UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4108
Oppenheimer Variable Account Funds
----------------------------------
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(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
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
AGGRESSIVE GROWTH FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
FUND EXPENSES
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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 June 30, 2005.
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, 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 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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/05) (6/30/05) JUNE 30, 2005
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Non-Service shares Actual $1,000.00 $1,024.10 $3.47
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Non-Service shares Hypothetical 1,000.00 1,021.37 3.46
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Service shares Actual 1,000.00 1,022.50 4.88
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Service shares Hypothetical 1,000.00 1,019.98 4.87
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------
Non-Service shares 0.69%
- -----------------------------------
Service shares 0.97
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5 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
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VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--99.5%
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CONSUMER DISCRETIONARY--24.5%
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AUTO COMPONENTS--1.2%
Gentex Corp. 763,100 $ 13,888,420
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HOTELS, RESTAURANTS & LEISURE--5.7%
Cheesecake Factory, Inc. (The) 1 570,500 19,813,465
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P.F. Chang's China Bistro, Inc. 1 318,000 18,755,640
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Shuffle Master, Inc. 1 441,350 12,371,041
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Starbucks Corp. 1 324,500 16,763,670
---------------
67,703,816
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HOUSEHOLD DURABLES--0.9%
Harman International Industries, Inc. 135,900 11,056,824
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LEISURE EQUIPMENT & PRODUCTS--2.3%
Brunswick Corp. 628,800 27,239,616
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MEDIA--2.5%
Getty Images, Inc. 1 411,600 30,565,416
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SPECIALTY RETAIL--8.4%
Bed Bath & Beyond, Inc. 1 382,000 15,959,960
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Chico's FAS, Inc. 1 903,400 30,968,552
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O'Reilly Automotive, Inc. 1 1,156,524 34,475,980
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Urban Outfitters, Inc. 1 334,100 18,940,129
---------------
100,344,621
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TEXTILES, APPAREL & LUXURY GOODS--3.5%
Coach, Inc. 1 878,900 29,504,672
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Polo Ralph Lauren Corp. 282,400 12,174,264
---------------
41,678,936
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CONSUMER STAPLES--2.3%
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FOOD & STAPLES RETAILING--2.3%
Whole Foods Market, Inc. 228,000 26,972,400
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ENERGY--4.7%
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ENERGY EQUIPMENT & SERVICES--1.8%
BJ Services Co. 97,500 5,116,800
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Smith International, Inc. 252,000 16,052,400
---------------
21,169,200
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OIL & GAS--2.9%
Apache Corp. 319,700 20,652,620
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Murphy Oil Corp. 46,400 2,423,472
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XTO Energy, Inc. 357,099 12,137,795
---------------
35,213,887
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FINANCIALS--10.4%
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COMMERCIAL BANKS--1.9%
Commerce Bancorp, Inc. 754,600 22,871,926
VALUE
SHARES SEE NOTE 1
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DIVERSIFIED FINANCIAL SERVICES--7.1%
Chicago Mercantile Exchange (The) 94,700 $ 27,983,850
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Investors Financial Services Corp. 455,600 17,230,792
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Legg Mason, Inc. 384,400 40,019,884
---------------
85,234,526
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INSURANCE--1.4%
Brown & Brown, Inc. 357,700 16,075,038
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HEALTH CARE--17.9%
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BIOTECHNOLOGY--1.6%
Gilead Sciences, Inc. 1 438,000 19,267,620
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HEALTH CARE EQUIPMENT & SUPPLIES--7.8%
Bard (C.R.), Inc. 412,200 27,415,422
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Cooper Cos., Inc. (The) 312,100 18,994,406
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Gen-Probe, Inc. 1 347,200 12,579,056
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ResMed, Inc. 1 27,100 1,788,329
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Stryker Corp. 132,900 6,320,724
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Thermo Electron Corp. 1 374,000 10,049,380
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Varian Medical Systems, Inc. 1 426,900 15,936,177
---------------
93,083,494
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HEALTH CARE PROVIDERS & SERVICES--8.5%
Coventry Health Care, Inc. 1 455,650 32,237,238
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Health Management Associates,
Inc., Cl. A 1,224,900 32,067,882
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Lincare Holdings, Inc. 1 200,600 8,192,504
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Patterson Cos., Inc. 1 622,000 28,039,760
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100,537,384
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INDUSTRIALS--17.2%
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AEROSPACE & DEFENSE--3.3%
L-3 Communications Holdings, Inc. 253,000 19,374,740
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Rockwell Collins, Inc. 418,500 19,954,080
---------------
39,328,820
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AIR FREIGHT & LOGISTICS--2.4%
Expeditors International
of Washington, Inc. 571,200 28,451,472
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COMMERCIAL SERVICES & SUPPLIES--3.7%
Corporate Executive Board Co. 328,900 25,762,737
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Stericycle, Inc. 1 360,700 18,150,424
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43,913,161
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MACHINERY--3.6%
Actuant Corp., Cl. A 1 118,400 5,676,096
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Donaldson Co., Inc. 535,100 16,229,583
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Oshkosh Truck Corp. 269,100 21,065,148
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42,970,827
6 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
VALUE
SHARES SEE NOTE 1
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ROAD & RAIL--1.7%
C.H. Robinson Worldwide, Inc. 355,700 $ 20,701,740
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TRADING COMPANIES & DISTRIBUTORS--2.5%
Fastenal Co. 477,700 29,263,902
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INFORMATION TECHNOLOGY--22.5%
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COMMUNICATIONS EQUIPMENT--2.3%
Comverse Technology, Inc. 1 1,152,200 27,249,530
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ELECTRONIC EQUIPMENT & INSTRUMENTS--1.6%
CDW Corp. 326,400 18,634,176
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IT SERVICES--9.3%
Affiliated Computer Services,
Inc., Cl. A 1 236,200 12,069,820
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Alliance Data Systems Corp. 1 522,100 21,176,376
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Cognizant Technology Solutions
Corp. 1 374,700 17,659,611
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Fiserv, Inc. 1 646,200 27,754,290
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Global Payments, Inc. 194,000 13,153,200
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NAVTEQ Corp. 1 194,500 7,231,510
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SRA International, Inc., Cl. A 1 348,600 12,103,392
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111,148,199
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OFFICE ELECTRONICS--0.4%
Zebra Technologies Corp., Cl. A 1 123,100 5,390,549
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.8%
Linear Technology Corp. 665,700 24,424,533
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Microchip Technology, Inc. 300,800 8,909,696
---------------
33,334,229
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SOFTWARE--6.1%
Activision, Inc. 1 137,300 2,268,196
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Adobe Systems, Inc. 710,600 20,337,372
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Amdocs Ltd. 1 742,100 19,613,703
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Autodesk, Inc. 289,300 9,943,241
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Electronic Arts, Inc. 1 252,600 14,299,686
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FactSet Research Systems, Inc. 186,650 6,689,536
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73,151,734
---------------
Total Common Stocks (Cost $916,773,036) 1,186,441,463
VALUE
SHARES SEE NOTE 1
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PREFERRED STOCKS--0.0%
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Blaze Network Products, Inc.,
8% Cv., Series D 1,2,3 1,147,862 $ 873
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BroadBand Office, Inc., Cv., Series C 1,2,3 211,641 --
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Centerpoint Broadband
Technologies, Inc.:
Cv., Series D 1,2,3 1,298,701 --
Cv., Series Z 1,2,3 262,439 --
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MicroPhotonix Integration Corp.,
Cv., Series C 1,2,3 633,383 --
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Multiplex, Inc., Cv., Series C 1,2,3 2,330,253 110,687
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Questia Media, Inc., Cv., Series B 1,2,3 2,329,735 170,537
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Total Preferred Stocks
(Cost $62,496,986) 282,097
PRINCIPAL
AMOUNT
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MONEY MARKET DEPOSIT--0.0%
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JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $166,998) $ 166,998 166,998
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TOTAL INVESTMENTS, AT VALUE
(COST $979,437,020) 99.5% 1,186,890,558
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OTHER ASSETS NET OF LIABILITIES 0.5 6,336,312
-------------------------------
NET ASSETS 100.0% $1,193,226,870
===============================
7 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
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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 June 30, 2005 was $282,097, which represents 0.02%
of the Fund's net assets, all of which 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 June 30, 2005. The
aggregate fair value of securities of affiliated companies held by the Fund as
of June 30, 2005 amounts to $282,097. Transactions during the period in which
the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2004 ADDITIONS REDUCTIONS JUNE 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------
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
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
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D $ 873 $ --
BroadBand Office, Inc., Cv., Series C -- --
Centerpoint Broadband Technologies, Inc., Cv., Series D -- --
Centerpoint Broadband Technologies, Inc., Cv., Series Z -- --
MicroPhotonix Integration Corp., Cv., Series C -- --
Multiplex, Inc., Cv., Series C 110,687 --
Questia Media, Inc., Cv., Series B 170,537 --
--------------------------
$ 282,097 $ --
==========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
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June 30, 2005
- --------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $916,940,034) $ 1,186,608,461
Affiliated companies (cost $62,496,986) 282,097
----------------
1,186,890,558
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Receivables and other assets:
Investments sold 9,788,183
Shares of beneficial interest sold 321,633
Interest and dividends 276,474
Other 19,777
----------------
Total assets 1,197,296,625
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LIABILITIES
- --------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 3,240,727
Shares of beneficial interest redeemed 705,623
Shareholder communications 63,459
Trustees' compensation 21,633
Distribution and service plan fees 16,294
Transfer and shareholder servicing agent fees 1,769
Other 20,250
----------------
Total liabilities 4,069,755
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NET ASSETS $ 1,193,226,870
================
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COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 26,506
- --------------------------------------------------------------------------------------------------
Additional paid-in capital 1,737,544,756
- --------------------------------------------------------------------------------------------------
Accumulated net investment loss (1,618,521)
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Accumulated net realized loss on investments (750,179,409)
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Net unrealized appreciation on investments 207,453,538
----------------
NET ASSETS $ 1,193,226,870
================
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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 $1,165,120,506 and 25,876,839 shares of beneficial
interest outstanding) $ 45.03
- --------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $28,106,364 and 629,883 shares of beneficial
interest outstanding) $ 44.62
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENT OF OPERATIONS Unaudited
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For the Six Months Ended June 30, 2005
