UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4108
Oppenheimer Global Securities Fund/VA
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: December 31
-----------
Date of reporting period: January 1, 2004 - June 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
STATEMENT OF INVESTMENTS June 30, 2004 / Unaudited
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
COMMON STOCKS--97.1%
- ---------------------------------------------------------------------------
CONSUMER DISCRETIONARY--17.2%
- ---------------------------------------------------------------------------
AUTOMOBILES--2.1%
Porsche AG, Preferred 46,541 $ 31,284,822
- ---------------------------------------------------------------------------
Toyota Motor Corp. 733,700 29,720,515
----------------
61,005,337
- ---------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.1%
International Game Technology 314,500 12,139,700
- ---------------------------------------------------------------------------
Panera Bread Co., Cl. A 1 136,300 4,890,444
- ---------------------------------------------------------------------------
Starbucks Corp. 1 367,400 15,974,552
----------------
33,004,696
- ---------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.5%
Sharp Corp. 885,000 14,136,966
- ---------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.5%
Amazon.com, Inc. 1 306,600 16,679,040
- ---------------------------------------------------------------------------
MEDIA--8.4%
Grupo Televisa SA,
Sponsored GDR 445,299 20,158,686
- ---------------------------------------------------------------------------
JC Decaux SA 1 541,174 11,581,597
- ---------------------------------------------------------------------------
Pearson plc 2,142,518 26,032,553
- ---------------------------------------------------------------------------
Reed Elsevier plc 1,564,246 15,205,032
- ---------------------------------------------------------------------------
Singapore Press Holdings Ltd. 6,468,639 15,622,827
- ---------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 26,591,602 81,902,134
- ---------------------------------------------------------------------------
Societe Television Francaise 1 386,660 12,179,431
- ---------------------------------------------------------------------------
Television Broadcasts Ltd. 5,211,832 22,317,904
- ---------------------------------------------------------------------------
Wolters Kluwer NV 811,250 14,726,150
- ---------------------------------------------------------------------------
WPP Group plc 1,173,870 11,921,352
- ---------------------------------------------------------------------------
Zee Telefilms Ltd. 5,357,100 14,693,427
----------------
246,341,093
- ---------------------------------------------------------------------------
SPECIALTY RETAIL--4.3%
Circuit City Stores, Inc./Circuit
City Group 1,407,549 18,227,760
- ---------------------------------------------------------------------------
Gap, Inc. (The) 574,000 13,919,500
- ---------------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 2,148,700 55,479,215
- ---------------------------------------------------------------------------
New Dixons Group plc 9,885,260 29,624,229
- ---------------------------------------------------------------------------
RadioShack Corp. 352,200 10,083,486
----------------
127,334,190
- ---------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Coach, Inc. 1 189,400 8,558,986
- ---------------------------------------------------------------------------
CONSUMER STAPLES--7.5%
- ---------------------------------------------------------------------------
BEVERAGES--1.5%
Companhia de Bebidas das
Americas, ADR 618,915 12,421,624
- ---------------------------------------------------------------------------
Diageo plc 446,470 6,019,920
- ---------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 3,145,900 14,386,089
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
BEVERAGES CONTINUED
Grupo Modelo SA de CV,
Series C 4,225,200 $ 10,580,402
----------------
43,408,035
- ---------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.2%
Boots Group plc 1,110,260 13,852,578
- ---------------------------------------------------------------------------
Carrefour SA 198,200 9,616,665
- ---------------------------------------------------------------------------
Seven-Eleven Japan Co. Ltd. 353,000 11,517,023
----------------
34,986,266
- ---------------------------------------------------------------------------
FOOD PRODUCTS--1.1%
Cadbury Schweppes plc 3,613,821 31,179,053
- ---------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.6%
Hindustan Lever Ltd. 4,774,500 13,220,095
- ---------------------------------------------------------------------------
Reckitt Benckiser plc 2,200,417 62,291,011
----------------
75,511,106
- ---------------------------------------------------------------------------
PERSONAL PRODUCTS--1.1%
Gillette Co. 563,700 23,900,880
- ---------------------------------------------------------------------------
