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 Aggressive Growth 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. Over the 12-month period ended
December 31, 2004, the Fund delivered stronger gains than its benchmark, the S&P
500 Index. Much of the Fund's positive performance was driven by the stock
market's broadly based upward trend, which boosted stock prices in economically
sensitive sectors such as industrials. Nevertheless, every sector in which the
Fund invested produced positive contributions to returns. The Fund's individual
stock selections, particularly in the area of technology, helped performance
relative to the benchmark.
Throughout the reporting period, the Fund maintained its focus on
high-quality, mid-cap companies that, in our opinion, offered strong potential
for sustained, long-term growth. This strategy proved strikingly effective in
technology. Although many of the sector's most volatile, cyclically oriented
stocks lost ground, the Fund succeeded in investing in several of the sector's
best performers, such as software developers Adobe Systems, Inc. and Symantec
Corp. and an Internet security and services provider. While some of the Fund's
technology holdings, such as a developer of integrated circuits and a
manufacturer of circuit boards, did suffer declines, the Fund achieved
double-digit gains in technology for the period as a whole, compared to a loss
for the benchmark.
Good individual stock selections bolstered returns in other sectors as
well. Among industrials, we succeeded in matching the benchmark's robust gains
through investments in freight and logistics companies, such as Expeditors
International of Washington, Inc.; commercial services providers; and defense
contractors. Among financials, we augmented returns by avoiding many interest
rate sensitive stocks, focusing instead on companies that benefited from
exposure to capital markets activity, such as an asset administration services
provider. Gains in such holdings offset the Fund's relatively light exposure to
the financial sector, enabling us to roughly equal the benchmark's substantial
gains. Finally, in the consumer discretionary sector, we compensated for
company-specific declines in a few holdings such as an electrochromic products
manufacturer and a leading toys and comic books company, with strong returns
from restaurant and leisure names, such as Starbucks Corp.; media companies,
such as Getty Images, Inc.; and specialty retailers, such as a PETsMART, Inc. A
gene cloning systems maker, a holding we sold during the period, proved to be a
notable detractor from the Fund's performance.
As of the end of the period, we have found a relatively large number of
attractive investments in the technology, health care and consumer discretionary
sectors. The Fund holds relatively few financials, reflecting the vulnerability
of many such stocks to rising interest rates. The Fund's portfolio holdings,
allocations and strategies are subject to change.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each share class of the Fund
held until December 31, 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 October 16, 2000. Performance
information does not reflect charges that apply to separate accounts investing
in the Fund. If these charges were taken into account, performance would be
lower. The 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 S&P 500
Index, an unmanaged index of equity securities that is a measure of the general
domestic stock market. 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 AGGRESSIVE GROWTH FUND/VA
NON-SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Agressive Growth Fund/va (Non-Service)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Agressive
Growth Fund/VA S & P 500
(Non-Service) Index
12/31/1994 10,000 10,000
03/31/1995 10,424 10,973
06/30/1995 11,269 12,019
09/30/1995 12,683 12,973
12/31/1995 13,252 13,753
03/31/1996 14,368 14,491
06/30/1996 15,760 15,141
09/30/1996 16,430 15,609
12/31/1996 15,932 16,909
03/31/1997 14,048 17,363
06/30/1997 16,958 20,392
09/30/1997 19,273 21,919
12/31/1997 17,792 22,548
03/31/1998 20,112 25,691
06/30/1998 20,888 26,544
09/30/1998 16,031 23,910
12/31/1998 19,991 28,997
03/31/1999 21,931 30,441
06/30/1999 24,192 32,583
09/30/1999 25,169 30,554
12/31/1999 36,705 35,096
03/31/2000 46,119 35,900
06/30/2000 44,490 34,946
09/30/2000 47,229 34,608
12/31/2000 32,580 31,902
03/31/2001 23,895 28,122
06/30/2001 23,785 29,767
09/30/2001 20,595 25,399
12/31/2001 22,393 28,113
03/31/2002 21,237 28,191
06/30/2002 18,532 24,416
09/30/2002 15,722 20,200
12/31/2002 16,170 21,902
03/31/2003 15,921 21,212
06/30/2003 18,388 24,476
09/30/2003 19,401 25,124
12/31/2003 20,308 28,181
03/31/2004 21,403 28,658
06/30/2004 22,355 29,151
09/30/2004 21,625 28,606
12/31/2004 24,325 31,245
AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/04
1-Year 19.78% 5-Year -7.90% 10-Year 9.30%
SERVICE SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Agressive Growth Fund/va (Service)
S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Agressive
Growth Fund/VA S & P 500
(Service) Index
10/16/2000 10,000 10,000
12/31/2000 7,240 9,257
03/31/2001 5,311 8,161
06/30/2001 5,285 8,638
09/30/2001 4,575 7,370
12/31/2001 4,973 8,158
03/31/2002 4,713 8,181
06/30/2002 4,110 7,085
09/30/2002 3,484 5,862
12/31/2002 3,578 6,356
03/31/2003 3,521 6,156
06/30/2003 4,067 7,103
09/30/2003 4,290 7,291
12/31/2003 4,489 8,178
03/31/2004 4,728 8,316
06/30/2004 4,936 8,459
09/30/2004 4,769 8,301
12/31/2004 5,360 9,067
