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 - December 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Oppenheimer Global Securities
Fund/VA participated strongly in the global stock market rally that extended
from August 2004 to the end of the fiscal year. Beyond the broad market gain,
Fund returns were also boosted by positions in stocks reflecting its technology
and mass-affluence themes. Sirius Satellite Radio, Inc., QUALCOMM, Inc., and
Ericsson (Telefonaktiebolaget LM Ericsson, B shares) were the major contributors
in technology, while Hennes & Mauritz AB, B shares (H&M) & Reckitt Benckiser plc
were the key contributors in the mass affluence category.
Sirius, a subscription-based radio system that broadcasts digital-quality
audio throughout the continental U.S. from orbiting satellites was a strong
performer in the portfolio over the reporting period. Although the stock
experienced some pullbacks along the way, we believe several recent
developments--such as the naming of a proven CEO and the signing of several
radio celebrities, may point to a promising future.
Both QUALCOMM and Ericsson are telecommunication equipment companies that
have outperformed in a relatively weak sector. QUALCOMM, which pioneered and
commercialized CDMA (Code Division Multiple Access) wireless technology,
dominates the chip market for cell phones. While we took some profits in the
company during the year, we maintained a significant position in this industry
leader for the reporting period. Ericsson is a major provider to
third-generation (3G) wireless infrastructure, which promises to substantially
enhance voice capacity and data rates. We bought Ericsson as a restructuring
investment in 2002, and the company has shown strong, sustained momentum since
then.
Gains in these and other stocks were partly offset by declines in other
issues, including a Taiwanese semiconductor manufacturer that suffered during
the industry's sell-off. We believe the price decline represents a mid-cycle
"soft-patch" rather than a cyclical downturn, and we maintained a position in
the issue.
Another drag on performance was a Japanese wireless service provider whose
operating margins were squeezed by intense competition. Since we own the
company's primary competitor, who has emerged as the technology winner, we sold
the entire position.
In addition, we moved out of two electronic design automation software
companies because of changes in the market structure of design automation
devices.
During the period we also began to build several positions, including oil
service companies Transocean, Inc. and Technip S.A., both of which should
benefit from a rebound in oil exploration spurred by the hike in energy prices.
Another acquisition, Toyota Motor Corp., lies within our mass-affluence theme.
The automaker, which continues to expand into Europe and fast-growing emerging
markets, is one of the industry's lowest-cost manufacturers and is a leader in
energy-efficient hybrid gas/electric cars. Furthermore, we used the depressed
valuations and high cash flow yield of Vodafone Group plc to double our position
in the wireless phone services provider. Finally, our recent purchase of Hennes
& Mauritz AB, a European "cheap chic" retailer which is expanding aggressively
in the U.S., has already produced significant, positive results.
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, 2004. In the case of Non-Service shares, performance is
measured over a ten-year period. In the case of Service shares, performance is
measured from inception of the class on July 13, 2000. In the case of Class 3
shares, performance is measured from inception of the class on May 1, 2003. In
the case of Class 4 shares, performance is measured from inception of the class
on May 3, 2004. 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 graph assumes that all dividends and
capital gains distributions were reinvested in additional shares.
The Fund's performance is compared to the performance of the Morgan
Stanley Capital International World Index, an unmanaged index of equity
securities listed on stock exchanges of 20 foreign countries and the U.S. Index
performance reflects the reinvestment of income but does not consider the effect
of transaction costs, and none of the data in the graphs show the effect of
taxes. The Fund's performance reflects the effects of the Fund's business and
operating expenses. While index comparisons may be useful to provide a benchmark
for the Fund's performance, it must be noted that the Fund's investments are not
limited to the investments in the index.
4 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NON-SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund/VA (Non-Service)
Morgan Stanley Capital International World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Global Morgan Stanley
Securities Capital
Fund/VA International
(Non-Service) World Index
12/31/1994 10,000 10,000
03/31/1995 9,686 10,481
06/30/1995 10,142 10,942
09/30/1995 10,619 11,567
12/31/1995 10,224 12,132
03/31/1996 10,612 12,640
06/30/1996 11,069 13,021
09/30/1996 11,424 13,210
12/31/1996 12,044 13,830
03/31/1997 12,654 13,884
06/30/1997 13,986 15,990
09/30/1997 15,103 16,463
12/31/1997 14,745 16,074
03/31/1998 16,230 18,392
06/30/1998 16,542 18,783
09/30/1998 13,958 16,547
12/31/1998 16,824 20,059
03/31/1999 17,414 20,793
06/30/1999 19,146 21,803
09/30/1999 19,473 21,497
12/31/1999 26,664 25,142
03/31/2000 30,515 25,418
06/30/2000 29,517 24,535
09/30/2000 29,036 23,320
12/31/2000 28,020 21,894
03/31/2001 23,827 19,097
06/30/2001 25,673 19,627
09/30/2001 21,086 16,820
12/31/2001 24,648 18,277
03/31/2002 25,123 18,391
06/30/2002 22,879 16,705
09/30/2002 18,682 13,648
12/31/2002 19,192 14,706
03/31/2003 17,741 13,979
06/30/2003 21,440 16,389
09/30/2003 23,486 17,199
12/31/2003 27,448 19,670
03/31/2004 28,652 20,205
06/30/2004 28,363 20,416
09/30/2004 28,131 20,231
12/31/2004 32,709 22,670
AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/04
1-Year 19.16% 5-Year 4.17% 10-Year 12.58%
SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Global Securities Fund/VA (Service)
Morgan Stanley Capital International World Index
Oppenheimer Global Morgan Stanley
Securities Capital
Fund/VA International
(Service) World Index
07/13/2000 10,000 10,000
09/30/2000 9,620 9,505
12/31/2000 9,280 8,924
03/31/2001 7,889 7,784
06/30/2001 8,498 8,000
09/30/2001 6,977 6,855
12/31/2001 8,151 7,449
03/31/2002 8,308 7,496
06/30/2002 7,560 6,808
09/30/2002 6,166 5,563
12/31/2002 6,328 5,994
03/31/2003 5,842 5,697
06/30/2003 7,062 6,680
09/30/2003 7,736 7,010
12/31/2003 9,040 8,017
03/31/2004 9,431 8,235
06/30/2004 9,332 8,321
09/30/2004 9,248 8,246
12/31/2004 10,746 9,239
AVERAGE ANNUAL TOTAL RETURNS OF SERVICE SHARES OF THE FUND AT 12/31/04
1-Year 18.88% 5-Year N/A Since Inception (7/13/00) 1.62%
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 PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, 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. THE FUND'S TOTAL RETURNS DO NOT INCLUDE THE CHARGES ASSOCIATED WITH THE
SEPARATE ACCOUNT PRODUCTS THAT OFFER THIS FUND. SUCH PERFORMANCE WOULD HAVE BEEN
LOWER IF SUCH CHARGES WERE TAKEN INTO ACCOUNT.