- --------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------
Dividends $ 2,381,423
- --------------------------------------------------------------------------------------------------
Interest 69,758
----------------
Total investment income 2,451,181
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EXPENSES
- --------------------------------------------------------------------------------------------------
Management fees 3,935,111
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Distribution and service plan fees--Service shares 31,284
- --------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,346
Service shares 5,035
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Shareholder communications:
Non-Service shares 28,986
Service shares 632
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Trustees' compensation 11,027
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Custodian fees and expenses 7,947
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Other 31,096
----------------
Total expenses 4,056,464
Less reduction to custodian expenses (109)
----------------
Net expenses 4,056,355
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NET INVESTMENT LOSS (1,605,174)
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------------------------
Net realized gain on investments 38,148,717
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (9,815,757)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 26,727,786
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment loss $ (1,605,174) $ (4,465,478)
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 38,148,717 (417,401)
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (9,815,757) 213,639,469
----------------------------------
Net increase in net assets resulting from operations 26,727,786 208,756,590
- ------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (70,429,668) (109,692,557)
Service shares 3,318,916 9,104,838
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (40,382,966) 108,168,871
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 1,233,609,836 1,125,440,965
----------------------------------
End of period (including accumulated net investment loss of $1,618,521
and $13,347, respectively) $1,193,226,870 $ 1,233,609,836
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 43.97 $ 36.71 $ 29.23 $ 40.72 $ 70.77 $ 82.31
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) (.06) 1 (.15) 1 (.15) (.10) .23 .53
Net realized and unrealized gain (loss) 1.12 7.41 7.63 (11.16) (21.38) (8.59)
----------------------------------------------------------------------------------------
Total from investment operations 1.06 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)
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Net asset value, end of period $ 45.03 $ 43.97 $ 36.71 $ 29.23 $ 40.72 $ 70.77
========================================================================================
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TOTAL RETURN, AT NET ASSET VALUE 2 2.41% 19.78% 25.59% (27.79)% (31.27)% (11.24)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,165,121 $1,209,459 $1,113,743 $ 979,919 $1,621,550 $2,595,101
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,156,988 $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) (0.27)% (0.39)% (0.43)% (0.29)% 0.47% 0.65%
Total expenses 0.69% 4 0.69% 4 0.70% 4 0.68% 4 0.68% 4 0.64% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 15% 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.
12 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 43.64 $ 36.54 $ 29.13 $ 40.70 $ 70.77 $ 97.75
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) (.12) 2 (.27) 2 -- 3 .16 .19 .20
Net realized and unrealized gain (loss) 1.10 7.37 7.41 (11.53) (21.36) (27.18)
---------------------------------------------------------------------------------------
Total from investment operations .98 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 $ 44.62 $ 43.64 $ 36.54 $ 29.13 $ 40.70 $ 70.77
=======================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 2.25% 19.43% 25.44% (28.05)% (31.31)% (27.60)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 28,106 $ 24,151 $ 11,698 $ 144 $ 54 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 25,365 $ 17,579 $ 3,858 $ 72 $ 31 $ 1
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) (0.56)% (0.68)% (0.72)% (0.56)% 0.09% 1.14%
Total expenses 0.97% 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 N/A 6 0.98% N/A 6 N/A 6
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 15% 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.
13 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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).
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
14 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $750,100,352. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$38,148,717 of capital loss carryforward to offset realized capital gains.
During the year ended December 31, 2004, the Fund utilized $9,896,185 of capital
loss carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
post-October losses of $10,744,831 and unused capital loss carryforwards as
follows:
EXPIRING
-----------------------------
2009 $ 547,279,416
2010 230,224,822
--------------
Total $ 777,504,238
==============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
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.
15 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,173,630 $ 50,998,355 2,254,599 $ 88,253,010
Redeemed (2,803,072) (121,428,023) (5,085,553) (197,945,567)
------------------------------------------------------------------------
Net decrease (1,629,442) $ (70,429,668) (2,830,954) $ (109,692,557)
========================================================================
- --------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 150,774 $ 6,511,796 312,167 $ 12,156,781
Redeemed (74,321) (3,192,880) (78,906) (3,051,943)
------------------------------------------------------------------------
Net increase 76,453 $ 3,318,916 233,261 $ 9,104,838
========================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$177,355,112 and $248,106,653, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million, 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 six months ended June 30, 2005, the
Fund paid $10,336 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 per annum 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,
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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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.
16 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
- --------------------------------------------------------------------------------
5. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2005, 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.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST JUNE 30, 2005 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 17,150,662 110,687 17,039,975
Questia Media, Inc., Cv., Series B 8/18/00 8,999,999 170,537 8,829,462
--------------------------------------------------
$ 62,496,986 $ 282,097 $ 62,214,889
==================================================
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
17 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
18 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory
agreement for the current year, the Board evaluated the nature and extent of the
services provided by the Manager and its affiliates. The Manager provides the
Fund with office space, facilities and equipment; administrative, accounting,
clerical, legal and compliance personnel; securities trading services and
oversight of third party service providers and the services of the portfolio
manager and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that were available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality
of the portfolio management services to be provided, the Board considered the
experience of John O'Hare and the Manager's Growth Equity investment team and
analysts. Mr. O'Hare has been primarily responsible for the day-to-day
management of the Fund's portfolio since October 2003. Mr. O'Hare is a Chartered
Financial Analyst and has been a Vice President of the Manager since September
2003. He was Executive Vice President and Portfolio Manager from June 2000
through August 2003 and Portfolio Manager and Senior Vice President from August
1997 through June 2000 at Geneva Capital Management, Ltd. Mr. O'Hare has had
over 17 years of experience managing equity investments and is the portfolio
manager and an officer of another portfolio in the OppenheimerFunds complex.
The Board reviewed information, prepared by the Manager and by the independent
consultant, comparing the Fund's historical performance to relevant market
indices and to the performance of other mid-cap growth funds (including both
funds advised by the Manager and funds advised by other investment advisers).
The Board also receives and reviews comparative performance information
regarding the Fund and other funds at each Board meeting. The Board noted that
the Fund's three-year, five-year and ten-year performance was below its peer
group average. However, its one-year performance was better than its peer group
average. The Board notes that it had discussed plans for improving the Fund's
performance with the Manager and that the Fund's performance has shown
improvement.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including
comparative information, regarding the fees paid to the Manager and its
affiliates and the other expenses borne by the Fund. The independent consultant
provided comparative data in regard to the fees and expenses of the Fund, other
mid-cap growth and multi-cap growth funds and other funds with comparable assets
levels and distribution features. The Board noted that
19 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
the Fund's management fees and total expenses are both lower than its peer group
average. In addition, the Board evaluated the comparability of the fees charged
and the services provided to the Fund to the fees charged and services provided
to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information
regarding the cost of services provided by the Manager and its affiliates and
the Manager's profitability. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders. In addition the Board considered
information that was provided regarding the direct and indirect benefits the
Manager receives as a result of its relationship with the Fund, including
compensation paid to the Manager's affiliates and research provided to the
Manager in connection with permissible brokerage arrangements (soft dollar
arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board noted that the Fund has not experienced any recent
asset growth and that, based on current asset levels, the Fund has not passed
its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are both independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described
above, the Board, including a majority of the independent Trustees, concluded
that the nature, extent and quality of the services provided to the Fund by the
Manager are a benefit to the Fund and in the best interest of the Fund's
shareholders and that the amount and structure of the compensation received by
the Manager and its affiliates are reasonable in relation to the services
provided. Accordingly, the Board elected to continue the investment advisory
agreement for another year. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
20 | OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
CORE BOND FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- ----------------------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,024.00 $3.77
- ----------------------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.08 3.77
- ----------------------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,022.40 5.03
- ----------------------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.84 5.02
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- -------------------------------------------
Non-Service shares 0.75%
- -------------------------------------------
Service shares 1.00
- --------------------------------------------------------------------------------
5 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--12.8%
- --------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile
Asset-Backed Certificates, Series
2005-1A, Cl. A2, 3.32%, 4/20/08 1,2 $ 640,000 $ 639,040
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Automobile Loan Certificates:
Series 2004-A, Cl. A2,
1.88%, 10/25/06 828,086 826,671
Series 2005-A, Cl. A2,
3.65%, 12/26/07 2,510,000 2,509,215
- --------------------------------------------------------------------------------
Capital Auto Receivables
Asset Trust, Automobile
Mtg.-Backed Nts., Series 2004-2,
Cl. A3, 3.58%, 1/15/09 2,250,000 2,229,118
- --------------------------------------------------------------------------------
Centex Home Equity Co. LLC,
Home Equity Loan Asset-Backed
Certificates:
Series 2004-D, Cl. AF1,
2.98%, 4/25/20 1 806,902 802,242
Series 2005-B, Cl. AF1,
4.02%, 3/26/35 1 699,278 697,976
Series 2005-C, Cl. AF1,
4.196%, 6/25/35 1 1,770,000 1,768,894
- --------------------------------------------------------------------------------
Chase Funding Mortgage Loan
Asset-Backed Certificates, Home
Equity Mtg. Obligations:
Series 2003-1, Cl. 1A3, 3.14%,
7/25/23 153,332 153,067
Series 2003-5, Cl. 1A2, 2.451%,
11/25/18 385,806 384,344
Series 2004-1, Cl. 1A2,
2.427%, 6/25/19 1,220,000 1,214,061
- --------------------------------------------------------------------------------
Chase Manhattan Auto Owner
Trust, Automobile Loan
Pass-Through Certificates:
Series 2002-A, Cl. A4,
4.24%, 9/15/08 387,690 388,678
Series 2005-A, Cl. A2,
3.72%, 12/15/07 2,070,000 2,066,481
- --------------------------------------------------------------------------------
CIT Equipment Collateral,
Equipment Receivable-Backed Nts.,
Series 2004-DFS, Cl. A2,
2.66%, 11/20/06 1 1,840,000 1,830,541
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust,
Credit Card Receivable Nts.:
Series 2001-A6, Cl. A6,
5.65%, 6/16/08 2,040,000 2,073,836
Series 2003-C4, Cl. C4,
5%, 6/10/15 310,000 315,976
- --------------------------------------------------------------------------------
CitiFinancial Mortgage Securities,
Inc., Home Equity Collateralized
Mtg. Obligations, Series 2003-3, Cl.