AVERAGE ANNUAL TOTAL RETURNS OF SERVICE SHARES OF THE FUND AT 12/31/04
1-Year 19.43% 5-Year N/A Since Inception (10/16/00) -13.77%
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 AGGRESSIVE GROWTH 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 $ 1,088.10 $ 3.63
- -----------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.67 3.51
- -----------------------------------------------------------------------------
Service shares Actual 1,000.00 1,086.10 5.20
- -----------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.16 5.04
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 0.69%
- -----------------------------------
Service shares 0.99
6 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF INVESTMENTS December 31, 2004
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--25.9%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.3%
Gentex Corp. 435,400 $ 16,118,508
- --------------------------------------------------------------------------------
AUTOMOBILES--1.0%
Harley-Davidson, Inc. 205,200 12,465,900
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--6.0%
Cheesecake Factory, Inc. (The) 1 384,700 12,491,209
- --------------------------------------------------------------------------------
P.F. Chang's China Bistro, Inc. 1 239,000 13,467,650
- --------------------------------------------------------------------------------
Ruby Tuesday, Inc. 359,800 9,383,584
- --------------------------------------------------------------------------------
Shuffle Master, Inc. 1 273,700 12,891,270
- --------------------------------------------------------------------------------
Starbucks Corp. 1 400,400 24,968,944
---------------
73,202,657
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.8%
Harman International Industries, Inc. 80,400 10,210,800
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--2.4%
Brunswick Corp. 602,400 29,818,800
- --------------------------------------------------------------------------------
MEDIA--2.3%
Getty Images, Inc. 1 408,900 28,152,765
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--8.6%
Bed Bath & Beyond, Inc. 1 497,200 19,803,476
- --------------------------------------------------------------------------------
Chico's FAS, Inc. 1 453,700 20,656,961
- --------------------------------------------------------------------------------
O'Reilly Automotive, Inc. 1 588,897 26,529,810
- --------------------------------------------------------------------------------
PETsMART, Inc. 724,400 25,737,932
- --------------------------------------------------------------------------------
Urban Outfitters, Inc. 1 295,200 13,106,880
---------------
105,835,059
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--3.5%
Coach, Inc. 1 577,900 32,593,560
- --------------------------------------------------------------------------------
Polo Ralph Lauren Corp. 246,500 10,500,900
---------------
43,094,460
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.3%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.3%
Whole Foods Market, Inc. 296,400 28,261,740
- --------------------------------------------------------------------------------
ENERGY--4.8%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.4%
BJ Services Co. 258,200 12,016,628
- --------------------------------------------------------------------------------
Smith International, Inc. 1 322,100 17,525,461
---------------
29,542,089
- --------------------------------------------------------------------------------
OIL & GAS--2.4%
Apache Corp. 379,000 19,166,030
- --------------------------------------------------------------------------------
XTO Energy, Inc. 314,500 11,127,010
---------------
30,293,040
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FINANCIALS--11.4%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--2.2%
Commerce Bancorp, Inc. 426,500 $ 27,466,600
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.0%
Chicago Mercantile Exchange (The) 98,800 22,595,560
- --------------------------------------------------------------------------------
Investors Financial Services Corp. 452,600 22,620,948
- --------------------------------------------------------------------------------
Legg Mason, Inc. 400,000 29,304,000
---------------
74,520,508
- --------------------------------------------------------------------------------
INSURANCE--3.2%
AMBAC Financial Group, Inc. 325,700 26,749,741
- --------------------------------------------------------------------------------
Brown & Brown, Inc. 283,700 12,355,135
---------------
39,104,876
- --------------------------------------------------------------------------------
HEALTH CARE--17.3%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--3.1%
Gen-Probe, Inc. 1 239,500 10,827,795
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 766,200 26,809,338
---------------
37,637,133
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--6.7%
Bard (C.R.), Inc. 330,400 21,138,992
- --------------------------------------------------------------------------------
Cooper Cos., Inc. (The) 258,000 18,212,220
- --------------------------------------------------------------------------------
Stryker Corp. 132,900 6,412,425
- --------------------------------------------------------------------------------
Thermo Electron Corp. 1 679,300 20,508,067
- --------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1 388,000 16,777,120
---------------
83,048,824
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--7.5%
Coventry Health Care, Inc. 1 368,450 19,557,326
