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 811-4108
Oppenheimer Global Securities Fund/VA
(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.
498 Seventh Avenue, New York, New York 10018
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: December 31
Date of reporting period: January 1, 2003 - June 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF INVESTMENTS June 30, 2003 / Unaudited
Market Value
Shares See Note 1
- -----------------------------------------------------------------
Common Stocks--96.4%
- -----------------------------------------------------------------
Consumer Discretionary--15.2%
- -----------------------------------------------------------------
Automobiles--1.8%
Porsche AG, Preferred 76,827 $ 32,554,762
- -----------------------------------------------------------------
Hotels, Restaurants & Leisure--1.6%
International Game Technology 1 151,600 15,513,228
- -----------------------------------------------------------------
Panera Bread Co., Cl. A 1 124,300 4,972,000
- -----------------------------------------------------------------
Starbucks Corp. 1 348,400 8,542,768
----------------
29,027,996
- -----------------------------------------------------------------
Household Durables--1.1%
Sharp Corp. 1,645,000 21,111,347
- -----------------------------------------------------------------
Media--8.0%
Grupo Televisa SA,
Sponsored GDR 406,299 14,017,316
- -----------------------------------------------------------------
JC Decaux SA 1 485,714 6,079,690
- -----------------------------------------------------------------
Pearson plc 1,410,598 13,174,772
- -----------------------------------------------------------------
Reed Elsevier plc 2,032,496 16,912,158
- -----------------------------------------------------------------
Singapore Press Holdings Ltd. 1,376,033 14,299,491
- -----------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 25,771,102 43,553,162
- -----------------------------------------------------------------
Television Broadcasts Ltd. 4,640,832 16,633,593
- -----------------------------------------------------------------
Wolters Kluwer NV 1,067,650 12,873,377
- -----------------------------------------------------------------
Zee Telefilms Ltd. 4,768,900 9,046,235
----------------
146,589,794
- -----------------------------------------------------------------
Specialty Retail--2.7%
Circuit City Stores, Inc./
Circuit City Group 1,294,649 11,392,911
- -----------------------------------------------------------------
Gap, Inc. (The) 536,500 10,064,740
- -----------------------------------------------------------------
New Dixons Group plc 9,206,090 20,052,687
- -----------------------------------------------------------------
RadioShack Corp. 316,900 8,337,639
----------------
49,847,977
- -----------------------------------------------------------------
Consumer Staples--7.8%
- -----------------------------------------------------------------
Beverages--1.9%
Companhia de Bebidas das
Americas, ADR 548,615 11,164,315
- -----------------------------------------------------------------
Diageo plc 408,680 4,363,260
- -----------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 2,757,700 11,375,777
- -----------------------------------------------------------------
Grupo Modelo SA de CV,
Series C 3,708,000 8,466,079
----------------
35,369,431
- -----------------------------------------------------------------
Food & Staples Retailing--1.5%
Boots Group plc 1,024,420 10,962,547
- -----------------------------------------------------------------
Carrefour SA 188,190 9,223,489
- -----------------------------------------------------------------
Seven-Eleven Japan Co. Ltd. 332,000 8,267,166
----------------
28,453,202
Market Value
Shares See Note 1
- -----------------------------------------------------------------
Food Products--0.5%
Cadbury Schweppes plc 1,488,725 $ 8,794,698
- -----------------------------------------------------------------
Household Products--2.6%
Hindustan Lever Ltd. 4,257,900 16,350,813
- -----------------------------------------------------------------
Reckitt Benckiser plc 1,676,914 30,770,815
----------------
47,121,628
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Personal Products--1.3%
Gillette Co. 531,000 16,917,660
- -----------------------------------------------------------------
Shiseido Co. Ltd. 706,000 6,861,561
----------------
23,779,221
- -----------------------------------------------------------------
Energy--5.0%
- -----------------------------------------------------------------
Oil & Gas--5.0%
BP plc, ADR 414,469 17,415,987
- -----------------------------------------------------------------
Burlington Resources, Inc. 169,500 9,164,865
- -----------------------------------------------------------------