AF1, 3.434%, 8/25/33 2 151,894 151,989
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2002-4, Cl. A1,
3.684%, 2/25/33 2 $ 175,930 $ 178,374
Series 2005-7, Cl. AF1B,
4.317%, 6/1/35 1,800,000 1,799,820
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates:
Series 2001-D, Cl. A4, 3.78%, 2/6/07 291,467 291,665
Series 2004-B, Cl. A2, 2.48%, 2/8/07 1 417,906 417,107
Series 2004-C, Cl. A2, 2.62%, 6/8/07 2,932,282 2,922,263
Series 2005-A, Cl. A2, 3.17%, 9/8/07 1 2,710,000 2,703,112
Series 2005-B, Cl. A2, 3.75%, 12/8/07 2,130,000 2,129,987
- --------------------------------------------------------------------------------
Equity One ABS, Inc., Home Equity
Mtg. Pass-Through Certificates,
Series 2004-3, Cl. AF2, 3.80%, 7/25/34 410,000 407,017
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates:
Series 2004-A, Cl. A2,
2.13%, 10/15/06 556,869 555,329
Series 2005-A, Cl. A3,
3.48%, 11/17/08 1,630,000 1,620,391
Series 2005-B, Cl. A2,
3.77%, 9/15/07 2,190,000 2,189,581
- --------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust,
Motorcycle Receivable Nts.,
Series 2003-3, Cl. A1, 1.50%, 1/15/08 1,066,276 1,063,388
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner
Trust, Automobile Receivable
Obligations:
Series 2003-4, Cl. A2, 1.58%, 7/17/06 416,347 416,269
Series 2005-1, Cl. A2, 3.21%, 5/21/07 1 1,080,000 1,077,375
Series 2005-3, Cl. A2,
3.73%, 10/18/07 1,930,000 1,930,000
- --------------------------------------------------------------------------------
Litigation Settlement Monetized
Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1,
8.33%, 4/25/31 1 3,783,986 3,931,561
- --------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile
Loan Certificates, Series 2002-1,
Cl. A3, 2.49%, 10/22/07 293,445 293,359
- --------------------------------------------------------------------------------
National City Auto Receivables
Trust, Automobile Receivable
Obligations, Series 2004-A,
Cl. A2, 1.50%, 2/15/07 348,712 348,222
- --------------------------------------------------------------------------------
NC Finance Trust, Collateralized
Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 1/25/29 1 3,370,016 909,904
6 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Nissan Auto Lease Trust,
Automobile Lease Obligations,
Series 2004-A,
Cl. A2, 2.55%, 1/15/07 $ 1,445,706 $ 1,441,415
- --------------------------------------------------------------------------------
Nissan Auto Receivables Owner
Trust, Automobile Receivable Nts.,
Series 2002-A, Cl. A4,
4.28%, 10/16/06 176,738 176,903
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2004-3, Cl. A2, 3.464%,
11/25/34 1,2 330,143 330,377
- --------------------------------------------------------------------------------
Popular ABS Mortgage
Pass-Through Trust, Home Equity
Pass-Through Certificates:
Series 2004-5, Cl. AF2,
3.735%, 11/10/34 1 620,000 614,544
Series 2005-1, Cl. AF2,
3.914%, 5/25/35 450,000 446,638
Series 2005-2, Cl. AF2,
4.415%, 4/25/35 1 730,000 730,721
- --------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc., Home Equity
Asset-Backed Pass-Through
Certificates, Series 2004-RS7,
Cl. AI3, 4.45%, 7/25/28 3 1,500,000 1,503,990
- --------------------------------------------------------------------------------
Tobacco Settlement Authority,
Asset-Backed Securities, Series
2001-A, 6.79%, 6/1/10 1,850,000 1,841,953
- --------------------------------------------------------------------------------
USAA Auto Owner Trust,
Automobile Loan Asset-Backed Nts.:
Series 2001-2, Cl. A4, 3.91%, 4/16/07 166,150 166,273
Series 2004-2, Cl. A2, 2.41%, 2/15/07 1,491,255 1,487,584
Series 2004-3, Cl. A2, 2.79%, 6/15/07 1,540,000 1,535,458
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust,
Automobile Lease Asset-Backed
Securities, Series 2004-A, Cl. A2,
2.47%, 1/22/07 1,991,252 1,984,742
- --------------------------------------------------------------------------------
Wachovia Auto Owner Trust,
Automobile Receivable Nts.,
Series 2004-B, Cl. A2, 2.40%, 5/21/07 1,282,695 1,278,505
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B,
2.94%, 9/25/18 2,375,793 2,357,796
- --------------------------------------------------------------------------------
Whole Auto Loan Trust,
Automobile Loan Receivable
Certificates, Series 2004-1, Cl. A2A,
2.59%, 5/15/07 1,839,413 1,831,682
---------------
Total Asset-Backed Securities
(Cost $63,357,961) 60,965,434
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--73.6%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--59.2%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--59.0%
Fannie Mae Whole Loan,
Collateralized Mtg. Obligations
Pass-Through Certificates,
Trust 2004-W9, Cl. 2A2,
7%, 2/25/44 $ 1,056,248 $ 1,115,992
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
6%, 10/1/22-10/1/34 21,091,282 21,675,058
6.50%, 4/1/18-4/1/34 2,357,161 2,450,383
7%, 3/1/31-3/1/33 8,588,727 9,046,292
7%, 7/1/35 4 5,288,000 5,567,270
8%, 4/1/16 1,217,869 1,302,304
9%, 8/1/22-5/1/25 336,272 366,549
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Pass-Through Participation
Certificates, Series 151, Cl. F,
9%, 5/15/21 63,046 63,029
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through
Certificates:
Series 2456, Cl. BD, 6%, 3/15/30 750,325 755,197
Series 2500, Cl. FD, 3.72%, 3/15/32 2 656,614 658,879
Series 2526, Cl. FE, 3.62%, 6/15/29 2 915,276 918,270
Series 2550, Cl. QK, 4.50%, 4/15/22 209,414 209,397
Series 2551, Cl. FD, 3.62%, 1/15/33 2 729,723 735,363
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. IO, 3.726%, 6/1/26 5 1,058,087 189,695
Series 183, Cl. IO, 1.17%, 4/1/27 5 1,596,624 287,906
Series 184, Cl. IO, 5.90%, 12/1/26 5 1,704,552 296,609
Series 192, Cl. IO, 4.075%, 2/1/28 5 401,771 68,227
Series 200, Cl. IO, 2.953%, 1/1/29 5 480,878 83,056
Series 206, Cl. IO, (16.134)%, 12/1/29 5 1,103,876 219,005
Series 2130, Cl. SC, 7.611%, 3/15/29 5 1,117,523 97,772
Series 2796, Cl. SD, 13.76%, 7/15/26 5 1,746,941 161,488
Series 2920, Cl. S, 15.485%, 1/15/35 5 7,024,802 420,510
Series 3000, Cl. SE, 7/15/25 4,5 6,820,000 313,294
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Principal-Only Stripped
Mtg.-Backed Security, Series 176,
Cl. PO, 6.242%, 6/1/26 6 431,081 380,495
7 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.:
4.50%, 7/17/20 4 $ 14,065,000 $ 14,003,466
5%, 7/1/18 2,556,529 2,587,972
5%, 6/1/18-8/11/35 4 37,383,223 37,502,295
5.50%, 3/1/33-1/1/34 18,942,979 19,225,411
5.50%, 7/17/20-7/1/35 4 30,023,000 30,513,727
6%, 5/1/29 2,035,297 2,092,509
6%, 7/1/20-7/1/35 4 18,234,000 18,761,360
6.50%, 3/1/11-11/1/31 4,138,989 4,303,970
6.50%, 7/1/35 4 72,731,000 75,276,585
7%, 11/1/17 2,786,985 2,921,629
7.50%, 1/1/08-1/1/26 81,644 86,795
8%, 5/1/17 14,411 15,492
8.50%, 7/1/32 154,261 167,694
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 131, Cl. G, 8.75%, 11/25/05 4,123 4,141
Trust 1989-17, Cl. E, 10.40%, 4/25/19 110,730 119,376
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 2,259,037 2,369,120
Trust 1998-58, Cl. PC, 6.50%, 10/25/28 1,999,267 2,098,338
Trust 2001-70, Cl. LR, 6%, 9/25/30 823,585 835,534
Trust 2001-72, Cl. NH, 6%, 4/25/30 599,700 604,302
Trust 2001-74, Cl. PD, 6%, 5/25/30 253,051 255,091
Trust 2002-77, Cl. WF,
3.66%, 12/18/32 2 1,134,675 1,142,261