Shiseido Co. Ltd. 806,000 10,156,715
----------------
34,057,595
- ---------------------------------------------------------------------------
ENERGY--7.2%
- ---------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.8%
GlobalSantaFe Corp. 983,300 26,057,450
- ---------------------------------------------------------------------------
Technip SA 191,730 26,009,418
- ---------------------------------------------------------------------------
Transocean, Inc. 1 990,600 28,667,964
----------------
80,734,832
- ---------------------------------------------------------------------------
OIL & GAS--4.4%
BP plc, ADR 448,169 24,008,413
- ---------------------------------------------------------------------------
Burlington Resources, Inc. 356,400 12,894,552
- ---------------------------------------------------------------------------
ChevronTexaco Corp. 256,472 24,136,580
- ---------------------------------------------------------------------------
Encana Corp. 392,017 16,847,302
- ---------------------------------------------------------------------------
ENI SpA 584,500 11,605,674
- ---------------------------------------------------------------------------
Husky Energy, Inc. 1,353,115 25,886,556
- ---------------------------------------------------------------------------
Oil & Natural Gas Corp. Ltd. 209,470 2,866,971
- ---------------------------------------------------------------------------
Total SA, B Shares 63,310 12,069,993
----------------
130,316,041
- ---------------------------------------------------------------------------
FINANCIALS--16.0%
- ---------------------------------------------------------------------------
CAPITAL MARKETS--0.3%
Northern Trust Corp. 219,800 9,293,144
- ---------------------------------------------------------------------------
COMMERCIAL BANKS--8.0%
ABN Amro Holding NV 1,236,400 27,046,706
- ---------------------------------------------------------------------------
Anglo Irish Bank Corp. 815,366 12,747,394
- ---------------------------------------------------------------------------
Australia & New Zealand
Banking Group Ltd. 924,550 11,773,080
- ---------------------------------------------------------------------------
Bank One Corp. 1,034,139 52,741,089
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Commerce Bancorp, Inc. 101,000 $ 5,556,010
- ---------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 1,316,350 15,927,835
- ---------------------------------------------------------------------------
Resona Holdings, Inc. 1 6,636,000 11,798,415
- ---------------------------------------------------------------------------
Royal Bank of Scotland
Group plc (The) 1,496,307 43,091,210
- ---------------------------------------------------------------------------
Societe Generale, Cl. A 307,630 26,143,323
- ---------------------------------------------------------------------------
Wachovia Corp. 658,129 29,286,741
----------------
236,111,803
- ---------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.5%
3i Group plc 992,476 11,024,111
- ---------------------------------------------------------------------------
American Express Co. 456,900 23,475,522
- ---------------------------------------------------------------------------
Citigroup, Inc. 221,466 10,298,169
- ---------------------------------------------------------------------------
Credit Saison Co. Ltd. 526,900 15,838,629
- ---------------------------------------------------------------------------
MBNA Corp. 1,058,250 27,292,268
- ---------------------------------------------------------------------------
MLP AG 377,528 5,534,800
- ---------------------------------------------------------------------------
Schwab (Charles) Corp. 975,900 9,378,399
----------------
102,841,898
- ---------------------------------------------------------------------------
INSURANCE--4.2%
ACE Ltd. 541,471 22,893,394
- ---------------------------------------------------------------------------
Aegon NV 1,804,007 21,750,917
- ---------------------------------------------------------------------------
Allianz AG 242,350 26,242,109
- ---------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 7,960 23,521,800
- ---------------------------------------------------------------------------
Everest Re Group Ltd. 139,800 11,234,328
- ---------------------------------------------------------------------------
Manulife Financial Corp. 410,613 16,553,148
----------------
122,195,696
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HEALTH CARE--14.8%
- ---------------------------------------------------------------------------
BIOTECHNOLOGY--3.6%
Affymetrix, Inc. 1 454,400 14,872,512
- ---------------------------------------------------------------------------
Amgen, Inc. 1 298,100 16,267,317
- ---------------------------------------------------------------------------
Genentech, Inc. 1 288,600 16,219,320
- ---------------------------------------------------------------------------
Genzyme Corp.