ChevronTexaco Corp. 230,572 16,647,298
- -----------------------------------------------------------------
Encana Corp. 351,017 13,356,084
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ENI SpA 542,800 8,209,182
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Husky Energy, Inc. 1,375,715 17,718,501
- -----------------------------------------------------------------
Total SA, B Shares 59,820 9,040,170
----------------
91,552,087
- -----------------------------------------------------------------
Financials--16.8%
- -----------------------------------------------------------------
Capital Markets--0.3%
Northern Trust Corp. 117,600 4,914,504
- -----------------------------------------------------------------
Commercial Banks--8.6%
ABN Amro Holding NV 1,442,900 27,588,288
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Australia & New Zealand
Banking Group Ltd. 728,743 9,095,293
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Bank One Corp. 946,539 35,192,320
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ICICI Bank Ltd., Sponsored ADR 1 1,713,750 12,458,963
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Royal Bank of Scotland
Group plc (The) 897,727 25,183,532
- -----------------------------------------------------------------
Societe Generale, Cl. A 410,090 25,995,162
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Wachovia Corp. 586,829 23,449,687
----------------
158,963,245
- -----------------------------------------------------------------
Diversified Financial Services--3.2%
American Express Co. 426,500 17,831,965
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Citigroup, Inc. 204,866 8,768,265
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Credit Saison Co. Ltd. 490,500 8,043,260
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MBNA Corp. 439,150 9,151,886
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MLP AG 1 361,428 5,395,596
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Schwab (Charles) Corp. 904,300 9,124,387
----------------
58,315,359
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Insurance--4.3%
ACE Ltd. 485,571 16,650,230
- -----------------------------------------------------------------
Aegon NV 1,676,205 16,784,867
3 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- -----------------------------------------------------------------
Insurance Continued
Allianz AG 227,657 $ 18,922,297
- -----------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 7,040 17,107,200
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Manulife Financial Corp. 367,013 10,315,530
----------------
79,780,124
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Thrifts & Mortgage Finance--0.4%
Fannie Mae 118,500 7,991,640
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Health Care--16.4%
- -----------------------------------------------------------------
Biotechnology--3.8%
Affymetrix, Inc. 1 430,600 8,487,126
- -----------------------------------------------------------------
Amgen, Inc. 1 279,400 18,563,336
- -----------------------------------------------------------------
Gilead Sciences, Inc. 1 355,480 19,757,578
- -----------------------------------------------------------------
Human Genome Sciences, Inc. 1 311,100 3,957,192
- -----------------------------------------------------------------
IDEC Pharmaceuticals Corp. 1 200,500 6,817,000
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Millennium Pharmaceuticals,
Inc. 1 295,600 4,649,788
- -----------------------------------------------------------------
Qiagen NV 1 832,493 7,026,551
----------------
69,258,571
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Health Care Equipment & Supplies--1.7%
Amersham plc 902,670 6,773,687
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Applera Corp./
Applied Biosystems Group 488,500 9,296,155
- -----------------------------------------------------------------
Essilor International SA 177,140 7,135,929
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Smith & Nephew plc 1,338,150 7,689,876
----------------
30,895,647
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Health Care Providers & Services--2.5%
Fresenius AG, Preference 240,392 11,359,629
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IMS Health, Inc. 536,800 9,657,032
- -----------------------------------------------------------------
Oxford Health Plans, Inc. 1 217,600 9,145,728
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Quest Diagnostics, Inc. 1 266,400 16,996,320
----------------
47,158,709
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Pharmaceuticals--8.4%
Aventis SA 272,780 15,007,660
- -----------------------------------------------------------------
Eisai Co. Ltd. 430,000 8,845,305