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
CLASS 3 SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund/VA (Class 3)
Morgan Stanley Capital International World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Global Morgan Stanley
Securities Capital
Fund/VA International
(Class 3) World Index
05/01/2003 10,000 10,000
06/30/2003 11,225 10,763
09/30/2003 12,291 11,295
12/31/2003 14,353 12,918
03/31/2004 14,979 13,269
06/30/2004 14,835 13,408
09/30/2004 14,714 13,287
12/31/2004 17,108 14,888
AVERAGE ANNUAL TOTAL RETURNS OF CLASS 3 SHARES OF THE FUND AT 12/31/04
1-Year 19.19% 5-Year N/A Since Inception (5/1/03) 38.01%
CLASS 4 SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund/VA (Class 4)
Morgan Stanley Capital International World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Global Morgan Stanley
Securities Capital
Fund/VA International
(Class 4) World Index
05/03/2004 10,000 10,000
06/30/2004 10,115 10,310
09/30/2004 10,024 10,216
12/31/2004 11,642 11,448
AVERAGE ANNUAL TOTAL RETURNS OF CLASS 4 SHARES OF THE FUND AT 12/31/04
1-Year N/A 5-Year N/A Since Inception (5/3/04) 16.42%
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 PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, 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. THE FUND'S TOTAL RETURNS DO NOT INCLUDE THE CHARGES ASSOCIATED WITH THE
SEPARATE ACCOUNT PRODUCTS THAT OFFER THIS FUND. SUCH PERFORMANCE WOULD HAVE BEEN
LOWER IF SUCH CHARGES WERE TAKEN INTO ACCOUNT.
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended December 31, 2004.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any charges associated with the separate
accounts that offer this Fund. Therefore, the "hypothetical" lines of the table
are useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these separate
account charges were included, your costs would have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(7/1/04) (12/31/04) DECEMBER 31, 2004
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,153.20 $3.58
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.82 3.36
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,151.60 4.93
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.56 4.63
- --------------------------------------------------------------------------------
Class 3 shares Actual 1,000.00 1,153.20 3.58
- --------------------------------------------------------------------------------
Class 3 shares Hypothetical 1,000.00 1,021.82 3.36
- --------------------------------------------------------------------------------
Class 4 shares Actual 1,000.00 1,151.40 5.09
- --------------------------------------------------------------------------------
Class 4 shares Hypothetical 1,000.00 1,020.41 4.79
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/366
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended December 31, 2004 are as follows:
CLASS EXPENSE RATIOS
- --------------------------------------
Non-Service shares 0.66%
- --------------------------------------
Service shares 0.91
- --------------------------------------
Class 3 shares 0.66
- --------------------------------------
Class 4 shares 0.94
- --------------------------------------------------------------------------------
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS December 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--94.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--16.9%
- --------------------------------------------------------------------------------
AUTOMOBILES--1.3%
Porsche AG, Preferred 22,868 $ 14,506,586
- --------------------------------------------------------------------------------
Toyota Motor Corp. 667,900 27,277,577
------------
41,784,163
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.3%
International Game Technology 568,100 19,531,278
------------
Starbucks Corp. 1 334,400 20,853,184
------------
40,384,462
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.4%
Sharp Corp. 806,000 13,159,344
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.4%
Amazon.com, Inc. 1 279,100 12,361,339
- --------------------------------------------------------------------------------
MEDIA--8.6%
Grupo Televisa SA, Sponsored
GDR 405,299 24,520,590
- --------------------------------------------------------------------------------
JC Decaux SA 1 492,604 14,382,403
- --------------------------------------------------------------------------------
Pearson plc 1,950,238 23,532,707
- --------------------------------------------------------------------------------
Reed Elsevier plc 1,423,866 13,135,346
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 5,887,640 16,590,997
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 13,387,014 102,410,657
- --------------------------------------------------------------------------------
Societe Television Francaise 1 351,960 11,457,716
- --------------------------------------------------------------------------------
Television Broadcasts Ltd. 4,743,832 22,032,541
- --------------------------------------------------------------------------------
Wolters Kluwer NV 738,450 14,825,209
- --------------------------------------------------------------------------------
WPP Group plc 1,068,520 11,754,828
- --------------------------------------------------------------------------------
Zee Telefilms Ltd. 4,876,300 19,193,350
------------
273,836,344
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--4.3%
Circuit City Stores, Inc./
Circuit City Group 1,281,249 20,038,734
- --------------------------------------------------------------------------------
Gap, Inc. (The) 522,500 11,035,200
- --------------------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 1,955,900 68,135,981
- --------------------------------------------------------------------------------
New Dixons Group plc 8,998,110 26,258,740
- --------------------------------------------------------------------------------
RadioShack Corp. 320,600 10,541,328
------------
136,009,983
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.6%
Coach, Inc. 1 172,400 9,723,360
- --------------------------------------------------------------------------------
LVMH Moet Hennessey
Louis Vuitton 108,870 8,338,758
------------
18,062,118
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.4%
- --------------------------------------------------------------------------------
BEVERAGES--1.5%
Companhia de Bebidas das
Americas, ADR 563,415 15,961,547
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BEVERAGES Continued
Diageo plc 406,400 $ 5,797,243
- --------------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 2,863,600 15,036,019
