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 MULTIPLE STRATEGIES 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
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: DECEMBER 31
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Date of reporting period: JANUARY 1, 2003 - DECEMBER 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
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MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund's strong performance in
its equity portion during its fiscal year ended December 31, 2003, was primarily
driven by its stock-selection strategy. The portfolio manager's "bottom-up"
investment approach seeking companies with above-average fundamentals at below
average prices led it to stocks from a variety of market-capitalization ranges
and representing a number of investment styles. In addition, the Fund's
performance was supported by income derived from dividend-paying stocks and
relatively strong total returns from a diversified portfolio of bonds.
The Fund benefited from strong performance in the consumer discretionary,
industrials, financial and consumer staples sectors during the reporting period.
Diversified franchiser Cendant Corp. saw its stock price rise as investors
gradually recognized that its business fundamentals were better than they had
anticipated. Cendant's housing-related businesses, such as realtor Century 21,
benefited from a persistently strong housing market, and its cyclical
travel-related businesses, such as car rental agencies Avis and Budget,
strengthened along with the overall economy.
In the industrials sector, aeronautical and defense contractors proved to be
wise investments this year, as Brazilian aircraft manufacturer Empresa
Brasileira de Aeronautica SA (Embraer) and Orbital Sciences Corp. added to
performance. Orbital, a key contractor for Northrop, has been engaged to take
part in an 8-year contract to develop and test an antimissile defense system for
the U.S. Defense Department.
Other positive contributors during the latter part of 2003 included Liberty
Media Corp., which struggled early in the year but rallied following a large
stock buyback, and financial services provider J.P. Morgan Chase & Co., which
benefited from strong mortgage activity and a rebounding stock market during the
year. The Fund's overweight position in real estate also proved beneficial. Host
Marriott Corp. was a strong contributor to the Fund's performance as both room
rates and occupancy rose throughout 2003. Also, healthcare holdings, like
Province Healthcare Co. and Guidant Corp., a leader in the treatment of cardiac
and vascular disease, were also strong performers this year.
On the other hand, some holdings produced disappointing returns during the
period. Schering-Plough, a manufacturer of pharmaceutical and health care
products underperformed due to disappointing results from their allergy and
hepatitis drugs. Despite what we believe to be the high quality of its assets,
media conglomerate Viacom, Inc., failed to benefit as much as we had hoped from
an upturn in advertising revenues.
The Fund's fixed-income segment successfully added value to the overall
performance through an emphasis on corporate bonds, which rallied dramatically
as investors became more comfortable with credit-related risks after many
issuers reduced debt and improved their cost structures in the wake of 2002's
corporate governance scandals. Mortgage-backed securities also contributed
positively to performance, primarily due to a focus on higher-coupon securities
that held up relatively well during the market-decline in July and August.
Finally, our decision to maintain slightly less duration, or interest-rate
sensitivity, than many of our peers, proved to significantly benefit performance
once rates began backing up in June. The Fund's holdings, strategies and
management are subject to change.
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 May 1, 2002. 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 both the S&P 500
Index, an unmanaged index of U.S. equity securities that is a measure of the
general domestic stock market and the Lehman Brothers Aggregate Bond Index, an
unmanaged index of U.S. corporate, government and mortgage-backed securities
that is a measure of the domestic bond market. Index performance reflects the
reinvestment of income but does not consider the effect of transaction costs.
The Fund's performance reflects the effects of 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.
4 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NON-SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Multiple Strategies Fund/VA (Non-Service)
S&P 500 Index
Lehman Brothers Aggregate Bond Index
[LINE GRAPH]
Oppenheimer Multiple Strategies S&P 500 Lehman Brothers
Fund/VA (Non-Service) Index Aggregate Bond Index
12/31/1993 $10,000 $10,000 $10,000
03/31/1994 9,759 9,621 9,713
06/30/1994 9,593 9,662 9,613
09/30/1994 9,976 10,133 9,672
12/31/1994 9,805 10,131 9,708
03/31/1995 10,440 11,117 10,198
06/30/1995 11,128 12,176 10,819
09/30/1995 11,656 13,143 11,032
12/31/1995 11,900 13,934 11,502
03/31/1996 12,303 14,682 11,298
06/30/1996 12,635 15,340 11,362
09/30/1996 13,126 15,814 11,572
12/31/1996 13,744 17,131 11,919
03/31/1997 13,748 17,591 11,853
06/30/1997 15,001 20,660 12,288
09/30/1997 16,164 22,207 12,696
12/31/1997 16,110 22,845 13,070
03/31/1998 17,223 26,029 13,274
06/30/1998 17,253 26,893 13,584
09/30/1998 15,449 24,224 14,158
12/31/1998 17,182 29,378 14,206
03/31/1999 17,460 30,841 14,135
06/30/1999 18,637 33,011 14,011
09/30/1999 18,021 30,955 14,106
12/31/1999 19,210 35,557 14,089
03/31/2000 20,384 36,371 14,400
06/30/2000 20,496 35,405 14,651
09/30/2000 20,557 35,062 15,092
12/31/2000 20,446 32,321 15,727
03/31/2001 20,275 28,491 16,204
06/30/2001 21,538 30,158 16,296
09/30/2001 19,176 25,733 17,047
12/31/2001 20,900 28,482 17,055
03/31/2002 20,974 28,561 17,071
06/30/2002 19,437 24,737 17,701
09/30/2002 17,545 20,466 18,512
12/31/2002 18,726 22,190 18,804
03/31/2003 18,534 21,491 19,066
06/30/2003 20,857 24,798 19,542
09/30/2003 21,591 25,454 19,514
12/31/2003 23,399 28,551 19,576
AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/03
1-Year 24.96% 5-Year 6.37% 10-Year 8.87% Inception Date 2/9/1987
SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Multiple Strategies Fund/VA (Service)
S&P 500 Index
Lehman Brothers Aggregate Bond Index
[LINE GRAPH]
Oppenheimer Multiple Strategies S&P 500 Lehman Brothers
Fund/VA (Service) Index Aggregate Bond Index
05/01/2002 $10,000 $10,000 $10,000
06/30/2002 9,407 9,220 10,172
09/30/2002 8,491 7,628 10,638
12/31/2002 9,056 8,271 10,806
03/31/2003 8,951 8,010 10,956
06/30/2003 10,075 9,242 11,230
09/30/2003 10,423 9,487 11,214
12/31/2003 11,291 10,641 11,249
CUMULATIVE TOTAL RETURN OF SERVICE SHARES OF THE FUND AT 12/31/03
1-Year 24.69% Since Inception (5/1/02) 7.56% Inception Date 5/1/2002
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.
