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.
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: DECEMBER 31
-----------
Date of reporting period: JANUARY 1, 2003 - DECEMBER 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Oppenheimer Global Securities
Fund/VA produced strong, competitive returns for the one-year period ended
December 31, 2003.
Over the past year, the Fund continued to seek to capitalize on global growth
trends of mass affluence, new technologies, corporate restructuring and aging
populations. Within each trend, we looked for reasonably priced companies with
strong growth prospects. Our contrarian stock selection process often led us to
out of favor, but well-managed companies whose stock price had declined in the
marketplace.
During 2003, the Fund benefited from its selective investments in the
technology and consumer staples sectors. KDDI Corp., the number two wireless
carrier in Japan, was one of the Fund's best performing stocks during the period
on strong demand for wireless products. National Semiconductor Corp. remained a
strong contributor to performance throughout the year. The company made
significant progress on its long term restructuring, which refocused the company
on its higher-margin analog chip segment. In addition, the Fund received
favorable performance from its holdings in QUALCOMM, Inc., Vodafone Group plc
and Yahoo Japan Corp.
The Fund also benefited from holdings in consumer staples. Reckitt Benckiser
plc and Wella AG performed very well as consumer spending continued to
strengthen over the course of the year.
Two companies in particular detracted from the Fund's overall return.
Although we had sold most of our position, Sony Corp. detracted from performance
due to the company's inability to turn around a slide in the brand quality and
reputation. Tandberg ASA, a global leader in videoconferencing software, had
disappointing earnings during the year and was punished in the marketplace.
However, we added to our position and the stock has since rebounded strongly.
Early in 2003, we reduced the Fund's investment in video game software.
Throughout 2002 and into early 2003, Electronic Arts, Inc. was our largest
holding in video game software, but that position was trimmed back during the
period, as we felt most of the likely positive outcomes in its software business
had been more than fully discounted in its stock price.
From a country perspective, the United States was the biggest contributor to
performance as most of the Fund's technology holdings were based there. The Fund
also did well in Japan, where we generally kept a market weight throughout the
last 12 months, but solid stock selection led to good performance in the country
versus the benchmark. Finally, the Fund received positive returns from Brazil,
which is not part of the MSCI World Index, and where we have a holding in
Empresa Brasileira de Aeronautica SA, the regional jet manufacturer.
Please remember country, sector and market capitalization weightings were the
result of individual stock selection and do not reflect predetermined target
allocations. The Fund's holdings, allocations, management, and strategies are
subject to change. Investing in foreign securities poses additional risks, such
as currency fluctuations and higher expenses.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each share class of the Fund
held until December 31, 2003. In the case of Non-Service shares, performance is
measured over a ten-year period. In the case of Service shares, performance is
measured from inception of the class on July 13, 2000. Performance information
does not reflect charges that apply to separate accounts investing in the Fund.
If these charges were taken into account, performance would be lower. The
graphs assume that all dividends and capital gains distributions were reinvested
in additional shares.
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International World Index, an unmanaged index of equity securities
listed on stock exchanges of 20 foreign countries and the U.S. Index performance
reflects the reinvestment of income but does not consider the effect of
transaction costs. The Fund's performance reflects the effects of the Fund's
business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the investments in the index.
3 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FUND PERFORMANCE DISCUSSION
NON-SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund/VA (Non-Service)
Morgan Stanley Capital International World Index
[LINE CHART]
Oppenheimer Global Securities Morgan Stanley Capital
Fund/VA (Non-Service) International World Index
12/31/1993 $10,000 $10,000
03/31/1994 9,634 10,073
06/30/1994 9,528 10,388
09/30/1994 10,227 10,623
12/31/1994 9,428 10,558
03/31/1995 9,131 11,066
06/30/1995 9,562 11,553
09/30/1995 10,012 12,213
12/31/1995 9,639 12,809
03/31/1996 10,005 13,345
06/30/1996 10,436 13,748
09/30/1996 10,770 13,947
12/31/1996 11,355 14,602
03/31/1997 11,930 14,659
06/30/1997 13,185 16,883
09/30/1997 14,239 17,382
12/31/1997 13,901 16,971
03/31/1998 15,301 19,419
06/30/1998 15,595 19,831
09/30/1998 13,159 17,471
12/31/1998 15,861 21,179
03/31/1999 16,417 21,953
06/30/1999 18,050 23,020
09/30/1999 18,358 22,697
12/31/1999 25,138 26,546
03/31/2000 28,768 26,837
06/30/2000 27,828 25,905
09/30/2000 27,375 24,622
12/31/2000 26,417 23,116
03/31/2001 22,464 20,163
06/30/2001 24,204 20,723
09/30/2001 19,880 17,759
12/31/2001 23,237 19,297
03/31/2002 23,685 19,417
06/30/2002 21,569 17,637
09/30/2002 17,613 14,410
12/31/2002 18,094 15,526
03/31/2003 16,725 14,759
06/30/2003 20,213 17,304
09/30/2003 22,142 18,159
12/31/2003 25,877 20,768
AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/03
1-Year 43.02% 5-Year 10.28% 10-Year 9.97% Inception Date 11/12/90
SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund/VA (Service Shares)
Morgan Stanley Capital International World Index
[LINE CHART]
Oppenheimer Global Securities Morgan Stanley Capital
Fund/VA (Service Shares) International World Index
07/13/2000 10,000 10,000
09/30/2000 9,620 9,505
12/31/2000 9,280 8,924
03/31/2001 7,889 7,784
06/30/2001 8,498 8,000
09/30/2001 6,977 6,855
12/31/2001 8,151 7,449
03/31/2002 8,308 7,496
06/30/2002 7,560 6,808
09/30/2002 6,166 5,563
12/31/2002 6,328 5,994
03/31/2003 5,842 5,697
06/30/2003 7,062 6,680
09/30/2003 7,736 7,010
12/31/2003 9,040 8,017
AVERAGE ANNUAL TOTAL RETURNS OF SERVICE SHARES OF THE FUND AT 12/31/03
1-Year 42.86% Since Inception -2.87% Inception Date 7/13/00
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR MORE CURRENT
PERFORMANCE DATA, CALL US AT 1.800.981.2871. THE FUND'S TOTAL RETURNS SHOULD NOT
BE EXPECTED TO BE THE SAME AS THE RETURNS OF OTHER FUNDS, WHETHER OR NOT BOTH
FUNDS HAVE THE SAME PORTFOLIO MANAGERS AND/OR SIMILAR NAMES.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND 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 OR CALLING US AT 1.800.981.2871. READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING.