- --------------------------------------------------------------------------------
Grupo Modelo SA de CV,
Series C 3,951,400 10,868,388
------------
47,663,197
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.0%
Boots Group plc 1,010,620 12,718,608
- --------------------------------------------------------------------------------
Carrefour SA 180,410 8,592,587
- --------------------------------------------------------------------------------
Seven-Eleven Japan Co. Ltd. 321,000 10,118,376
------------
31,429,571
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cadbury Schweppes plc 3,289,501 30,630,265
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.5%
Hindustan Lever Ltd. 5,411,000 17,862,399
- --------------------------------------------------------------------------------
Reckitt Benckiser plc 2,002,937 60,527,259
------------
78,389,658
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.0%
Gillette Co. 513,100 22,976,618
- --------------------------------------------------------------------------------
Shiseido Co. Ltd. 734,000 10,629,999
------------
33,606,617
- --------------------------------------------------------------------------------
TOBACCO--0.4%
Altria Group, Inc. 133,000 8,126,300
- --------------------------------------------------------------------------------
ITC Ltd. 115,900 3,492,197
------------
11,618,497
- --------------------------------------------------------------------------------
ENERGY--7.6%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.2%
GlobalSantaFe Corp. 895,100 29,636,761
- --------------------------------------------------------------------------------
Technip SA 174,520 32,261,411
- --------------------------------------------------------------------------------
Transocean, Inc. 1 901,700 38,223,063
------------
100,121,235
- --------------------------------------------------------------------------------
OIL & GAS--4.4%
BP plc, ADR 407,969 23,825,390
- --------------------------------------------------------------------------------
Burlington Resources, Inc. 324,400 14,111,400
- --------------------------------------------------------------------------------
ChevronTexaco Corp. 466,944 24,519,229
- --------------------------------------------------------------------------------
Encana Corp. 356,817 20,369,973
- --------------------------------------------------------------------------------
ENI SpA 532,000 13,319,886
- --------------------------------------------------------------------------------
Husky Energy, Inc. 1,009,715 28,863,447
- --------------------------------------------------------------------------------
Oil & Natural Gas Corp. Ltd. 190,670 3,594,746
- --------------------------------------------------------------------------------
Total SA, B Shares 57,630 12,630,122
------------
141,234,193
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FINANCIALS--17.7%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.3%
Northern Trust Corp. 200,100 $ 9,720,858
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--8.2%
ABN Amro Holding NV 1,125,400 29,813,845
- --------------------------------------------------------------------------------
Anglo Irish Bank Corp. 742,166 18,057,321
- --------------------------------------------------------------------------------
Australia & New Zealand
Banking Group Ltd. 841,550 13,583,038
- --------------------------------------------------------------------------------
Commerce Bancorp, Inc. 91,900 5,918,360
- --------------------------------------------------------------------------------
HSBC Holdings plc 3 1,790,887 30,644,174
- --------------------------------------------------------------------------------
HSBC Holdings plc 3 205,000 3,459,567
- --------------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 1,198,250 24,144,738
- --------------------------------------------------------------------------------
Resona Holdings, Inc. 1 6,040,000 12,219,640
- --------------------------------------------------------------------------------
Royal Bank of Scotland
Group plc (The) 1,823,287 61,329,317
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 280,020 28,336,943
- --------------------------------------------------------------------------------
Wachovia Corp. 599,029 31,508,925
------------
259,015,868
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--5.1%
3i Group plc 903,406 11,551,442
- --------------------------------------------------------------------------------
American Express Co. 415,900 23,444,283
- --------------------------------------------------------------------------------
Citigroup, Inc. 201,566 9,711,450
- --------------------------------------------------------------------------------
Credit Saison Co. Ltd. 479,600 17,511,466
- --------------------------------------------------------------------------------
Investor AB, B Shares 611,109 7,770,595
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 1,242,563 48,472,383
- --------------------------------------------------------------------------------
MBNA Corp. 963,250 27,154,018
- --------------------------------------------------------------------------------
MLP AG 343,647 6,801,006
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 888,300 10,624,068
------------
163,040,711
- --------------------------------------------------------------------------------
INSURANCE--4.1%
ACE Ltd. 647,871 27,696,485
- --------------------------------------------------------------------------------
Aegon NV 1,642,107 22,387,295
- --------------------------------------------------------------------------------
Allianz AG 220,600 29,130,474
- --------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 7,250 21,286,000
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 127,300 11,400,988
- --------------------------------------------------------------------------------
Manulife Financial Corp. 373,713 17,279,723
------------
129,180,965
- --------------------------------------------------------------------------------
HEALTH CARE--12.8%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--3.6%
Affymetrix, Inc. 1 413,600 15,117,080
- --------------------------------------------------------------------------------
Amgen, Inc. 1 456,900 29,310,135
- --------------------------------------------------------------------------------
Applera Corp./Applied
Biosystems Group 498,500 10,423,635
- --------------------------------------------------------------------------------
Genentech, Inc. 1 262,700 14,301,388
- --------------------------------------------------------------------------------
Genzyme Corp.
