-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MuV2a7rcUGtGIILm6yaGffOM9YaVN+gEYnP0c+tsXEX5l11DUgkEyI7iS94JExFx rebTd0goLX7+h8TpHPdOwA== 0000935069-05-000967.txt : 20050426 0000935069-05-000967.hdr.sgml : 20050426 20050426153418 ACCESSION NUMBER: 0000935069-05-000967 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050228 FILED AS OF DATE: 20050426 DATE AS OF CHANGE: 20050426 EFFECTIVENESS DATE: 20050426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER PRINCIPAL PROTECTED TRUST CENTRAL INDEX KEY: 0001214591 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-21281 FILM NUMBER: 05772936 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 N-CSRS 1 rs676_15521ncsr.txt RS676_15521NCSR.TXT 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 EX-99.CERT 2 rs676_15521ex99cert.txt RS676_15521EX99CERT.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, JOHN V. MURPHY, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Principal Protected Main Street Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2005 ---------------------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, BRIAN W. WIXTED, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Principal Protected Main Street Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 11, 2005 ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 3 rs676_15521ex906cert.txt RS676_15521EX906CERT.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer Principal Protected Main Street Fund (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended February 28, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Principal Protected Oppenheimer Principal Protected Main Street Fund Main Street Fund - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: April 11, 2005 Date: April 11, 2005 -----END PRIVACY-ENHANCED MESSAGE-----