(General Division) 1 270,900 12,821,697
- ---------------------------------------------------------------------------
Gilead Sciences, Inc. 1 383,580 25,699,860
- ---------------------------------------------------------------------------
Human Genome Sciences, Inc. 1 332,200 3,863,486
- ---------------------------------------------------------------------------
Millennium Pharmaceuticals,
Inc. 1 320,500 4,422,900
- ---------------------------------------------------------------------------
Qiagen NV 1 917,711 10,919,695
----------------
105,086,787
- ---------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
Applera Corp./Applied
Biosystems Group 547,700 11,912,475
- ---------------------------------------------------------------------------
Essilor International SA 196,440 12,822,283
- ---------------------------------------------------------------------------
Nektar Therapeutics 1,2 314,361 5,019,716
- ---------------------------------------------------------------------------
Smith & Nephew plc 1,474,640 15,871,728
----------------
45,626,202
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.8%
Express Scripts, Inc. 1 178,900 $ 14,174,247
- ---------------------------------------------------------------------------
IMS Health, Inc. 582,100 13,644,424
- ---------------------------------------------------------------------------
Quest Diagnostics, Inc. 298,900 25,391,555
----------------
53,210,226
- ---------------------------------------------------------------------------
PHARMACEUTICALS--7.9%
AstraZeneca plc 293,320 13,160,090
- ---------------------------------------------------------------------------
Aventis SA 1 190,530 14,383,708
- ---------------------------------------------------------------------------
Chugai Pharmaceutical Co. Ltd. 829,200 13,010,039
- ---------------------------------------------------------------------------
Eli Lilly & Co. 175,900 12,297,169
- ---------------------------------------------------------------------------
Mylan Laboratories, Inc. 468,600 9,489,150
- ---------------------------------------------------------------------------
Novartis AG 444,100 19,591,604
- ---------------------------------------------------------------------------
Pfizer, Inc. 722,519 24,767,951
- ---------------------------------------------------------------------------
Roche Holdings AG 340,855 33,748,020
- ---------------------------------------------------------------------------
Sanofi-Synthelabo SA 600,899 38,089,467
- ---------------------------------------------------------------------------
Schering-Plough Corp. 862,600 15,940,848
- ---------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,391,000 23,915,282
- ---------------------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd., Sponsored ADR 193,900 13,047,531
----------------
231,440,859
- ---------------------------------------------------------------------------
INDUSTRIALS--4.5%
- ---------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.1%
Boeing Co. 306,800 15,674,412
- ---------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 880,534 25,174,467
- ---------------------------------------------------------------------------
Lockheed Martin Corp. 260,600 13,572,048
- ---------------------------------------------------------------------------
Northrop Grumman Corp. 276,000 14,821,200
- ---------------------------------------------------------------------------
Raytheon Co. 634,500 22,696,065
----------------
91,938,192
- ---------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.5%
Rentokil Initial plc 3,249,769 8,516,043
- ---------------------------------------------------------------------------
Societe BIC SA 143,093 6,368,363
----------------
14,884,406
- ---------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.2%
JGC Corp. 538,000 5,177,107
- ---------------------------------------------------------------------------
Leighton Holdings Ltd. 225,823 1,429,933
----------------
6,607,040
- ---------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.4%
Hutchison Whampoa Ltd. 1,554,000 10,609,311
- ---------------------------------------------------------------------------
MACHINERY--0.3%
Hyundai Heavy Industries Co. Ltd. 376,230 8,937,701
- ---------------------------------------------------------------------------
INFORMATION TECHNOLOGY--21.2%
- ---------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--7.1%
Alcatel SA 1 1,149,650 17,735,792
- ---------------------------------------------------------------------------
Cisco Systems, Inc. 1 1,015,800 24,074,460
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
JDS Uniphase Corp. 1 4,976,900 $ 18,862,451
- ---------------------------------------------------------------------------
Juniper Networks, Inc. 1 473,200 11,626,524