(General Division) 1 246,600 14,320,062
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BIOTECHNOLOGY Continued
Gilead Sciences, Inc. 1 698,360 $ 24,435,616
- --------------------------------------------------------------------------------
Human Genome Sciences, Inc. 1 302,400 3,634,848
- --------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc. 1 291,700 3,535,404
------------
115,078,168
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
Essilor International SA 178,810 14,011,685
- --------------------------------------------------------------------------------
Nektar Therapeutics 1,2 314,361 5,090,133
- --------------------------------------------------------------------------------
Smith & Nephew plc 2,623,390 26,845,349
------------
45,947,167
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.6%
Express Scripts, Inc. 1 162,800 12,444,432
- --------------------------------------------------------------------------------
IMS Health, Inc. 529,900 12,298,979
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 272,100 25,999,155
------------
50,742,566
- -------------------------------------------------------------------------------
PHARMACEUTICALS--6.1%
AstraZeneca plc 267,000 9,683,274
- --------------------------------------------------------------------------------
Chugai Pharmaceutical Co. Ltd. 754,800 12,478,103
- --------------------------------------------------------------------------------
Eli Lilly & Co. 160,100 9,085,675
- --------------------------------------------------------------------------------
Novartis AG 404,244 20,370,399
- --------------------------------------------------------------------------------
Pfizer, Inc. 657,719 17,686,064
- --------------------------------------------------------------------------------
Roche Holdings AG 310,265 35,716,901
- --------------------------------------------------------------------------------
Sanofi-Synthelabo SA 691,494 55,266,885
- --------------------------------------------------------------------------------
Schering-Plough Corp. 785,200 16,394,976
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,266,000 17,506,802
------------
194,189,079
- ------------------------------------------------------------------------------
INDUSTRIALS--4.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.0%
Boeing Co. 279,300 14,459,361
- --------------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 920,934 30,796,033
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 237,200 13,176,460
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 251,200 13,655,232
- --------------------------------------------------------------------------------
Raytheon Co. 577,600 22,428,208
------------
94,515,294
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.1%
JGC Corp. 490,000 4,480,628
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.9%
Hutchison Whampoa Ltd. 1,415,000 13,243,950
- --------------------------------------------------------------------------------
Siemens AG 189,018 16,021,697
------------
29,265,647
- --------------------------------------------------------------------------------
MACHINERY--0.4%
Hyundai Heavy Industries Co. Ltd. 342,470 11,396,920
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MARINE--0.1%
Peninsular & Oriental Steam
Navigation Co. 586,910 $ 3,352,258
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--19.7%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--5.8%
Alcatel SA 1 1,046,470 16,376,510
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 1 924,600 17,844,780
- --------------------------------------------------------------------------------
Corning, Inc. 1 1,238,400 14,575,968
- --------------------------------------------------------------------------------
JDS Uniphase Corp. 1 4,530,200 14,360,734
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1 430,700 11,710,733
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 690,500 29,277,200
- --------------------------------------------------------------------------------
Scientific-Atlanta, Inc. 317,200 10,470,772
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson, B Shares 1 21,949,100 70,021,507
--------------
184,638,204
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.5%
International Business
Machines Corp. 304,117 29,979,854
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 1 3,464,000 18,636,320
--------------
48,616,174
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.8%
Hoya Corp. 70,400 7,948,941
- --------------------------------------------------------------------------------
Keyence Corp. 50,200 11,248,092
- --------------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 222,100 12,463,010
- --------------------------------------------------------------------------------
Nidec Corp. 48,300 5,887,255
- --------------------------------------------------------------------------------
Omron Corp. 134,000 3,197,326
- --------------------------------------------------------------------------------
Tandberg ASA 1,405,950 17,468,029
--------------
58,212,653
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.3%
Yahoo Japan Corp. 1 1,762 8,460,076
- --------------------------------------------------------------------------------
IT SERVICES--1.6%
Amadeus Global Travel
Distribution SA 1,419,001 14,600,839
- --------------------------------------------------------------------------------
Infosys Technologies Ltd. 738,140 35,472,152
--------------
50,072,991
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Canon, Inc. 208,000 11,264,629
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.4%
Advanced Micro Devices, Inc. 1 1,920,800 42,296,016
- --------------------------------------------------------------------------------
Altera Corp. 1 254,000 5,257,800
- --------------------------------------------------------------------------------
National Semiconductor Corp. 1 1,125,800 20,208,110
- --------------------------------------------------------------------------------
Nikon Corp. 1,192,415 14,787,233
- --------------------------------------------------------------------------------
Samsung Electronics Co. 62,740 27,303,294
- --------------------------------------------------------------------------------
Silicon Laboratories, Inc. 1 158,800 5,607,228
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued
Taiwan Semiconductor
Manufacturing Co. Ltd. 2 15,313,223 $ 24,402,580
--------------
139,862,261
- --------------------------------------------------------------------------------
SOFTWARE--3.9%
BEA Systems, Inc. 1 1,408,805 12,482,012
- --------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 888,770 12,273,914
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 81,442 5,023,343
- --------------------------------------------------------------------------------
Novell, Inc. 1 1,827,226 12,333,776
- --------------------------------------------------------------------------------
Red Hat, Inc. 1 402,100 5,368,035
- --------------------------------------------------------------------------------
SAP AG 170,738 30,448,323
- --------------------------------------------------------------------------------
Symantec Corp. 1 633,000 16,306,080
- --------------------------------------------------------------------------------
Trend Micro, Inc. 341,000 18,519,702
- --------------------------------------------------------------------------------
Veritas Software Corp. 1 319,100 9,110,305
--------------
121,865,490
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--7.3%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.7%
France Telecom SA 903,108 29,903,100
- --------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA 78 1,368
- --------------------------------------------------------------------------------
Tele Norte Leste Participacoes
SA, Preference 1,387,785 23,199,418
--------------
53,103,886
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--5.6%
Hutchison Telecommunications
International Ltd. 1 18,720 16,859
- --------------------------------------------------------------------------------
KDDI Corp. 8,604 46,349,253
- --------------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 874,960 19,467,860
- --------------------------------------------------------------------------------
Vodafone Group plc 41,162,730 111,627,608
--------------
177,461,580
- --------------------------------------------------------------------------------
UTILITIES--1.0%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.4%
Energias de Portugal SA 2,729,106 8,272,266
- --------------------------------------------------------------------------------
Fortum Oyj 256,200 4,743,026
--------------
13,015,292
- --------------------------------------------------------------------------------
GAS UTILITIES--0.6%
Gail India Ltd. 324,270 1,720,936
- --------------------------------------------------------------------------------
Hong Kong & China Gas Co. Ltd. 8,035,000 16,591,628
--------------
18,312,564
--------------
Total Common Stocks
(Cost $2,080,377,086) 3,005,102,915
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.8%
- ------------------------------------------------------------------------------------
Undivided interest of 10.58% in joint repurchase
agreement (Principal Amount/Value $1,443,703,000,
with a maturity value of $1,443,962,867) with UBS
Warburg LLC, 2.16%, dated 12/31/04, to be
repurchased at $152,800,499 on 1/3/05,
collateralized by Federal National Mortgage
Assn., 5%--6%, 4/1/34--10/1/34, with
a value of $1,474,609,071
(Cost $152,773,000) $ 152,773,000 $ 152,773,000
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,233,150,086) 99.7% 3,157,875,915
- ------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.3 9,821,293
--------------------------------
NET ASSETS 100.0% $3,167,697,208
================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of December 31, 2004 was $29,492,713, which represents
0.93% of the Fund's net assets, of which $5,090,133 is considered restricted.
