,188
===============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid security. The aggregate value of illiquid securities as of February
28, 2005 was $91,914, which represents less than 0.01% of the Fund's net assets.
See Note 6 of Notes to Financial Statements.
3. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $25,000,000, or 0.20% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Directors.
4. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 7 of Notes to Financial
Statements.
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 February 28, 2005. There were no
affiliate securities held by the Fund as of February 28, 2005. Transactions
during the period in which the the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
AUGUST 31, 2004 ADDITIONS REDUCTIONS FEB. 28, 2005
- --------------------------------------------------------------------------------
Frontier Oil Corp.* 1,510,700 -- 519,000 991,700
DIVIDEND REALIZED
INCOME GAIN
- --------------------------------------------------------------------------------
Frontier Oil Corp.* $165,054 $11,067,115
* No longer an affiliate as of February 28, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
49 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 28, 2005
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $93,492,483)
(cost $10,249,839,800)--see accompanying statement of investments $ 12,287,043,778
- ---------------------------------------------------------------------------------------------------------
Cash 6,474,941
- ---------------------------------------------------------------------------------------------------------
Collateral for securities loaned 156,100
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 232,225,806
Interest and dividends 20,474,975
Shares of capital stock sold 8,862,151
Other 286,933
-----------------
Total assets 12,555,524,684
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 95,761,069
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 216,443,692
Shares of capital stock redeemed 25,389,569
Distribution and service plan fees 4,645,014
Transfer and shareholder servicing agent fees 1,952,974
Shareholder communications 1,581,081
Directors' compensation 174,178
Other 157,919
-----------------
Total liabilities 346,105,496
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 12,209,419,188
=================
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 3,485,636
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 11,008,602,223
- ---------------------------------------------------------------------------------------------------------
Accumulated net investment income 15,423,931
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (855,296,580)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 2,037,203,978
-----------------
NET ASSETS $ 12,209,419,188
=================
50 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $7,919,565,418 and
224,055,799 shares of capital stock outstanding) $35.35
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $37.51
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,388,577,322 and 69,601,978 shares
of capital stock outstanding) $34.32
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $1,280,170,893 and 37,318,913 shares
of capital stock outstanding) $34.30
- ---------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $171,280,490 and 4,900,867 shares
of capital stock outstanding) $34.95
- ---------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $449,825,065 and 12,686,008 shares of capital stock outstanding) $35.46
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
51 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2005
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $27,002) $ 154,188,787
Affiliated companies 165,054
- --------------------------------------------------------------------------------------
Interest 1,377,375
- --------------------------------------------------------------------------------------
Portfolio lending fees 165,153
--------------
Total investment income 155,896,369
- --------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------
Management fees 27,504,018
- --------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 9,363,551
Class B 12,263,665
Class C 6,276,638
Class N 405,594
- --------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 7,510,252
Class B 2,838,782
Class C 1,222,594
Class N 247,907
Class Y 277,626
- --------------------------------------------------------------------------------------
Shareholder communications:
Class A 766,124
Class B 498,028
Class C 128,318
Class N 6,159
- --------------------------------------------------------------------------------------
Directors' compensation 96,768
- --------------------------------------------------------------------------------------
Custodian fees and expenses 45,996
- --------------------------------------------------------------------------------------
Other 234,358
--------------
Total expenses 69,686,378
Less reduction to custodian expenses (18,082)
Less payments and waivers of expenses (469)
--------------
Net expenses 69,667,827
- --------------------------------------------------------------------------------------
NET INVESTMENT INCOME 86,228,542
52 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- -----------------------------------------------------------------------------------------
Net realized gain on:
Investments:
Unaffiliated companies $ 458,886,823
Affiliated companies 11,067,115
Foreign currency transactions 1,244,169
--------------
Net realized gain 471,198,107
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 493,516,471
Translation of assets and liabilities denominated in foreign currencies 513,969
--------------
Net change in unrealized appreciation 494,030,440
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,051,457,089
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