- ---------------------------------------------------------------------------
QUALCOMM, Inc. 1,148,800 83,839,424
- ---------------------------------------------------------------------------
Scientific-Atlanta, Inc. 348,500 12,023,250
- ---------------------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson, B Shares 1 14,166,500 41,749,421
----------------
209,911,322
- ---------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.8%
International Business
Machines Corp. 119,717 10,553,054
- ---------------------------------------------------------------------------
Sun Microsystems, Inc. 1 3,182,400 13,811,616
----------------
24,364,670
- ---------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.9%
Keyence Corp. 55,200 12,591,559
- ---------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 244,000 13,908,995
- ---------------------------------------------------------------------------
Tandberg ASA 2,847,250 30,088,879
----------------
56,589,433
- ---------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.3%
Yahoo Japan Corp. 1 881 8,558,493
- ---------------------------------------------------------------------------
IT SERVICES--1.2%
Amadeus Global Travel
Distribution SA 1,558,901 10,222,874
- ---------------------------------------------------------------------------
Infosys Technologies Ltd. 202,735 24,354,217
----------------
34,577,091
- ---------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Canon, Inc. 229,000 12,067,543
- ---------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT--3.9%
Advanced Micro Devices, Inc. 1 2,110,200 33,552,180
- ---------------------------------------------------------------------------
National Semiconductor Corp. 1 1,236,800 27,197,232
- ---------------------------------------------------------------------------
Samsung Electronics Co. 68,920 28,450,749
- ---------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd. 2 16,823,221 24,204,634
----------------
113,404,795
- ---------------------------------------------------------------------------
SOFTWARE--5.6%
Amdocs Ltd. 1 452,500 10,602,075
- ---------------------------------------------------------------------------
BEA Systems, Inc. 1 944,200 7,761,324
- ---------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 2,032,870 29,740,888
- ---------------------------------------------------------------------------
Electronic Arts, Inc. 1 89,442 4,879,061
- ---------------------------------------------------------------------------
Novell, Inc. 1 1,445,926 12,131,319
- ---------------------------------------------------------------------------
Red Hat, Inc. 1 685,100 15,736,747
- ---------------------------------------------------------------------------
SAP AG 187,572 31,264,700
- ---------------------------------------------------------------------------
Sybase, Inc. 1 623,610 11,224,980
- ---------------------------------------------------------------------------
Symantec Corp. 1 347,700 15,222,306
- ---------------------------------------------------------------------------
Trend Micro, Inc. 374,500 16,611,648
MARKET VALUE
SHARES SEE NOTE 1
- ---------------------------------------------------------------------------
SOFTWARE CONTINUED
Veritas Software Corp. 1 350,600 $ 9,711,620
----------------
164,886,668
- ---------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--8.2%
- ---------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION
SERVICES--1.6%
France Telecom SA 992,148 25,856,017
- ---------------------------------------------------------------------------
Tele Norte Leste Participacoes SA 78,987 857
- ---------------------------------------------------------------------------
Tele Norte Leste Participacoes SA,
Preference 1,524,785,693 19,299,838
----------------
45,156,712
- ---------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--6.6%
KDDI Corp. 9,452 54,053,503
- ---------------------------------------------------------------------------
NTT DoCoMo, Inc. 13,589 24,284,975
- ---------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 822,560 17,265,534
- ---------------------------------------------------------------------------
Vodafone Group plc 45,221,080 99,025,161
----------------
194,629,173
- ---------------------------------------------------------------------------
UTILITIES--0.5%
- ---------------------------------------------------------------------------
GAS UTILITIES--0.5%
Gail India Ltd. 356,250 1,318,067
- ---------------------------------------------------------------------------
Hong Kong & China Gas
Co. Ltd. 8,827,000 14,542,287
----------------
15,860,354
----------------
Total Common Stocks
(Cost $2,244,134,593) 2,856,042,755
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.0%
- ---------------------------------------------------------------------------
Hindustan Lever Ltd., 1.50% Sec.