GRAPHS ARE NOT DRAWN TO SAME SCALE. AN EXPLANATION OF THE CALCULATION OF THE
PERFORMANCE IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
4 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS December 31, 2003
MARKET VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--95.4%
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--16.7%
- -------------------------------------------------------------------------------
AUTOMOBILES--1.0%
Porsche AG, Preferred 45,562 $ 26,953,268
- -------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.6%
International Game Technology 665,500 23,758,350
- -------------------------------------------------------------------------------
Panera Bread Co., Cl. A 1 131,100 5,182,383
- -------------------------------------------------------------------------------
Starbucks Corp. 1 359,500 11,885,070
----------------
40,825,803
- -------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.8%
Sharp Corp. 1,347,000 21,253,868
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MEDIA--10.0%
Grupo Televisa SA, Sponsored GDR 437,699 17,446,682
- -------------------------------------------------------------------------------
JC Decaux SA 1 530,684 8,675,146
- -------------------------------------------------------------------------------
Pearson plc 2,090,128 23,273,034
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Reed Elsevier plc 2,157,226 18,044,078
- -------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 1,471,033 16,370,797
- -------------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 26,291,602 83,081,462
- -------------------------------------------------------------------------------
Societe Television Francaise 1 378,800 13,225,493
- -------------------------------------------------------------------------------
Television Broadcasts Ltd. 5,033,832 25,416,845
- -------------------------------------------------------------------------------
Vivendi Universal SA 1 580,710 14,114,868
- -------------------------------------------------------------------------------
Wolters Kluwer NV 782,250 12,234,974
- -------------------------------------------------------------------------------
WPP Group plc 1,173,870 11,526,206
- -------------------------------------------------------------------------------
Zee Telefilms Ltd. 5,167,400 16,994,375
----------------
260,403,960
- -------------------------------------------------------------------------------
SPECIALTY RETAIL--3.3%
Circuit City Stores, Inc./
Circuit City Group 1,365,149 13,828,959
- -------------------------------------------------------------------------------
Gap, Inc. (The) 561,400 13,030,094
- -------------------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 1,022,700 24,304,991
- -------------------------------------------------------------------------------
New Dixons Group plc 9,517,970 23,683,663
- -------------------------------------------------------------------------------
RadioShack Corp. 342,500 10,507,900
----------------
85,355,607
- -------------------------------------------------------------------------------
CONSUMER STAPLES--7.7%
- -------------------------------------------------------------------------------
BEVERAGES--1.6%
Companhia de Bebidas das
Americas, ADR 596,715 15,222,200
- -------------------------------------------------------------------------------
Diageo plc 446,470 5,874,479
- -------------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 3,065,000 11,313,818
- -------------------------------------------------------------------------------
Grupo Modelo SA de CV,
Series C 4,073,700 9,751,721
----------------
42,162,218
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.3%
Boots Group plc 1,081,050 $ 13,372,530
- -------------------------------------------------------------------------------
Carrefour SA 194,580 10,681,270
- -------------------------------------------------------------------------------
Seven-Eleven Japan Co. Ltd. 347,000 10,523,001
----------------
34,576,801
- -------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cadbury Schweppes plc 3,512,391 25,795,336
- -------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.7%
Hindustan Lever Ltd. 4,613,900 20,700,610
- -------------------------------------------------------------------------------
Reckitt Benckiser plc 2,119,950 47,969,195
----------------
68,669,805
- -------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.1%
Gillette Co. 549,900 20,197,827
- -------------------------------------------------------------------------------
Shiseido Co. Ltd. 769,000 9,349,697
----------------
29,547,524
- -------------------------------------------------------------------------------
ENERGY--4.5%
- -------------------------------------------------------------------------------
OIL & GAS--4.5%
BP plc, ADR 434,469 21,441,045
- -------------------------------------------------------------------------------
Burlington Resources, Inc. 171,300 9,486,594
- -------------------------------------------------------------------------------
ChevronTexaco Corp. 250,872 21,672,832
- -------------------------------------------------------------------------------
Encana Corp. 381,417 15,053,021
- -------------------------------------------------------------------------------
ENI SpA 584,500 11,029,401
- -------------------------------------------------------------------------------
Husky Energy, Inc. 1,431,515 25,999,348
- -------------------------------------------------------------------------------
Total SA, B Shares 60,960 11,333,871
----------------
116,016,112
- -------------------------------------------------------------------------------
FINANCIALS--17.4%
- -------------------------------------------------------------------------------
CAPITAL MARKETS--0.2%
Northern Trust Corp. 124,600 5,783,932
- -------------------------------------------------------------------------------
COMMERCIAL BANKS--8.8%
ABN Amro Holding NV 1,517,200 35,499,526
- -------------------------------------------------------------------------------
Australia & New Zealand
Banking Group Ltd. 885,850 11,800,405
- -------------------------------------------------------------------------------
Bank One Corp. 1,006,039 45,865,318
- -------------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 1,870,550 32,136,049
- -------------------------------------------------------------------------------
Resona Holdings, Inc. 1 6,533,000 8,229,495
- -------------------------------------------------------------------------------
Royal Bank of Scotland Group
plc (The) 978,787 28,840,831
- -------------------------------------------------------------------------------
Societe Generale, Cl. A 428,820 37,862,465
- -------------------------------------------------------------------------------
Wachovia Corp. 639,929 29,814,292
----------------
230,048,381
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.2%
3i Group plc 957,363 10,582,867
- -------------------------------------------------------------------------------
American Express Co. 448,000 21,607,040
- -------------------------------------------------------------------------------
Citigroup, Inc. 217,566 10,560,654
- -------------------------------------------------------------------------------
Credit Saison Co. Ltd. 511,900 11,559,186
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Continued
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
MBNA Corp. 450,750 $ 11,201,138