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Johnson & Johnson 322,780 16,687,726
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Mylan Laboratories, Inc. 294,100 10,225,857
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Novartis AG 414,975 16,420,701
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Pfizer, Inc. 525,819 17,956,719
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Sanofi-Synthelabo SA 614,209 35,971,672
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Schering-Plough Corp. 452,200 8,410,920
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Shionogi & Co. Ltd. 501,000 6,788,482
-----------------------------------------------------------------
Takeda Chemical Industries Ltd. 233,000 8,596,211
- -----------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd., Sponsored ADR 179,200 10,201,856
----------------
155,113,109
Market Value
Shares See Note 1
- -----------------------------------------------------------------
Industrials--5.6%
- -----------------------------------------------------------------
Aerospace & Defense--4.1%
Boeing Co. 289,100 $ 9,921,912
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Bombardier, Inc., Cl. B 1,573,900 5,293,632
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Empresa Brasileira de
Aeronautica SA (Embraer), ADR 918,334 17,540,180
- -----------------------------------------------------------------
Lockheed Martin Corp. 246,100 11,706,977
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Northrop Grumman Corp. 133,600 11,528,344
- -----------------------------------------------------------------
Raytheon Co. 579,600 19,034,064
----------------
75,025,109
- -----------------------------------------------------------------
Commercial Services & Supplies--1.0%
Rentokil Initial plc 2,974,279 9,288,402
- -----------------------------------------------------------------
Societe BIC SA 244,785 9,529,251
----------------
18,817,653
- -----------------------------------------------------------------
Industrial Conglomerates--0.5%
Hutchison Whampoa Ltd. 1,471,000 8,960,138
- -----------------------------------------------------------------
Information Technology--21.2%
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Communications Equipment--6.0%
Alcatel SA 1 1,083,060 9,763,296
- -----------------------------------------------------------------
JDS Uniphase Corp. 1 4,598,900 16,142,139
- -----------------------------------------------------------------
Nokia Corp., Sponsored ADR,
A Shares 487,500 8,009,625
- -----------------------------------------------------------------
QUALCOMM, Inc. 1,077,200 38,509,900
- -----------------------------------------------------------------
Scientific-Atlanta, Inc. 790,400 18,843,136
- -----------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson AB, B Shares 1 17,281,300 18,565,910
----------------
109,834,006
- -----------------------------------------------------------------
Computers & Peripherals--1.0%
International Business
Machines Corp. 113,117 9,332,152
- -----------------------------------------------------------------
Network Appliance, Inc. 1 265,800 4,308,618
- -----------------------------------------------------------------
SanDisk Corp. 1 123,900 4,999,365
----------------
18,640,135
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Electronic Equipment & Instruments--1.5%
Keyence Corp. 31,500 5,771,393
- -----------------------------------------------------------------
Murata Manufacturing Co. Ltd. 226,600 8,907,366
- -----------------------------------------------------------------
Tandberg ASA 1 2,576,750 13,350,666
----------------
28,029,425
- -----------------------------------------------------------------
Internet Software & Services--0.7%
Yahoo Japan Corp. 1 776 12,602,124
- -----------------------------------------------------------------
IT Services--1.2%
Amadeus Global Travel
Distribution SA 1,476,301 8,459,598
- -----------------------------------------------------------------
Infosys Technologies Ltd. 193,900 13,622,863
----------------
22,082,461
4 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
Market Value
Shares See Note 1
- -----------------------------------------------------------------
Office Electronics--0.6%
Canon, Inc. 217,000 $ 9,957,693
- -----------------------------------------------------------------
Semiconductors & Semiconductor Equipment--4.0%
Advanced Micro Devices, Inc. 1 1,690,500 10,836,105
- -----------------------------------------------------------------
Broadcom Corp., Cl. A 1 360,200 8,972,582
- -----------------------------------------------------------------
National Semiconductor Corp. 1 1,090,200 21,498,744
- -----------------------------------------------------------------