See Note 6 of Notes to Financial Statements.
3. The Fund holds securities which have been issued by the same entity and that
trade on separate exchanges.
- --------------------------------------------------------------------------------
GEOGRAPHIC HOLDINGS (Unaudited)
- --------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
United States $1,255,621,619 39.8%
United Kingdom 466,673,375 14.8
Japan 265,507,452 8.4
France 231,558,120 7.3
Sweden 145,928,083 4.6
India 105,480,518 3.3
Germany 96,908,086 3.1
Brazil 69,958,366 2.2
The Netherlands 67,026,349 2.1
Canada 66,513,143 2.1
Korea, Republic of South 58,168,074 1.8
Switzerland 56,087,300 1.8
Hong Kong 51,884,978 1.6
Mexico 50,424,997 1.6
Bermuda 39,097,473 1.2
Taiwan 24,402,580 0.8
Ireland 18,057,321 0.6
Norway 17,468,029 0.6
Singapore 16,590,997 0.5
Spain 14,600,839 0.5
Australia 13,583,038 0.4
Italy 13,319,886 0.4
Portugal 8,272,266 0.3
Finland 4,743,026 0.2
-----------------------------
Total $3,157,875,915 100.0%
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES December 31, 2004
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (cost $2,233,150,086)--see accompanying statement of investments $ 3,157,875,915
- ---------------------------------------------------------------------------------------------------------
Cash 70,058
- ---------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $2,287,816) 2,318,287
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 5,682,367
Shares of beneficial interest sold 3,273,141
Investments sold 587,702
Other 32,367
----------------
Total assets 3,169,839,837
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,560,266
Distribution and service plan fees 210,215
Custodian fees 124,870
Foreign capital gains tax 106,918
Trustees' compensation 50,045
Shareholder communications 36,185
Transfer and shareholder servicing agent fees 3,455
Other 50,675
---------------
Total liabilities 2,142,629
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 3,167,697,208
================
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 107,376
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,361,502,185
- ---------------------------------------------------------------------------------------------------------
Accumulated net investment income 13,762,145
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (132,454,462)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 924,779,964
----------------
NET ASSETS $ 3,167,697,208
================
- ---------------------------------------------------------------------------------------------------------
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 $2,518,866,995 and 85,355,332 shares of beneficial interest outstanding) $29.51
- ---------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $346,402,810 and 11,809,440 shares of beneficial interest outstanding) $29.33
- ---------------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $265,043,754 and 8,937,735 shares of beneficial interest outstanding) $29.65
- ---------------------------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $37,383,649 and 1,273,510 shares of beneficial interest outstanding) $29.35
- ---------------------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS For the Year Ended December 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,284,789) $ 46,732,962
- --------------------------------------------------------------------------------
Interest 1,850,524
-------------
Total investment income 48,583,486
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 18,297,753
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 617,506
Class 4 shares 32,566
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 10,282
Service shares 10,036
Class 3 shares 10,026
Class 4 shares 5,016
- --------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 89,139
Service shares 8,396
Class 3 shares 6,834
Class 4 shares 382
- --------------------------------------------------------------------------------
Custodian fees and expenses 571,468
- --------------------------------------------------------------------------------
Trustees' compensation 70,320
- --------------------------------------------------------------------------------
Other 114,362
--------------
Total expenses 19,844,086
Less reduction to custodian expenses (11,719)
--------------
Net expenses 19,832,367
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 28,751,119
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------
Net realized gain on:
Investments 137,644,145
Foreign currency transactions 41,371,491
Net increase from payment by affiliate 70,760
-------------
Net realized gain 179,086,396
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (net of foreign capital gains tax of $106,918) 280,226,888
Translation of assets and liabilities denominated in foreign
currencies 50,820,961
--------------
Net change in unrealized appreciation 331,047,849
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 538,885,364
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2004 2003
- -----------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net investment income $ 28,751,119 $ 18,395,967
- -----------------------------------------------------------------------------------------------------
Net realized gain (loss) 179,086,396 (67,064,035)
- -----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 331,047,849 777,963,383
-----------------------------------
Net increase in net assets resulting from operations 538,885,364 729,295,315
- -----------------------------------------------------------------------------------------------------
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 (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (177,302,804) 79,623,681
Service shares 130,991,549 77,667,391
Class 3 shares 80,796,251 121,430,754
Class 4 shares 32,377,319 --
- -----------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------
Total increase 570,631,011 994,243,952
- -----------------------------------------------------------------------------------------------------
Beginning of period 2,597,066,197 1,602,822,245
-----------------------------------
End of period (including accumulated net investment income of
$13,762,145 and $14,682,479, respectively) $ 3,167,697,208 $ 2,597,066,197
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NON-SERVICE SHARES YEAR ENDED DECEMBER 31, 2004 2003 2002 2001 2000
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.08 $ 17.70 $ 22.84 $ 30.33 $ 33.41
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26 1 .19 .16 .17 .27
Net realized and unrealized gain (loss) 4.49 7.34 (5.19) (3.85) 1.82
------------------------------------------------------------------------
Total from investment operations 4.75 7.53 (5.03) (3.68) 2.09
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.32) (.15) (.11) (.19) (.09)
Distributions from net realized gain -- -- -- (3.62) (5.08)
------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.32) (.15) (.11) (3.81) (5.17)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.51 $ 25.08 $ 17.70 $ 22.84 $ 30.33
========================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 19.16% 43.02% (22.13)% (12.04)% 5.09%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,518,867 $2,280,752 $1,549,993 $1,905,890 $2,136,420
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,451,188 $1,751,226 $1,776,289 $1,918,335 $2,116,100
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.01% 0.99% 0.80% 0.70% 0.83%
Total expenses 0.66% 4 0.67% 4 0.67% 4 0.70% 4 0.68% 4
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 34% 34% 39% 50%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. 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
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SERVICE SHARES YEAR ENDED DECEMBER 31, 2004 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 .20 2 .12 .12 .21 .03
Net realized and unrealized gain (loss) 4.46 7.36 (5.19) (3.92) (2.38)
-------------------------------------------------------------------
Total from investment operations 4.66 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 $ 29.33 $ 24.96 $ 17.61 $ 22.78 $30.30