- -------------------------------------------------------------------------------
MLP AG 1 377,528 7,428,645
- -------------------------------------------------------------------------------
Schwab (Charles) Corp. 956,200 11,321,408
----------------
84,260,938
- -------------------------------------------------------------------------------
INSURANCE--4.8%
ACE Ltd. 525,871 21,781,577
- -------------------------------------------------------------------------------
Aegon NV 1,752,350 25,927,144
- -------------------------------------------------------------------------------
Allianz AG 237,130 29,940,317
- -------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 7,760 21,844,400
- -------------------------------------------------------------------------------
Everest Re Group Ltd. 134,400 11,370,240
- -------------------------------------------------------------------------------
Manulife Financial Corp. 397,413 12,870,369
----------------
123,734,047
- -------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.4%
Fannie Mae 123,900 9,299,934
- -------------------------------------------------------------------------------
HEALTH CARE--16.7%
- -------------------------------------------------------------------------------
BIOTECHNOLOGY--3.1%
Affymetrix, Inc. 1 447,300 11,008,053
- -------------------------------------------------------------------------------
Amgen, Inc. 1 287,500 17,767,500
- -------------------------------------------------------------------------------
Biogen Idec, Inc. 1 64,600 2,375,988
- -------------------------------------------------------------------------------
Genentech, Inc. 1 64,700 6,053,979
- -------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 376,080 21,865,291
- -------------------------------------------------------------------------------
Human Genome Sciences, Inc. 1 332,200 4,401,650
- -------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc. 1 303,700 5,670,079
- -------------------------------------------------------------------------------
Qiagen NV 1 882,911 10,847,051
----------------
79,989,591
- -------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.3%
Applera Corp./
Applied Biosystems Group 535,400 11,088,134
- -------------------------------------------------------------------------------
Essilor International SA 188,860 9,766,965
- -------------------------------------------------------------------------------
Smith & Nephew plc 1,438,080 12,080,282
----------------
32,935,381
- -------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.7%
Express Scripts, Inc. 1 173,200 11,505,676
- -------------------------------------------------------------------------------
Fresenius AG, Preference 200,002 14,001,131
- -------------------------------------------------------------------------------
IMS Health, Inc. 560,700 13,939,002
- -------------------------------------------------------------------------------
Oxford Health Plans, Inc. 1 230,400 10,022,400
- -------------------------------------------------------------------------------
Quest Diagnostics, Inc. 1 292,300 21,370,053
----------------
70,838,262
- -------------------------------------------------------------------------------
PHARMACEUTICALS--9.6%
Aventis SA 290,150 19,177,398
- -------------------------------------------------------------------------------
Chugai Pharmaceutical Co. Ltd. 802,500 11,539,167
- -------------------------------------------------------------------------------
Eli Lilly & Co. 171,300 12,047,529
- -------------------------------------------------------------------------------
Johnson & Johnson 340,780 17,604,695
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
PHARMACEUTICALS Continued
Mylan Laboratories, Inc. 468,600 $ 11,836,836
- -------------------------------------------------------------------------------
Novartis AG 429,798 19,513,368
- -------------------------------------------------------------------------------
Pfizer, Inc. 707,219 24,986,047
- -------------------------------------------------------------------------------
Roche Holdings AG 331,076 33,395,376
- -------------------------------------------------------------------------------
Sanofi-Synthelabo SA 645,659 48,619,820
- -------------------------------------------------------------------------------
Schering-Plough Corp. 834,000 14,503,260
- -------------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,353,000 25,199,104
- -------------------------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd., Sponsored ADR 186,800 10,593,428
----------------
249,016,028
- -------------------------------------------------------------------------------
INDUSTRIALS--5.2%
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.6%
Boeing Co. 299,800 12,633,572
- -------------------------------------------------------------------------------
Bombardier, Inc., Cl. B 1,678,300 7,104,121
- -------------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 861,434 30,176,033
- -------------------------------------------------------------------------------
Lockheed Martin Corp. 254,400 13,076,160
- -------------------------------------------------------------------------------
Northrop Grumman Corp. 135,100 12,915,560
- -------------------------------------------------------------------------------
Raytheon Co. 620,400 18,636,816
----------------
94,542,262
- -------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.9%
Rentokil Initial plc 3,102,419 10,552,219
- -------------------------------------------------------------------------------
Societe BIC SA 261,163 12,069,879
----------------
22,622,098
- -------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.3%
JGC Corp. 522,000 5,445,516
- -------------------------------------------------------------------------------
Leighton Holdings Ltd. 225,823 2,009,428
----------------
7,454,944
- -------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.4%
Hutchison Whampoa Ltd. 1,524,000 11,238,214
- -------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--19.8%
- -------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--5.6%
Alcatel SA 1 1,118,600 14,405,766
- -------------------------------------------------------------------------------
Cisco Systems, Inc. 1 570,900 13,867,161
- -------------------------------------------------------------------------------
JDS Uniphase Corp. 1 4,819,500 17,591,175
- -------------------------------------------------------------------------------
Juniper Networks, Inc. 1 339,700 6,345,596
- -------------------------------------------------------------------------------
QUALCOMM, Inc. 1,117,700 60,277,561
- -------------------------------------------------------------------------------
Scientific-Atlanta, Inc. 336,600 9,189,180
- -------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson
AB, B Shares 1 13,818,200 24,773,780
----------------
146,450,219
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.5%
International Business
Machines Corp. 116,217 $ 10,770,992
- -------------------------------------------------------------------------------
SanDisk Corp. 1 42,800 2,616,792
----------------
13,387,784
- -------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.7%
Keyence Corp. 54,200 11,424,634
- -------------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 239,300 12,928,497
- -------------------------------------------------------------------------------
Tandberg ASA 1 2,775,250 20,440,604
----------------