Trust 2003-10, Cl. HP, 5%, 2/25/18 2,900,000 2,964,580
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 3,964,000 4,184,472
Trust 2003-81, Cl. PA, 5%, 2/25/12 102,591 102,425
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,908,000 1,952,488
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 2002-47, Cl. NS,
1.647%, 4/25/32 5 2,165,586 215,070
Trust 2002-51, Cl. S, 1.873%, 8/25/32 5 1,988,015 199,411
Trust 2005-71, Cl. SA, 7/25/25 4,5 4,360,000 265,688
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 222, Cl. 2, 1.27%, 6/1/23 5 $ 3,229,845 $ 569,389
Trust 240, Cl. 2, 2.59%, 9/1/23 5 3,784,158 682,797
Trust 252, Cl. 2, (1.693)%, 11/1/23 5 2,575,984 492,929
Trust 254, Cl. 2, 1.695%, 1/1/24 5 1,255,988 231,627
Trust 273, Cl. 2, 3.102%, 7/1/26 5 771,366 136,956
Trust 303, Cl. IO, (13.189)%, 11/1/29 5 466,614 86,212
Trust 319, Cl. 2, (3.322)%, 2/1/32 5 738,088 131,937
Trust 321, Cl. 2, (8.72)%, 3/1/32 5 8,102,880 1,473,004
Trust 329, Cl. 2, (0.512)%, 1/1/33 5 3,156,653 558,154
Trust 331, Cl. 9, (6.005)%, 12/1/32 5 1,952,755 336,055
Trust 333, Cl. 2, (1.40)%, 3/1/33 5 3,507,905 629,948
Trust 334, Cl. 17, (4.447)%, 2/1/33 5 1,325,004 215,568
Trust 338, Cl. 2, (2.826)%, 6/1/33 5 1,145,379 205,863
Trust 2001-81, Cl. S, 5.117%, 1/25/32 5 855,114 87,749
Trust 2002-52, Cl. SD,
(1.65)%, 9/25/32 5 2,451,645 266,615
Trust 2002-77, Cl. SH,
9.708%, 12/18/32 5 1,022,217 109,198
Trust 2003-4, Cl. S,
18.483%, 2/25/33 5 1,854,298 182,405
Trust 2004-54, Cl. DS,
8.941%, 11/25/30 5 1,720,117 140,293
Trust 2005-6, Cl. SE,
15.541%, 2/25/35 5 4,852,167 294,966
Trust 2005-19, Cl. SA,
14.04%, 3/25/35 5 18,361,726 1,143,822
Trust 2005-40, Cl. SA,
18.084%, 5/25/35 5 4,317,381 265,069
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Principal-Only Stripped
Mtg.-Backed Security,
Trust 1993-184, Cl. M,
8.754%, 9/25/23 6 865,869 760,482
---------------
281,154,280
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.2%
Government National
Mortgage Assn.:
7%, 1/15/09-5/15/09 48,075 49,875
8.50%, 8/15/17-12/15/17 445,531 485,043
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB,
2.354%, 1/16/27 5 1,764,116 165,409
Series 2002-15, Cl. SM,
(2.418)%, 2/16/32 5 2,066,472 181,165
Series 2004-11, Cl. SM,
(2.233)%, 1/17/30 5 1,575,895 130,491
---------------
1,011,983
8 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-AGENCY--14.4%
- --------------------------------------------------------------------------------
COMMERCIAL--13.2%
Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1996-MD6,
Cl. A3, 7.691%, 11/13/29 2 $ 1,200,000 $ 1,274,316
- --------------------------------------------------------------------------------
Asset Securitization Corp.,
Interest-Only Stripped Mtg.-Backed
Security Collateralized Mtg.
Obligations, Series 1997-D4,
Cl. PS1, 5.667%, 4/14/29 5 41,727,021 1,432,155
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2004-6, Cl. A3,
4.512%, 12/10/42 1,720,000 1,726,706
Series 2005-2, Cl. A4,
4.783%, 7/10/42 2,550,000 2,593,828
Series 2005-3, Cl. A2,
4.501%, 7/10/43 4 2,100,000 2,113,125
- --------------------------------------------------------------------------------
Bank of America Mortgage
Securities, Inc., Collateralized Mtg.
Obligations Pass-Through
Certificates:
Series 2004-2, Cl. 2A1,
6.50%, 7/20/32 2,789,741 2,828,729
Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 2,080,384 2,133,045
Series 2004-E, Cl. 2A9,
3.712%, 6/25/34 1,128,836 1,128,828
Series 2004-G, Cl. 2A1,
2.469%, 8/25/34 2 151,502 151,443
Series 2005-E, Cl. 2A2,
4.994%, 6/25/35 709,000 709,410
- --------------------------------------------------------------------------------
Bear Stearns Commercial
Mortgage Securities, Inc.,
Commercial Mtg. Obligations,
Series 2005-PWR7, Cl.
A2, 4.945%, 2/11/41 860,000 884,063
- --------------------------------------------------------------------------------
Capital Lease Funding Securitization
LP, Interest-Only Corporate-Backed
Pass-Through Certificates, Series
1997-CTL1, 7.322%, 6/22/24 5 20,903,266 839,948
- --------------------------------------------------------------------------------
Countrywide Alternative Loan Trust,
Collateralized Mtg. Obligations:
Series 2004-J9, Cl. 1A1, 3.494%,
10/25/34 2 1,446,006 1,447,507
Series 2005-J3, Cl. 3A1,
6.50%, 9/25/34 4,208,565 4,332,606
- --------------------------------------------------------------------------------
DLJ Mortgage Acceptance Corp.,
Commercial Mtg. Obligations,
Series 1996-CF1, Cl. A3,
7.906%, 3/13/28 2 227,124 228,909
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
First Union National Bank/Lehman
Brothers/Bank of America
Commercial Mtg. Trust,
Pass-Through Certificates,
Series 1998-C2, Cl. A2,
6.56%, 11/18/35 $ 1,503,330 $ 1,584,367
- --------------------------------------------------------------------------------
GE Capital Commercial Mortgage
Corp., Commercial Mtg. Obligations,
Series 2005-CA, Cl. A3,
4.578%, 6/10/48 730,000 736,035
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg.
Obligations, Series 2004-C3, Cl.
A4, 4.547%, 12/10/41 1,110,000 1,118,402
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial
Mtg. Pass-Through Certificates,
Series 1997-C1, Cl. A3,
6.869%, 7/15/29 1,008,440 1,053,661
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial Mtg.
Pass-Through Certificates, Series
2005-GG3, Cl. A2, 4.305%, 8/10/42 1,460,000 1,460,477
- --------------------------------------------------------------------------------
GS Mortgage Securities Corp. II,
Commercial Mtg. Pass-Through
Certificates, Series 2004-C1, Cl.
A1, 3.659%, 10/10/28 1,264,262 1,247,734
- --------------------------------------------------------------------------------
GSR Mortgage Loan Trust,
Collateralized Mtg. Obligations,
Series 04-12, Cl. 3A1,
4.495%, 12/25/34 1,2 1,985,700 1,980,962
- --------------------------------------------------------------------------------
J.P. Morgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 2005-LDP2, Cl.
A2, 4.575%, 7/15/42 510,000 514,650
- --------------------------------------------------------------------------------
Lehman Brothers Commercial
Conduit Mortgage Trust,
Interest-Only Stripped
Mtg.-Backed Security, Series
1998-C1, Cl. IO, 6.379%, 2/18/30 5 17,741,847 530,935
- --------------------------------------------------------------------------------
Lehman Structured Securities Corp.,
Collateralized Mtg. Obligations,
Series 2002-GE1, Cl. A, 2.514%,
7/26/24 1 380,452 330,889
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust,
Pass-Through Collateralized Mtg.
Obligations, Series 2004-6, Cl.
10A1, 6%, 7/25/34 2,970,307 3,032,823
- --------------------------------------------------------------------------------
Mastr Asset Securitization Trust,
Pass-Through Collateralized Mtg.
Obligations, Series 2004-9, Cl.
A3, 4.70%, 8/25/34 2 2,885,183 2,889,665
9 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
Mastr Seasoned Securities Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. A1, 6.50%, 8/25/32 4 $ 4,833,325 $ 4,926,973
- --------------------------------------------------------------------------------
Nomura Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl.
A1B, 6.59%, 3/15/30 3 1,680,000 1,784,166
- --------------------------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2003-QS1, Cl.