===================================================================
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 18.88% 42.86% (22.37)% (12.17)% (7.20)%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $346,403 $168,739 $ 52,830 $ 20,467 $ 983
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $247,490 $ 91,800 $ 34,847 $ 8,502 $ 325
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.77% 0.68% 0.51% 0.44% 0.60%
Total expenses 0.91% 5 0.93% 5 0.90% 5 0.85% 5 0.83% 5
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 34% 34% 39% 50%
1. For the period from July 13, 2000 (inception of offering) to December 31,
2000.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. 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.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
CLASS 3 SHARES YEAR ENDED DECEMBER 31, 2004 2003 1
- --------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------
Net asset value, beginning of period $ 25.19 $ 17.55
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26 2 .07
Net realized and unrealized gain 4.52 7.57
----------------------------
Total from investment operations 4.78 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 $ 29.65 $ 25.19
=============================
- --------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 19.19% 43.53%
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $265,044 $147,576
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $199,388 $80,579
- --------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.00% 0.73%
Total expenses 0.66% 5 0.68% 5
- --------------------------------------------------------------------------------------
Portfolio turnover rate 30% 34%
1. For the period from May 1, 2003 (inception of offering) to December 31, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. 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.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS 4 SHARES PERIOD ENDED DECEMBER 31, 2004 1
- -----------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 25.21
- -----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 2
Net realized and unrealized gain 4.05
----------
Total from investment operations 4.14
- -----------------------------------------------------------------------------
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 $ 29.35
- -----------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 16.42%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------
Net assets, end of period (in thousands) $37,384
- -----------------------------------------------------------------------------
Average net assets (in thousands) $19,774
- -----------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.53%
Total expenses 0.94% 5
- -----------------------------------------------------------------------------
Portfolio turnover rate 30%
1. For the period from May 3, 2004 (inception of offering) to December 31, 2004.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. 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.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Global Securities Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek long-term capital
appreciation by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and special
situations that are considered to have appreciation possibilities. The Trust's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Non-Service, Service, 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.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of 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 (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. 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
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
unrealized foreign exchange gains and losses arise from changes in the values of
assets and liabilities, including investments in securities at fiscal period
end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
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 1,2,3,4 TAX PURPOSES
--------------------------------------------------------------------------
$32,197,430 $-- $ 130,533,912 $904,456,195
1. As of December 31, 2004, the Fund had $130,358,556 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, 2004,
details of the capital loss carryforwards were as follows:
EXPIRING
--------------------------
2010 $ 24,452,753
2011 105,905,803
------------
Total $130,358,556
============
2. The Fund had $94,954 of post-October foreign currency losses which were
deferred.
3. The Fund had $80,402 of post-October passive foreign investment company
losses which were deferred.
4. During the fiscal year ended December 31, 2004, the Fund utilized
$170,421,832 of capital loss carryforward to offset capital gains realized in
that fiscal year.
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, 2004. Net assets of
the Fund were unaffected by the reclassifications.
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
INCREASE TO INCREASE TO
ACCUMULATED ACCUMULATED NET
NET INVESTMENT REALIZED LOSS
INCOME ON INVESTMENTS
----------------------------------
$5,445,215 $5,445,215
The tax character of distributions paid during the years ended December 31, 2004
and December 31, 2003 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
------------------------------------------------------------------
Distributions paid from:
Ordinary income $35,116,668 $13,773,189
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, 2004 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $ 2,253,473,856
Federal tax cost of other investments 2,287,816
---------------
Total federal tax cost $ 2,255,761,672
===============
Gross unrealized appreciation $ 940,496,257
Gross unrealized depreciation (36,040,062)
---------------
Net unrealized appreciation $ 904,456,195
===============
Certain foreign countries impose a tax on capital gains which is accrued by the
Fund based on unrealized appreciation, if any, on affected securities. The tax
is paid when the gain is realized.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
21 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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:
YEAR ENDED DECEMBER 31, 2004 1 YEAR ENDED DECEMBER 31, 2003 2
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 23,590,376 $ 610,109,742 56,815,585 $ 1,050,428,269
Dividends and/or distributions reinvested 1,203,327 30,456,227 828,612 13,324,089
Redeemed (30,383,126) (817,868,773) (54,266,655) (984,128,677)
----------------------------------------------------------------------
Net increase (decrease) (5,589,423) $(177,302,804) 3,377,542 $ 79,623,681
======================================================================
- -------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 6,516,321 $ 168,136,666 9,204,619 $ 180,268,510
Dividends and/or distributions reinvested 96,757 2,439,240 28,051 449,100
Redeemed (1,562,747) (39,584,357) (5,472,867) (103,050,219)
----------------------------------------------------------------------
Net increase 5,050,331 $ 130,991,549 3,759,803 $ 77,667,391
======================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 3,286,454 $ 85,761,974 6,450,195 $ 132,821,158
Dividends and/or distributions reinvested 87,346 2,221,201 -- --
Redeemed (293,439) (7,186,924) 3 (592,821) (11,390,404)
----------------------------------------------------------------------
Net increase 3,080,361 $ 80,796,251 5,857,374 $ 121,430,754
======================================================================
- -------------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 1,345,840 $ 34,232,416 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (72,330) (1,855,097) 3 -- --
----------------------------------------------------------------------
Net increase 1,273,510 $ 32,377,319 -- $ --
======================================================================
1. For the year ended December 31, 2004, for Non-Service, Service and Class 3
shares and for the period from May 3, 2004 (inception of offering) to December
31, 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 1, 2003 (inception of offering) to December 31, 2003,
for Class 3 shares.