5 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF INVESTMENTS December 31, 2003
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MARKET VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--56.4%
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CONSUMER DISCRETIONARY--10.1%
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HOTELS, RESTAURANTS & LEISURE--1.6%
Brinker International, Inc. 1 117,700 $ 3,902,932
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McDonald's Corp. 192,000 4,767,360
--------------
8,670,292
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HOUSEHOLD DURABLES--1.0%
Toll Brothers, Inc. 1 111,100 4,417,336
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WCI Communities, Inc. 1 61,000 1,257,210
--------------
5,674,546
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MEDIA--5.7%
AMC Entertainment, Inc. 1 144,500 2,197,850
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EchoStar Communications
Corp., Cl. A 1,2 94,600 3,216,400
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Gilat Satellite Networks Ltd. 1 44,600 218,094
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Liberty Media Corp., Cl. A 1 779,900 9,273,011
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Regal Entertainment Group 46,600 956,232
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UnitedGlobalCom, Inc., Cl. A 1 978,171 8,294,890
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Viacom, Inc., Cl. B 2 169,800 7,535,724
--------------
31,692,201
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MULTILINE RETAIL--1.2%
Sears Roebuck & Co. 142,300 6,473,227
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SPECIALTY RETAIL--0.5%
Gap, Inc. (The) 2 126,900 2,945,349
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TEXTILES, APPAREL & LUXURY GOODS--0.1%
Nike, Inc., Cl. B 2 11,500 787,290
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CONSUMER STAPLES--3.8%
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BEVERAGES--1.0%
Adolph Coors Co., Cl. B 22,900 1,284,690
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Constellation Brands, Inc., Cl. A 1 133,900 4,409,327
--------------
5,694,017
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FOOD PRODUCTS--1.1%
Tyson Foods, Inc., Cl. A 308,500 4,084,540
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Unilever NV, NY Shares 30,000 1,947,000
--------------
6,031,540
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PERSONAL PRODUCTS--0.4%
Estee Lauder Cos., Inc. (The), Cl. A 58,000 2,277,080
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TOBACCO--1.3%
Altria Group, Inc. 136,300 7,417,446
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ENERGY--3.3%
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ENERGY EQUIPMENT & SERVICES--0.3%
Halliburton Co. 42,600 1,107,600
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Schlumberger Ltd. 16,100 880,992
--------------
1,988,592
MARKET VALUE
SHARES SEE NOTE 1
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OIL & GAS--3.0%
BP plc, ADR 34,800 $ 1,717,380
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Devon Energy Corp. 17,900 1,024,954
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Houston Exploration Co. 1 18,300 668,316
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LUKOIL, Sponsored ADR 9,300 865,830
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Petroleo Brasileiro SA, Preference 81,000 2,145,026
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Pioneer Natural Resources Co. 1 46,000 1,468,780
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Talisman Energy, Inc. 56,300 3,203,077
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Total SA, B Shares 1,700 316,069
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TotalFinaElf SA, Sponsored ADR 24,000 2,220,240
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Westport Resources Corp. 1 53,900 1,609,454
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YUKOS, ADR 36,617 1,537,914
--------------
16,777,040
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FINANCIALS--9.3%
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CAPITAL MARKETS--0.9%
Bank of New York Co., Inc. (The) 2 87,700 2,904,624
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UBS AG 25,042 1,715,025
--------------
4,619,649
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COMMERCIAL BANKS--2.6%
FleetBoston Financial Corp. 146,200 6,381,630
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SunTrust Banks, Inc. 41,500 2,967,250
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U.S. Bancorp 106,700 3,177,526
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Wells Fargo & Co. 35,300 2,078,817
--------------
14,605,223
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DIVERSIFIED FINANCIAL SERVICES--2.5%
CIT Group, Inc. 72,000 2,588,400
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Citigroup, Inc. 98,900 4,800,606
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J.P. Morgan Chase & Co. 2 144,500 5,307,485
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Merrill Lynch & Co., Inc. 2 23,000 1,348,950
--------------
14,045,441
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INSURANCE--2.3%
American International Group, Inc. 2 6,000 397,680
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Chubb Corp. 49,900 3,398,190
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Platinum Underwriters Holdings Ltd. 55,400 1,662,000
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Prudential Financial, Inc. 96,600 4,034,982
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XL Capital Ltd., Cl. A 44,200 3,427,710
--------------
12,920,562
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REAL ESTATE--1.0%
Developers Diversified Realty Corp. 42,800 1,436,796
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Host Marriott Corp. 1 334,900 4,125,968
--------------
5,562,764
6 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
MARKET VALUE
SHARES SEE NOTE 1
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HEALTH CARE--8.4%
- ----------------------------------------------------------------
BIOTECHNOLOGY--0.8%
Applera Corp./Celera
Genomics Group 1 48 $ 668
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Medimmune, Inc. 1 25,500 647,700
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Wyeth 93,100 3,952,095
--------------
4,600,463
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HEALTH CARE EQUIPMENT & SUPPLIES--1.4%
Applera Corp./Applied
Biosystems Group 192 3,976
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Beckman Coulter, Inc. 61,000 3,100,630
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Guidant Corp. 2 54,400 3,274,880
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Millipore Corp. 1 29,800 1,282,890
--------------
7,662,376
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HEALTH CARE PROVIDERS & SERVICES--1.6%
Aetna, Inc. 58,400 3,946,672
- ----------------------------------------------------------------
Covance, Inc. 1 63,800 1,709,840
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Province Healthcare Co. 1 206,600 3,305,600
--------------
8,962,112
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PHARMACEUTICALS--4.6%
Abbott Laboratories 2 96,500 4,496,900
- ----------------------------------------------------------------
GlaxoSmithKline plc, ADR 62,600 2,918,412
- ----------------------------------------------------------------
Johnson & Johnson 2 12,000 619,920
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Novartis AG 89,813 4,077,623
- ----------------------------------------------------------------
Pfizer, Inc. 140,700 4,970,931
- ----------------------------------------------------------------
Schering-Plough Corp. 175,200 3,046,728
- ----------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd., Sponsored ADR 51,800 2,937,578
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Watson Pharmaceuticals, Inc. 1 54,200 2,493,200
--------------
25,561,292
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INDUSTRIALS--6.6%
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AEROSPACE & DEFENSE--2.6%
Boeing Co. 38,700 1,630,818
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Empresa Brasileira de
Aeronautica SA, ADR 101,400 3,552,042
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Northrop Grumman Corp. 2 5,000 478,000
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Orbital Sciences Corp. 1 433,164 5,206,631
- ----------------------------------------------------------------
Raytheon Co. 121,800 3,658,872
--------------
14,526,363
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AIRLINES--0.1%
Singapore Airlines Ltd. 116,000 765,000
- ----------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.7%
Brink's Co. (The) 74,000 1,673,140
- ----------------------------------------------------------------
Cendant Corp. 1 484,500 10,789,815
- ----------------------------------------------------------------
ChoicePoint, Inc. 1 67,500 2,571,075
--------------
15,034,030
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.4%
Tyco International Ltd. 2 76,000 $ 2,014,000
- ----------------------------------------------------------------
ROAD & RAIL--0.8%
Burlington Northern Santa Fe Corp. 40,600 1,313,410
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Canadian National Railway Co. 22,000 1,392,160
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Swift Transportation Co., Inc. 1 87,000 1,828,740
--------------
4,534,310
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INFORMATION TECHNOLOGY--9.7%
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COMMUNICATIONS EQUIPMENT--0.2%
Cisco Systems, Inc. 1,2 20,000 485,800
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QUALCOMM, Inc. 14,300 771,199
--------------
1,256,999
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COMPUTERS & PERIPHERALS--3.1%
Hewlett-Packard Co. 334,200 7,676,574
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International Business
Machines Corp. 2 103,500 9,592,380
--------------
17,268,954
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ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3%
Flextronics International Ltd. 1 347,800 5,161,352
- ----------------------------------------------------------------
Keyence Corp. 9,160 1,930,805
--------------
7,092,157
- ----------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.6%
Net2Phone, Inc. 1 466,000 3,168,800
- ----------------------------------------------------------------
IT SERVICES--0.5%
Infosys Technologies Ltd.,
Sponsored ADR 10,700 1,023,990
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Titan Corp. (The) 1 91,000 1,984,710
--------------
3,008,700
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.8%
Analog Devices, Inc. 2 40,200 1,835,130
- ----------------------------------------------------------------
ASML Holding NV 1 82,100 1,646,105
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Brooks Automation, Inc. 1 54,900 1,326,933
- ----------------------------------------------------------------
Intel Corp. 2 164,600 5,300,120
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KLA-Tencor Corp. 1,2 20,500 1,202,735
- ----------------------------------------------------------------
Novellus Systems, Inc. 1 30,600 1,286,730
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STMicroelectronics NV 2 43,000 1,161,430
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Teradyne, Inc. 1 69,500 1,768,775
--------------
15,527,958
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SOFTWARE--1.2%
BEA Systems, Inc. 1,2 30,000 369,000
- ----------------------------------------------------------------
Compuware Corp. 1 120,800 729,632
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Microsoft Corp. 72,500 1,996,650
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Oracle Corp. 1 4,200 55,440
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Take-Two Interactive Software, Inc. 1 123,800 3,566,678
--------------
6,717,400
7 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF INVESTMENTS Continued
- ----------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------
MATERIALS--2.0%
- ----------------------------------------------------------------
CHEMICALS--0.9%
Dow Chemical Co. 95,300 $ 3,961,621
- ----------------------------------------------------------------
Praxair, Inc. 35,000 1,337,000
- ----------------------------------------------------------------
Sterling Chemicals, Inc. 1 18 473
--------------
5,299,094
- ----------------------------------------------------------------
METALS & MINING--0.5%
Companhia Vale do Rio Doce,
Sponsored ADR 54,900 2,827,899
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PAPER & FOREST PRODUCTS--0.6%
Boise Cascade Corp. 48,433 1,591,509
- ----------------------------------------------------------------
Bowater, Inc. 33,700 1,560,647
--------------
3,152,156
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.5%
- ----------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.2%
IDT Corp., Cl. B 1 224,800 5,199,624
- ----------------------------------------------------------------
Qwest Communications
International, Inc. 1 365,700 1,579,824
- ----------------------------------------------------------------
WorldCom, Inc./
WorldCom Group 1 375,000 5,175
--------------
6,784,623
- ----------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
AT&T Corp. 57,000 1,157,100
- ----------------------------------------------------------------
AT&T Wireless Services, Inc. 1,2 72,000 575,280
--------------
1,732,380
- ----------------------------------------------------------------
UTILITIES--1.7%
- ----------------------------------------------------------------
ELECTRIC UTILITIES--1.3%
AES Corp. (The) 1 389,900 3,680,656
- ----------------------------------------------------------------
Dominion Resources, Inc. 19,600 1,251,068
- ----------------------------------------------------------------
Edison International 1,2 25,500 559,215
- ----------------------------------------------------------------
PG&E Corp. 1 58,100 1,613,437
--------------
7,104,376
- ----------------------------------------------------------------
GAS UTILITIES--0.1%
Kinder Morgan, Inc. 13,600 803,760
- ----------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.3%
Equitable Resources, Inc. 42,600 1,828,392
--------------
Total Common Stocks (Cost $214,617,654) 315,415,853
- ----------------------------------------------------------------
PREFERRED STOCKS--0.3%
Rouse Co. (The), $3 Cum. Cv.,
Series B (Cost $995,900) 23,000 1,409,900
MARKET VALUE
UNITS SEE NOTE 1
- ----------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
Covergent Communications, Inc.