- --------------------------------------------------------------------------------
Health Management Associates,
Inc., Cl. A 1,216,800 27,645,696
- --------------------------------------------------------------------------------
Lincare Holdings, Inc. 1 377,200 16,087,580
- --------------------------------------------------------------------------------
Patterson Cos., Inc. 1 680,000 29,505,200
---------------
92,795,802
- --------------------------------------------------------------------------------
INDUSTRIALS--15.3%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.9%
L-3 Communications Holdings, Inc. 240,400 17,606,896
- --------------------------------------------------------------------------------
Rockwell Collins, Inc. 452,300 17,838,712
---------------
35,445,608
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--2.3%
Expeditors International of
Washington, Inc. 509,500 28,470,860
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--3.6%
Corporate Executive Board Co. 376,700 25,216,298
- --------------------------------------------------------------------------------
Stericycle, Inc. 1 418,400 19,225,480
---------------
44,441,778
7 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY--2.5%
Actuant Corp., Cl. A 1 37,500 $ 1,955,625
- --------------------------------------------------------------------------------
Donaldson Co., Inc. 582,600 18,981,108
- --------------------------------------------------------------------------------
Oshkosh Truck Corp. 143,400 9,805,692
---------------
30,742,425
- --------------------------------------------------------------------------------
ROAD & RAIL--1.7%
C.H. Robinson Worldwide, Inc. 379,500 21,069,840
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--2.3%
Fastenal Co. 464,700 28,606,932
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--22.5%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.0%
Comverse Technology, Inc. 1 1,000,700 24,467,115
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.7%
CDW Corp. 394,000 26,141,900
- --------------------------------------------------------------------------------
National Instruments Corp. 275,800 7,515,550
---------------
33,657,450
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.2%
VeriSign, Inc. 1 448,600 15,037,072
- --------------------------------------------------------------------------------
IT SERVICES--7.2%
Affiliated Computer Services,
Inc., Cl. A 1 473,500 28,499,965
- --------------------------------------------------------------------------------
Alliance Data Systems Corp. 1 440,100 20,895,948
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 745,600 29,965,664
- --------------------------------------------------------------------------------
Global Payments, Inc. 159,700 9,348,838
---------------
88,710,415
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.8%
Zebra Technologies Corp., Cl. A 1 176,300 9,922,164
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.8%
Linear Technology Corp. 552,000 21,395,520
- --------------------------------------------------------------------------------
SOFTWARE--6.8%
Adobe Systems, Inc. 446,000 27,982,040
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 737,200 19,351,500
- --------------------------------------------------------------------------------
Autodesk, Inc. 73,200 2,777,940
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 303,800 18,738,384
- --------------------------------------------------------------------------------
Kronos, Inc. 1 108,100 5,527,153
- --------------------------------------------------------------------------------
Symantec Corp. 1 376,300 9,693,488
---------------
84,070,505
---------------
Total Common Stocks
(Cost $949,375,860) 1,227,607,245
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.1%
- --------------------------------------------------------------------------------
Blaze Network Products, Inc.,
8% Cv., Series D 1,2,3 1,147,862 $ 873
- --------------------------------------------------------------------------------
BroadBand Office, Inc., Cv.,
Series C 1,2,3 211,641 --
- --------------------------------------------------------------------------------
Centerpoint Broadband
Technologies, Inc.:
Cv., Series D 1,2,3 1,298,701 --
Cv., Series Z 1,2,3 262,439 --
- --------------------------------------------------------------------------------
MicroPhotonix Integration Corp.,
Cv., Series C 1,2,3 633,383 --
- --------------------------------------------------------------------------------
Multiplex, Inc., Cv., Series C 1,2,3 2,330,253 564,154
- --------------------------------------------------------------------------------
Questia Media, Inc., Cv., Series B 1,2,3 2,329,735 969,869
---------------
Total Preferred Stocks
(Cost $62,496,986) 1,534,896
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.3%
- --------------------------------------------------------------------------------
Undivided interest of 0.23% 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 $3,287,592 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 $3,287,000) $ 3,287,000 3,287,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,015,159,846) 99.9% 1,232,429,141
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.1 1,180,695
-----------------------------
NET ASSETS 100.0% $ 1,233,609,836
=============================
8 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
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 $1,534,896, which represents
0.12% of the Fund's net assets, of which $1,534,896 is considered restricted.