A2, 5.75%, 1/25/33 1,762,055 1,786,206
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Inc., Interest-Only
Commercial Mtg. Pass-Through
Certificates, Series 1999-C1, Cl.
X, 5.733%, 5/18/32 5 370,919,712 1,385,311
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust, Commercial
Mtg. Obligations:
Series 2005-C16, Cl. A2,
4.38%, 10/15/41 2,210,000 2,217,391
Series 2005-C17, Cl. A2,
4.782%, 3/15/42 2,520,000 2,567,251
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., Collateralized
Mtg. Pass-Through Certificates,
Series 2005-AR5, Cl. A1,
4.69%, 5/25/35 2 2,820,825 2,828,905
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed
Securities Trust, Collateralized
Mtg. Obligations:
Series 2004-DD, Cl. 2A1,
4.54%, 1/25/35 2 1,823,964 1,824,470
Series 2004-N, Cl. A10,
3.803%, 8/25/34 1 2,022,348 2,024,704
Series 2004-W, Cl. A2,
4.611%, 11/25/34 2 948,722 947,059
---------------
62,597,654
- --------------------------------------------------------------------------------
OTHER--0.0%
Salomon Brothers Mortgage
Securities VI, Inc., Interest-Only
Stripped Mtg.-Backed Security,
Series 1987-3,
Cl. B, 41.67%, 10/23/17 5 21,005 4,699
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VI, Inc., Principal-Only
Stripped Mtg.-Backed Security,
Series 1987-3, Cl. A, 8.50%, 10/23/17 6 31,088 28,542
---------------
33,241
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
RESIDENTIAL--1.2%
Countrywide Alternative Loan Trust,
Collateralized Mtg. Obligations,
Series 2005-J1, Cl. 3A1,
6.50%, 8/25/32 $ 3,116,132 $ 3,184,297
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Collateralized Mtg. Obligations
Pass-Through Certificates,
Series 2002-AL1, Cl. B2,
3.45%, 2/25/32 2,827,603 2,553,723
---------------
5,738,020
---------------
Total Mortgage-Backed Obligations
(Cost $351,545,046) 350,535,178
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--13.3%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
4.125%, 7/12/10 16,283,000 16,354,694
6.625%, 9/15/09 3 7,275,000 8,016,963
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts.:
3.01%, 6/2/06 7 2,500,000 2,481,460
6.625%, 9/15/09 6,010,000 6,628,880
7.25%, 5/15/30 1,665,000 2,319,240
- --------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
4.65%, 6/15/35 3,555,000 3,575,562
Series A, 6.79%, 5/23/12 5,659,000 6,560,711
- --------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.375%, 2/15/31 3 1,726,000 2,037,220
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.625%, 6/15/10 3 2,042,000 2,033,705
3.75%, 3/31/07 4,000,000 4,007,344
4%, 3/15/10 2,695,000 2,725,214
4%, 2/15/15 3 4,335,000 4,351,768
4.125%, 5/15/15 3 772,000 783,520
4.875%, 2/15/12 1,200,000 1,274,813
---------------
Total U.S. Government Obligations
(Cost $62,633,163) 63,151,094
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.6%
- --------------------------------------------------------------------------------
United Mexican States Nts., 7.50%,
1/14/12 3 (Cost $2,630,698) 2,610,000 2,966,265
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--36.3%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--9.9%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.9%
Delphi Corp., 6.55% Nts., 6/15/06 3 1,203,000 1,175,933
- --------------------------------------------------------------------------------
Lear Corp., 8.11% Sr. Unsec. Nts.,
Series B, 5/15/09 2,265,000 2,344,026
- --------------------------------------------------------------------------------
Visteon Corp., 7.95% Sr. Unsec.
Nts., 8/1/05 3 730,000 731,095
---------------
4,251,054
10 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
AUTOMOBILES--2.2%
DaimlerChrysler NA Holdings Corp.:
7.20% Unsec. Nts., 9/1/09 $ 1,450,000 $ 1,579,778
8% Nts., 6/15/10 748,000 846,371
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
6.50% Unsec. Nts., 1/25/07 1,415,000 1,425,678
7.375% Nts., 10/28/09 485,000 474,365
7.60% Nts., 8/1/05 810,000 811,830
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.125% Nts., 9/15/06 1,195,000 1,196,195
7.50% Nts., 7/15/05 2,166,000 2,166,951
- --------------------------------------------------------------------------------
Hertz Corp. (The),
6.35% Nts., 6/15/10 3 1,900,000 1,818,933
---------------
10,320,101
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.2%
Hilton Hotels Corp., 8.25% Sr.
Unsec. Nts., 2/15/11 1,068,000 1,240,370
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc., 7.375% Nts., 5/1/07 1,580,000 1,659,000
- --------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50%
Sr. Unsec. Nts., 4/15/06 2,785,000 2,878,008
---------------
5,777,378
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.2%
Beazer Homes USA, Inc., 8.625%
Sr. Unsec. Nts., 5/15/11 1,440,000 1,533,600
- --------------------------------------------------------------------------------
D.R. Horton, Inc., 6.125%
Nts., 1/15/14 1,415,000 1,470,506
- --------------------------------------------------------------------------------
Lennar Corp., 5.95% Sr.
Unsec. Nts., 3/1/13 1,250,000 1,330,451
- --------------------------------------------------------------------------------
Toll Corp., 8.25%
Sr. Sub. Nts., 12/1/11 1,440,000 1,555,200
---------------
5,889,757
- --------------------------------------------------------------------------------
MEDIA--2.9%
AOL Time Warner, Inc.,
7.70% Debs., 5/1/32 1,365,000 1,732,322
- --------------------------------------------------------------------------------
Chancellor Media CCU,
8% Sr. Unsec. Nts., 11/1/08 2,525,000 2,716,779
- --------------------------------------------------------------------------------
Cox Communications, Inc.,
7.875% Unsec. Nts., 8/15/09 325,000 364,474
- --------------------------------------------------------------------------------
Cox Enterprises, Inc., 7.375%
Unsec. Debs., 6/15/09 8 1,440,000 1,559,138
- --------------------------------------------------------------------------------
Liberty Media Corp., 5.70%
Sr. Unsec. Nts., 5/15/13 3 1,235,000 1,150,452
- --------------------------------------------------------------------------------
TCI Communications, Inc., 9.80%
Sr. Unsec. Debs., 2/1/12 2,210,000 2,818,448
- --------------------------------------------------------------------------------
Time Warner Entertainment Co.
LP, 10.15% Sr. Nts., 5/1/12 1,073,000 1,388,929
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Univision Communications, Inc.:
2.875% Sr. Unsec. Nts., 10/15/06 $ 357,000 $ 350,200
3.50% Sr. Unsec. Nts., 10/15/07 1,860,000 1,820,146
---------------
13,900,888
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.1%
Federated Department Stores, Inc.,
6.625% Sr. Unsec. Nts., 9/1/08 1,785,000 1,904,786
- --------------------------------------------------------------------------------
J.C. Penney Co., Inc.,
7.40% Nts., 4/1/37 1,450,000 1,573,250
- --------------------------------------------------------------------------------
May Department Stores Co.:
3.95% Nts., 7/15/07 973,000 966,741
7.90% Unsec. Debs., 10/15/07 860,000 919,108
---------------
5,363,885
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.4%
Gap, Inc. (The):
6.90% Nts., 9/15/07 1 1,315,000 1,380,031
9.55% Unsub. Nts., 12/15/08 2 466,000 537,702
---------------
1,917,733
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.0%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.6%
Albertson's, Inc.:
8% Sr. Unsec. Debs., 5/1/31 3 990,000 1,203,879
8.70% Sr. Unsec. Debs., 5/1/30 537,000 697,201
- --------------------------------------------------------------------------------
Delhaize America, Inc.,
9% Unsub. Debs., 4/15/31 915,000 1,146,933
- --------------------------------------------------------------------------------
Kroger Co. (The),
7.80% Sr. Nts., 8/15/07 3 1,800,000 1,923,973
- --------------------------------------------------------------------------------
Safeway, Inc., 4.80% Sr. Unsec.
Nts., 7/16/07 2,440,000 2,459,400
---------------
7,431,386
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.4%
ConAgra Foods, Inc.,
6% Nts., 9/15/06 1,320,000 1,342,865
- --------------------------------------------------------------------------------
General Mills, Inc.,
3.875% Nts., 11/30/07 2,070,000 2,053,949
- --------------------------------------------------------------------------------
Kraft Foods, Inc.,
5.25% Nts., 6/1/07 3,275,000 3,340,212
---------------
6,737,026
- --------------------------------------------------------------------------------
ENERGY--1.1%
- --------------------------------------------------------------------------------
OIL & GAS--1.1%
Chesapeake Energy Corp.,
7.50% Sr. Nts., 6/15/14 3 1,380,000 1,504,200
- --------------------------------------------------------------------------------
Kinder Morgan, Inc.,
6.50% Sr. Unsec. Nts., 9/1/12 1,160,000 1,279,640
11 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Pemex Project Funding Master
Trust, 7.875% Unsec.
Unsub. Nts., 2/1/09 $ 835,000 $ 914,325
- --------------------------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 8 1,447,463 1,398,589
---------------
5,096,754
- --------------------------------------------------------------------------------
FINANCIALS--11.4%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.9%
Credit Suisse First Boston, Inc.