Debs., 1/1/05 [INR]
(Cost $563,565) 25,547,400 565,868
- ---------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.6%
- ---------------------------------------------------------------------------
Undivided interest of 6.18% in joint
repurchase agreement (Principal
Amount/Market Value $1,249,774,000, with a
maturity value of $1,249,822,255) with UBS
Warburg LLC, 1.39%, dated 6/30/04, to be
repurchased at $77,236,982 on 7/1/04,
collateralized by Federal Home Loan
Mortgage Corp., 4.50%, 6/1/19, with a value
of $340,921,875 and Federal National
Mortgage Assn., 4.50%--5%, 4/1/19--3/1/34,
with a value of $937,433,252
(Cost $77,234,000) 77,234,000 77,234,000
- ---------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,321,932,158) 99.7% 2,933,842,623
- ---------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.3 9,220,295
--------------------------------
NET ASSETS 100.0% $ 2,943,062,918
================================
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
PRINCIPAL AMOUNT IS REPORTED IN U.S. DOLLARS, EXCEPT FOR THOSE DENOTED IN THE
FOLLOWING CURRENCY:
INR Indian Rupee
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted. See Note 6 of
Notes to Financial Statements.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS MARKET VALUE PERCENT
- -----------------------------------------------------
United States $ 1,212,229,033 41.3%
United Kingdom 410,822,484 14.0
Japan 277,347,407 9.5
France 212,856,057 7.3
Sweden 97,228,636 3.3
Germany 94,326,431 3.2
The Netherlands 74,443,468 2.5
India 72,946,480 2.5
Canada 59,287,006 2.0
Brazil 56,896,786 1.9
Korea, Republic of South 54,653,984 1.9
Switzerland 53,339,624 1.8
Hong Kong 47,469,502 1.6
Mexico 45,125,177 1.5
Bermuda 34,127,722 1.2
Norway 30,088,879 1.0
Taiwan 24,204,634 0.8
Singapore 15,622,827 0.5
Australia 13,203,013 0.5
Israel 13,047,531 0.5
Ireland 12,747,394 0.4
Italy 11,605,674 0.4
Spain 10,222,874 0.4
--------------------------
Total $ 2,933,842,623 100.0%
==========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2004
- ---------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------
Investments, at value (cost $2,321,932,158)--see accompanying
statement of investments $ 2,933,842,623
- ---------------------------------------------------------------------------------------
Cash--foreign currencies (cost $2,413,867) 2,395,632
- ---------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 4,589,341
Shares of beneficial interest sold 4,243,409
Investments sold 362,633
Other 28,135
----------------
Total assets 2,945,461,773
- ---------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------
Bank overdraft 137,015
- ---------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,843,081
Distribution and service plan fees 148,901
Shareholder communications 85,814
Custodian fees 85,150
Trustees' compensation 36,417
Transfer and shareholder servicing agent fees 2,482
Other 59,995
----------------
Total liabilities 2,398,855
- ---------------------------------------------------------------------------------------
NET ASSETS $ 2,943,062,918
================
- ---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 115,014
- ---------------------------------------------------------------------------------------
Additional paid-in capital 2,591,083,730
- ---------------------------------------------------------------------------------------
Accumulated net investment loss (1,599,959)
- ---------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (258,549,189)
- ---------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies 612,013,322
----------------
NET ASSETS $ 2,943,062,918
================
- ---------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------
Non-Service Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $2,477,436,396 and 96,809,620 shares
of beneficial interest outstanding) $ 25.59
- ---------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $249,020,460 and 9,775,581 shares of
beneficial interest outstanding) $ 25.47
- ---------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $203,916,749 and 7,931,416 shares of
beneficial interest outstanding) $ 25.71
- ---------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $12,689,313 and 497,752 shares of
beneficial interest outstanding) $ 25.49
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2004
- -----------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $2,881,521) $ 27,579,333
- -----------------------------------------------------------------------------
Interest 842,746
--------------
Total investment income 28,422,079
- -----------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------
Management fees 8,877,175
- -----------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 269,640
Class 4 shares 2,496
- -----------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 4,991
Service shares 4,990
Class 3 shares 4,989
Class 4 shares 13
- -----------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 52,026
Service shares 4,252
Class 3 shares 3,592
Class 4 shares 13
- -----------------------------------------------------------------------------
Custodian fees and expenses 249,314
- -----------------------------------------------------------------------------
Trustees' compensation 33,226
- -----------------------------------------------------------------------------
Other 86,410
--------------
Total expenses 9,593,127
Less reduction to custodian expenses (5,278)
--------------
Net expenses 9,587,849
- -----------------------------------------------------------------------------
NET INVESTMENT INCOME 18,834,230
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------
Net realized gain on:
Investments 33,193,649
Foreign currency transactions 14,282,045
Net increase from payment by affiliate 70,760