See Note 5 of Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended December 31, 2004.
The aggregate fair value of securities of affiliated companies held by the Fund
as of December 31, 2004 amounts to $1,534,896. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2003 ADDITIONS REDUCTIONS DECEMBER 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------
Axsun Technologies, Inc., Cv., Series C 3,170,523 -- (3,170,523) --
Blaze Network Products, Inc., 8% Cv., Series D 1,147,862 -- -- 1,147,862
BroadBand Office, Inc., Cv., Series C 211,641 -- -- 211,641
Centerpoint Broadband Technologies, Inc., Cv., Series D 1,298,701 -- -- 1,298,701
Centerpoint Broadband Technologies, Inc., Cv., Series Z 262,439 -- -- 262,439
fusionOne, Inc., 8% Non-Cum. Cv., Series D 2,663,972 -- (2,663,972) --
MicroPhotonix Integration Corp., Cv., Series C 633,383 -- -- 633,383
Multiplex, Inc., Cv., Series C 2,330,253 -- -- 2,330,253
Questia Media, Inc., Cv., Series B 2,329,735 -- -- 2,329,735
UNREALIZED DIVIDEND REALIZED
DEPRECIATION INCOME LOSS
- ---------------------------------------------------------------------------------------------------------------------------
Axsun Technologies, Inc., Cv., Series C $ -- $ -- $ 35,097,690
Blaze Network Products, Inc., 8% Cv., Series D 7,345,444 -- --
BroadBand Office, Inc., Cv., Series C 4,000,015 -- --
Centerpoint Broadband Technologies, Inc., Cv., Series D 13,999,997 -- --
Centerpoint Broadband Technologies, Inc., Cv., Series Z 6,999,992 -- --
fusionOne, Inc., 8% Non-Cum. Cv., Series D -- -- 13,886,753
MicroPhotonix Integration Corp., Cv., Series C 4,000,004 -- --
Multiplex, Inc., Cv., Series C 16,586,508 -- --
Questia Media, Inc., Cv., Series B 8,030,130 -- --
---------------------------------------------
$ 60,962,090 $ -- $ 48,984,443
=============================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF ASSETS AND LIABILITIES December 31, 2004
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $952,662,860) $ 1,230,894,245
Affiliated companies (cost $62,496,986) 1,534,896
----------------
1,232,429,141
- ------------------------------------------------------------------------------------------
Cash 300,688
- ------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 750,381
Shares of beneficial interest sold 576,828
Interest and dividends 191,812
Other 13,357
----------------
Total assets 1,234,262,207
- ------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 521,138
Shareholder communications 55,262
Legal, auditing and other professional fees 32,433
Trustees' compensation 19,178
Distribution and service plan fees 13,448
Custodian fees 5,255
Transfer and shareholder servicing agent fees 1,724
Other 3,933
----------------
Total liabilities 652,371
- ------------------------------------------------------------------------------------------
NET ASSETS $ 1,233,609,836
================
- ------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 28,059
- ------------------------------------------------------------------------------------------
Additional paid-in capital 1,804,653,955
- ------------------------------------------------------------------------------------------
Accumulated net investment loss (13,347)
- ------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (788,328,126)
- ------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 217,269,295
----------------
NET ASSETS $ 1,233,609,836
================
- ------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------
Non-Service Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $1,209,459,305 and 27,506,281 shares of
beneficial interest outstanding) $ 43.97
- ------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $24,150,531 and 553,430 shares of
beneficial interest outstanding) $ 43.64
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF OPERATIONS For the Year Ended December 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,622) $ 3,356,689
- --------------------------------------------------------------------------------
Interest 113,675
---------------
Total investment income 3,470,364
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 7,692,943
- --------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 43,863
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 10,165
Service shares 10,001
- --------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 77,471
Service shares 1,237
- --------------------------------------------------------------------------------
Trustees' compensation 23,623
- --------------------------------------------------------------------------------
Custodian fees and expenses 23,398