Novellus Systems, Inc. 1 249,600 9,140,602
- -----------------------------------------------------------------
NVIDIA Corp. 1 167,600 3,856,476
- -----------------------------------------------------------------
Samsung Electronics Co. 65,210 19,380,117
----------------
73,684,626
- -----------------------------------------------------------------
Software--6.2%
Amdocs Ltd. 1 418,300 10,039,200
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Cadence Design Systems, Inc. 1 4,315,570 52,045,774
- -----------------------------------------------------------------
Electronic Arts, Inc. 1 131,721 9,746,037
- -----------------------------------------------------------------
Sybase, Inc. 1 583,910 8,122,188
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Symantec Corp. 1 64,800 2,842,128
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Synopsys, Inc. 1 303,443 18,767,949
- -----------------------------------------------------------------
Trend Micro, Inc. 1 540,000 8,387,258
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Veritas Software Corp. 1 158,600 4,547,062
----------------
114,497,596
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Materials--0.9%
- -----------------------------------------------------------------
Chemicals--0.9%
International Flavors &
Fragrances, Inc. 523,430 16,713,120
- -----------------------------------------------------------------
Telecommunication Services--7.0%
- -----------------------------------------------------------------
Diversified Telecommunication Services--1.4%
France Telecom SA 1 394,350 9,672,915
- -----------------------------------------------------------------
Tele Norte Leste Participacoes
SA (Telemar), Preference 1,353,128,519 15,681,953
----------------
25,354,868
- -----------------------------------------------------------------
Wireless Telecommunication Services--5.6%
KDDI Corp. 14,262 55,230,731
- -----------------------------------------------------------------
SK Telecom Co. Ltd. 43,540 7,435,881
- -----------------------------------------------------------------
SK Telecom Co. Ltd., ADR 358,700 6,765,082
- -----------------------------------------------------------------
Vodafone Group plc 17,086,790 33,411,984
----------------
102,843,678
- -----------------------------------------------------------------
Utilities--0.5%
- -----------------------------------------------------------------
Gas Utilities--0.5%
Hong Kong & China Gas Co. Ltd. 7,912,000 9,993,806
----------------
Total Common Stocks (Cost $1,686,901,164) 1,773,629,489
Principal Market Value
Amount See Note 1
- -----------------------------------------------------------------
Convertible Corporate Bonds and Notes--0.2%
Nektar Therapeutics, 3% Cv.
Unsec. Sub. Debs., 6/30/10 2
(Cost $3,568,000) $ 3,568,000 $ 3,590,300
- -----------------------------------------------------------------
Joint Repurchase Agreements--2.5%
- -----------------------------------------------------------------
Undivided interest of 10.39% in joint
repurchase agreement (Principal
Amount/Market Value $440,796,000,
with a maturity value of $440,808,979)
with Banc One Capital Markets, Inc.,
1.06%, dated 6/30/03, to be repurchased
at $45,804,349 on 7/1/03, collateralized
by U.S. Treasury Bonds, 3.375%, 4/30/04,
with a value of $449,915,616
(Cost $45,803,000) 45,803,000 45,803,000
- -----------------------------------------------------------------
Total Investments, at Value
(Cost $1,736,272,164) 99.1% 1,823,022,789
- -----------------------------------------------------------------
Other Assets Net of Liabilities 0.9 16,637,470
--------------------------------
Net Assets 100.0% $1,839,660,259
================================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $3,590,300 or 0.20% of the Fund's net
assets as of June 30, 2003.
Distribution of investments representing geographic holdings, as a percentage of
total investments at value, is as follows:
Geographic Holdings Market Value Percent
- ------------------------------------------------------------------------------
United States $ 810,094,476 44.5%
Great Britain 204,794,405 11.2
Japan 169,369,897 9.3
France 137,419,234 7.5
Germany 68,232,284 3.7
The Netherlands 64,273,083 3.5
India 51,478,874 2.8
Canada 46,683,747 2.6
Brazil 44,386,448 2.4
Hong Kong 35,587,537 2.0
Mexico 33,859,172 1.9
Korea, Republic of South 33,581,080 1.8
Sweden 18,565,910 1.0
Bermuda 16,650,230 0.9
Switzerland 16,420,701 0.9
Singapore 14,299,491 0.8
Norway 13,350,666 0.7
Israel 10,201,856 0.6
Australia 9,095,293 0.5
Spain 8,459,598 0.5
Italy 8,209,182 0.5
Finland 8,009,625 0.4
------------------------------
Total $1,823,022,789 100.0%
==============================
See accompanying Notes to Financial Statements.