44,793,735
- -------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.5%
Yahoo Japan Corp. 1 900 12,092,936
- -------------------------------------------------------------------------------
IT SERVICES--1.3%
Amadeus Global Travel
Distribution SA 1,499,101 9,738,093
- -------------------------------------------------------------------------------
Infosys Technologies Ltd. 197,435 24,076,035
----------------
33,814,128
- -------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Canon, Inc. 221,000 10,290,100
- -------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.7%
Advanced Micro Devices, Inc. 1 2,046,800 30,497,320
- -------------------------------------------------------------------------------
National Semiconductor Corp. 1 601,500 23,705,115
- -------------------------------------------------------------------------------
Novellus Systems, Inc. 1 262,900 11,054,945
- -------------------------------------------------------------------------------
NVIDIA Corp. 1 174,900 4,066,425
- -------------------------------------------------------------------------------
Samsung Electronics Co. 67,240 25,451,313
----------------
94,775,118
- -------------------------------------------------------------------------------
SOFTWARE--6.1%
Amdocs Ltd. 1 441,300 9,920,424
- -------------------------------------------------------------------------------
BEA Systems, Inc. 1 921,800 11,338,140
- -------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 3,647,570 65,583,309
- -------------------------------------------------------------------------------
Electronic Arts, Inc. 1 89,442 4,273,539
- -------------------------------------------------------------------------------
Red Hat, Inc. 1 370,500 6,954,285
- -------------------------------------------------------------------------------
Sybase, Inc. 1 610,510 12,564,296
- -------------------------------------------------------------------------------
Symantec Corp. 1 140,000 4,851,000
- -------------------------------------------------------------------------------
Synopsys, Inc. 1 637,486 21,521,527
- -------------------------------------------------------------------------------
Trend Micro, Inc. 1 560,000 15,022,861
- -------------------------------------------------------------------------------
Veritas Software Corp. 1 163,200 6,064,512
----------------
158,093,893
- -------------------------------------------------------------------------------
MATERIALS--0.5%
- -------------------------------------------------------------------------------
CHEMICALS--0.5%
International Flavors &
Fragrances, Inc. 336,730 11,758,612
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--6.4%
- -------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.3%
France Telecom SA 1 1,257,828 $ 35,951,497
- -------------------------------------------------------------------------------
Tele Norte Leste Participacoes
SA, Preference 1,459,595,519 22,979,143
----------------
58,930,640
- -------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.1%
KDDI Corp. 11,210 64,224,503
- -------------------------------------------------------------------------------
SK Telecom Co. Ltd. 46,540 7,772,942
- -------------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 391,100 7,294,015
- -------------------------------------------------------------------------------
Vodafone Group plc 11,596,840 28,752,736
----------------
108,044,196
- -------------------------------------------------------------------------------
UTILITIES--0.5%
- -------------------------------------------------------------------------------
GAS UTILITIES--0.5%
Hong Kong & China Gas Co. Ltd. 8,472,000 12,931,269
----------------
Total Common Stocks
(Cost $1,885,360,779) 2,478,686,944
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.0%
Hindustan Lever Ltd.,
9% Sec. Debs., 1/1/05 [INR]
(Cost $573,468) 25,547,400 598,206
- -------------------------------------------------------------------------------
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 4,848,020
- -------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.2%
Undivided interest of 6.74% in joint
repurchase agreement (Principal Amount/
Market Value $1,603,898,000, with a
maturity value of $1,603,979,086) with
PaineWebber, Inc., 0.91%, dated 12/31/03,
to be repurchased at $108,116,466 on
1/2/04, collateralized by Federal Home
Loan Mortgage Corp., 5%--5.50%,
9/1/33--11/1/33, with a value of
$405,980,626 and Federal National
Mortgage Assn., 4.50%, 10/1/33, with
a value of $1,234,398,060
(Cost $108,111,000) 108,111,000 108,111,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,997,613,247) 99.8% 2,592,244,170
- -------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 0.2 4,822,027
--------------------------------
NET ASSETS 100.0% $2,597,066,197
================================
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Continued
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
INR Indian Rupee
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 $4,848,020 or 0.19% of the Fund's net
assets as of December 31, 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 $1,124,379,033 43.4%
Great Britain 281,788,501 10.9
France 235,884,438 9.1
Japan 229,082,565 8.8
India 94,505,275 3.7
The Netherlands 84,508,695 3.3
Germany 78,323,361 3.0
Brazil 68,377,376 2.6
Canada 61,026,859 2.4
Switzerland 52,908,744 2.0
Hong Kong 49,586,328 1.9
Sweden 49,078,771 1.9
Korea, Republic of South 40,518,270 1.6
Mexico 38,512,221 1.5
Bermuda 21,781,577 0.8
Norway 20,440,604 0.8
Singapore 16,370,797 0.6
Australia 13,809,833 0.5
Italy 11,029,401 0.4
Israel 10,593,428 0.4
Spain 9,738,093 0.4
---------------------------
Total $2,592,244,170 100.0%
===========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES December 31, 2003
- --------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $1,997,613,247)--see accompanying statement $2,592,244,170
- --------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 5,978,095
Interest and dividends 2,482,206
Investments sold 1,202,338
Other 11,066
----------------
Total assets 2,601,917,875
- --------------------------------------------------------------------------------------------------
LIABILITIES
Bank overdraft 4,622
- --------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 3,589,235
Foreign capital gains taxes 979,395
Distribution and service plan fees 85,813
Shareholder reports 48,768
Trustees' compensation 12,174
Transfer and shareholder servicing agent fees 2,501
Other 129,170
----------------
Total liabilities 4,851,678
- --------------------------------------------------------------------------------------------------
NET ASSETS $2,597,066,197
================
- --------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 103,561
- --------------------------------------------------------------------------------------------------
Additional paid-in capital 2,294,643,685
- --------------------------------------------------------------------------------------------------
Accumulated net investment income 14,682,479
- --------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (306,095,643)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 593,732,115
----------------
NET ASSETS $2,597,066,197
================
- --------------------------------------------------------------------------------------------------
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 $2,280,751,733 and 90,944,755 shares of beneficial interest outstanding) $25.08