Wts., Exp. 4/1/08 1,3 1,000 $ 10
- ----------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09 1,3 2,593 350
- ----------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 1,3 692 --
- ----------------------------------------------------------------
Sun Healthcare Group, Inc. Wts.,
Exp. 2/28/05 1,3 1,241 312
- ----------------------------------------------------------------
United Mexican States Bonds,
Series E Rts., Exp. 6/30/07 1,3 4,450,000 5,563
- ----------------------------------------------------------------
United Mexican States Collateralized
Fixed Rate Par Bonds:
Series B, 6.25%, 12/31/19 Rts.,
Exp. 6/30/04 1 4,450,000 44,500
Series C, 6.25%, 12/31/19 Rts.,
Exp. 6/30/05 1,3 4,450,000 8,900
Series D, 6.25%, 12/31/19 Rts.,
Exp. 6/30/06 1,3 4,450,000 8,900
- ----------------------------------------------------------------
XO Communications, Inc.:
Cl. A Wts., Exp. 1/16/10 1 506 987
Cl. B Wts., Exp. 1/16/10 1 379 644
Cl. C Wts., Exp. 1/16/10 1 379 417
--------------
Total Rights, Warrants and
Certificates (Cost $40,537) 70,583
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------
ASSET-BACKED SECURITIES--9.3%
Bank One Auto Securitization
Trust, Automobile Receivables,
Series 2003-1, Cl. A2,
1.29%, 8/21/06 $ 1,250,000 1,249,710
- ----------------------------------------------------------------
BMW Vehicle Owner Trust,
Automobile Loan Certificates,
Series 2003-A, Cl. A2,
1.45%, 11/25/05 3 1,759,658 1,762,517
- ----------------------------------------------------------------
Capital Auto Receivables Asset Trust,
Automobile Mtg.-Backed Nts.,
Series 2003-2, Cl. A2A,
1.20%, 5/16/05 1,470,000 1,470,782
- ----------------------------------------------------------------
Caterpillar Financial Asset Trust,
Equipment Loan Pass-Through
Certificates, Series 2003-A,
Cl. A2,1.25%, 10/25/05 880,000 880,358
- ----------------------------------------------------------------
Centex Home Equity Co. LLC, Home
Equity Loan Asset-Backed Certificates:
Series 2003-A, Cl. AF1, 1.836%,
10/25/17 270,603 270,842
Series 2003-B, Cl. AF1, 1.64%,
2/25/18 3 420,526 420,415
Series 2003-C, Cl. AF1, 2.14%,
7/25/18 1,274,467 1,277,429
8 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
Chase Funding Mortgage Loan
Asset-Backed Certificates, Home
Equity Mtg. Obligations:
Series 2003-3, Cl. 1A1,
1.199%, 8/25/17 4 $ 648,200 $ 648,281
Series 2003-4, Cl. 1A1,
1.24%, 9/25/17 4 1,430,738 1,431,090
- ----------------------------------------------------------------
Chase Manhattan Auto Owner
Trust, Automobile Loan Pass-Through
Certificates:
Series 2003-A, Cl. A2,1.26%, 1/16/06 3 560,000 560,367
Series 2003-B, Cl. A2,1.287%, 3/15/06 690,000 690,235
- ----------------------------------------------------------------
CitiFinancial Mortgage Securities,
Inc., Home Equity Collateralized
Mtg. Obligations:
Series 2003-1, Cl. AF1, 1.94%, 1/25/33 491,394 491,814
Series 2003-2, Cl. AF1, 1.219%,
5/25/33 3,4 666,554 666,525
Series 2003-3, Cl. AF1, 1.261%,
8/25/33 3,4 1,021,633 1,021,656
- ----------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates:
Series 2002-B, Cl. A2, 2.20%, 4/6/05 119,581 119,779
Series 2003-A, Cl. A2, 1.52%, 12/8/05 2,080,000 2,083,765
Series 2003-B, Cl. A2, 1.61%, 7/8/06 2,470,000 2,451,228
- ----------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates, Series 2003-A, Cl. A2A,
1.62%, 8/15/05 597,795 599,077
- ----------------------------------------------------------------
Harley-Davidson Motorcycle Trust,
Motorcycle Receivable Nts.:
Series 2002-2, Cl. A1, 1.91%, 4/16/07 619,148 621,266
Series 2003-3, Cl. A1, 1.50%, 1/15/08 1,827,112 1,830,249
- ----------------------------------------------------------------
Honda Auto Receivables Owner
Trust, Automobile
Receivables Obligations:
Series 2003-1, Cl. A2,
1.46%, 9/19/05 1,094,314 1,095,991
Series 2003-2, Cl. A2,
1.34%, 12/21/05 1,603,000 1,604,634
Series 2003-3, Cl. A2,
1.52%, 4/21/06 2,310,000 2,313,790
Series 2003-4, Cl. A2,
1.58%, 7/17/06 2,170,000 2,173,529
- ----------------------------------------------------------------
Household Automotive Trust,
Automobile Loan Certificates,
Series 2003-2, Cl. A2,
1.56%, 12/18/06 1,080,000 1,081,449
- ----------------------------------------------------------------
M&I Auto Loan Trust, Automobile
Loan Certificates:
Series 2002-1, Cl. A3,
2.49%, 10/22/07 1,590,000 1,603,812
Series 2003-1, Cl. A2,
1.60%, 7/20/06 1,780,000 1,780,684
- ----------------------------------------------------------------
Nissan Auto Lease Trust, Auto
Lease Obligations, Series 2003-A,
Cl. A2, 1.69%, 12/15/05 1,390,000 1,393,851
- ----------------------------------------------------------------
Nissan Auto Receivables Owner
Trust, Automobile Receivable Nts.:
Series 2003-A, Cl. A2,
1.45%, 5/16/05 1,585,470 1,587,537
Series 2003-B, Cl. A2,
1.20%, 11/15/05 2,140,000 2,140,837
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
Residential Funding Mortgage
Securities II, Inc., Home Equity
Loan Pass-Through Certificates,
Serie 2003-HS1, Cl. AI2, 1.241%,
1/25/33 4 $ 547,113 $ 547,419
- ----------------------------------------------------------------
Toyota Auto Receivables Owner
Trust, Automobile Mtg.-Backed
Obligations:
Series 2002-B, Cl. A3,
3.76%, 6/15/06 571,105 578,747
Series 2003-A, Cl. A2,
1.28%, 8/15/05 1,919,011 1,920,760
Series 2003-B, Cl. A2,
1.43%, 2/15/06 1,510,000 1,510,782
- ----------------------------------------------------------------
USAA Auto Owner Trust,
Automobile Loan
Asset-Backed Nts.:
Series 2002-1, Cl. A3, 2.41%, 10/16/06 909,950 916,488
Series 2003-1, Cl. A2,
1.22%, 4/17/06 1,280,000 1,280,488
- ----------------------------------------------------------------
Volkswagen Auto Loan Enhanced
Trust, Automobile Loan Receivables:
Series 2003-1, Cl. A2,