3. Net of redemption fees of $34,168 and $5,752 for Class 3 and Class 4 shares,
respectively.
- --------------------------------------------------------------------------------
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, 2004, were
$854,707,319 and $843,096,565, respectively.
22 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
- --------------------------------------------------------------------------------
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 year ended December 31, 2004, the Fund paid
$34,406 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.
- --------------------------------------------------------------------------------
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, 2004, the Fund had no outstanding foreign currency
contracts.
23 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of December 31, 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 will not invest 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.
Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST DECEMBER 31, 2004 APPRECIATION
- -------------------------------------------------------------------------------
Nektar Therapeutics 6/25/03 $3,568,000 $5,090,133 $1,522,133
- --------------------------------------------------------------------------------
7. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor (collectively, the
"Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal
Defendants") excluding the Fund, 31 present and former Directors or Trustees and
9 present and former officers of the funds. This complaint, filed in the U.S.
District Court for the Southern District of New York on January 10, 2005,
consolidates into a single action and amends six individual previously-filed
putative derivative and class action complaints. Like those prior complaints,
the complaint alleges that the Manager charged excessive fees for distribution
and other costs, improperly used assets of the funds in the form of directed
brokerage commissions and 12b-1 fees to pay brokers to promote sales of the
funds, and failed to properly disclose the use of assets of the funds to make
those payments in violation of the Investment Company Act of 1940 and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in those
actions, the Directors/Trustees and the Officers breached their fiduciary duties
to shareholders of the funds under the Investment Company Act of 1940 and at
common law. The complaint seeks unspecified compensatory and punitive damages,
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the funds named as Nominal
Defendants, and the Directors/Trustees of those funds have meritorious defenses
against the claims asserted. The Oppenheimer defendants intend to defend these
lawsuits vigorously and to contest any claimed liability, and they have retained
legal counsel to defend such suits. The Oppenheimer defendants believe that it
is premature to render any opinion as to the likelihood of an outcome
unfavorable to them and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss.
24 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER GLOBAL SECURITIES
FUND/VA:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Global Securities Fund/VA, a series of Oppenheimer Variable Account
Funds, including the statement of investments, as of December 31, 2004, 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 presented. 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 the standards of the Public
Company Accounting Oversight Board (United States). 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 consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also 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, 2004, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
Additionally, an audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Global Securities Fund/VA as of December 31, 2004, 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 presented, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
February 11, 2005
25 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record received information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends of $0.3225, $0.2939 and $0.3218 per share were paid to
Non-service, Service and Class 3 shareholders, respectively, on March 15, 2004,
all of which was designated as a "capital gain distribution" for federal income
tax purposes.
Dividends, if any, paid by the Fund during the fiscal year ended December
31, 2004 which are not designated as capital gain distributions should be
multiplied by 23.70% to arrive at the amount eligible for the corporate
dividend-received deduction.
The Fund has elected the application of Section 853 of the Internal
Revenue Code to permit shareholders to take a federal income tax credit or
deduction, at their option, on a per share basis for an aggregate amount of
$4,623,019 of foreign income taxes paid by the Fund during the fiscal year ended
December 31, 2004. A separate notice will be mailed to each shareholder, which
will reflect the proportionate share of such foreign taxes which must be treated
by shareholders as gross income for federal income tax purposes.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file 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 Fund's Form N-PX
filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
26 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S)
HELD WITH
FUND, LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE; NUMBER OF
SERVICE, AGE PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH
TRUSTEES 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 (since 1991),
Chairman of the Board Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company (since 1993), Transland
of Trustees (since 2003) Financial Services, Inc. (since 1997); Chairman of the following private companies: Great Frontier
and Trustee (since 1999) Insurance (insurance agency) (since 1995), Ambassador Media Corporation and Broadway Ventures (since
Age: 67 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 equity funds)
Trustee (since 1993) (until February 2001); Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.
Age: 73 (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 Assistant Secretary and a director (December 1991-April 1999) of Centennial Asset Management
Trustee (since 1999) Corporation; President, Treasurer and a director (June 1989-April 1999) of Centennial Capital
Age: 68 Corporation; Chief Executive Officer and a director of MultiSource Services, Inc. (March 1996-April
1999). Until April 1999 Mr. Bowen held several positions in subsidiary or affiliated companies 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). Formerly
Trustee (since 1999) Director (March 2001-May 2002) of Genetic ID, Inc. and its subsidiaries (a privately held biotech
Age: 66 a partner (July 1974-June 1999) with PricewaterhouseCoopers LLP (an accounting firm); and Chairman (July
company); 1994-June 1998) of Price Waterhouse LLP Global Investment Management Industry Services Group.
Oversees 38 portfolios in the OppenheimerFunds complex.
JON S. FOSSEL, Director (since February 1998) of Rocky Mountain Elk Foundation (a not-for-profit foundation); a director
Trustee (since 1990) (since 1997) of Putnam Lovell Finance (finance company); a director (since June 2002) of UNUMProvident
Age: 63 (an insurance company). Formerly a director (October 1999-October 2003) of P.R. Pharmaceuticals (a
privately held company); 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 (until
October 1995) of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financial
Services, Inc. Oversees 38 portfolios in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984). Formerly (until October 1994)
Trustee (since 1996) Mr. Freedman held several positions in subsidiary or affiliated companies of the Manager. Oversees 38
Age: 64 portfolios in the OppenheimerFunds complex.
27 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization) (since February 2000); a director
Trustee (since 2002) of The California Endowment (a philanthropic organization) (since April 2002) and of Community Hospital
Age: 58 of Monterey Peninsula (educational organization) (since February 2002); a director of America Funds
Emerging Markets Growth Fund (since October 1991) (an investment company); an advisor to Credit Suisse
First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees
of the Rockefeller Foundation and of the University of Michigan. Formerly, Trustee of MassMutual
Institutional Funds (open-end investment company) (1996-May 2004); a director of MML Series Investment
Fund (April 1989-May 2004) and MML Services (April 1987-May 2004) (investment companies); member of the
investment committee (2000- 2003) of Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s
pension fund; and President (February 1991-April 2000) of ARCO Investment Management Company. Oversees
37 portfolios in the OppenheimerFunds complex.
