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 811-114495
OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
(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: OCTOBER 7, 2004 - FEBRUARY 28, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III(R) PORTFOLIO ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Fixed Income 44.7%
Equity 42.9
Cash Equivalents 12.4
Portfolio holdings and allocations are subject to change. Percentages are as of
February 28, 2005, and are based on total investments.
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OPPENHEIMER MAIN STREET FUND(R) (UNDERLYING FUND) SECTOR ALLOCATION
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Financials 21.9%
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Information Technology 17.0
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Consumer Discretionary 12.1
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Health Care 11.9
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Energy 10.9
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Industrials 10.3
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Consumer Staples 8.2
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Telecommunication Services 3.8
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Materials 3.2
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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.
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11 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
TOP HOLDINGS AND ALLOCATIONS
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OPPENHEIMER MAIN STREET FUND(R) (UNDERLYING FUND)
TOP TEN COMMON STOCK INDUSTRIES
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Oil & Gas 10.1%
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Diversified Financial Services 8.4
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Commercial Banks 7.3
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Pharmaceuticals 6.9
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Computers & Peripherals 5.2
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Industrial Conglomerates 4.7
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Insurance 4.1
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Software 3.9
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Media 3.9
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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
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Exxon Mobil Corp. 4.4%
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General Electric Co. 3.9
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Citigroup, Inc. 2.7
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Microsoft Corp. 2.7
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Bank of America Corp. 2.4
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Pfizer, Inc. 2.2
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Johnson & Johnson 2.0
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International Business Machines Corp. 1.8
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Intel Corp. 1.8
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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
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12 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES
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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 (December 16, 2011) 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 III
NOTES
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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 October 7, 2004 through December
10, 2004. From December 16, 2004, and until December 16, 2011, 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 III
FUND EXPENSES
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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 III
FUND EXPENSES
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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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(9/1/04) (2/28/05) FEBRUARY 28, 2005 1,2
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Class A Actual $ 1,000.00 $ 997.50 $ 4.98
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Class A Hypothetical 1,000.00 1,018.55 6.33
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Class B Actual 1,000.00 994.90 7.66
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Class B Hypothetical 1,000.00 1,015.17 9.74
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Class C Actual 1,000.00 995.10 7.51
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Class C Hypothetical 1,000.00 1,015.37 9.54
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Class N Actual 1,000.00 997.00 5.61
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Class N Hypothetical 1,000.00 1,017.75 7.13
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses are equal to the Fund's annualized expense ratio for
that class, multiplied by the average account value over the period,
multiplied by 144/365 [to reflect the period from October 7, 2004
(commencement of operations) to February 28, 2005].
2. Hypothetical expenses paid are equal to the Fund's annualized expense
ratio for that class, multiplied by 181/365 (to reflect the one-half
year period). Those expense ratios for the period from October 7, 2004
(commencement of operations) to February 28, 2005 are as follows:
CLASS EXPENSE RATIOS
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Class A 1.26%
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Class B 1.94
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Class C 1.90
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Class N 1.42
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.
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16 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
STATEMENT OF INVESTMENTS February 28, 2005 / Unaudited
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VALUE
SHARES SEE NOTE 1
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INVESTMENTS IN AFFILIATED COMPANIES EQUITY FUNDS--42.8%
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Oppenheimer Main Street Fund, Cl. Y (Cost $36,882,256) 1,044,231 $ 37,028,448
PRINCIPAL
AMOUNT
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U.S. GOVERNMENT OBLIGATIONS--44.7%
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U.S. Treasury Bonds, STRIPS, 4.03%, 11/15/11 1,2 (Cost $39,102,559) $ 51,100,000 38,619,387
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JOINT REPURCHASE AGREEMENTS--12.4% 3
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Undivided interest of 2.40% 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 $10,715,774 on 3/1/05, collateralized
by Federal National Mortgage Assn., 6%, 2/1/34, with a value of $456,527,652
(Cost $10,715,000) 10,715,000 10,715,000
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TOTAL INVESTMENTS, AT VALUE (COST $86,699,815) 99.9% 86,362,835
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OTHER ASSETS NET OF LIABILITIES 0.1 57,100
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NET ASSETS 100.0% $ 86,419,935
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FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Zero coupon bond reflects effective yield on the date of purchase.
2. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts with an aggregate
market value of $680,185. See Note 5 of Notes to Financial Statements.
3. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
STATEMENT OF ASSETS AND LIABILITIES Unaudited
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February 28, 2005
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ASSETS
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Investments, at value (including cost and market value of $10,715,000 in
repurchase agreements) (cost $86,699,815)--see accompanying statement of
investments $ 86,362,835
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Cash 313,693
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Receivables and other assets:
Interest 774
Other 3,023
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Total assets 86,680,325
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LIABILITIES
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Payables and other liabilities:
Warranty agreement fees 83,792
Futures margins 69,445
Distribution and service plan fees 34,939
Shareholder communications 34,172
Legal, auditing and other professional fees 10,536
Registration and filing fees 10,241
Transfer and shareholder servicing agent fees 5,141
Trustees' compensation 569
Shares of beneficial interest redeemed 420
Other 11,135
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Total liabilities 260,390
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NET ASSETS $ 86,419,935
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COMPOSITION OF NET ASSETS
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Par value of shares of beneficial interest $ 2,895
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Additional paid-in capital 86,911,814
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Accumulated net investment income 12,435
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Accumulated net realized loss on investments (266,879)
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Net unrealized depreciation on investments (240,330)
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NET ASSETS $ 86,419,935
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18 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
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NET ASSET VALUE PER SHARE
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Class A Shares:
Net asset value and redemption price per share (based on net assets of
$41,973,945 and 1,404,886 shares of beneficial interest outstanding) $ 29.88
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $ 31.70
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Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $21,276,467
and 713,357 shares of beneficial interest outstanding) $ 29.83
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Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $21,645,017
and 725,610 shares of beneficial interest outstanding) $ 29.83
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Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,524,506
and 51,036 shares of beneficial interest outstanding) $ 29.87
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
STATEMENT OF OPERATIONS UNAUDITED
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For the Period Ended February 28, 2005 1
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INVESTMENT INCOME
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Interest $ 501,773
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EXPENSES
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Management fees 121,849
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Distribution and service plan fees:
Class A 30,306
Class B 61,361
Class C 59,209
Class N 2,028
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Transfer and shareholder servicing agent fees:
Class A 7,549
Class B 7,082
Class C 3,374
Class N 207
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Shareholder communications:
Class A 25,304
Class B 7,056
Class C 5,470
Class N 380
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Warranty agreement fees 106,744
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Legal, auditing and other professional fees 12,007
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Trustees' compensation 1,741
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Custodian fees and expenses 300
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Other 22,017
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Total expenses 473,984
Less reduction to custodian expenses (300)
Less payments and waivers of expenses (81,837)
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Net expenses 391,847
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NET INVESTMENT INCOME 109,926
20 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
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REALIZED AND UNREALIZED GAIN (LOSS)
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Net realized loss on:
Investments $ (31,597)
Closing of futures contracts (235,282)
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Net realized loss (266,879)
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Net change in unrealized depreciation on:
Investments (336,980)
Futures contracts 96,650
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Net change in unrealized depreciation (240,330)
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NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (397,283)
===========
1. For the period from October 7, 2004 (commencement of operations) to February
28, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
STATEMENTS OF CHANGES IN NET ASSETS
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PERIOD
ENDED
FEBRUARY 28, 2005
(UNAUDITED) 1
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OPERATIONS
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Net investment income $ 109,926
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Net realized loss (266,879)
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Net change in unrealized depreciation (240,330)
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Net decrease in net assets resulting from operations (397,283)
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DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
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Dividends from net investment income:
Class A (65,951)
Class B (13,033)
Class C (16,445)
Class N (2,062)
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BENEFICIAL INTEREST TRANSACTIONS
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Net increase in net assets resulting from beneficial
interest transactions:
Class A 42,093,016
Class B 21,408,607
Class C 21,778,278
Class N 1,531,808
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NET ASSETS
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Total increase 86,316,935
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Beginning of period 103,000 2
--------------
End of period (including accumulated net investment income
of $12,435 at February 28, 2005) $ 86,419,935
==============
1. For the period from October 7, 2004 (commencement of operations) to February
28, 2005.
2. Reflects the value of the Manager's seed money investment on September 1,
2004.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
FINANCIAL HIGHLIGHTS
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CLASS A CLASS B
PERIOD PERIOD
ENDED ENDED
FEBRUARY 28, 2005 1 FEBRUARY 28, 2005 1
(UNAUDITED) (UNAUDITED)
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PER SHARE OPERATING DATA
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Net asset value, beginning of period $ 30.00 $ 30.00
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Income (loss) from investment operations:
Net investment income .11 2 .01 2
Net realized and unrealized loss (.18) (.16)
-------------------------------------
Total from investment operations (.07) (.15)
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Dividends and/or distributions to shareholders:
Dividends from net investment income (.05) (.02)
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Net asset value, end of period $ 29.88 $ 29.83
=====================================
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TOTAL RETURN, AT NET ASSET VALUE 3 (0.25)% (0.51)%
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RATIOS/SUPPLEMENTAL DATA
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Net assets, end of period (in thousands) $ 41,974 $ 21,276
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Average net assets (in thousands) $ 30,298 $ 15,611
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Ratios to average net assets: 4
Net investment income 0.77% 0.09%
Total expenses 1.60% 5 2.28% 6
Expenses after payments and waivers and reduction
to custodian expenses 1.26% 1.94%
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Portfolio turnover rate 23% 23%
1. For the period from October 7, 2004 (commencement of operations) to February
28, 2005.
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. Expenses paid including all underlying fund expenses were 1.80% for February
28, 2005.