53 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
(UNAUDITED) 2004
- --------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------
Net investment income $ 86,228,542 $ 59,524,857
- --------------------------------------------------------------------------------------------------------
Net realized gain 471,198,107 1,310,210,960
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 494,030,440 (72,947,699)
----------------------------------------
Net increase in net assets resulting from operations 1,051,457,089 1,296,788,118
- --------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (92,759,468) (47,938,253)
Class B (6,841,043) --
Class C (6,104,311) --
Class N (1,600,231) (486,743)
Class Y (9,431,972) (4,473,289)
- --------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital stock transactions:
Class A (44,101,336) (415,275,359)
Class B (370,116,393) (688,965,854)
Class C (61,415,313) (71,809,797)
Class N 7,991,836 62,792,249
Class Y (163,997,848) 91,154,911
- --------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------
Total increase 303,081,010 221,785,983
- --------------------------------------------------------------------------------------------------------
Beginning of period 11,906,338,178 11,684,552,195
----------------------------------------
End of period (including accumulated net investment income
of $15,423,931 and $45,932,414, respectively) $ 12,209,419,188 $ 11,906,338,178
========================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS A (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 32.78 $ 29.62 $ 27.90 $ 32.15 $ 45.41 $ 42.89
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .28 1 .26 .22 .16 .14 .21
Net realized and unrealized gain
(loss) 2.70 3.10 1.69 (4.29) (11.18) 6.79
-------------------------------------------------------------------------------------------
Total from investment operations 2.98 3.36 1.91 (4.13) (11.04) 7.00
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.41) (.20) (.19) (.07) (.12) --
Distributions from net realized gain -- -- -- (.05) (2.10) (4.48)
-------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.41) (.20) (.19) (.12) (2.22) (4.48)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 35.35 $ 32.78 $ 29.62 $ 27.90 $ 32.15 $ 45.41
===========================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 9.12% 11.37% 6.93% (12.90)% (24.85)% 17.74%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $7,919,565 $7,384,256 $7,033,312 $6,443,983 $7,320,747 $9,264,943
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $7,715,541 $7,521,103 $6,310,359 $7,203,226 $7,954,409 $8,428,173
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.66% 0.75% 0.87% 0.52% 0.47% 0.54%
Total expenses 0.92% 4 0.93% 4,5 0.97% 4 0.99% 4 0.86% 4 0.90% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 76% 94% 78% 76% 73%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
55 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS B (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 31.67 $ 28.68 $ 27.04 $ 31.34 $ 44.50 $ 42.42
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .14 1 (.21) (.13) (.20) (.13) (.08)
Net realized and unrealized gain
(loss) 2.60 3.20 1.77 (4.05) (10.93) 6.64
-------------------------------------------------------------------------------------------
Total from investment operations 2.74 2.99 1.64 (4.25) (11.06) 6.56
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.09) -- -- -- -- --
Distributions from net realized gain -- -- -- (.05) (2.10) (4.48)
-------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.09) -- -- (.05) (2.10) (4.48)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 34.32 $ 31.67 $ 28.68 $ 27.04 $ 31.34 $ 44.50
===========================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.66% 10.43% 6.06% (13.58)% (25.39)% 16.84%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $2,388,577 $2,558,206 $2,941,765 $3,510,800 $5,404,510 $8,367,040
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,480,226 $2,884,434 $2,964,666 $4,607,653 $6,630,335 $7,628,232
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.85% (0.10)% 0.04% (0.25)% (0.29)% (0.22)%
Total expenses 1.73% 4 1.78% 4,5 1.81% 4 1.75% 4 1.61% 4 1.66% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 76% 94% 78% 76% 73%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS C (UNAUDITED) 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 31.71 $ 28.69 $ 27.03 $ 31.33 $ 44.50 $ 42.41
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .15 1 (.03) -- (.11) (.11) (.08)
Net realized and unrealized gain
(loss) 2.60 3.05 1.66 (4.14) (10.96) 6.65
-------------------------------------------------------------------------------------------
Total from investment operations 2.75 3.02 1.66 (4.25) (11.07) 6.57
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.16) -- -- -- -- --
Distributions from net realized gain -- -- -- (.05) (2.10) (4.48)
-------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.16) -- -- (.05) (2.10) (4.48)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 34.30 $ 31.71 $ 28.69 $ 27.03 $ 31.33 $ 44.50
===========================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.68% 10.53% 6.14% (13.58)% (25.42)% 16.87%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $1,280,171 $1,241,930 $1,188,826 $1,198,517 $1,562,452 $2,213,568
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,271,451 $1,278,659 $1,111,131 $1,432,566 $1,825,540 $2,004,263
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.91% (0.01)% 0.09% (0.24)% (0.29)% (0.23)%
Total expenses 1.67% 4 1.70% 4,5 1.74% 4 1.75% 4 1.61% 4 1.67% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 76% 94% 78% 76% 73%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
57 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS N (UNAUDITED) 2004 2003 2002 2000
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 32.39 $ 29.33 $ 27.72 $ 32.09 $ 34.36