- --------------------------------------------------------------------------------
Other 55,128
---------------
Total expenses 7,937,829
Less reduction to custodian expenses (1,987)
---------------
Net expenses 7,935,842
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (4,465,478)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies 48,472,613
Affiliated companies (48,984,443)
Net increase from payment by affiliate 94,429
---------------
Net realized loss (417,401)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 213,639,469
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 208,756,590
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2004 2003
- ----------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------
Net investment loss $ (4,465,478) $ (4,523,545)
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) (417,401) 62,819,476
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 213,639,469 175,024,712
----------------------------------
Net increase in net assets resulting from operations 208,756,590 233,320,643
- ----------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (109,692,557) (98,877,573)
Service shares 9,104,838 10,935,179
- ----------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------
Total increase 108,168,871 145,378,249
- ----------------------------------------------------------------------------------------------------
Beginning of period 1,125,440,965 980,062,716
----------------------------------
End of period (including accumulated net investment loss of
$13,347 for the year ended December 31, 2004) $ 1,233,609,836 $ 1,125,440,965
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER AGGRESSIVE GROWTH 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 $ 36.71 $ 29.23 $ 40.72 $ 70.77 $ 82.31
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.15) 1 (.15) (.10) .23 .53
Net realized and unrealized gain (loss) 7.41 7.63 (11.16) (21.38) (8.59)
------------------------------------------------------------------------------
Total from investment operations 7.26 7.48 (11.26) (21.15) (8.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.23) (.54) --
Distributions from net realized gain -- -- -- (8.36) (3.48)
------------------------------------------------------------------------------
Total dividends and/or distributions to shareholders -- -- (.23) (8.90) (3.48)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 43.97 $ 36.71 $ 29.23 $ 40.72 $ 70.77
==============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 19.78% 25.59% (27.79)% (31.27)% (11.24)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,209,459 $ 1,113,743 $ 979,919 $ 1,621,550 $ 2,595,101
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,124,874 $ 1,041,584 $ 1,240,435 $ 1,898,088 $ 2,978,465
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.39)% (0.43)% (0.29)% 0.47% 0.65%
Total expenses 0.69% 4 0.70% 4 0.68% 4 0.68% 4 0.64% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53% 154% 54% 134% 39%
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.
13 | OPPENHEIMER AGGRESSIVE GROWTH 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 $ 36.54 $ 29.13 $ 40.70 $ 70.77 $ 97.75
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.27) 2 -- 3 .16 .19 .20
Net realized and unrealized gain (loss) 7.37 7.41 (11.53) (21.36) (27.18)
---------------------------------------------------------------------------
Total from investment operations 7.10 7.41 (11.37) (21.17) (26.98)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.20) (.54) --
Distributions from net realized gain -- -- -- (8.36) --
---------------------------------------------------------------------------
Total dividends and/or distributions to shareholders -- -- (.20) (8.90) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 43.64 $ 36.54 $ 29.13 $ 40.70 $ 70.77
===========================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 19.43% 25.44% (28.05)% (31.31)% (27.60)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 24,151 $ 11,698 $ 144 $ 54 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 17,579 $ 3,858 $ 72 $ 31 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) (0.68)% (0.72)% (0.56)% 0.09% 1.14%
Total expenses 0.99% 0.95% 1.55% 0.83% 0.64%
Expenses after payments and waivers and reduction
to custodian expenses N/A 6 N/A 6 0.98% N/A 6 N/A 6
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53% 154% 54% 134% 39%
1. For the period from October 16, 2000 (inception of offering) to December 31,
2000.
2. Per share amounts calculated based on the average shares outstanding
during the period.
3. Less than $0.005 per share.
4. 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.