ROBERT J. MALONE, Chairman, Chief Executive Officer and Director of Steele Street State Bank (a commercial banking entity)
Trustee (since 2002) (since August 2003); director of Colorado UpLIFT (a non-profit organization) (since 1986); trustee (since
Age: 60 2000) of the Gallagher Family Foundation (non-profit organization). Formerly, Chairman of U.S.
Bank-Colorado (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1,
1999), a director of: Commercial Assets, Inc. (a REIT) (1993-2000), Jones Knowledge, Inc. (a privately
held company) (2001-July 2004) and U.S. Exploration, Inc. (oil and gas exploration) (1997-February
2004). Oversees 37 portfolios in the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Institutional Funds (since 1996) and MML Series Investment Fund (since 1987) (both
Trustee (since 2000) open-end investment companies) and the Springfield Library and Museum Association (since 1995) (museums)
Age: 62 and the Community Music School of Springfield (music school) (since 1996); Trustee (since 1987),
Chairman of the Board (since 2003) and Chairman of the investment committee (since 1994) for the
Worcester Polytech Institute (private university); and President and Treasurer (since January 1999) of
the SIS Fund (a private not for profit charitable fund). 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) (commercial bank); and Executive Vice President (January
1999-July 1999) of Peoples Heritage Financial Group, Inc. (commercial bank). Oversees 38 portfolios in
the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH
TRUSTEE FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH
AND OFFICER OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since September 2000) of
President and Trustee the Manager; President and a director or trustee of other Oppenheimer funds; President and a director
(since 2001) (since July 2001) of Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of
Age: 55 Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since
November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman and a
director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc.
(transfer agent subsidiaries of the Manager); 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 the Manager: OFI Institutional Asset Management, Inc.,
Centennial Asset Management Corporation, Trinity Investment Manage- ment Corporation and Tremont Capital
Management, Inc. (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.; 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 the shares of Babson Capital Management
LLC); a member of the Investment Company Institute's Board of Governors (elected to serve from October
3, 2003 through September 30, 2006). 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 62 portfolios as
Trustee/Director and 21 additional portfolios as Officer in the OppenheimerFunds complex.
28 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. WILBY AND ZACK, TWO WORLD
FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND
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.
WILLIAM L. WILBY, Senior Vice President (since July 1994) and Senior Investment Officer, Director of Equities (since July
Vice President and 2004) of the Manager. Formerly, Senior Investment Officer, Director of International Equities of the
Portfolio Manager Manager (May 2000-July 2004) and Senior Vice President of HarbourView Asset Management Corporation (May
(since 1995) 1999-November 2001). An officer of 2 portfolios in the OppenheimerFunds complex.
Age: 53
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of HarbourView Asset
Treasurer (since 1999) Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Age: 45 Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI
Private Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and
OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since November
2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June 2003);
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. Formerly
Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer (March
1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An officer of 83 portfolios in
the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February 2002) of the Manager;
Vice President and General Counsel and a director (since November 2001) of the Distributor; General Counsel (since November
Secretary (since 2001) 2001) of Centennial Asset Management Corporation; Senior Vice President and General Counsel (since
Age: 56 November 2001) of HarbourView Asset Management Corporation; Secretary and General Counsel (since
November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since October 1997)
of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and a director (since
November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel and a director (since
November 2001) of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of OppenheimerFunds Legacy
Program; Senior Vice President and General Counsel (since November 2001) of OFI Institutional Asset
Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice
President (May 1985-December 2003), 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); and
OppenheimerFunds International Ltd. (October 1997- November 2001). An officer of 83 portfolios in the
OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the Manager; Vice President
Vice President and (since June 1983) of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Chief Compliance Officer Shareholder Services, Inc. Formerly (until February 2004) Vice President and Director of Internal Audit
(since 2004) of OppenheimerFunds, Inc. An officer of 83 portfolios in the OppenheimerFunds complex.
Age: 54
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE, UPON REQUEST, BY
CALLING 1.800.981.2871.
29 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant 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 $25,500 in fiscal 2004 and $24,000 in
fiscal 2003.
(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 no such fees in fiscal 2004 and $35,859
in fiscal 2003 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 include: internal control reviews.
(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 no such fees in fiscal 2004 and $5,548
in fiscal 2003 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 include: 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 no such fees during the last two fiscal
years 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.
(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.
Under applicable laws, pre-approval of non-audit services maybe
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 no such fees in fiscal 2004 and $41,407
in fiscal 2003 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. 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 registrant's Board of Trustees has established a Governance Committee,
one function of which is to create and oversee the process by which shareholders
can submit nominees for positions on the Board. The Governance Committee has not
yet adopted a charter, but anticipates that it will do so by the end of this
calendar year. The Committee has temporarily adopted the process previously
adopted by the Audit Committee regarding shareholder submission of nominees for
board positions. Shareholders may submit names of individuals, accompanied by
complete and properly supported resumes, for the Governance Committee's
consideration by mailing such information to the Committee in care of the Fund.
The Committee may consider such persons at such time as it meets to consider
possible nominees. The Committee, however, reserves solo discretion to determine
the candidates for trustees and independent trustees to recommend to the Board
and/or shareholders and may identify candidates other than those submitted by
Shareholders. The Committee may, but need not, consider the advice and
recommendation of the Manager and its affiliates in selecting nominees. The full
Board elects new trustees except for those instances when a shareholder vote is
required.
Shareholders who desire to communicate with the Board should address
correspondence to the Board of Trustees of the registrant, or to an individual
Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial,
Colorado 80112 and may submit their correspondence electronically at
WWW.OPPENHEIMERFUNDS.COM under the caption "contact us." If your correspondence
is intended for a particular Trustee, please indicate the name of the Trustee
for whom it is intended. The sender should indicate in the address whether it is
intended for the entire board, the Independent Trustees as group, or to an
individual Trustee. The Governance Committee will consider if a different
process should be recommended to the Board.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-3(c)) as of December 31, 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 changes in registrant's internal controls over
financial reporting that occurred during the registrant's last
fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over
financial reporting.
ITEM 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)