--------------
Net realized gain 47,546,454
- -----------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 56,232,594
Translation of assets and liabilities denominated in foreign
currencies (37,951,387)
--------------
Net change in unrealized appreciation 18,281,207
- -----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 84,661,891
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2004 DECEMBER 31,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income $ 18,834,230 $ 18,395,967
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) 47,546,454 (67,064,035)
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 18,281,207 777,963,383
----------------------------------
Net increase in net assets resulting from operations 84,661,891 729,295,315
- --------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (30,456,227) (13,324,089)
Service shares (2,439,240) (449,100)
Class 3 shares (2,221,201) --
Class 4 shares -- --
- --------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest
transactions:
Non-Service shares 152,342,477 79,623,681
Service shares 77,858,927 77,667,391
Class 3 shares 53,839,039 121,430,754
Class 4 shares 12,411,055 --
- --------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------
Total increase 345,996,721 994,243,952
- --------------------------------------------------------------------------------------------------
Beginning of period 2,597,066,197 1,602,822,245
----------------------------------
End of period (including accumulated net investment income
(loss) of ($1,599,959) and $14,682,479, respectively) $ 2,943,062,918 $ 2,597,066,197
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 2004
NON-SERVICE SHARES (UNAUDITED) 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.08 $ 17.70 $ 22.84 $ 30.33
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .17 .19 .16 .17
Net realized and unrealized gain (loss) .66 7.34 (5.19) (3.85)
-----------------------------------------------------------
Total from investment operations .83 7.53 (5.03) (3.68)
- -------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) (.15) (.11) (.19)
Dividends in excess of net investment income -- -- -- --
Distributions from net realized gain -- -- -- (3.62)
-----------------------------------------------------------
Total dividends and/or distributions to shareholders (.32) (.15) (.11) (3.81)
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.59 $ 25.08 $ 17.70 $ 22.84
===========================================================
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 3.33% 43.02% (22.13)% (12.04)%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,477,436 $ 2,280,752 $ 1,549,993 $ 1,905,890
- -------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,437,314 $ 1,751,226 $ 1,776,289 $ 1,918,335
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.34% 0.99% 0.80% 0.70%
Total expenses 0.65% 3 0.67% 3 0.67% 3 0.70% 3
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 34% 34% 39%
YEAR
ENDED
DECEMBER 31,
NON-SERVICE SHARES 2000 1999
- -------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------
Net asset value, beginning of period $ 33.41 $ 22.07
- -------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 .14
Net realized and unrealized gain (loss) 1.82 12.21
------------------------------
Total from investment operations 2.09 12.35
- -------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.09) (.14)
Dividends in excess of net investment income -- (.13)
Distributions from net realized gain (5.08) (.74)
------------------------------
Total dividends and/or distributions to shareholders (5.17) (1.01)
- -------------------------------------------------------------------------------------
Net asset value, end of period $ 30.33 $ 33.41
==============================
- -------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 5.09% 58.48%
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,136,420 $ 1,762,366
- -------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,116,100 $ 1,251,190
- -------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.83% 0.57%
Total expenses 0.68% 3 0.69% 3
- -------------------------------------------------------------------------------------
Portfolio turnover rate 50% 64%
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.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2004 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2003 2002 2001 2000 1
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 24.96 $ 17.61 $ 22.78 $ 30.30 $ 32.65
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .18 .12 .12 .21 .03
Net realized and unrealized gain (loss) .62 7.36 (5.19) (3.92) (2.38)
--------------------------------------------------------------
Total from investment operations .80 7.48 (5.07) (3.71) (2.35)
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.29) (.13) (.10) (.19) --
Distributions from net realized gain -- -- -- (3.62) --
--------------------------------------------------------------
Total dividends and/or distributions to shareholders (.29) (.13) (.10) (3.81) --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.47 $ 24.96 $ 17.61 $ 22.78 $ 30.30
==============================================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.23% 42.86% (22.37)% (12.17)% (7.20)%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 249,020 $ 168,739 $ 52,830 $ 20,467 $ 983
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 217,349 $ 91,800 $ 34,847 $ 8,502 $ 325
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.19% 0.68% 0.51% 0.44% 0.60%
Total expenses 0.90% 4 0.93% 4 0.90% 4 0.85% 4 0.83% 4
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 10% 34% 34% 39% 50%
1. For the period from July 13, 2000 (inception of offering) to December 31,
2000.