1.11%, 12/20/05 2,770,000 2,768,972
Series 2003-2, Cl. A2,
1.55%, 6/20/06 1,200,000 1,201,937
- ----------------------------------------------------------------
Whole Auto Loan Trust,
Automobile Loan Receivables:
Series 2002-1, Cl. A2, 1.88%, 6/15/05 1,519,986 1,524,122
Series 2003-1, Cl. A2A, 1.40%,
4/15/06 2,240,000 2,241,947
--------------
Total Asset-Backed Securities (Cost $51,784,349) 51,815,161
- ----------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--24.0%
CIT Equipment Collateral, Equipment
Receivable-Backed Nts.,
Series 2003-EF1, Cl. A2, 1.49%,
12/20/05 600,000 600,292
- ----------------------------------------------------------------
Federal Home Loan
Mortgage Corp.:
5%, 1/1/34 5 2,672,000 2,637,766
7%, 5/1/29-11/1/33 3,841,335 4,072,957
- ----------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 2500, Cl. FD,
1.62%, 3/15/32 4 509,042 505,721
Series 2526, Cl. FE,
1.52%, 6/15/29 4 556,460 554,878
Series 2551, Cl. FD,
1.52%, 1/15/33 4 480,961 482,916
- ----------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 0.11%, 6/1/26 6 776,041 129,710
Series 177, Cl. B, 2.489%, 7/1/26 6 1,325,734 233,985
Series 183, Cl. IO, 3.34%, 4/1/27 6 1,278,610 217,735
Series 184, Cl. IO,
0.119%, 12/1/26 6 1,253,253 211,110
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Structured Pass-Through Securities,
Collateralized Mtg. Obligations:
Series H006, Cl. A1, 1.724%, 4/15/08 302,204 301,969
Series T-42, Cl. A2, 5.50%, 2/25/42 276,035 280,202
9 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF INVESTMENTS Continued
- ----------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
Federal National Mortgage Assn.:
5%, 1/1/34 5 $ 7,578,000 $ 7,499,856
5.50%, 1/14/34 5 19,268,000 19,520,893
6%, 5/1/16 4,566,251 4,796,106
6.50%, 11/1/27-12/1/27 423,538 444,023
6.50%, 1/25/34 5 42,266,000 44,207,616
7%, 9/1/33-11/1/33 1,855,125 1,967,553
7%, 7/1/32-1/25/34 5 37,260,017 39,460,899
8.50%, 7/1/32 174,277 188,205
- ----------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 2002-77, Cl. WF,
1.52%, 12/18/32 4 834,958 837,555
- ----------------------------------------------------------------
Federal National Mortgage Assn.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 2003-81, Cl. PA, 5%, 2/25/12 473,112 484,583
- ----------------------------------------------------------------
Federal National Mortgage Assn.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates
Interest-Only Stripped
Mtg.-Backed Security:
Trust 2002-47, Cl. NS,
24.442%, 4/25/32 6 1,879,860 192,999
Trust 2002-51, Cl. S,
24.442%, 8/25/32 6 1,726,155 175,590
- ----------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 2002-52, Cl. SD,
6.90%, 9/25/32 6 2,332,251 213,994
Trust 222, Cl. 2,
(2.144)%, 6/1/23 6 1,634,395 306,960
Trust 240, Cl. 2,
(4.534)%, 9/1/23 6 2,615,342 483,523
Trust 252, Cl. 2,
(6.48)%, 11/1/23 6 1,832,083 367,296
Trust 273, Cl. 2,
(0.977)%, 7/1/26 6 561,834 94,857
- ----------------------------------------------------------------
Government National
Mortgage Assn., 8%, 4/15/23 417,675 457,924
- ----------------------------------------------------------------
Prudential Mortgage Capital Co.
II LLC, Commercial Mtg.
Pass-Through Certificates, Series
PRU-HTG 2000-C1, Cl. A2, 7.306%,
10/6/15 983,000 1,134,033
- ----------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., Collateralized Mtg.
Obligations Pass-Through
Certificates, Series 2003-AR7, Cl. A1,
1.507%, 8/25/33 4 1,164,590 1,165,473
--------------
Total Mortgage-Backed Obligations
(Cost $133,254,209) 134,229,179
- ----------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.7%
Federal Home Loan Bank
Unsec. Bonds:
2.875%, 12/15/06 1,385,000 1,395,911
4.875%, 11/15/13 760,000 769,712
Series EY06, 5.25%, 8/15/06 2,045,000 2,190,925
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
4.50%, 1/15/13 $ 1,695,000 $ 1,689,540
5.50%, 7/15/06 7 12,500,000 13,476,113
- ----------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts.:
4.25%, 7/15/07 5,550,000 5,801,104
7.25%, 1/15/10 3,300,000 3,895,680
- ----------------------------------------------------------------
Freddie Mac Unsec. Nts., 6.875%,
9/15/10 1,500,000 1,744,517
- ----------------------------------------------------------------
Tennessee Valley Authority Bonds:
5.375%, 11/13/08 247,000 266,749
7.125%, 5/1/30 460,000 553,622
--------------
Total U.S. Government
Obligations (Cost $31,715,476) 31,783,873
- ----------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.1%
United Mexican States Nts.,
7.50%, 1/14/12 (Cost $527,240) 475,000 536,988
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--10.7%
ABN Amro Bank NV (NY Branch),
7.125% Sub. Nts., Series B, 10/15/93 400,000 443,375
- ----------------------------------------------------------------
Aetna, Inc., 7.375% Sr. Unsec. Nts.,
3/1/06 400,000 440,302
- ----------------------------------------------------------------
Allied Waste North America, Inc.,
10% Sr. Unsec. Sub. Nts.,
Series B, 8/1/09 400,000 434,000
- ----------------------------------------------------------------
American Honda Finance Corp.,
3.85% Nts., 11/6/08 310,000 312,488
- ----------------------------------------------------------------
Amgen, Inc., 8.125% Unsec.
Debs., 4/1/97 91,000 112,727
- ----------------------------------------------------------------
AT&T Wireless Services, Inc., 7.50%
Sr. Unsec. Nts., 5/1/07 885,000 992,989
- ----------------------------------------------------------------
AXA, 8.60% Unsec. Sub. Nts., 12/15/30 750,000 948,783
- ----------------------------------------------------------------
Bank of America Corp., 7.80% Jr.
Unsec. Sub. Nts., 2/15/10 400,000 476,273
- ----------------------------------------------------------------
Bankers Trust Corp., 7.375% Unsec.