5. Annualized for periods of less than one full year.
6. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Aggressive Growth 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 capital appreciation by
investing in "growth type" companies. The Trust's investment advisor is
OppenheimerFunds, Inc. (the Manager).
The Fund offers two classes of shares. Both classes are sold at their
offering price, which is the net asset value per share, to separate investment
accounts of participating insurance companies as an underlying investment for
variable life insurance policies, variable annuity contracts or other investment
products. The class of shares designated as Service shares is subject to a
distribution and service plan. Both 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 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).
- --------------------------------------------------------------------------------
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.
15 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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
- --------------------------------------------------------------------------------
$-- $-- $788,249,069 $217,190,229
1. As of December 31, 2004, the Fund had $777,504,238 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
------------------------
2009 $ 547,279,416
2010 230,224,822
------------------------
Total $ 777,504,238
=============
2. As of December 31, 2004, the Fund had $10,744,831 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2013.
3. During the fiscal year ended December 31, 2004, the Fund utilized $9,896,185
of capital loss carryforward to offset capital gains realized in that fiscal
year.
4. During the fiscal year ended December 31, 2003, the Fund utilized $32,872,643
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.
INCREASE TO
REDUCTION TO ACCUMULATED NET
REDUCTION TO ACCUMULATED NET REALIZED LOSS
PAID-IN CAPITAL INVESTMENT LOSS ON INVESTMENTS
---------------------------------------------------
$4,357,702 $4,452,131 $94,429
No distributions were paid during the years ended December 31, 2004 and December
31, 2003.
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 $ 1,015,238,912
================
Gross unrealized appreciation $ 283,313,180
Gross unrealized depreciation (66,122,951)
----------------
Net unrealized appreciation $ 217,190,229
================
- --------------------------------------------------------------------------------
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
16 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
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.
- --------------------------------------------------------------------------------
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 YEAR ENDED DECEMBER 31, 2003
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,254,599 $ 88,253,010 7,581,692 $ 249,645,333
Redeemed (5,085,553) (197,945,567) (10,767,148) (348,522,906)
-----------------------------------------------------------
Net decrease (2,830,954) $ (109,692,557) (3,185,456) $ (98,877,573)
===========================================================
- --------------------------------------------------------------------------------------
SERVICE SHARES
Sold 312,167 $ 12,156,781 328,184 $ 11,390,813
Redeemed (78,906) (3,051,943) (12,954) (455,634)
-----------------------------------------------------------
Net increase 233,261 $ 9,104,838 315,230 $ 10,935,179
===========================================================
- --------------------------------------------------------------------------------
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
$598,039,270 and $679,849,231, respectively.
17 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 0.60% of the next $700 million and 0.58% of average annual
net assets over $1.5 billion.
- --------------------------------------------------------------------------------
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
$19,290 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 SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services and
personal service and account maintenance for the Fund's Service shares. Under
the Plan, payments are made quarterly at an annual rate of up to 0.25% of the
average annual net assets of Service 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 shares. The
impact of the service plan is to increase operating expenses of the Service
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 $94,429, 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. 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 DATES COST DECEMBER 31, 2004 DEPRECIATION
- ------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D 10/17/00 $ 7,346,317 $ 873 $ 7,345,444
BroadBand Office, Inc., Cv., Series C 8/28/00 4,000,015 -- 4,000,015
Centerpoint Broadband Technologies, Inc., Cv., Series D 10/23/00 13,999,997 -- 13,999,997
Centerpoint Broadband Technologies, Inc., Cv., Series Z 5/26/00 6,999,992 -- 6,999,992
MicroPhotonix Integration Corp., Cv., Series C 7/6/00 4,000,004 -- 4,000,004
Multiplex, Inc., Cv., Series C 2/9/01 17,150,662 564,154 16,586,508
Questia Media, Inc., Cv., Series B 8/18/00 8,999,999 969,869 8,030,130
18 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
- --------------------------------------------------------------------------------
6. 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.
19 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER AGGRESSIVE GROWTH
FUND/VA:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Aggressive Growth 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 Aggressive Growth 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
20 | OPPENHEIMER AGGRESSIVE GROWTH 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.
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
http://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.
21 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE;
FUND, LENGTH OF SERVICE, AGE NUMBER OF 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.