2. Assumes an investment on the business day before the first day of the fiscal
period, 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.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30, 2004 DEC. 31,
CLASS 3 SHARES (UNAUDITED) 2003 1
- ----------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.19 $ 17.55
- ----------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .07
Net realized and unrealized gain .64 7.57
-------------------------
Total from investment operations .84 7.64
- ----------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) --
Distributions from net realized gain -- --
-------------------------
Total dividends and/or distributions to shareholders (.32) --
- ----------------------------------------------------------------------------------
Net asset value, end of period $ 25.71 $ 25.19
=========================
- ----------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.35% 43.53%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 203,917 $ 147,576
- ----------------------------------------------------------------------------------
Average net assets (in thousands) $ 180,491 $ 80,579
- ----------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.39% 0.73%
Total expenses 0.66% 4 0.68% 4
- ----------------------------------------------------------------------------------
Portfolio turnover rate 10% 34%
1. For the period from May 1, 2003 (inception of offering) to December 31, 2003.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
PERIOD
ENDED
JUNE 30, 2004
CLASS 4 SHARES (UNAUDITED) 1
- --------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------
Net asset value, beginning of period $ 25.21
- --------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .03
Net realized and unrealized gain .25
-----------
Total from investment operations .28
- --------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income --
Distributions from net realized gain --
-----------
Total dividends and/or distributions to shareholders --
- --------------------------------------------------------------------
Net asset value, end of period $ 25.49
===========
- --------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 1.11%
- --------------------------------------------------------------------
- --------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (in thousands) $ 12,689
- --------------------------------------------------------------------
Average net assets (in thousands) $ 6,404
- --------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.67%
Total expenses 0.89% 4
- --------------------------------------------------------------------
Portfolio turnover rate 10%
1. For the period from May 3, 2004 (inception of offering) to June 30, 2004.
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.
15 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Global Securities Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek long-term capital
appreciation by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and special
situations that are considered to have appreciation possibilities. The Trust's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Non-Service, Service, Class 3 and Class 4 shares. All
classes are sold at their offering price, which is the net asset value per
share, to separate investment accounts of participating insurance companies as
an underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. The classes of shares
designated as Service shares and Class 4 shares are subject to a distribution
and service plan. The Fund assesses a 1% fee on the proceeds of Class 3 and
Class 4 shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund or other investment option offered through your variable life
insurance or variable annuity contract) within 60 days of their purchase. The
fee, which is retained by the Fund, is accounted for as an addition to paid-in
capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Securities may be valued primarily using dealer-supplied valuations or a
portfolio pricing service authorized by the Board of Trustees. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars as of the close of the New York Stock 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. Foreign exchange rates may be valued primarily using
dealer supplied valuations or a portfolio pricing service authorized by the
Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
16 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2004, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $255,078,627 expiring by
2011. This estimated capital loss carryforward represents carryforward as of the
end of the last fiscal year, increased for losses deferred under tax accounting
rules to the current fiscal year and is increased or decreased by capital losses
or gains realized in the first six months of the current fiscal year. During the
six months ended June 30, 2004, it is estimated that the Fund will utilize
$47,546,454 of capital loss carryforward to offset realized capital gains.
During the year ended December 31, 2003, the Fund did not utilize any capital
loss carryforward to offset realized capital gains.