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
June 30, 2003
- --------------------------------------------------------------------------------
Assets
Investments, at value (cost $1,736,272,164)--
see accompanying statement $1,823,022,789
- --------------------------------------------------------------------------------
Cash 3,580,286
- --------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 2,190
- --------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 17,169,538
Investments sold 3,810,201
Interest and dividends 2,284,812
Other 5,994
-----------------
Total assets 1,849,875,810
- --------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased 7,256,255
Shares of beneficial interest redeemed 2,771,660
Shareholder reports 50,928
Service plan fees 45,233
Trustees' compensation 5,133
Transfer and shareholder servicing agent fees 3,082
Other 83,260
-----------------
Total liabilities 10,215,551
- --------------------------------------------------------------------------------
Net Assets $1,839,660,259
================
- --------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial interest $ 93,932
- --------------------------------------------------------------------------------
Additional paid-in capital 2,077,276,833
- --------------------------------------------------------------------------------
Undistributed net investment income 14,650,371
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (339,238,294)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and
translation of assets and liabilities denominated
in foreign currencies 86,877,417
----------------
Net Assets $1,839,660,259
================
- --------------------------------------------------------------------------------
Net Asset Value Per Share
Non-Service shares:
Net asset value, redemption price per share and offering
price per share (based on net assets of $1,703,283,353
and 86,963,810 shares of beneficial interest outstanding) $19.59
- --------------------------------------------------------------------------------
Service shares:
Net asset value, redemption price per share and offering
price per share (based on net assets of $85,875,451 and
4,403,809 shares of beneficial interest outstanding) $19.50
- --------------------------------------------------------------------------------
Class 3 shares:
Net asset value, redemption price per share and offering
price per share (based on net assets of $50,501,455 and
2,563,890 shares of beneficial interest outstanding) $19.70
See accompanying Notes to Financial Statements.
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended June 30, 2003
- -----------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $1,886,197) $17,496,508
- -----------------------------------------------------------------------------
Interest 287,236
------------
Total investment income 17,783,744
- -----------------------------------------------------------------------------
Expenses
Management fees 5,240,203
- -----------------------------------------------------------------------------
Distribution and service plan fees--Service shares 80,109
- -----------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,077
Service shares 4,770
Class 3 shares 2,221
- -----------------------------------------------------------------------------
Custodian fees and expenses 204,468
- -----------------------------------------------------------------------------
Shareholder reports 67,876
- -----------------------------------------------------------------------------
Trustees' compensation 28,322
- -----------------------------------------------------------------------------
Other 62,338
------------
Total expenses 5,695,384
Less reduction to custodian expenses (675)
------------
Net expenses 5,694,709
- -----------------------------------------------------------------------------
Net Investment Income 12,089,035
- -----------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (119,042,548)
Foreign currency transactions 25,110,686
------------
Net realized loss (93,931,862)
- -----------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 249,977,520
Translation of assets and liabilities
denominated in foreign currencies 21,131,165
------------
Net change in unrealized appreciation 271,108,685
- -----------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $189,265,858
=============
See accompanying Notes to Financial Statements.
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
June 30, 2003 December 31,
(Unaudited) 2002
- ------------------------------------------------------------------------------------------------------
Operations
Net investment income $ 12,089,035 $ 14,349,649
- ------------------------------------------------------------------------------------------------------
Net realized loss (93,931,862) (172,795,488)
- ------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 271,108,685 (283,662,127)
------------------------------------
Net increase (decrease) in net assets
resulting from operations 189,265,858 (442,107,966)
- ------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Non-Service shares (13,324,089) (9,494,638)
Service shares (449,100) (108,690)
Class 3 shares -- --
- ------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Non-Service shares (12,549,523) 86,880,795
Service shares 24,883,380 41,295,581
Class 3 shares 49,011,488 --
- ------------------------------------------------------------------------------------------------------
Net Assets
Total increase (decrease) 236,838,014 (323,534,918)
- ------------------------------------------------------------------------------------------------------
Beginning of period 1,602,822,245 1,926,357,163
------------------------------------
End of period [including undistributed net investment income
of $14,650,371 and $16,334,525, respectively] $1,839,660,259 $1,602,822,245
====================================
See accompanying Notes to Financial Statements.