- --------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $168,738,958 and 6,759,109 shares of beneficial interest outstanding) $24.96
- --------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $147,575,506 and 5,857,374 shares of beneficial interest outstanding) $25.19
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS For the Year Ended December 31, 2003
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $2,762,565) $ 30,810,084
- ------------------------------------------------------------------------------------------
Interest 706,052
--------------
Total investment income 31,516,136
- ------------------------------------------------------------------------------------------
EXPENSES
Management fees 12,206,333
- ------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 228,953
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 10,062
Service shares 9,754
Class 3 shares 6,666
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 350,448
- ------------------------------------------------------------------------------------------
Shareholder reports 118,036
- ------------------------------------------------------------------------------------------
Trustees' compensation 60,983
- ------------------------------------------------------------------------------------------
Other 131,247
--------------
Total expenses 13,122,482
Less reduction to custodian expenses (2,313)
--------------
Net expenses 13,120,169
- ------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 18,395,967
- ------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (99,590,714)
Foreign currency transactions 32,526,679
--------------
Net realized loss (67,064,035)
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (net of foreign capital gains tax of $979,395) 680,877,529
Translation of assets and liabilities denominated in foreign currencies 97,085,854
--------------
Net change in unrealized appreciation (depreciation) 777,963,383
- ------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $729,295,315
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 2003 2002
- -----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 18,395,967 $ 14,349,649
- -----------------------------------------------------------------------------------------------------------------
Net realized loss (67,064,035) (172,795,488)
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 777,963,383 (283,662,127)
----------------------------------
Net increase (decrease) in net assets resulting from operations 729,295,315 (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 in net assets resulting from beneficial interest transactions:
Non-Service shares 79,623,681 86,880,795
Service shares 77,667,391 41,295,581
Class 3 shares 121,430,754 --
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease) 994,243,952 (323,534,918)
- -----------------------------------------------------------------------------------------------------------------
Beginning of period 1,602,822,245 1,926,357,163
----------------------------------
End of period [including accumulated net investment income of
$14,682,479 and $16,334,525, respectively] $2,597,066,197 $1,602,822,245
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
NON-SERVICE SHARES YEAR ENDED DECEMBER 31, 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $17.70 $22.84 $30.33 $33.41 $22.07
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .19 .16 .17 .27 .14
Net realized and unrealized gain (loss) 7.34 (5.19) (3.85) 1.82 12.21
---------------------------------------------------------------------
Total from investment operations 7.53 (5.03) (3.68) 2.09 12.35
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.15) (.11) (.19) (.09) (.14)
Dividends in excess of net investment income -- -- -- -- (.13)
Distributions from net realized gain -- -- (3.62) (5.08) (.74)
---------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.15) (.11) (3.81) (5.17) (1.01)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $25.08 $17.70 $22.84 $30.33 $33.41
=====================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 43.02% (22.13)% (12.04)% 5.09% 58.48%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $2,280,752 $1,549,993 $1,905,890 $2,136,420 $1,762,366
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,751,226 $1,776,289 $1,918,335 $2,116,100 $1,251,190
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.99% 0.80% 0.70% 0.83% 0.57%
Total expenses 0.67% 3 0.67% 3 0.70% 3 0.68% 3 0.69% 3
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 34% 39% 50% 64%
<FN>
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. Reduction to custodian expenses less than 0.01%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 OPPENHEIMER GLOBAL SECURITIES FUND/VA
SERVICE SHARES YEAR ENDED DECEMBER 31, 2003 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 .12 .12 .21 .03
Net realized and unrealized gain (loss) 7.36 (5.19) (3.92) (2.38)
------------------------------------------------------
Total from investment operations 7.48 (5.07) (3.71) (2.35)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.10) (.19) --
Distributions from net realized gain -- -- (3.62) --
------------------------------------------------------
Total dividends and/or distributions to shareholders (.13) (.10) (3.81) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $24.96 $17.61 $22.78 $30.30
======================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 42.86% (22.37)% (12.17)% (7.20)%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $168,739 $52,830 $20,467 $983
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 91,800 $34,847 $ 8,502 $325
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.68% 0.51% 0.44% 0.60%
Total expenses 0.93% 4 0.90% 4 0.85% 4 0.83% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 34% 39% 50%
<FN>
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, 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%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
CLASS 3 SHARES PERIOD ENDED DECEMBER 31, 2003 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 17.55
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07
Net realized and unrealized gain 7.57
----------
Total from investment operations 7.64
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income --
Distributions from net realized gain --
----------
Total dividends and/or distributions to shareholders --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.19
==========
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 43.53%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $147,576
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 80,579
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.73%
Total expenses 0.68% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34%
<FN>
1. For the period from May 1, 2003 (inception of offering) to December 31, 2003.
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. 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%.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 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 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.
- --------------------------------------------------------------------------------
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. 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 foreign exchanges will be fair valued. 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.