Sub. Nts., 5/1/08 100,000 114,474
- ----------------------------------------------------------------
Beazer Homes USA, Inc., 8.625% Sr.
Unsec. Nts., 5/15/11 565,000 624,325
- ----------------------------------------------------------------
Boeing Capital Corp.:
6.50% Nts., 2/15/12 7 750,000 821,311
7.375% Sr. Nts., 9/27/10 1,340,000 1,542,356
- ----------------------------------------------------------------
British Sky Broadcasting Group plc,
8.20% Sr. Unsec. Nts., 7/15/09 505,000 602,028
- ----------------------------------------------------------------
British Telecommunications plc,
7.875% Nts., 12/15/05 770,000 849,014
- ----------------------------------------------------------------
Cambridge Industries, Inc.,
Liquidating Trust Interests,
7/15/07 3,8 309,823 --
10 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
CenterPoint Energy, Inc.,
5.875% Nts., 6/1/08 9 $ 690,000 $ 719,504
- ----------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec.
Unsub. Nts., 4/2/12 1,000,000 1,183,293
- ----------------------------------------------------------------
Citigroup, Inc., 6.875%
Unsec. Nts., 2/15/98 450,000 498,395
- ----------------------------------------------------------------
Citizens Communications Co.,
9.25% Sr. Nts., 5/15/11 555,000 657,228
- ----------------------------------------------------------------
Coca-Cola Co. (The), 7.375%
Unsec. Debs., 7/29/93 360,000 420,836
- ----------------------------------------------------------------
Conoco, Inc., 6.95% Sr. Unsec.
Nts., 4/15/29 400,000 455,051
- ----------------------------------------------------------------
Credit Suisse First Boston, Inc.
(USA), 6.125% Nts., 11/15/11 880,000 959,589
- ----------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts.,
10/15/08 585,000 641,789
- ----------------------------------------------------------------
D.R. Horton, Inc., 9.375% Sr. Unsec.
Sub. Nts., 3/15/11 520,000 592,800
- ----------------------------------------------------------------
DaimlerChrysler NA Holding
Corp., 6.40% Nts., 5/15/06 7 1,055,000 1,130,956
- ----------------------------------------------------------------
Delphi Corp., 6.55% Nts., 6/15/06 515,000 552,929
- ----------------------------------------------------------------
Deutsche Telekom International
Finance BV, 8.50% Unsub. Nts., 6/15/10 770,000 932,448
- ----------------------------------------------------------------
Doman Industries Ltd.,
8.75% Sr. Nts., 3/15/04 1,3,10 700,000 122,500
- ----------------------------------------------------------------
Dominion Resources, Inc.,
8.125% Sr. Unsub. Nts., 6/15/10 530,000 636,746
- ----------------------------------------------------------------
DTE Energy Co.,
6.375% Sr. Nts., 4/15/33 605,000 594,922
- ----------------------------------------------------------------
EOP Operating LP:
6.763% Sr. Unsec. Nts., 6/15/07 180,000 199,516
8.375% Nts., 3/15/06 425,000 476,129
- ----------------------------------------------------------------
Ford Motor Co.:
7.70% Unsec. Debs., 5/15/97 400,000 385,190
8.90% Unsec. Unsub. Debs., 1/15/32 340,000 382,106
- ----------------------------------------------------------------
France Telecom SA:
8.45% Sr. Unsec. Nts., 3/1/06 115,000 128,531
9% Sr. Unsec. Nts., 3/1/11 540,000 649,645
9.75% Sr. Unsec. Nts., 3/1/31 4 230,000 306,645
- ----------------------------------------------------------------
Franklin Resources, Inc.,
3.70% Nts., 4/15/08 425,000 423,108
- ----------------------------------------------------------------
Gap, Inc. (The),
6.90% Nts., 9/15/07 495,000 548,831
- ----------------------------------------------------------------
General Electric Capital Corp.:
6.75% Nts., Series A, 3/15/32 195,000 216,606
7.25% Nts., Series A, 2/1/05 400,000 423,743
- ----------------------------------------------------------------
General Motors Acceptance
Corp., 6.875% Unsec.
Unsub. Nts., 8/28/12 1,665,000 1,794,187
- ----------------------------------------------------------------
General Motors Corp.,
8.375% Sr. Unsec. Debs., 7/15/33 790,000 919,799
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
Goldman Sachs Group, Inc.
(The), 7.80% Sr. Unsec.
Unsub. Nts., Series B, 1/28/10 $ 400,000 $ 474,908
- ----------------------------------------------------------------
Hartford Financial Services Group,
Inc. (The), 2.375% Nts., 6/1/06 345,000 343,471
- ----------------------------------------------------------------
Health Net, Inc., 8.375% Sr. Unsec.
Unsub. Nts., 4/15/11 480,000 577,565
- ----------------------------------------------------------------
Hertz Corp. (The),
7.625% Sr. Nts., 6/1/12 1,280,000 1,388,799
- ----------------------------------------------------------------
Household Finance Corp.,
7% Nts., 5/15/12 820,000 936,611
- ----------------------------------------------------------------
Huntsman Corp./ICI Chemical
Co. plc, 13.08% Sr. Unsec.
Disc. Nts., 12/31/09 11 500,000 243,750
- ----------------------------------------------------------------
Hutchison Whampoa
International Ltd.,
7.45% Sr. Bonds., 11/24/33 9 495,000 517,450
- ----------------------------------------------------------------
IT Group, Inc., 11.25% Sr. Unsec.
Sub. Nts., Series B, 4/1/09 1,3,10 400,000 --
- ----------------------------------------------------------------
John Hancock Global
Funding II, 7.90% Nts., 7/2/10 9 920,000 1,097,715
- ----------------------------------------------------------------
Kaiser Aluminum & Chemical
Corp., 10.875% Sr. Nts.,
Series B, 10/15/06 1,3,10 250,000 226,250
- ----------------------------------------------------------------
Kinder Morgan, Inc.,
6.50% Sr. Unsec. Nts., 9/1/12 595,000 657,682
- ----------------------------------------------------------------
Kroger Co. (The),
7.80% Sr. Nts., 8/15/07 905,000 1,033,442
- ----------------------------------------------------------------
Leap Wireless International, Inc.:
0%/14.50% Sr. Unsec. Disc. Nts.,
4/15/10 1,3, 10, 12 300,000 37,500
12.50% Sr. Nts., 4/15/10 3,10 400,000 58,000
- ----------------------------------------------------------------
Liberty Media Corp.,
3.50% Nts., 9/25/06 600,000 603,464
- ----------------------------------------------------------------
MeadWestvaco Corp.,
2.75% Nts., 12/1/05 945,000 937,443
- ----------------------------------------------------------------
Merrill Lynch & Co., Inc.,
3.375% Nts., Series B, 9/14/07 685,000 694,448
- ----------------------------------------------------------------
Metallurg, Inc.,
11% Sr. Nts., 12/1/07 450,000 254,250
- ----------------------------------------------------------------
Morgan Stanley,
6.60% Nts., 4/1/12 570,000 637,624
- ----------------------------------------------------------------
News America Holdings, Inc.,
7.75% Sr. Unsec. Debs., 12/1/45 825,000 978,879
- ----------------------------------------------------------------
Nextlink Communications, Inc.,
Escrow Shares, 6/1/09 3,8 350,000 --
- ----------------------------------------------------------------
Niagara Mohawk Power Corp.,
5.375% Sr. Unsec. Nts., 10/1/04 370,000 380,178
- ----------------------------------------------------------------
NiSource Finance Corp.:
3.20% Nts., 11/1/06 180,000 181,575
7.875% Sr. Unsec. Nts., 11/15/10 790,000 940,899
11 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF INVESTMENTS Continued
- ----------------------------------------------------------------
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
Northrop Grumman Corp.,
7.125% Sr. Nts., 2/15/11 $ 635,000 $ 735,477
- ----------------------------------------------------------------
Orbcomm Global LP, Escrow
Shares, 8/15/04 3,8 200,000 --
- ----------------------------------------------------------------
Petroleos Mexicanos,
9.50% Sr. Sub. Nts., 9/15/27 365,000 432,525
- ----------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 9 445,000 434,020
- ----------------------------------------------------------------
Progress Energy, Inc., 6.55% Sr.