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
Six Months Year
Ended Ended
June 30, 2003 December 31,
Non-Service shares (Unaudited) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.70 $ 22.84 $ 30.33 $ 33.41 $ 22.07 $ 21.37
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 .16 .17 .27 .14 .24
Net realized and unrealized gain (loss) 1.91 (5.19) (3.85) 1.82 12.21 2.64
------------------------------------------------------------------------------
Total from investment operations 2.04 (5.03) (3.68) 2.09 12.35 2.88
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.15) (.11) (.19) (.09) (.14) (.46)
Dividends in excess of net investment income -- -- -- -- (.13) --
Distributions from net realized gain -- -- (3.62) (5.08) (.74) (1.72)
------------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.15) (.11) (3.81) (5.17) (1.01) (2.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.59 $17.70 $22.84 $30.33 $33.41 $22.07
==============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 11.71% (22.13)% (12.04)% 5.09% 58.48% 14.11%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,703,283 $1,549,993 $1,905,890 $2,136,420 $1,762,366 $1,135,029
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,549,437 $1,776,289 $1,918,335 $2,116,100 $1,251,190 $1,055,123
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.50% 0.80% 0.70% 0.83% 0.57% 1.22%
Expenses, gross 0.69% 0.67% 0.70% 0.68% 0.69% 0.74% 3
Expenses, net 0.69% 4 0.67% 4 0.70% 4 0.68% 4 0.69% 4 0.74%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 34% 39% 50% 64% 81%
1. 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. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
Six Months Year
Ended Ended
June 30, 2003 December 31,
Service shares (Unaudited) 2002 2001 2000 1
- -----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 17.61 $ 22.78 $ 30.30 $ 32.65
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 .12 .21 .03
Net realized and unrealized gain (loss) 1.92 (5.19) (3.92) (2.38)
-----------------------------------------------------
Total from investment operations 2.02 (5.07) (3.71) (2.35)
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.10) (.19) --
Dividends in excess of net investment -- -- -- --
Distributions from net realized gain -- -- (3.62) --
-----------------------------------------------------
Total dividends and/or distributions to shareholders (.13) (.10) (3.81) --
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.50 $17.61 $22.78 $30.30
=====================================================
- -----------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.61% (22.37)% (12.17)% (7.20)%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $85,875 $52,830 $20,467 $983
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $64,605 $34,847 $ 8,502 $325
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.34% 0.51% 0.44% 0.60%
Expenses, gross 0.95% 0.90% 0.85% 0.83%
Expenses, net 0.95% 4 0.90% 4 0.85% 4 0.83% 4
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 34% 39% 50%
1. For the period from July 13, 2000 (inception of offering) to December 31,
2000.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), 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. Total
returns are not annualized for periods less than one full year. Total return
information does not reflect expenses that apply at the separate account level
or to related insurance products. Inclusion of these charges would reduce the
total return figures for all periods shown. 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%.
See accompanying Notes to Financial Statements.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
Period
Ended
June 30, 2003 1
Class 3 shares (Unaudited)
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Per Share Operating Data
Net asset value, beginning of period $ 17.55
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Income (loss) from investment operations:
Net investment income .05
Net realized and unrealized gain 2.10
---------
Total from investment operations 2.15
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Dividends and/or distributions to shareholders:
Dividends from net investment income --
Dividends in excess of net investment income --
Distributions from net realized gain --
---------
Total dividends and/or distributions to shareholders --
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Net asset value, end of period $19.70
=========
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Total Return, at Net Asset Value 2 12.25%
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Ratios/Supplemental Data
Net assets, end of period (in thousands) $50,501
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Average net assets (in thousands) $24,953
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Ratios to average net assets: 3
Net investment income 2.87%
Expenses, gross 0.74%
Expenses, net 0.74% 4
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Portfolio turnover rate 25%
1. For the period from May 1, 2003 (inception of offering) to June 30, 2003.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), 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. Total
returns are not annualized for periods less than one full year. Total return
information does not reflect expenses that apply at the separate account level
or to related insurance products. Inclusion of these charges would reduce the
total return figures for all periods shown. 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%.
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
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1. Significant Accounting Policies
Oppenheimer Global Securities Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek long-term capital
appreciation by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and special
situations that are considered to have appreciation possibilities. The Trust's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Non-Service, Service and Class 3 shares. All classes are
sold at their offering price, which is the net asset value per share, to
separate investment accounts of participating insurance companies as an
underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. The class of shares designated as
Service shares is subject to a distribution and service plan. All classes of
shares have identical rights and voting privileges. Earnings, net assets and
net asset value per share may differ by minor amounts due to each class having
its own expenses directly attributable to that class. The Fund assesses a 1%
fee on the proceeds of Class 3 shares that are redeemed (either by selling or
exchanging to another Oppenheimer fund or other investment option offered
through your variable life insurance or variable annuity contract) within 60
days of their purchase. The fee, which is retained by the Fund, is accounted
for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
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Securities Valuation. 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. Securities (including restricted
securities) for which quotations are not readily available are valued primarily
using dealer-supplied valuations, a portfolio pricing service authorized by the
Board of Trustees, or at their fair value. Fair value is determined in good
faith using consistently applied procedures under the supervision of 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).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
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. Secured by U.S. government securities, 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.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
- --------------------------------------------------------------------------------
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.