6. Expenses paid including all underlying fund expenses were 2.48% for February
28, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
FINANCIAL HIGHLIGHTS Continued
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CLASS C CLASS N
PERIOD PERIOD
ENDED ENDED
FEBRUARY 28, 2005 1 FEBRUARY 28, 2005 1
(UNAUDITED) (UNAUDITED)
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PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 30.00 $ 30.00
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Income (loss) from investment operations:
Net investment income .02 2 .10 2
Net realized and unrealized loss (.17) (.19)
-------------------------------------
Total from investment operations (.15) (.09)
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Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.04)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.83 $ 29.87
=====================================
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TOTAL RETURN, AT NET ASSET VALUE 3 (0.49)% (0.30)%
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RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 21,645 $ 1,525
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 15,070 $ 1,033
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.15% 0.65%
Total expenses 2.23% 5 1.74% 6
Expenses after payments and waivers and reduction
to custodian expenses 1.90% 1.42%
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Portfolio turnover rate 23% 23%
1. For the period from October 7, 2004 (commencement of operations) to February
28, 2005.
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. Expenses paid including all underlying fund expenses were 2.43% for February
28, 2005.
6. Expenses paid including all underlying fund expenses were 1.94% for February
28, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES TO FINANCIAL STATEMENTS Unaudited
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1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Principal Protected Main Street Fund III (the Fund), a series of
Oppenheimer Principal Protected Trust III, 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 (October 7,
2004 to December 10, 2004). Shares are not offered during the Warranty Period
(December 16, 2004 to December 16, 2011) to the Maturity Date (December 16,
2011) 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 Under- lying 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 and Class C 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. 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 90 months after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
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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.
25 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 period ended February 28, 2005, the amount paid for Warranty
Agreement fees was $22,951.
- --------------------------------------------------------------------------------
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.
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
26 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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
27 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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:
PERIOD ENDED FEBRUARY 28, 2005 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 1,408,069 $ 42,287,322
Dividends and/or distributions reinvested 2,068 62,198
Redeemed (8,584) (256,504)
----------------------------
Net increase 1,401,553 $ 42,093,016
============================
- --------------------------------------------------------------------------------
CLASS B
Sold 720,320 $ 21,617,319
Dividends and/or distributions reinvested 391 11,752
Redeemed (7,387) (220,464)
----------------------------
Net increase 713,324 $ 21,408,607
============================
- --------------------------------------------------------------------------------
CLASS C
Sold 728,238 $ 21,857,729
Dividends and/or distributions reinvested 377 11,343
Redeemed (3,038) (90,794)
----------------------------
Net increase 725,577 $ 21,778,278
============================
- --------------------------------------------------------------------------------
CLASS N
Sold 50,935 $ 1,529,775
Dividends and/or distributions reinvested 68 2,033
Redeemed -- --
----------------------------
Net increase 51,003 $ 1,531,808
============================
1. For the period from October 7, 2004 (commencement of operations) to February
28, 2005.
2. The Fund sold 3,333 shares of Class A at a value of $100,000 and 33 shares of
Class B, Class C and Class N at a value of $1,000, respectively, to the Manager
upon seeding of the Fund on October 7, 2004.
- --------------------------------------------------------------------------------
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 period
ended February 28, 2005, were $36,882,256 and zero, respectively. There were
purchases of $46,482,638 and sales of $7,680,997 of U.S. government and
government agency obligations for the period ended February 28, 2005.
28 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
- --------------------------------------------------------------------------------
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. That fee will
apply during the Warranty Period and the Post-Warranty Period. The management
fee shall be reduced to 0.40% per annum of average annual net assets of the Fund
in any month during the Warranty Period following a month where the Fund's
investment in equity securities (including shares of the Underlying Fund) is, on
average, less than 10% of net assets, 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 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.
- --------------------------------------------------------------------------------
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 period ended February 28, 2005, the Fund paid
$13,071 to OFS for services to the Fund.
- --------------------------------------------------------------------------------
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all offering and
organizational costs associated with the registration and seeding of 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.
29 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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 B, Class C and Class N shares were $1,356,140, $291,840 and
$26,658, 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
PERIOD RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ------------------------------------------------------------------------------------------------
February 28, 2005 $ 210,399 $ -- $ 12,573 $ 810 $ --
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager will reimburse the Fund for
expenses equal to the Underlying Fund expenses 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 period ended February 28, 2005, the Manager reimbursed the Fund $48,940 for
such Underlying Fund expenses.
The Manager voluntarily agreed to waive its management fee and assume all
expenses of the Fund, with the exception of the 12b-1 fee, during the Offering
Period. During the period ended February 28, 2005, the Manager reimbursed the
Fund $32,897.
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.
30 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy
and sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of February 28, 2005, the Fund had outstanding futures contracts as follows:
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS FEBRUARY 28, 2005 APPRECIATION
- -----------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Standard & Poor's 500 Index 3/17/05 35 $ 10,535,875 $ 96,650
31 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. 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") excluding 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.
32 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
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.
33 | OPPENHEIMER PRINCIPAL PROTECTED MAIN STREET FUND III
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 III
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