15 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
The tax components of capital shown in the table below represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years and unrealized appreciation or depreciation of
securities and other investments for federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
- -------------------------------------------------------------------------------------------------
$35,066,177 $-- $302,670,033 $569,922,654
<FN>
1. As of December 31, 2003, the Fund had $300,780,388 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of December 31, 2003,
details of the capital loss carryforwards were as follows:
EXPIRING
-------------------------
2009 $ 47,254,011
2010 147,620,574
2011 105,905,803
------------
Total $300,780,388
============
2. During the fiscal years ended December 31, 2003 and December 31, 2002, the
Fund did not utilize any capital loss carryforwards.
3. As of December 31, 2003, the Fund had $1,844,693 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2012. Additionally, the Fund had $44,952 of
post-October foreign currency losses which were deferred.
</FN>
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. Accordingly,
the following amounts have been reclassified for December 31, 2003. Net assets
of the Fund were unaffected by the reclassifications.
REDUCTION TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
-----------------------------------
$6,274,824 $6,274,824
The tax character of distributions paid during the years ended December 31,
2003 and December 31, 2002 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2003 DECEMBER 31, 2002
---------------------------------------------------------------
Distributions paid from:
Ordinary income $13,773,189 $9,603,328
16 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments
for federal income tax purposes as of December 31, 2003 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.
Federal tax cost of securities $2,022,402,103
==============
Gross unrealized appreciation $ 611,728,385
Gross unrealized depreciation (41,805,731)
--------------
Net unrealized appreciation $ 569,922,654
==============
Certain foreign countries impose a tax on capital gains which is accrued by the
Fund based on unrealized appreciation, if any, on affected securities. The tax
is paid when the gain is realized.
-------------------------------------------------------------------------------
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. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of the Fund or are
invested in other Oppenheimer funds selected by the Trustee. Deferral of
trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
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.
- --------------------------------------------------------------------------------
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:
YEAR ENDED DECEMBER 31, 2003 1 YEAR ENDED DECEMBER 31, 2002
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 56,815,585 $1,050,428,269 148,964,909 $ 2,936,874,923
Dividends and/or distributions reinvested 828,612 13,324,089 405,580 9,494,638
Redeemed (54,266,655) (984,128,677) (145,263,047) (2,859,488,766)
-------------------------------------------------------------------------
Net increase 3,377,542 $ 79,623,681 4,107,442 $ 86,880,795
=========================================================================
17 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
2. SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED DECEMBER 31, 2003 1 YEAR ENDED DECEMBER 31, 2002
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 9,204,619 $ 180,268,510 5,676,692 $108,715,377
Dividends and/or distributions reinvested 28,051 449,100 4,653 108,690
Redeemed (5,472,867) (103,050,219) (3,580,556) (67,528,486)
---------------------------------------------------------------------
Net increase 3,759,803 $ 77,667,391 2,100,789 $ 41,295,581
=====================================================================
- -------------------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 6,450,195 $ 132,821,158 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (592,821) (11,390,404) -- --
---------------------------------------------------------------------
Net increase 5,857,374 $ 121,430,754 -- $ --
=====================================================================
<FN>
1. For the year ended December 31, 2003, for Non-Service and Service shares and
for the period from May 5, 2003 (inception of offering) to December 31, 2003,
for Class 3 shares.
</FN>
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended December 31, 2003, were
$841,778,088 and $625,248,280, 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 per account fee. For the year ended December 31, 2003, the Fund
paid $25,856 to OFS for services to the Fund.
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. Fees incurred by the Fund under the plan are detailed in the
Statement of Operations.
- --------------------------------------------------------------------------------
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.
18 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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 December 31, 2003, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
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 (the SEC) 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. The
SEC's order requires the Fund's Board of Trustees to adopt operating policies
and procedures to administer interfund borrowing and lending. 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 year
ended or at December 31, 2003.
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER GLOBAL SECURITIES
FUND/VA:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Global Securities Fund/VA, a series of Oppenheimer Variable Account
Funds, including the statement of investments, as of December 31, 2003, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for the periods indicated. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31, 2003, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Global Securities Fund/VA as of December 31, 2003, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for the
periods indicated, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 12, 2004
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record received information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the
Fund to report this information to the Internal Revenue Service.
Dividends of $0.1504 and $0.1267 per share were paid to Non-Service and
Service shareholders, respectively, on March 14, 2003, all of which was
designated as ordinary income for federal income tax purposes.
Dividends, if any, paid by the Fund during the fiscal year ended December
31, 2003 which are not designated as capital gain distributions should be
multiplied by 17.25% to arrive at the amount eligible for the corporate
dividend-received deduction.
The Fund has elected the application of Section 853 of the Internal Revenue
Code to permit shareholders to take a federal income tax credit or deduction,
at their option, on a per share basis for an aggregate amount of $2,586,134 of
foreign income taxes paid by the Fund during the fiscal year ended December 31,
2003. A separate notice will be mailed to each shareholder, which will reflect
the proportionate share of such foreign taxes which must be treated by
shareholders as gross income for federal income tax purposes.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
PORTFOLIO PROXY VOTING
POLICIES AND PROCEDURES 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 1.800.225.5677, (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.
21 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
TRUSTEES AND OFFICERS Unaudited
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS
FUND, LENGTH OF SERVICE, AGE HELD BY TRUSTEE; NUMBER OF FUNDS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY,
TRUSTEES CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL
HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek
Chairman of the Board Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
(since 2003) and The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
Trustee (since 1999) (since 1997); Chairman of the following private companies: Great Frontier
Age: 66 Insurance (insurance agency) (since 1995), Ambassador Media Corporation and
Broadway Ventures (since 1984); a director of the following public companies:
Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992)
and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a
Director/ Trustee of Campus Crusade for Christ and the Bradley Foundation.
Formerly a director of the following: Storage Technology Corporation (a
publicly-held computer equipment company) (1991-February 2003), and
International Family Entertainment (television channel) (1992-1997), Frontier
Real Estate, Inc. (residential real estate brokerage) (1994-1999), and
Frontier Title (title insurance agency) (1995-June 1999); a U.S. Senator
(January 1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds
complex.
ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner
Trustee (since 1993) of private equity funds) (until February 2001); Chairman, President and Chief
Age: 72 Executive Officer of A.G. Edwards Capital, Inc. (until March 2000); Vice
Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards &
Sons, Inc. (its brokerage company subsidiary) (until March 1999); Chairman of
A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor)
(until March 1999); and a Director (until March 2000) of A.G. Edwards & Sons an
A.G. Edwards Trust Company. Oversees 38 portfolios in the OppenheimerFunds
complex.
GEORGE C. BOWEN, Formerly (until April 1999): Senior Vice President (from September 1987) and
Trustee (since 1997) Treasurer (from March 1985) of OppenheimerFunds, Inc. (the Manager); Vice
Age: 67 President (from June 1983) and Treasurer (since March 1985) of OppenheimerFunds
Distributor, Inc. (a subsidiary of the Manager); Senior Vice President (since
February 1992), Treasurer (since July 1991) Assistant Secretary and a director
(since December 1991) of Centennial Asset Management Corporation; Vice Presiden
(since October 1989) and Treasurer (since April 1986) of HarbourView Asset
Management Corporation (an investment advisory subsidiary of the Manager);
President, Treasurer and a director (June 1989-January 1990) of Centennial
Capital Corporation (an investment advisory subsidiary of the Manager); Vice
President and Treasurer (since August 1978) and Secretary (since April 1981) of
Shareholder Services, Inc. (a transfer agent subsidiary of the Manager); Vice
President, Treasurer and Secretary (since November 1989) of Shareholder
Financial Services, Inc. (a transfer agent subsidiary of the Manager); Assistan
Treasurer (since March 1998) of Oppenheimer Acquisition Corp. (the Manager's
parent corporation); Treasurer (since November 1989) of Oppenheimer Partnership
Holdings, Inc. (a holding company subsidiary of the Manager); Vice President an
Treasurer (since July 1996) of Oppenheimer Real Asset Management, Inc. (an
investment advisory subsidiary of the Manager); Chief Executive Officer and
director (since March 1996) of MultiSource Services, Inc. (a broker-dealer
subsidiary of the Manager); Treasurer (since October 1997) of OppenheimerFunds
International Ltd. and OppenheimerFunds plc (offshore fund management
subsidiaries of the Manager). Oversees 38 portfolios in the OppenheimerFunds
complex.
EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home (since
Trustee (Since 1999) June 2000). Formerly (March 2001 - May 2002) Director of Genetic ID, Inc. and
Age: 65 its subsidiaries (a privately held biotech company); a partner with
PricewaterhouseCoopers LLP (from 1974-1999) (an accounting firm) and Chairman
(from 1994-1998), Price Waterhouse LLP Global Investment Management Industry
Services Group. Oversees 38 portfolios in the OppenheimerFunds complex.
22 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
JON S. FOSSEL, Chairman and Director (since 1998) of Rocky Mountain Elk Foundation (a
Trustee (since 1990) not-for-profit foundation); and a director (since October 1999) of P.R.
Age: 61 Pharmaceuticals (a privately held company) and UNUMProvident (an insurance
company) (since June 1, 2002). Formerly Chairman and a director (until Oct
1996) and President and Chief Executive Officer (until October 1995) of th
Manager; President, Chief Executive Officer and a director of Oppenheimer
Acquisition Corp., Shareholders Services Inc. and Shareholder Financial
Services, Inc. (until October 1995). Oversees 38 portfolios in the
OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984).
Trustee (since 1996) Formerly (until October 1994) Mr. Freedman held several positions in subsidiary
Age: 63 or affiliated companies of the Manager. Oversees 38 portfolios in the
OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee (since 1996) of MassMutual Institutional Funds and of MML Series
Trustee (since 2002) Investment Fund (open-end investment companies); Director of MML Services
Age: 57 (since April 1987) and America Funds Emerging Markets Growth Fund (since
October 1991) (both are investment companies), The California Endowment (a
philanthropy organization) (since April 2002), and Community Hospital of
Monterey Peninsula, (since February 2002); a trustee (since February 2000) of
Monterey Internationa Studies (an educational organization), and an advisor to
Unilever (Holland)'s pension fund and to Credit Suisse First Boston's Sprout
venture capital unit. Mrs. Hamilton also is a member of the investment
committees of the Rockefeller Foundation, the University of Michigan and
Hartford Hospital. Formerly, President (February 1991-April 2000) ARCO
Investment Management Company. Oversees 37 portfolios in the OppenheimerFunds
complex.