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .22 2 .15 .20 .12 .02
Net realized and unrealized gain
(loss) 2.67 3.05 1.65 (4.31) (2.29)
---------------------------------------------------------------------
Total from investment operations 2.89 3.20 1.85 (4.19) (2.27)
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.33) (.14) (.24) (.13) --
Distributions from net realized gain -- -- -- (.05) --
---------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.33) (.14) (.24) (.18) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 34.95 $ 32.39 $ 29.33 $ 27.72 $ 32.09
=====================================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.93% 10.93% 6.78% (13.15)% (6.61)%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $171,280 $150,955 $ 79,188 $ 43,464 $ 7,641
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $164,316 $122,478 $ 60,950 $ 28,141 $ 2,672
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.31% 0.38% 0.65% 0.28% 0.36%
Total expenses 1.26% 1.31% 1.23% 1.24% 1.16%
Expenses after payments and waivers
and reduction to custodian expenses N/A 5,6 N/A 5,6 1.18% N/A 5 N/A 5
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 76% 94% 78% 76%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
58 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 28, 2005 AUGUST 31,
CLASS Y (UNAUDITED) 2004 2003 2002 2001 2001 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 32.93 $ 29.75 $ 28.02 $ 32.28 $ 45.64 $ 43.00
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .36 1 .34 .11 .19 .17 .24
Net realized and unrealized gain
(loss) 2.70 3.13 1.86 (4.28) (11.22) 6.88
-------------------------------------------------------------------------------------------
Total from investment operations 3.06 3.47 1.97 (4.09) (11.05) 7.12
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.53) (.29) (.24) (.12) (.21) --
Distributions from net realized gain -- -- -- (.05) (2.10) (4.48)
-------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.53) (.29) (.24) (.17) (2.31) (4.48)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 35.46 $ 32.93 $ 29.75 $ 28.02 $ 32.28 $ 45.64
===========================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 9.31% 11.69% 7.11% (12.74)% (24.76)% 18.00%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $ 449,825 $ 570,991 $ 441,460 $ 225,298 $ 225,475 $ 260,289
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 546,008 $ 558,130 $ 242,029 $ 227,835 $ 239,222 $ 205,586
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.08% 1.07% 1.01% 0.74% 0.60% 0.77%
Total expenses 0.56% 0.60% 0.87% 0.92% 0.79% 4 0.66%
Expenses after payments and waivers
and reduction to custodian expenses N/A 5 N/A 5 0.83% 0.78% 0.73% N/A 5
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 76% 94% 78% 76% 73%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
59 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Main Street 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 a high total return. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Directors. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Directors. Short-term "money
market type"
60 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Directors.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
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.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis 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 comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
61 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal 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 dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of February 28, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $755,029,939 expiring by
2013. This estimated capital loss carryforward represents carryforward as of the
end of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year. As of
February 28, 2005, it is estimated that the Fund will utilize $471,198,107 of
capital loss carryforward to offset realized capital gains. During the year
ended August 31, 2004, the Fund utilized $941,293,880 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of August 31, 2004, the Fund had available for federal income tax purposes an
unused capital loss carryforward as follows:
EXPIRING
----------------------------
2011 $1,226,228,046
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION. The Board of Directors has adopted a deferred
compensation plan for independent directors that enables directors to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Director under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Director. The Fund purchases shares of the funds selected for
deferral by the Director in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of directors' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at
62 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
the fair market value of the securities received. Interest income, which
includes accretion of discount and amortization of premium, is accrued as
earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. 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. SHARES OF CAPITAL STOCK
The Fund has authorized 840 million shares of $.01 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 22,081,464 $ 756,879,239 44,245,000 $ 1,438,726,778
Dividends and/or
distributions reinvested 2,447,591 85,151,676 1,388,214 44,020,257
Acquisition-Note 8 -- -- 484,771 14,962,004
Redeemed (25,728,545) (886,132,251) (58,289,882) (1,912,984,398)
---------------------------------------------------------------------------
Net decrease (1,199,490) $ (44,101,336) (12,171,897) $ (415,275,359)
===========================================================================
- --------------------------------------------------------------------------------------------------------------------