Unsec. Nts., 3/1/04 1,160,000 1,168,708
- ----------------------------------------------------------------
Prudential Holdings LLC, 8.695%
Bonds, Series C, 12/18/23 9 900,000 1,114,210
- ----------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 9 920,000 1,128,512
- ----------------------------------------------------------------
PSEG Energy Holdings, 7.75% Unsec.
Nts., 4/16/07 595,000 634,419
- ----------------------------------------------------------------
Pulte Homes, Inc.,
8.375% Sr. Nts., 8/15/04 225,000 231,249
- ----------------------------------------------------------------
R&B Falcon Corp.,
9.50% Sr. Unsec. Nts., 12/15/08 500,000 618,073
- ----------------------------------------------------------------
Raytheon Co.,
6.50% Unsec. Nts., 7/15/05 835,000 890,165
- ----------------------------------------------------------------
Rogers Wireless Communications,
Inc., 9.625% Sr. Sec. Nts., 5/1/11 168,000 201,600
- ----------------------------------------------------------------
Safeway, Inc.,
3.80% Sr. Unsec. Nts., 8/15/05 1,080,000 1,103,157
- ----------------------------------------------------------------
Sears Roebuck Acceptance Corp.,
3.07% Nts., Series VII, 2/25/04 4 825,000 826,422
- ----------------------------------------------------------------
Shopping Center Associates,
6.75% Sr. Unsec. Nts., 1/15/04 9 195,000 195,256
- ----------------------------------------------------------------
Sprint Capital Corp.,
8.75% Nts., 3/15/32 920,000 1,090,671
- ----------------------------------------------------------------
Sterling Chemicals, Inc.:
10% Sr. Sec. Nts., 12/19/07 3 221,615 214,413
11.25% Sr. Sub. Nts., 8/15/06 1,3,10 335,000 --
- ----------------------------------------------------------------
TCI Communications, Inc.,
9.80% Sr. Unsec. Debs., 2/1/12 1,400,000 1,828,932
- ----------------------------------------------------------------
TECO Energy, Inc.,
10.50% Sr. Unsec. Nts., 12/1/07 475,000 556,938
- ----------------------------------------------------------------
Telefonos de Mexico SA,
8.25% Sr. Unsec. Nts., 1/26/06 475,000 526,101
- ----------------------------------------------------------------
Time Warner Cos., Inc.,
9.125% Debs., 1/15/13 530,000 674,668
- ----------------------------------------------------------------
Time Warner Entertainment Co. LP:
8.375% Sr. Debs., 3/15/23 10,000 12,430
10.15% Sr. Nts., 5/1/12 500,000 668,460
- ----------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub.
Nts., 12/1/11 565,000 626,444
- ----------------------------------------------------------------
Tyco International Group SA:
6.375% Nts., 10/15/11 750,000 805,313
6.75% Sr. Unsub. Nts., 2/15/11 1,910,000 2,096,225
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
Vornado Realty LP, 5.625% Sr. Unsec.
Unsub. Nts., 6/15/07 $ 680,000 $ 726,567
- ----------------------------------------------------------------
Waste Management, Inc.:
7% Sr. Nts., 7/15/28 220,000 237,509
7.375% Sr. Unsub. Nts., 8/1/10 435,000 503,322
- ----------------------------------------------------------------
Weyerhaeuser Co., 5.50% Unsec.
Unsub. Nts., 3/15/05 845,000 879,941
--------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $57,824,667) 60,031,097
- ----------------------------------------------------------------
STRUCTURED NOTES--2.5%
Deutsche Bank AG, COUNTS
Corp. Sec. Credit Linked Nts.,
Series 2003-1, 2.89%, 1/7/05 3,4 3,550,000 3,499,590
- ----------------------------------------------------------------
JPMorgan Chase Bank, TRAC-X NA
High Yield T1 Credit Default
Swap Bonds, 7.375%, 3/25/09 9 447,000 468,233
- ----------------------------------------------------------------
JPMorgan Chase Bank, TRAC-X NA
High Yield T2 Credit Default Swap
Bonds, 6.05%, 3/25/09 9 6,100,000 6,275,375
- ----------------------------------------------------------------
UBS AG, High Grade Credit Linked
Nts., 2.814%, 12/10/04 3,4 3,550,000 3,581,063
--------------
Total Structured Notes (Cost $13,647,000) 13,824,261
- ----------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--12.1% 13
Undivided interest of 4.22% 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
$67,634,419 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 $67,631,000) 67,631,000 67,631,000
- ----------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE (COST $572,038,032) 121.1% 676,747,895
- ----------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (21.1) (117,735,883)
----------------------------
NET ASSETS 100.0% $559,012,012
============================
12 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc. 720 1/20/04 $ 12.50 $ 69,838 $ --
Abbott Laboratories 200 1/20/04 60.00 17,800 --
American International Group, Inc. 60 1/20/04 90.00 11,820 --
Analog Devices, Inc. 150 1/20/04 55.00 24,750 750
Bank of New York Co., Inc. (The) 66 1/20/04 40.00 7,722 --
BEA Systems, Inc. 300 1/20/04 25.00 26,700 --
Cisco Systems, Inc. 200 1/20/04 25.00 15,800 4,000
EchoStar Communications Corp., Cl. A 220 1/20/04 35.00 27,528 12,100
Edison International 255 1/20/04 15.00 33,772 178,500
Gap, Inc. (The) 450 1/20/04 20.00 43,424 148,500
Guidant Corp. 180 1/20/04 50.00 15,523 181,800
Intel Corp. 360 1/20/04 30.00 33,839 86,400
International Business Machines Corp. 128 1/20/04 130.00 20,096 --
J.P. Morgan Chase & Co. 440 1/20/04 35.00 44,879 79,200
Johnson & Johnson 120 1/20/04 75.00 16,440 --
KLA-Tencor Corp. 150 1/20/04 50.00 56,549 126,000
Merrill Lynch & Co., Inc. 223 1/20/04 60.00 39,470 10,035
Nike, Inc., Cl. B 115 1/20/04 60.00 29,555 96,600
Northrop Grumman Corp. 50 1/20/04 135.00 18,850 --
STMicroelectronics NV 180 1/20/04 40.00 31,860 --
Tyco International Ltd. 420 1/20/04 25.00 74,339 71,400
Viacom, Inc., Cl. B 300 1/20/04 60.00 84,819 --
--------------------------
$745,373 $995,285
==========================
3. Identifies issues considered to be illiquid. See Note 9 of Notes to Financial
Statements.
4. Represents the current interest rate for a variable or increasing rate
security.
5. When-issued security to be delivered and settled after December 31, 2003. See
Note 1 of Notes to Financial Statements.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $2,627,759 or 0.47% of the Fund's net assets
as of December 31, 2003.
7. Securities with an aggregate market value of $2,056,608 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
8. Received as the result of issuer reorganization. Currently has minimal market
value.
9. 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 $11,950,275 or 2.14% of the Fund's net
assets as of December 31, 2003.