ROBERT J. MALONE, Chairman and CEO (since 2003) of Steele Street State Bank (a commercial banking
Trustee (since 2002) entity); Director (since 2001) of Jones Knowledge, Inc. (a privately held
Age: 59 company), U.S. Exploration, Inc., (since 1997), Colorado UpLIFT (a non-profit
organization) (since 1986) and a trustee of the Gallagher Family Foundation
(non-profit organization) (since 2000). Formerly, Chairman of U.S. Bank (a
subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July
1996-April 1, 1999) and a director of Commercial Assets, Inc. (a REIT)
(1993-2000). Oversees 37 portfolios in the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee (since 1996) of MassMutual Institutional Funds and of MML Series
Trustee (since 2000) Investment Fund (open-end investment companies); Trustee (since 1987), Chairman
Age: 61 of the Board (since 2003) and Chairman of the investment committee (since 1994)
for the Worcester Polytech Institute; President and Treasurer (since January
1999) of the SIS Fund (a private not for profit charitable fund); Trustee (sinc
1995) of the Springfield Library and Museum Association; Trustee (since 1996) o
the Community Music School of Springfield. Formerly, member of the investment
committee of the Community Foundation of Western Massachusetts (1998 - 2003);
Chairman (January 1999-July 1999) of SIS & Family Bank, F.S.B. (formerly SIS
Bank); President, Chief Executive Officer and Director (May 1993-December 1998)
of SIS Bankcorp, Inc. and SIS Bank (formerly Springfield Institution for
Savings) and Executive Vice President (January 1999-July 1999) of Peoples
Heritage Financial Group, Inc. Oversees 38 portfolios in the OppenheimerFunds
complex.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225
AND OFFICER LIBERTY STREET, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE
TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee (since September 2000) of the Manager; President and a director or trustee of
(since 2001) other Oppenheimer funds; President and a director (since July 2001) of
Age: 54 Oppenheimer Acquisition Corp. and of Oppenheimer Partnership Holdings, Inc.; a
director (since November 2001) of OppenheimerFunds Distributor, Inc.; Chairman
and a director (since July 2001) of Shareholder Services, Inc. and of
Shareholder Financial Services, Inc.; President and a director (since July 2001
of OppenheimerFunds Legacy Program (a charitable trust program established by
the Manager); a director of the following investment advisory subsidiaries of
OppenheimerFunds, Inc.: OFI Institutional Asset Management, Inc. and Centennial
Asset Management Corporation (since November 2001), HarbourView Asset Managemen
Corporation and OFI Private Investments, Inc. (since July 2001); President
(since November 1, 2001) and a director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; a director (since November 2001) of Trinity Investment
Management Corp. and Tremont Advisers, Inc. (investment advisory affiliates of
the Manager); Executive Vice President (since February 1997) of Massachusetts
Mutual Life Insurance Company (the Manager's parent company); a director (since
June 1995) of DLB Acquisition Corporation (a holding company that owns shares o
David L. Babson & Company, Inc.); formerly, Chief Operating Officer (September
2000-June 2001) of the Manager; President and trustee (November 1999-November
2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-en
investment companies); a director (September 1999-August 2000)
23 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
TRUSTEES AND OFFICERS Unaudited / Continued
JOHN V. MURPHY, of C.M. Life Insurance Company; President, Chief Executive Officer and director
Continued (September 1999-August 2000) of MML Bay State Life Insurance Company; a
director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings
Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 72
portfolios as a Trustee/ Officer and 10 portfolios as an Officer in the
OppenheimerFunds complex.
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. WILBY
AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY
10281-1008, FOR MR. WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH
OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER EARLIER RESIGNATION, DEAT
OR REMOVAL.
WILLIAM L. WILBY, Senior Vice President of the Manager (since July 1994) and of HarbourView Asset
Vice President and Management Corporation (since May 1999); Senior Investment Officer, Director of
Portfolio Manager International Equities (since May 2000) of the Manager; an officer of 2
(since 1995) portfolios in the OppenheimerFunds complex; formerly Vice President of the
Age: 59 Manager (October 1991- July 1994) and of HarbourView Asset Management
Corporation (June 1992 - May 1999).
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (Since 1999) Treasurer (since March 1999) of HarbourView Asset Management Corporation,
Age: 44 Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings, Inc.,
OFI Private Investments, Inc. (since March 2000), OppenheimerFunds
International Ltd. and OppenheimerFunds plc (offshore fund management
subsidiaries of the Manager) (since May 2000) and OFI Institutional Asset
Management, Inc. (since November 2000); Treasurer and Chief Financial Officer
(since May 2000) of OFI Trust Company (a trust company subsidiary of the
Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition
Corp. and OppenheimerFunds Legacy Program (since April 2000); formerly
Principal and Chief Operating Officer (March 1995-March 1999), Bankers Trust
Company-Mutual Fund Services Division. An officer of 82 portfolios in the
OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Vice President and Secretary February 2002) of the Manager; General Counsel and a director (since November
(since 2001) 2001) of OppenheimerFunds Distributor, Inc.; Senior Vice President and General
Age: 55 Counsel (since November 2001) of HarbourView Asset Management Corporation; Vice
President and a director (since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel and a director (since
November 2001) of Shareholder Services, Inc., Shareholder Financial Services,
Inc., OFI Private Investments, Inc., OFI Trust Company and OFI Institutional
Asset Management, Inc.; General Counsel (since November 2001) of Centennial
Asset Management Corporation; a director (since November 2001) of Oppenheimer
Real Asset Management, Inc.; Assistant Secretary and a director (since November
2001) of OppenheimerFunds International Ltd.; Vice President (since November
2001) of OppenheimerFunds Legacy Program; Secretary (since November 2001) of
Oppenheimer Acquisition Corp.; formerly Senior Vice President (May 1985-Januar
2004), Acting General Counsel (November 2001-February 2002) and Associate
General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial
Services, Inc. (November 1989-November 2001); OppenheimerFunds International
Ltd. And OppenheimerFunds plc (October 1997-November 2001). An officer of 82
portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST.
24 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that Edward L.
Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a
member of the Board's Audit Committee, possess the technical attributes
identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit
committee financial experts," and has designated Messrs. Cameron and Bowen as
the Audit Committee's financial experts. Messrs. Cameron and Bowen are
"independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $24,000 in fiscal 2003 and $23,500 in
fiscal 2002.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $75,000 in fiscal 2003 and $65,000 in
fiscal 2002 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $11,600 in fiscal 2003 and $6,500 in
fiscal 2002 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed $0 in fiscal 2003 and $3,500 in
fiscal 2002 to the registrant's investment adviser or any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant.
Such fees would include services provided to the registrant's
Board of Trustees with respect to the annual renewal of the
registrant's investment advisory agreement.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $86,600 in fiscal 2003 and $75,000 in
fiscal 2002 to the registrant and the registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
registrant related to non-audit fees. Those billings did not
include any prohibited non-audit services as defined by the
Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal account's independence. No such services
were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable for fiscal periods ending December 31, 2003.
ITEM 10. 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 December 31, 2003, 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 significant changes in registrant's internal
controls over financial reporting that occurred during the registrant's
second fiscal half-year that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)