CLASS B
Sold 3,262,107 $ 108,342,550 9,896,057 $ 310,880,353
Dividends and/or
distributions reinvested 186,910 6,325,049 -- --
Acquisition-Note 8 -- -- 345,711 10,354,684
Redeemed (14,629,204) (484,783,992) (32,038,724) (1,010,200,891)
---------------------------------------------------------------------------
Net decrease (11,180,187) $ (370,116,393) (21,796,956) $ (688,965,854)
===========================================================================
63 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK Continued
SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 1,895,233 $ 63,030,208 5,098,506 $ 160,379,276
Dividends and/or
distributions reinvested 155,120 5,247,715 -- --
Acquisition-Note 8 -- -- 367,578 11,042,894
Redeemed (3,898,762) (129,693,236) (7,733,394) (243,231,967)
---------------------------------------------------------------------------
Net decrease (1,848,409) $ (61,415,313) (2,267,310) $ (71,809,797)
===========================================================================
- --------------------------------------------------------------------------------------------------------------------
CLASS N
Sold 1,015,423 $ 34,410,549 2,668,652 $ 86,070,838
Dividends and/or
distributions reinvested 45,108 1,553,077 15,059 473,180
Acquisition-Note 8 -- -- 677,940 20,916,882
Redeemed (819,640) (27,971,790) (1,401,462) (44,668,651)
---------------------------------------------------------------------------
Net increase 240,891 $ 7,991,836 1,960,189 $ 62,792,249
===========================================================================
- --------------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 6,799,680 $ 235,425,767 15,199,324 $ 503,145,210
Dividends and/or
distributions reinvested 270,488 9,431,944 140,639 4,469,511
Acquisition-Note 8 -- -- 5,635 171,061
Redeemed (11,721,827) (408,855,559) (12,846,991) (416,630,871)
---------------------------------------------------------------------------
Net increase (decrease) (4,651,659) $ (163,997,848) 2,498,607 $ 91,154,911
===========================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended February 28, 2005, were
$5,316,998,505 and $5,923,848,648, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.65% of the first $200 million of average annual net assets of
the Fund, 0.60% of the next $150 million, 0.55% of the next $150 million, and
0.45% of average annual net assets in excess of $500 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended February 28, 2005, the Fund paid
$12,332,894 to OFS for services to the Fund.
64 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Directors and its independent directors
must determine whether the Distributor shall be entitled to payment from the
Fund of all or a portion of the service fee and/or asset-based sales charge in
respect to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at February 28,
2005 for Class B, Class C and Class N shares were $36,207,477, $28,773,251 and
$2,374,201, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
65 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------------------------------
February 28, 2005 $1,386,403 $27,710 $2,479,299 $51,525 $81,011
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the six months ended February 28,
2005, OFS waived $469 for Class N shares. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of February 28, 2005, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of February 28, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 10% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities.
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market
66 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
value of the loaned securities is determined at the close of business of the
funds and any additional required collateral is delivered to the Fund on the
next business day. If the borrower defaults on its obligation to return the
securities loaned because of insolvency or other reasons, the Fund could
experience delays and cost in recovering the securities loaned or in gaining
access to the collateral. Cash collateral is invested in cash equivalents. The
Fund retains a portion of the interest earned from the collateral. The Fund also
continues to receive interest or dividends paid on the securities loaned. As of
February 28, 2005, the Fund had on loan securities valued at $93,492,483.
Collateral of $95,761,069 was received for the loans, of which, $95,604,969 was
received in cash and subsequently invested in approved instruments.
- --------------------------------------------------------------------------------
8. ACQUISITIONS OF OPPENHEIMER TRINITY CORE FUND AND OPPENHEIMER SELECT MANAGERS
MERCURY ADVISORS S&P 500 INDEX FUND
OPPENHEIMER TRINITY CORE FUND. On September 4, 2003, the Fund acquired all of
the net assets of Oppenheimer Trinity Core Fund, pursuant to an Agreement and
Plan of Reorganization approved by the Oppenheimer Trinity Core Fund
shareholders on August 29, 2003. The Fund issued (at an exchange ratio of
0.253882 for Class A, 0.253734 for Class B, 0.254265 for Class C, 0.254948 for
Class N and 0.261826 for Class Y of the Fund to one share of Oppenheimer Trinity
Core Fund), 172,551; 87,563; 62,625; 25,461 and 5,604 shares of beneficial
interest for Class A, Class B, Class C, Class N and Class Y, respectively,
valued at $5,214,489, $2,561,203, $1,833,025, $761,793 and $170,083 in exchange
for the net assets, resulting in combined Class A net assets of $7,168,850,638,
Class B net assets of $2,939,047,258, Class C net assets of $1,205,256,245,
Class N net assets of $81,166,505 and Class Y net assets of $465,470,533 on
September 4, 2003. The net assets acquired included net unrealized appreciation
of $1,073,398 and unused capital loss carryforward of $2,604,388 potential
utilization subject to tax limitation. The exchange qualified as a tax-free
reorganization for federal income tax purposes.