(USA), 5.50% Nts., 8/15/13 2,385,000 2,529,810
- --------------------------------------------------------------------------------
JPMorgan Capital XV,
5.875% Nts., 3/15/35 3 1,695,000 1,745,953
---------------
4,275,763
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.2%
Bank of America Corp., 4.875%
Sr. Unsec. Nts., 1/15/13 33,000 33,905
- --------------------------------------------------------------------------------
Barclays Bank plc, 6.278%
Perpetual Bond 9 1,890,000 1,930,635
- --------------------------------------------------------------------------------
Mellon Bank NA, 4.75%
Unsec. Sub. Nts., 12/15/14 1,920,000 1,952,406
- --------------------------------------------------------------------------------
National City Bank, 6.20%
Sub. Nts., 12/15/11 178,000 195,774
- --------------------------------------------------------------------------------
SunTrust Banks, Inc.:
4% Nts., 10/15/08 1,370,000 1,363,635
7.75% Unsec. Sub. Nts., 5/1/10 123,000 141,341
---------------
5,617,696
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.5%
HSBC Finance Corp., 4.75% Sr.
Unsec. Nts., 7/15/13 2,495,000 2,502,899
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.5%
American Express Centurion
Bank, 4.375% Nts., 7/30/09 950,000 957,790
- --------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec.
Unsub. Nts., 4/2/12 930,000 1,092,202
- --------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec.
Sub. Nts., 6/15/32 2,170,000 2,599,332
- --------------------------------------------------------------------------------
Franklin Resources, Inc.,
3.70% Nts., 4/15/08 1,430,000 1,408,969
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The),
5.70% Sr. Unsec. Nts., 9/1/12 2,310,000 2,461,506
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
7% Nts., 2/1/08 3 1,660,000 1,773,428
- --------------------------------------------------------------------------------
Lehman Brothers, Inc.,
6.625% Sr. Sub. Nts., 2/15/08 262,000 277,766
- --------------------------------------------------------------------------------
MBNA Corp., 7.50% Sr. Nts.,
Series F, 3/15/12 1,810,000 2,112,580
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.,
5% Sr. Unsub. Nts., Series C, 2/3/14 2,470,000 2,534,867
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Morgan Stanley, 6.60% Nts., 4/1/12 $ 1,130,000 $ 1,258,064
---------------
16,476,504
- --------------------------------------------------------------------------------
INSURANCE--3.0%
Allstate Financial Global
Funding LLC, 4.25% Nts., 9/10/08 8 520,000 521,953
- --------------------------------------------------------------------------------
Allstate Life Global Funding II,
3.50% Nts., 7/30/07 710,000 701,958
- --------------------------------------------------------------------------------
John Hancock Global Funding II,
7.90% Nts., 7/2/10 8 2,554,000 2,973,239
- --------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc.,
5.875% Sr. Unsec. Bonds, 8/1/33 1,580,000 1,511,005
- --------------------------------------------------------------------------------
MetLife, Inc., 5% Nts., 6/15/15 3 780,000 793,139
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc.,
5.90% Nts., 7/1/12 990,000 1,070,724
- --------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695%
Bonds, Series C, 12/18/23 8 1,885,000 2,497,029
- --------------------------------------------------------------------------------
Prudential Insurance Co. of
America, 8.30% Nts., 7/1/25 1,885,000 2,521,825
- --------------------------------------------------------------------------------
Travelers Property Casualty Corp.,
3.75% Sr. Unsec. Nts., 3/15/08 1,830,000 1,802,989
---------------
14,393,861
- --------------------------------------------------------------------------------
REAL ESTATE--2.0%
EOP Operating LP, 8.10% Unsec.
Nts., 8/1/10 1,700,000 1,961,100
- --------------------------------------------------------------------------------
iStar Financial, Inc., 4.875% Sr.
Unsec. Nts., Series B, 1/15/09 1,830,000 1,826,887
- --------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr.
Nts., 8/15/14 1,330,000 1,398,266
- --------------------------------------------------------------------------------
Simon Property Group LP:
5.45% Unsec. Nts., 3/15/13 3 965,000 1,005,557
5.625% Unsec. Unsub. Nts., 8/15/14 3 885,000 924,609
- --------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr.
Unsec. Unsub. Nts., 6/15/07 2,630,000 2,681,887
---------------
9,798,306
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.3%
Countrywide Financial Corp., 4.50%
Nts., Series A, 6/15/10 1,265,000 1,264,823
- --------------------------------------------------------------------------------
HEALTH CARE--1.4%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.4%
Aetna, Inc., 7.375% Sr. Unsec. Nts.,
3/1/06 2,730,000 2,787,406
- --------------------------------------------------------------------------------
CIGNA Corp.:
7% Sr. Unsec. Nts., 1/15/11 805,000 903,323
7.40% Unsec. Nts., 5/15/07 1,625,000 1,714,832
- --------------------------------------------------------------------------------
HCA, Inc., 7.125% Sr. Unsec. Nts.,
6/1/06 471,000 483,452
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc., 4.875%
Bonds, 3/15/15 609,000 623,129
---------------
6,512,142
12 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIALS--2.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.7%
Boeing Capital Corp.,
5.75% Sr. Nts., 2/15/07 $ 452,000 $ 464,307
- --------------------------------------------------------------------------------
Lockheed Martin Corp.:
7.65% Unsec. Unsub. Debs., 5/1/16 770,000 958,860
8.50% Bonds, 12/1/29 325,000 470,821
- --------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125%
Sr. Nts., 2/15/11 1,440,000 1,630,484
---------------
3,524,472
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.6%
FedEx Corp., 2.65% Unsec. Nts.,
4/1/07 2,975,000 2,898,694
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.6%
Allied Waste North America, Inc.,
8.875% Sr. Nts., Series B, 4/1/08 3 1,330,000 1,403,150
- --------------------------------------------------------------------------------
Waste Management, Inc.:
6.875% Sr. Unsec. Nts., 5/15/09 400,000 433,424
7% Sr. Nts., 7/15/28 920,000 1,070,317
---------------
2,906,891
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.6%
Tyco International Group SA:
6.375% Sr. Unsec. Unsub. Nts.,
2/15/06 1,895,000 1,920,634
6.75% Sr. Unsub. Nts., 2/15/11 3 975,000 1,083,624
---------------
3,004,258
- --------------------------------------------------------------------------------
ROAD & RAIL--0.4%
Canadian National Railway Co.,
4.25% Nts., 8/1/09 3 358,000 358,030
- --------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts.,
10/15/08 1,247,000 1,319,198
---------------
1,677,228
- --------------------------------------------------------------------------------
MATERIALS--0.1%
- --------------------------------------------------------------------------------
METALS & MINING--0.1%
Ford Motor Credit Co., 6.25%
Unsec. Nts., 12/8/05 715,000 718,510
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.4%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.0%
British Telecommunications plc,
8.875% Bonds, 12/15/30 1,070,000 1,515,098
- --------------------------------------------------------------------------------
Citizens Communications Co.,
9.25% Sr. Nts., 5/15/11 989,000 1,108,916
- --------------------------------------------------------------------------------
Deutsche Telekom International
Finance BV, 8.50% Unsub. Nts.,
6/15/10 1,460,000 1,693,799
- --------------------------------------------------------------------------------
France Telecom SA:
8% Sr. Unsec. Nts., 3/1/11 2 1,120,000 1,301,246
8.75% Sr. Unsec. Nts., 3/1/31 2 370,000 517,473
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Sprint Capital Corp.,
8.75% Nts., 3/15/32 $ 1,455,000 $ 2,030,397
- --------------------------------------------------------------------------------
Telefonos de Mexico SA de CV,
4.75% Nts., 1/27/10 8 1,260,000 1,265,242
---------------
9,432,171
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
AT&T Wireless Services, Inc.,
8.125% Sr. Unsec. Nts., 5/1/12 1,685,000 2,021,599
- --------------------------------------------------------------------------------
UTILITIES--4.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.5%
CenterPoint Energy, Inc.:
7.25% Sr. Nts., Series B, 9/1/10 1,295,000 1,438,394
8.125% Unsec. Nts., Series B, 7/15/05 530,000 530,558
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc.,
7% Unsec. Nts., 4/1/12 1,720,000 1,942,922
- --------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125%
Sr. Unsub. Nts., 6/15/10 990,000 1,141,847
- --------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub.
Nts., 6/1/06 725,000 739,978
- --------------------------------------------------------------------------------
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts.,
Series A, 11/15/06 995,000 1,012,376
7.375% Sr. Unsub. Nts.,
Series C, 11/15/31 1,140,000 1,398,008
- --------------------------------------------------------------------------------
IPALCO Enterprises, Inc.,
8.375% Sr. Sec. Nts., 11/14/08 1,2 1,180,000 1,277,350
- --------------------------------------------------------------------------------
MidAmerican Energy Holdings Co.,
5.875% Sr. Unsec. Nts., 10/1/12 2,005,000 2,132,889
- --------------------------------------------------------------------------------
Portland General Electric Co.,
8.125% First Mortgage Nts., 2/1/10 8 1,040,000 1,189,714
- --------------------------------------------------------------------------------
PSE&G Energy Holdings LLC,
7.75% Unsec. Nts., 4/16/07 1,3 1,575,000 1,634,063
- --------------------------------------------------------------------------------
PSE&G Power LLC, 6.875%
Sr. Unsec. Nts., 4/15/06 3 355,000 362,437
- --------------------------------------------------------------------------------
TXU Corp., 6.55% Nts., 11/15/34 3,8 1,585,000 1,564,588
---------------
16,365,124
- --------------------------------------------------------------------------------
GAS UTILITIES--0.6%
NiSource Finance Corp., 7.875%
Sr. Unsec. Nts., 11/15/10 1,590,000 1,829,052
- --------------------------------------------------------------------------------
Sempra Energy, 7.95% Sr. Unsec.