As of June 30, 2003, the Fund had available for federal income tax purposes
an estimated unused capital loss carryforward of $325,623,200. 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 increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2003, the Fund did not use carryforward to offset capital
gains realized. During the year ended December 31, 2002, the Fund did not use
carryforward to offset capital gains realized.
As of December 31, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
Expiring
-------------------------
2009 $ 47,254,011
2010 147,620,574
------------
Total $194,874,585
============
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes. The
character of 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.
The tax character of distributions paid during the six months ended June 30,
2003 and the year ended December 31, 2002 was as follows:
Six Months Ended Year Ended
June 30, 2003 December 31, 2002
-----------------------------------------------------------------
Distributions paid from:
Ordinary income $13,773,189 $9,603,328
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
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 accounting
principles generally accepted in the United States of America 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.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
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 June 30, 2003 1 Year Ended December 31, 2002
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------
Non-Service shares
Sold 42,455,760 $ 729,763,503 148,964,909 $ 2,936,874,923
Dividends and/or distributions reinvested 828,612 13,324,089 405,580 9,494,638
Redeemed (43,887,775) (755,637,115) (145,263,047) (2,859,488,766)
-----------------------------------------------------------------
Net increase (decrease) (603,403) $ (12,549,523) 4,107,442 $ 86,880,795
=================================================================
- ---------------------------------------------------------------------------------------------------------------
Service shares
Sold 4,615,318 $ 80,605,799 5,676,692 $ 108,715,377
Dividends and/or distributions reinvested 28,051 449,100 4,653 108,690
Redeemed (3,238,866) (56,171,519) (3,580,556) (67,528,486)
-----------------------------------------------------------------
Net increase 1,404,503 $ 24,883,380 2,100,789 $ 41,295,581
=================================================================
- ---------------------------------------------------------------------------------------------------------------
Class 3 shares
Sold 2,853,013 $ 54,349,183 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (289,123) (5,337,695) -- --
-----------------------------------------------------------------
Net increase 2,563,890 $ 49,011,488 -- $ --
=================================================================
1. For the six months ended June 30, 2003, for Non-Service shares and Service
shares and for the period from May 1, 2003 (inception of offering) to June 30,
2003, for Class 3 shares.
- --------------------------------------------------------------------------------
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 June 30, 2003, were
$441,987,087 and $397,709,365, 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 Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
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 $19.75 per account fee.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $5,000 for assets of less than $10 million and
$10,000 for assets of $10 million or more. The Fund is subject to the minimum
fee in the event that the per account fee does not equal or exceed the
applicable minimum fee.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average net assets of the Fund. This
undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan for Service Shares. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc., the Distributor, for distribution-related services for the
Fund's Service shares. Under the Plan, payments are made quarterly at an annual
rate of up to 0.25% of the average annual net assets of the Service shares of
the Fund. For the six months ended June 30, 2003, expense under the Service
Plan totaled $80,109.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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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 gain or loss. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2003, the Fund had outstanding foreign currency contracts as
follows:
Expiration Contract Valuation as of Unrealized
Contract Description Date Amount (000s) June 30, 2003 Appreciation
- ----------------------------------------------------------------------------------------------
Contract to Sell
British Pound Sterling [GBP] 7/1/03 569GBP $938,765 $2,190
- --------------------------------------------------------------------------------
6. Borrowing and Lending Arrangements
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission to allow these affiliated
funds to lend money to, and borrow money from, each other, in an attempt to
reduce borrowing costs below those of bank loan facilities. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the six
months ended or at June 30, 2003.
- --------------------------------------------------------------------------------
Portfolio Proxy Voting Policies and Procedures
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 1.800.225.5677, (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 will be required to file new 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 first such filing is due no later than August 31, 2004,
for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX
filing will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
15 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
ITEM 2. CODE OF ETHICS - NOT REQUIRED
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT - NOT REQUIRED
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. RESERVED
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of June 30, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure 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 significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)