As of December 31, 2003, the Fund had available for federal income tax purposes
post-October losses of $1,844,693 and unused capital loss carryforwards as
follows:
EXPIRING
------------------------
2009 $ 47,254,011
2010 147,620,574
2011 105,905,803
-------------
Total $ 300,780,388
=============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund does purchase shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
17 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2004 1 YEAR ENDED DECEMBER 31, 2003 2
--------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 14,688,629 $ 377,139,249 56,815,585 $ 1,050,428,269
Dividends and/or distributions reinvested 1,203,327 30,456,227 828,612 13,324,089
Redeemed (10,027,091) (255,252,999) (54,266,655) (984,128,677)
----------------------------------------------------------------
Net increase 5,864,865 $ 152,342,477 3,377,542 $ 79,623,681
================================================================
- --------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 3,746,605 $ 96,239,086 9,204,619 $ 180,268,510
Dividends and/or distributions reinvested 96,756 2,439,240 28,051 449,100
Redeemed (826,889) (20,819,399) (5,472,867) (103,050,219)
----------------------------------------------------------------
Net increase 3,016,472 $ 77,858,927 3,759,803 $ 77,667,391
================================================================
- --------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 2,068,886 $ 53,670,032 6,450,195 $ 132,821,158
Dividends and/or distributions reinvested 87,345 2,221,201 -- --
Redeemed (82,189) (2,052,194) (592,821) (11,390,404)
----------------------------------------------------------------
Net increase 2,074,042 $ 53,839,039 5,857,374 $ 121,430,754
================================================================
18 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
SIX MONTHS ENDED JUNE 30, 2004 1 YEAR ENDED DECEMBER 31, 2003 2
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 498,229 $ 12,422,740 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (477) (11,685) -- --
---------------------------------------------------------------
Net increase 497,752 $ 12,411,055 -- $ --
===============================================================
1. For the six months ended June 30, 2004, for Non-Service, Service and Class 3
shares and for the period from May 3, 2004 (inception of offering) to June 30,
2004, for Class 4 shares.
2. For the year ended December 31, 2003, for Non-Service and Service shares and
for the period from May 5, 2003 (inception of offering) to December 31, 2003,
for Class 3 shares.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2004, were
$573,427,284 and $265,755,169, 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.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2004, the Fund paid
$15,000 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE AND CLASS 4 SHARES. The Fund has
adopted a Distribution and Service Plan for Service share class and Class 4
shares to pay OppenheimerFunds Distributor, Inc. (the Distributor), for
distribution related services and personal service and account maintenance for
the Fund's Service class and Class 4 shares. Under the Plan, payments are made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Service share class and Class 4 shares of the Fund. The Distributor currently
uses all of those fees to compensate sponsor(s) of the insurance product that
offers Fund shares, for providing personal service and maintenance of accounts
of their variable contract owners that hold Service class and Class 4 shares.
The impact of the service plan is to increase operating expenses of the Service
class and Class 4 shares, which results in lower performance compared to the
Fund's shares that are not subject to a service fee. Fees incurred by the Fund
under the Plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
commissions for sales that is permitted under its investment advisory agreement,
the Fund's Manager terminated that practice in July 2003. Subsequently, the
Manager paid the Fund $70,760, an amount equivalent to certain of such
commissions incurred in prior years.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class. This
undertaking may be amended or withdrawn at any time.
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 June 30, 2004, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2004, investments in securities included issues that are illiquid
or restricted. Restricted securities are purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also 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 or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 2004 was $29,224,350, which
represents 0.99% of the Fund's net assets, of which $5,019,716 is considered
restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST JUNE 30, 2004 APPRECIATION
- ------------------------------------------------------------------------------------
STOCKS AND/OR WARRANTS
Nektar Therapeutics 6/25/03 $ 3,568,000 $ 5,019,716 $ 1,451,716
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
ITEM 2. CODE OF ETHICS
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semiannual reports.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Board is responsible for approving nominees for election as
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the Committee in
nominating candidates for election as independent Trustees of the Registrant.
The Registrant's Board has adopted a written charter for the Committee. A
current copy of the Audit Committee charter is available to shareholders on the
OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Audit Committee of the Board will consider
candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for trustees
includes a number of factors. In screening candidates for board membership,
whether the candidate is suggested by Board members, shareholders or others, the
Committee considers the candidate's professional experience, soundness of
judgment, integrity, ability to make independent, analytical inquiries,
collegiality, willingness and ability to devote the time required to perform
Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
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 June 30, 2004,
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 last 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)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)