10. Issue is in default. See Note 1 of Notes to Financial Statements.
11. Zero coupon bond reflects effective yield on the date of purchase.
12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
13. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES December 31, 2003
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (including cost and market value of $67,631,000 in repurchase agreements)
(including securities loaned of approximately $11,172,000) (cost $572,038,032)--see accompanying statement $676,747,895
- ----------------------------------------------------------------------------------------------------------------------------
Collateral for securities loaned 11,372,436
- ----------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold on a when-issued basis 4,230,766
Interest, dividends and principal paydowns 2,745,933
Shares of beneficial interest sold 596,016
Futures margins 48,158
Swap contracts 7,964
Other 4,731
-------------
Total assets 695,753,899
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Bank overdraft 6,039,241
- ----------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 11,372,436
- ----------------------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $745,373)--see accompanying statement 995,285
- ----------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $117,363,430 purchased on a when-issued basis) 118,065,502
Shares of beneficial interest redeemed 187,067
Shareholder reports 33,896
Distribution and service plan fees 12,442
Trustees' compensation 3,730
Transfer and shareholder servicing agent fees 845
Other 31,443
-------------
Total liabilities 136,741,887
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $559,012,012
=============
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 35,117
- ----------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 478,197,495
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 5,770,535
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (29,943,928)
- ----------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 104,952,793
-------------
NET ASSETS $559,012,012
=============
- ----------------------------------------------------------------------------------------------------------------------------
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 $533,709,907 and 33,522,899 shares of beneficial interest outstanding) $15.92
- ----------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $25,302,105 and 1,594,246 shares of beneficial interest outstanding) $15.87
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENT OF OPERATIONS For the Year Ended December 31, 2003
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 8,230,452
- -------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $107,442) 4,271,870
- -------------------------------------------------------------------------------------------------
Portfolio lending fees 8,348
-------------
Total investment income 12,510,670
- -------------------------------------------------------------------------------------------------
EXPENSES
Management fees 3,526,680
- -------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 24,612
- -------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 10,410
Service shares 140
- -------------------------------------------------------------------------------------------------
Shareholder reports 73,256
- -------------------------------------------------------------------------------------------------
Custodian fees and expenses 21,676
- -------------------------------------------------------------------------------------------------
Trustees' compensation 19,746
- -------------------------------------------------------------------------------------------------
Other 40,490
-------------
Total expenses 3,717,010
Less reduction to custodian expenses (2,429)
-------------
Net expenses 3,714,581
- -------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 8,796,089
- -------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 2,398,673
Closing of futures contracts (1,666,008)
Closing and expiration of option contracts written 977,861
Foreign currency transactions (358,495)
-------------
Net realized gain 1,352,031
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 95,352,119
Translation of assets and liabilities denominated in foreign currencies 1,670,853
Futures contracts 2,155,452
-------------
Net change in unrealized appreciation (depreciation) 99,178,424
- -------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $109,326,544
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2003 2002
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 8,796,089 $ 17,145,616
- ----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 1,352,031 (31,600,661)
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 99,178,424 (46,421,985)
-----------------------------
Net increase (decrease) in net assets resulting from operations 109,326,544 (60,877,030)
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Non-Service shares (13,791,025) (19,151,437)
Service shares (86,954) --
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares -- (7,948,868)
Service shares -- --
- ----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (18,122,603) (46,188,223)
Service shares 20,531,465 2,287,406
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease) 97,857,427 (131,878,152)
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 461,154,585 593,032,737
-----------------------------
End of period [including accumulated net investment income of
$5,770,535 and $13,848,088, respectively] $559,012,012 $461,154,585
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER MULTIPLE STRATEGIES 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 $13.16 $15.40 $16.55 $17.46 $17.05
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 .50 .53 .72 .82
Net realized and unrealized gain (loss) 2.90 (2.02) (.19) .38 1.04
------------------------------------------------------------
Total from investment operations 3.17 (1.52) .34 1.10 1.86
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.41) (.51) (.64) (.82) (.59)
Distributions from net realized gain -- (.21) (.85) (1.19) (.86)
------------------------------------------------------------
Total dividends and/or distributions to shareholders (.41) (.72) (1.49) (2.01) (1.45)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.92 $13.16 $15.40 $16.55 $17.46
============================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 24.96% (10.40)% 2.22% 6.44% 11.80%
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $533,710 $458,848 $593,033 $589,298 $578,783
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $475,389 $517,516 $599,324 $566,724 $593,151
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.82% 3.31% 3.42% 4.36% 4.46%
Total expenses 0.76% 3 0.74% 3 0.76% 3 0.76% 3 0.73% 3
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 248% 42% 30% 42% 17%
<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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
17 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SERVICE SHARES YEAR ENDED DECEMBER 31 2003 2002 1
- --------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $13.14 $14.51
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .39 .13
Net realized and unrealized gain (loss) 2.74 (1.50)
----------------------
Total from investment operations 3.13 (1.37)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.40) --
Distributions from net realized gain -- --
----------------------
Total dividends and/or distributions to shareholders (.40) --
- --------------------------------------------------------------------------------------
Net asset value, end of period $15.87 $13.14
======================
- --------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 24.69% (9.44)%
- --------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $25,302 $2,306
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $9,908 $1,037
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.37% 3.30%
Total expenses 1.01% 4 0.99% 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 248% 42%
<FN>
1. For the period from May 1, 2002 (inception of offering) to December 31, 2002.
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%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
18 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer multiple strategies 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 a high total investment
return, which includes current income and capital appreciation in the value of
its shares. The Trust's investment advisor is OppenheimerFunds, Inc. (the
Manager).
The Fund offers two classes of shares. Both 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 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).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in index-linked structured notes whose
principal and/or interest depend on the performance of an underlying index. The
structured notes are leveraged, which increases the volatility of each note's
market value relative to the change in the underlying index. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying financial statements. The Fund records a realized gain or loss when
a structured note is sold or matures. As of December 31, 2003, the market value
of these securities comprised 2.5% of the Fund's net assets, and resulted in
unrealized gains of $177,261.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN ISSUED BASIS. Delivery and payment for securities that have
been purchased by the Fund on a when issued basis can take place a month or more
after the trade date. Normally the settlement date occurs within six months
after the trade date; however, the Fund may, from time to time, purchase
securities whose settlement date extends six months or more beyond trade date.
During this period, such securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to their delivery. The
Fund maintains segregated assets with a market value equal to or greater than
the amount of its purchase commitments. The purchase of securities on a when
issued basis may increase the volatility of the Fund's net asset value to the
extent the Fund executes such purchases while remaining substantially fully
invested. As of December 31, 2003, the Fund had entered into net when issued
commitments of $113,132,664.
In connection with its ability to purchase securities on a when issued basis,
the Fund may enter into forward roll transactions with respect to
mortgage-related securities. Forward roll transactions require the sale of
securities for delivery in the current month, and a simultaneous agreement with
the same counterparty to repurchase similar (same type, coupon and maturity) but
not identical securities on a specified future date. The Fund records the
19 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
incremental difference between the forward purchase and sale of each forward
roll as free income or realized gain (loss) on investments.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities to what was sold to the counterparty
at redelivery; counterparty credit risk; and the potential pay down speed
variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of December 31, 2003, securities with an
aggregate market value of $444,250, representing 0.08% of the Fund's net assets,
were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. Secured by U.S. government securities, these balances
are invested in one or more repurchase agreements. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
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
-------------------------------------------------------------------------------------------
$5,770,532 $-- $29,278,783 $104,287,645
1. As of December 31, 2003, the Fund had $28,540,378 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:
20 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
EXPIRING
-------------------------
2010 $13,317,573
2011 15,222,805
-----------
Total $28,540,378
===========
2. During the fiscal years ended December 31, 2003 and December 31, 2002, the
Fund did not utilize any capital loss carryforwards. 3. The Fund had $738,405 of
straddle losses which were deferred.