Unsub. Nts., 3/1/10 990,000 1,125,320
---------------
2,954,372
---------------
Total Corporate Bonds and Notes
(Cost $169,597,510) 173,031,275
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 10
(Cost $14,872) 5,408 2,001
13 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.1%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $492,553) $ 492,553 $ 492,553
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments Purchased
with Cash Collateral from Securities
Loaned) (Cost $650,271,803) 651,143,800
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH
COLLATERAL FROM SECURITIES LOANED--5.4%
- --------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTE--0.6%
Trust Money Market Securities,
Series A-2, 3.295%, 7/15/05 11 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Whitehawk CDO Funding Corp.,
3.48%, 9/15/05 11 1,500,000 1,500,000
---------------
2,500,000
- --------------------------------------------------------------------------------
FUNDING AGREEMENT/GIC--0.2%
Allstate Life Insurance,
3.301%, 7/1/05 11 1,000,000 1,000,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.1%
Undivided interest of 0.14% in joint repurchase
agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,386,667) with Nomura Securities, 3.48%,
dated 6/30/05, to be repurchased at $5,591,440
on 7/1/05, collateralized by U.S. Agency
Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value
of $4,160,000,001 11 5,590,900 5,590,900
- --------------------------------------------------------------------------------
Undivided interest of 0.35% in joint repurchase
agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,385,278) with Nomura Securities, 3.4675%,
dated 6/30/05, to be repurchased at $14,001,348
on 7/1/05, collateralized by U.S. Agency
Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value
of $4,160,000,001 11 14,000,000 14,000,000
---------------
19,590,900
- --------------------------------------------------------------------------------
MASTER FLOATING NOTE--0.5%
Bear Stearns, 3.618%, 7/1/05 11 2,500,000 2,500,000
---------------
Total Investments Purchased with
Cash Collateral from Securities
Loaned (Cost $25,590,900) 25,590,900
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $675,862,703) 142.1% 676,734,700
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (42.1) (200,400,320)
---------------------------------
NET ASSETS 100.0% $ 476,334,380
=================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Illiquid security. The aggregate value of illiquid securities as of June 30,
2005 was $25,081,393, which represents 5.27% of the Fund's net assets. See Note
7 of Notes to Financial Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Partial or fully-loaned security--See Note 8 of Notes to Financial
Statements.
4. When-issued security or forward commitment to be delivered and settled after
June 30, 2005. See Note 1 of Notes to Financial Statements.
5. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $15,728,400 or 3.30% of the Fund's net assets
as of June 30, 2005.
6. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $1,169,519 or 0.25% of the Fund's net assets as of
June 30, 2005.
7. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $1,985,168. See Note 5 of Notes to Financial
Statements.
8. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $12,969,492 or 2.72% of the Fund's net
assets as of June 30, 2005.
9. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest.
10. Non-income producing security.
11. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 8 of Notes to Financial
Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- -------------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $35,798,414) (cost $675,862,703)--
see accompanying statement of investments $ 676,734,700
- -------------------------------------------------------------------------------------------------------------------------
Collateral for securities loaned 10,761,425
- -------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 28,172
- -------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $57,878,558 sold on a when-issued basis or forward commitment) 65,855,203
Interest and principal paydowns 4,523,316
Shares of beneficial interest sold 69,706
Futures margins 47,970
Other 13,594
---------------
Total assets 758,034,086
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 36,352,325
- -------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $239,188,415 purchased on a when-issued basis or forward commitment) 244,770,931
Shares of beneficial interest redeemed 493,726
Shareholder communications 42,705
Trustees' compensation 15,047
Distribution and service plan fees 3,844
Transfer and shareholder servicing agent fees 895
Other 20,233
---------------
Total liabilities 281,699,706
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 476,334,380
===============
- -------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 42,638
- -------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 493,279,089
- -------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 9,948,144
- -------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (28,395,461)
- -------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 1,459,970
---------------
NET ASSETS $ 476,334,380
===============
- -------------------------------------------------------------------------------------------------------------------------
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
$469,128,469 and 41,990,954 shares of beneficial interest outstanding) $ 11.17
- -------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$7,205,911 and 646,563 shares of beneficial interest outstanding) $ 11.14
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------------------
Interest $ 11,032,725
- -------------------------------------------------------------------------------------------------------------------------
Fee income 1,830,826
- -------------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 37,342
---------------
Total investment income 12,900,893
- -------------------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------------------
Management fees 1,764,493
- -------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 6,435
- -------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,208
Service shares 35
- -------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 20,195
Service shares 212
- -------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 10,766
- -------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,085
- -------------------------------------------------------------------------------------------------------------------------
Other 19,801
---------------
Total expenses 1,834,230
Less reduction to custodian expenses (9,636)
---------------
Net expenses 1,824,594
- -------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 11,076,299
- -------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (54,353)
Closing of futures contracts 2,655,900
Swap contracts (10,167)
---------------
Net realized gain 2,591,380
- -------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (2,142,064)
Futures contracts (155,071)
Swap contracts 45,833
---------------
Net change in unrealized appreciation (2,251,302)
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 11,416,377
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER CORE BOND FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income $ 11,076,299 $ 21,186,973
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain 2,591,380 15,136,520
- -------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (2,251,302) (7,471,728)
-------------------------------
Net increase in net assets resulting from operations 11,416,377 28,851,765
- -------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (24,996,468) (27,226,980)
Service shares (231,902) (159,134)
- -------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (21,399,668) (115,482,453)
Service shares 3,797,306 (303,187)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Total decrease (31,414,355) (114,319,989)
- -------------------------------------------------------------------------------------------------------------------------
Beginning of period 507,748,735 622,068,724
--------------------------------
End of period (including accumulated net investment income of $9,948,144
and $24,100,215, respectively) $ 476,334,380 $ 507,748,735
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER CORE BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.50 $ 11.42 $ 11.31 $ 11.21 $ 11.25 $ 11.52
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 1 .43 1 .51 .65 .81 .94
Net realized and unrealized gain (loss) .01 .18 .23 .27 .03 (.29)
Payment from affiliate -- -- -- .01 -- --
--------------------------------------------------------------------------------
Total from investment operations .26 .61 .74 .93 .84 .65
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.59) (.53) (.63) (.83) (.88) (.92)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.17 $ 11.50 $ 11.42 $ 11.31 $ 11.21 $ 11.25
================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN AT NET ASSET VALUE 2 2.40% 5.49% 6.78% 9.02% 7.79% 6.10%
- ------------------------------------------------------------------------------------------------------------------------------------
Total return before payment from affiliate 3 N/A N/A N/A 8.93% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 469,128 $ 504,244 $ 618,234 $ 724,787 $ 693,701 $ 562,345
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 484,217 $ 552,293 $ 691,931 $ 686,932 $ 638,820 $ 557,873
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income before payment from
affiliate 4.57% 3.82% 4.03% 5.91% 3 7.93% 7.94%
Net investment income after payment from
affiliate N/A N/A N/A 6.07% N/A N/A
Total expenses 0.75% 5 0.75% 5 0.73% 5 0.73% 5 0.77% 5 0.76% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 56% 6 95% 6 101% 157% 186% 260%
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. The Manager voluntarily reimbursed the Class $1,107,704 from an error in the
calculation of the Fund's net asset value per share.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------------------
Six Months Ended June 30, 2005 $ 1,467,274,534 $ 1,439,060,750
Year Ended December 31, 2004 2,841,348,053 2,925,500,296
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER CORE BOND FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 1
- -------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.47 $ 11.39 $ 11.30 $ 10.46
- -------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .24 2 .40 2 .43 .11
Net realized and unrealized gain -- 3 .18 .28 .72
Payment from affiliate -- -- -- .01
-----------------------------------------------------------
Total from investment operations .24 .58 .71 .84
- -------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.57) (.50) (.62) --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.14 $ 11.47 $ 11.39 $ 11.30
===========================================================
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETURN AT NET ASSET VALUE 4 2.24% 5.22% 6.56% 8.03%
- -------------------------------------------------------------------------------------------------------------------
Total return before payment from affiliate 5 N/A N/A N/A 7.94%
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 7,206 $ 3,505 $ 3,835 $ 2,435
- -------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 5,212 $ 3,002 $ 3,903 $ 834
- -------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 6
Net investment income before payment from affiliate 4.32% 3.55% 3.73% 4.37% 5
Net investment income after payment from affiliate N/A N/A N/A 5.04%
Total expenses 1.00% 7 0.99% 7 0.98% 7 0.98% 7,8
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 56% 9 95% 9 101% 157%
1. For the period from May 1, 2002 (inception of offering) to December 31, 2002.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005.
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. The Manager voluntarily reimbursed the Class $3,723 from an error in the
calculation of the Fund's net asset value per share.
6. Annualized for periods of less than one full year.
7. Reduction to custodian expenses less than 0.01%.
8. Voluntary waiver of transfer agent fees less than 0.01%.
9. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- ----------------------------------------------------------------------------
Six Months Ended June 30, 2005 $ 1,467,274,534 $ 1,439,060,750
Year Ended December 31, 2004 2,841,348,053 2,925,500,296
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Core Bond Fund/VA (the Fund), formerly Oppenheimer Bond Fund/VA, 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 main investment objective is to seek a high level
of current income. As a secondary objective, the Fund seeks capital appreciation
when consistent with its primary objective. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of June 30, 2005, the Fund had purchased $239,188,415
of securities issued on a when-issued basis or forward commitment and sold
$57,878,558 of securities issued on a when-issued basis or forward commitment.