- --------------------------------------------------------------------------------
OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500 INDEX FUND. On October 16,
2003, the Fund acquired all of the net assets of Oppenheimer Select Managers
Mercury Advisors S&P 500 Index Fund, pursuant to an Agreement and Plan of
Reorganization approved by the Oppenheimer Select Managers Mercury Advisors S&P
500 Index Fund shareholders on October 10, 2003. The Fund issued (at an exchange
ratio of 0.254787 for Class A, 0.260413 for Class B, 0.260086 for Class C,
0.256107 for Class N and 0.258975 for Class Y of the Fund to one share of
Oppenheimer Select Managers Mercury Advisors S&P 500 Index Fund), 312,220;
258,148; 304,963; 652,479 and 31 shares of beneficial interest for Class A,
Class B, Class C, Class N and Class Y, respectively, valued at $9,747,515,
$7,793,481, $9,209,869, $20,155,089 and $978 in exchange for the net assets,
resulting in combined Class A net assets of $7,382,484,399, Class B net assets
of $2,980,592,414, Class C net assets of $1,240,922,954, Class N net assets of
$107,133,453 and Class Y net assets of $474,429,948 on October 16, 2003. The net
assets acquired included net unrealized appreciation of $497,974 and no unused
capital loss carryforward. The exchange qualified as a tax-free reorganization
for federal income tax purposes.
67 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
OPPENHEIMER MAIN STREET FUND (UNDERLYING FUND)
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor (collectively, the
"Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal
Defendants") including the Fund, 30 present and former Directors or Trustees and
8 present and former officers of the funds. This complaint, initially filed in
the U.S. District Court for the Southern District of New York on January 10,
2005 and amended on March 4, 2005, consolidates into a single action and amends
six individual previously-filed putative derivative and class action complaints.
Like those prior complaints, the complaint alleges that the Manager charged
excessive fees for distribution and other costs, improperly used assets of the
funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the funds, and failed to properly disclose the use
of assets of the funds to make those payments in violation of the Investment
Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those
prior complaints, the complaint further alleges that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers breached
their fiduciary duties to shareholders of the funds under the Investment Company
Act of 1940 and at common law. The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory agreements, an
accounting of all fees paid, and an award of attorneys' fees and litigation
expenses.
The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the funds named as Nominal
Defendants, and the Directors/Trustees of those funds have meritorious defenses
against the claims asserted. The Oppenheimer defendants intend to defend these
lawsuits vigorously and to contest any claimed liability. The Oppenheimer
defendants believe that it is premature to render any opinion as to the
likelihood of an outcome unfavorable to them and that no estimate can yet be
made with any degree of certainty as to the amount or range of any potential
loss.
68 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. DISCLOSURE OF PROXY POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES
Not applicable.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The registrant's Board of Trustees has established a Governance Committee,
one function of which is to create and oversee the process by which shareholders
can submit nominees for positions on the Board. The Governance Committee has not
yet adopted a charter, but anticipates that it will do so in the coming months.
The Committee has temporarily adopted the process previously adopted by the
Audit Committee regarding shareholder submission of nominees for board
positions. Shareholders may submit names of individuals, accompanied by complete
and properly supported resumes, for the Governance Committee's consideration by
mailing such information to the Committee in care of the Fund. The Committee may
consider such persons at such time as it meets to consider possible nominees.
The Committee, however, reserves sole discretion to determine the candidates for
trustees and independent trustees to recommend to the Board and/or shareholders
and may identify candidates other than those submitted by Shareholders. The
Committee may, but need not, consider the advice and recommendation of the
Manager and its affiliates in selecting nominees. The full Board elects new
trustees except for those instances when a shareholder vote is required.
Shareholders who desire to communicate with the Board should address
correspondence to the Board of Trustees of the registrant, or to an individual
Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial,
Colorado 80112 and may submit their correspondence electronically at
WWW.OPPENHEIMERFUNDS.COM under the caption "contact us." If your correspondence
is intended for a particular Trustee, please indicate the name of the Trustee
for whom it is intended. The sender should indicate in the address whether it is
intended for the entire board, the Independent Trustees as group, or to an
individual Trustee. The Governance Committee will consider if a different
process should be recommended to the Board.
ITEM 11. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-3(c)) as of February 28, 2005,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and communicated
to registrant's management, including its principal executive
officer and principal financial officer, to allow timely decisions
regarding required disclosure, and (b) is recorded, processed,
summarized and reported, within the time periods specified in the
rules and forms adopted by the U.S. Securities and Exchange
Commission.
(b) There have been no changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Principal Protected Main Street Fund
By: ____________________________
John V. Murphy
Chief Executive Officer
Date: April 11, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: ____________________________
John V. Murphy
Chief Executive Officer
Date: April 11, 2005
By: ____________________________
Brian W. Wixted
Chief Financial Officer
Date: April 11, 2005