TRUSTEES EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR
REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Mortgage Company
Chairman of the Board (since 1991), Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company
of Trustees (since 2003) (since 1993), Transland Financial Services, Inc. (since 1997); Chairman of the following
and Trustee (since 1999) private companies: Great Frontier Insurance (insurance agency) (since 1995), Ambassador Media
Age: 67 Corporation and Broadway Ventures (since 1984); a director of the following public companies:
Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992) and
UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a Director/Trustee of
Campus Crusade for Christ and the Bradley Foundation. Formerly a director of the following:
Storage Technology Corporation (a publicly-held computer equipment company) (1991-February
2003), and Inter- national Family Entertainment (television channel) (1992-1997), Frontier
Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier Title (title
insurance agency) (1995-June 1999); a U.S. Senator (January 1979-January 1991). Oversees 38
portfolios in the OppenheimerFunds complex.
ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner of private
Trustee (since 1993) equity funds) (until February 2001); Chairman, President and Chief Executive Officer of A.G.
Age: 73 Edwards Capital, Inc. (until March 2000); Vice Chairman and Director of A.G. Edwards, Inc. and
Vice Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary) (until March
1999); Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor)
(until March 1999); and a Director (until March 2000) of A.G. Edwards & Sons and A.G. Edwards
Trust Company. Oversees 38 portfolios in the OppenheimerFunds complex.
GEORGE C. BOWEN, Formerly Assistant Secretary and a director (December 1991-April 1999) of Centennial Asset
Trustee (since 1999) Management Corporation; President, Treasurer and a director (June 1989-April 1999) of
Age: 68 Centennial Capital 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).
Trustee (since 1999) Formerly Director (March 2001-May 2002) of Genetic ID, Inc. and its subsidiaries (a privately
Age: 66 held biotech company); a partner (July 1974-June 1999) with PricewaterhouseCoopers LLP (an
accounting firm); and Chairman (July 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);
Trustee (since 1990) a director (since 1997) of Putnam Lovell Finance (finance company); a director (since June
Age: 63 2002) of UNUMProvident (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
Trustee (since 1996) October 1994) Mr. Freedman held several positions in subsidiary or affiliated companies of the
Age: 64 Manager. Oversees 38 portfolios in the OppenheimerFunds complex.
22 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization) (since February 2000);
Trustee (since 2002) a director of The California Endowment (a philanthropic organization) (since April 2002) and
Age: 58 of Community Hospital 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
Trustee (since 2002) banking entity) (since August 2003); director of Colorado UpLIFT (a non-profit organization)
Age: 60 (since 1986); trustee (since 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
Trustee (since 2000) 1987) (both open-end investment companies) and the Springfield Library and Museum Association
Age: 62 (since 1995) (museums) 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.
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INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY
AND OFFICER STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL
HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since
President and Trustee September 2000) of the Manager; President and a director or trustee of other Oppenheimer
(since 2001) funds; President and a director (since July 2001) of Oppenheimer Acquisition Corp. (the
Age: 55 Manager's parent holding company) and of 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.
23 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
TRUSTEES AND OFFICERS Unaudited / Continued
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OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. O'HARE 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.
JOHN O'HARE, Vice President of the Manager since September 2003; an officer of 2 portfolios in the
Vice President and OppenheimerFunds complex. Formerly Executive Vice President and Portfolio Manager (June 2000 -
Portfolio Manager August 2003) and Portfolio Manager and Senior Vice President (August 1997 - June 2000) at
(since 2003) Geneva Capital Management, Ltd. (an investment advisor). Mr. O'Hare holds a BBA in Finance and
Age: 46 Economics from the University of Wisconsin and is a Chartered Financial Analyst.
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of
Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder
Age: 45 Services, Inc., Oppenheimer 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
Vice President and Manager; General Counsel and a director (since November 2001) of the Distributor; General
Secretary (since 2001) Counsel (since November 2001) of Centennial Asset Management Corporation; Senior Vice President
Age: 56 and General Counsel (since 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
Vice President and President (since June 1983) of OppenheimerFunds Distributor, Inc., Centennial Asset Management
Chief Compliance Officer Corporation and Shareholder Services, Inc. Formerly (until February 2004) Vice President and
(since 2004) Director of Internal Audit of OppenheimerFunds, Inc. An officer of 83 portfolios in the
Age: 54 OppenheimerFunds complex.
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.
24 | OPPENHEIMER AGGRESSIVE GROWTH 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 $29,000 in fiscal 2004 and $28,000 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)