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 ON
INCOME INVESTMENTS
-----------------------------------------------
$2,995,663 $2,995,663
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 $13,877,979 $23,577,984
Long-term capital gain -- 3,522,321
------------------------------------
Total $13,877,979 $27,100,305
====================================
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 $572,220,690
Federal tax cost of other investments 79,313,454
------------
Total federal tax cost $651,534,144
============
Gross unrealized appreciation $111,351,997
Gross unrealized depreciation (7,064,352)
------------
Net unrealized appreciation (depreciation) $104,287,645
============
- --------------------------------------------------------------------------------
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
21 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 YEAR ENDED DECEMBER 31, 2002 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,968,658 $ 42,421,336 3,369,152 $ 47,017,452
Dividends and/or distributions reinvested 1,109,495 13,791,025 1,834,820 27,100,305
Redeemed (5,419,511) (74,334,964) (8,852,327) (120,305,980)
-------------------------------------------------------------------
Net decrease (1,341,358) $(18,122,603) (3,648,355) $(46,188,223)
===================================================================
- -----------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 1,500,492 $ 21,676,028 205,258 $ 2,669,841
Dividends and/or distributions reinvested 7,012 86,954 -- --
Redeemed (88,818) (1,231,517) (29,698) (382,435)
-------------------------------------------------------------------
Net increase 1,418,686 $ 20,531,465 175,560 $ 2,287,406
===================================================================
1. For the year ended December 31, 2002, for Non-Service shares and for the
period from May 1, 2002 (inception of offering) to December 31, 2002, for
Service shares.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended December 31, 2003, were
$1,285,127,765 and $1,199,348,827, 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
$10,148 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.
22 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
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.
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. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
"financial futures" or debt securities "interest rate futures" in order to gain
exposure to or protection from changes in market value of stock and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying fixed income
securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or has expired.
Cash held by the broker to cover initial margin requirements on open futures
contracts is noted in the Statement of Assets and Liabilities. Securities held
in collateralized accounts to cover initial margin requirements on open futures
contracts are noted in the Statement of Investments. The Statement of Assets and
Liabilities reflects a receivable and/or payable for the daily mark to market
for variation margin. Realized gains and losses are reported on the Statement of
Operations as closing and expiration of futures contracts. The net change in
unrealized appreciation and depreciation is reported on the Statement of
Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
23 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
As of December 31, 2003, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS DECEMBER 31, 2003 (DEPRECIATION)
- -------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 3/22/04 157 $17,162,063 $ 90,247
U.S. Treasury Nts., 10 yr. 3/22/04 225 25,259,766 465,375
--------
555,622
--------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 3/30/04 90 19,264,219 (3,479)
U.S. Treasury Nts., 5 yr. 3/22/04 149 16,632,125 (69,652)
--------
(73,131)
--------
$482,491
========
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended December 31, 2003 was as follows:
CALL OPTIONS
-------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ---------------------------------------------------------------
Options outstanding as of
December 31, 2002 12,390 $2,063,251
Options closed or expired (6,409) (1,129,063)
Options exercised (694) (188,815)
-------------------------
Options outstanding as of
December 31, 2003 5,287 $ 745,373
=========================
24 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to interest
income, in the amount due to or owed by the Fund at termination or settlement.
Total return swaps are subject to risks (if the counterparty fails to meet its
obligations).
As of December 31, 2003, the Fund had entered into the following total return
swap agreements:
PAID BY RECEIVED BY
SWAP NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED
COUNTERPARTY AMOUNT DECEMBER 31, 2003 DECEMBER 31, 2003 DATE APPRECIATION
- ----------------------------------------------------------------------------------------------------------
Value of total return
One-Month LIBOR of Lehman Brothers
Deutsche Bank AG $8,704,000 Flat CMBS Index 6/30/04 $7,964
- --------------------------------------------------------------------------------
9. ILLIQUID SECURITIES
As of December 31, 2003, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of December
31, 2003 was $12,194,831, which represents 2.18% of the Fund's net assets.
- --------------------------------------------------------------------------------
10. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. As of December 31, 2003, the
Fund had on loan securities valued at approximately $11,172,000. Cash of
$11,372,436 was received as collateral for the loans, and has been invested in
approved instruments.
- --------------------------------------------------------------------------------
11. 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.
25 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. OTHER MATTERS
On December 15, 2003, the Board of Trustees of the Fund approved a name change.
Effective February 27, 2004, the Fund will change its name to Oppenheimer
Balanced Fund/VA.
26 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MULTIPLE
STRATEGIES FUND/VA:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Multiple Strategies Fund/VA, (which is 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 Multiple Strategies 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
27 | OPPENHEIMER MULTIPLE STRATEGIES 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 $0.4094 and $0.4014 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 52.77% to arrive at the amount eligible for the corporate dividend-received
deduction.
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.
28 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE;
FUND, LENGTH OF SERVICE, AGE 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, CENTENNIAL, CO
TRUSTEES 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 Mortgage Company
Chairman of the Board (since 1991), Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company
(since 2003) and (since 1993), Transland Financial Services, Inc. (since 1997); Chairman of the following
Trustee (since 1999) private companies: Great Frontier Insurance (insurance agency) (since 1995), Ambassador Media
Age: 66 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 of private
Trustee (since 1993) equity funds) (until February 2001); Chairman, President and Chief Executive Officer of A.G.
Age: 72 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 and 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 Treasurer (from
Trustee (since 1997) March 1985) of OppenheimerFunds, Inc. (the Manager); Vice President (from June 1983) and
Age: 67 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
President (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); Assistant 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 and 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 June 2000).
Trustee (since 1999) Formerly (March 2001 - May 2002) Director of Genetic ID, Inc. and its subsidiaries (a privately
Age: 65 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.
JON S. FOSSEL, Chairman and Director (since 1998) of Rocky Mountain Elk Foundation (a not-for-profit
Trustee (since 1990) foundation); and a director (since October 1999) of P.R. Pharmaceuticals (a privately held
Age: 61 company) and UNUMProvident (an insurance company) (since June 1, 2002). Formerly Chairman and a
director (until October 1996) and President and Chief Executive Officer (until October 1995) of
the 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.
29 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984). Formerly (until
Trustee (since 1996) October 1994) Mr. Freedman held several positions in subsidiary or affiliated companies of the
Age: 63 Manager. Oversees 38 portfolios in the OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund
Trustee (since 2002) (open-end investment companies); Director of MML Services (since April 1987) and America Funds
Age: 57 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
International 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 entity);
Trustee (since 2002) Director (since 2001) of Jones Knowledge, Inc. (a privately held company), U.S. Exploration,
Age: 59 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 Investment Fund
Trustee (since 2000) (open-end investment companies); Trustee (since 1987), Chairman of the Board (since 2003) and
Age: 61 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 (since 1995) of the Springfield Library and Museum Association;
Trustee (since 1996) of 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 LIBERTY STREET,
AND OFFICER 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 (since September
President and Trustee 2000) of the Manager; President and a director or trustee of other Oppenheimer funds; President
(since 2001) and a director (since July 2001) of Oppenheimer Acquisition Corp. and of Oppenheimer
Age: 54 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 Management 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 of 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-end
investment companies); a director (September 1999-August 2000) of C.M. Life Insurance Company;
President, Chief Executive Officer and director (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.
30 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. FERREIRA, LEAVY,
MANIOUDAKIS 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, DEATH OR REMOVAL.
EMMANUEL FERREIRA, Vice President of the Manager (since January 2003). An officer of 3 portfolios in the
Vice President and OppenheimerFunds complex. Formerly, Portfolio Manager at Lashire Investments (July
Portfolio Manager 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999).
(since 2003)
Age: 36
CHRISTOPHER LEAVY, Senior Vice President (since September 2000) of the Manager; an officer of 7 portfolios in the
Vice President and Portfolio OppenheimerFunds complex; prior to joining the Manager in September 2000, he was a portfolio
Manager (since 2003) manager of Morgan Stanley Dean Witter Investment Management (1997 - September 2000).
Age: 32
ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002); an officer of 12
Vice President and Portfolio portfolios in the OppenheimerFunds complex; formerly Executive Director and
Manager (since 2003) portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley
Age: 37 Investment Management (August 1993-April 2002).
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since March
Treasurer (since 1999) 1999) of HarbourView Asset Management Corporation, Shareholder Services, Inc., Oppenheimer Real
Age: 44 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 February 2002) of the
Vice President and Secretary Manager; General Counsel and a director (since November 2001) of OppenheimerFunds Distributor,
(since 2001) Inc.; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset
Age: 55 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-January 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.
31 | OPPENHEIMER MULTIPLE STRATEGIES 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 $19,000 in fiscal 2003 and $18,500 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 $3,500 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 $90,100 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)