20 | OPPENHEIMER CORE BOND FUND/VA
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $27,629,574. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$2,591,380 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2004, the Fund utilized $9,566,561 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
post-October losses of $335,400 and unused capital loss carryforward as follows:
EXPIRING
--------------------------
2010 $ 29,885,554
21 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 544,995 $ 6,142,695 1,867,203 $ 21,055,436
Dividends and/or distributions reinvested 2,291,151 24,996,468 2,424,486 27,226,980
Redeemed (4,675,996) (52,538,831) (14,578,269) (163,764,869)
-----------------------------------------------------------------
Net decrease (1,839,850) $(21,399,668) (10,286,580) $(115,482,453)
=================================================================
22 | OPPENHEIMER CORE BOND FUND/VA
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 349,436 $ 3,895,552 132,217 $ 1,497,198
Dividends and/or distributions reinvested 21,294 231,902 14,183 159,134
Redeemed (29,644) (330,148) (177,573) (1,959,519)
-----------------------------------------------------------------
Net increase (decrease) 341,086 $ 3,797,306 (31,173) $ (303,187)
=================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended June 30, 2005, were $239,020,599 and $224,207,935, respectively. There
were purchases of $51,038,461 and sales of $35,225,669 of U.S. government and
government agency obligations for the six months ended June 30, 2005. In
addition, there were purchases of $1,467,274,534 and sales of $1,439,060,750 of
To Be Announced (TBA) mortgage-related securities for the six months ended June
30, 2005.
- --------------------------------------------------------------------------------
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 $200 million and 0.50% of average annual
net assets over $1 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 six months ended June 30, 2005, the Fund paid
$5,221 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 per annum 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, 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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.
23 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of June 30, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2005 (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 9/21/05 348 $ 41,325,000 $ 781,245
-----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 9/30/05 702 145,796,625 (42,874)
U.S. Treasury Nts., 5 yr. 9/21/05 356 38,765,063 (66,367)
U.S. Treasury Nts., 10 yr. 9/21/05 205 23,261,094 (112,204)
-----------
(221,445)
-----------
$ 559,800
===========
- --------------------------------------------------------------------------------
6. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termination or
settlement. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
24 | OPPENHEIMER CORE BOND FUND/VA
As of June 30, 2005, the Fund had entered into the following total return swap
agreements:
PAID BY RECEIVED BY
NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED
SWAP COUNTERPARTY AMOUNT JUNE 30, 2005 JUNE 30, 2005 DATE APPRECIATION
- ---------------------------------------------------------------------------------------------------------------------
One-Month
UBS AG $ 9,190,000 LIBOR Minus 0.25% 1.51% 12/1/05 $ 28,172
Index abbreviations are as follows:
LIBOR London-Interbank Offered Rate
- --------------------------------------------------------------------------------
7. ILLIQUID SECURITIES
As of June 30, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
8. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of June 30, 2005, the
Fund had on loan securities valued at $35,798,414. Collateral of $36,352,325 was
received for the loans, of which $25,590,900 was received in cash and
subsequently invested in approved instruments.
- --------------------------------------------------------------------------------
9. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
25 | OPPENHEIMER CORE BOND FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
26 | OPPENHEIMER CORE BOND FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory
agreement for the current year, the Board evaluated the nature and extent of the
services provided by the Manager and its affiliates. The Manager provides the
Fund with office space, facilities and equipment; administrative, accounting,
clerical, legal and compliance personnel; securities trading services and
oversight of third party service providers and the services of the portfolio
managers and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality
of the portfolio management services to be provided, the Board considered the
experience of the Fund's portfolio managers and the Manager's fixedincome
investment team and analysts. The Fund has been managed by a portfolio
management team comprised of Angelo Manioudakis, Benjamin Gord, Charles Moon,
Geoffrey Caan and Antulio N. Bomfim. Messrs. Manioudakis, Gord and Moon have
been portfolio managers of the Fund since April 2002 and Messrs Caan and Bomfim
have been portfolio managers of the Fund since 2003. Mr. Manioudakis is a Senior
Vice President of the Manager and Messrs. Gord, Moon, Caan and Bomfim are each
Vice Presidents of the Manager. Messrs. Manioudakis, Gord, Caan, Moon and Bomfim
have each had between 10 and 15 years of experience managing fixed-income
investments.
The Board also reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other A-rated corporate debt funds
(including both funds advised by the Manager and funds advised by other
investment advisers). The Board also receives and reviews comparative
performance information regarding the Fund and other funds at each Board
meeting. The Board noted that the Fund's five-year and ten-year performance was
slightly below its peer group average. However, its one-year and three-year
performance was better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including
comparative information, regarding the fees paid to the Manager and its
affiliates and the other expenses borne by the Fund. The independent consultant
provided comparative data in regard to the fees and expenses of the Fund, other
A-rated corporate debt and BBB-rated corporate debt funds and other funds with
comparable assets levels and distribution features. The Board noted that the
Fund's contractual and actual management fees are higher than its peer group
average and its total
27 | OPPENHEIMER CORE BOND FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
expenses are slightly higher than its peer group average. The Board determined
to allow the Manager to provide recommendations for reduction of Fund expenses,
and recognized that the Manager already waives a portion of the transfer agency
fees for the Fund if those expenses exceed a certain amount for a class of
shares. In addition, the Board evaluated the comparability of the fees charged
and the services provided to the Fund to the fees charged and services provided
to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information
regarding the cost of services provided by the Manager and its affiliates and
the Manager's profitability. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders. In addition the Board considered
information that was provided regarding the direct and indirect benefits the
Manager receives as a result of its relationship with the Fund, including
compensation paid to the Manager's affiliates
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has not experienced any
recent asset growth and that, based on current asset levels, the Fund is not yet
approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are both independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described
above, the Board, including a majority of the independent Trustees, concluded
that the nature, extent and quality of the services provided to the Fund by the
Manager are a benefit to the Fund and in the best interest of the Fund's
shareholders and that the amount and structure of the compensation received by
the Manager and its affiliates are reasonable in relation to the services
provided. Accordingly, the Board elected to continue the investment advisory
agreement for another year. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
28 | OPPENHEIMER CORE BOND FUND/VA
CAPITAL APPRECIATION FUND/VA
SEMIANNUAL
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 977.30 $3.24
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.52 3.31
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 976.50 4.47
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.28 4.57
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------------
Non-Service shares 0.66%
- ---------------------------------------
Service shares 0.91
- --------------------------------------------------------------------------------
5 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------
COMMON STOCKS--97.6%
- ----------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.7%
- ----------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.5%
Carnival Corp. 400,800 $ 21,863,640
- ----------------------------------------------------------------------------------------------
McDonald's Corp. 345,800 9,595,950
- ----------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd. 320,400 15,494,544
----------------
46,954,134
- ----------------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--1.3%
eBay, Inc. 1 780,900 25,777,509
- ----------------------------------------------------------------------------------------------
MEDIA--9.8%
Clear Channel Communications, Inc. 235,800 7,293,294
- ----------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special, Non-Vtg. 1 2,003,500 60,004,825
- ----------------------------------------------------------------------------------------------
News Corp., Inc., Cl. B 966,900 16,301,934
- ----------------------------------------------------------------------------------------------
Time Warner, Inc. 1 2,288,900 38,247,519
- ----------------------------------------------------------------------------------------------
Univision Communications, Inc., Cl. A 1 393,165 10,831,696
- ----------------------------------------------------------------------------------------------
Viacom, Inc., Cl. B 1,152,400 36,899,848
- ----------------------------------------------------------------------------------------------
Walt Disney Co. (The) 717,000 18,054,060
----------------
187,633,176
- ----------------------------------------------------------------------------------------------
MULTILINE RETAIL--2.1%
Federated Department Stores, Inc. 198,100 14,516,768
- ----------------------------------------------------------------------------------------------
J.C. Penney Co., Inc. (Holding Co.) 261,400 13,744,412
- ----------------------------------------------------------------------------------------------
Target Corp. 223,000 12,133,430
----------------
40,394,610
- ----------------------------------------------------------------------------------------------
SPECIALTY RETAIL--3.0%
Best Buy Co., Inc. 274,300 18,803,265
- ----------------------------------------------------------------------------------------------
Home Depot, Inc. 394,100 15,330,490
- ----------------------------------------------------------------------------------------------
Lowe's Cos., Inc. 176,100 10,252,542
- ----------------------------------------------------------------------------------------------
Staples, Inc. 71,500 1,524,380
- ----------------------------------------------------------------------------------------------
Williams-Sonoma, Inc. 1 266,200 10,533,534
----------------
56,444,211
- ----------------------------------------------------------------------------------------------
CONSUMER STAPLES--5.8%
- ----------------------------------------------------------------------------------------------
BEVERAGES--1.8%
PepsiCo, Inc. 644,100 34,736,313
- ----------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.2%
Costco Wholesale Corp. 177,600 7,960,032
- ----------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 699,500 33,715,900
----------------
41,675,932
- ----------------------------------------------------------------------------------------------
FOOD PRODUCTS--0.1%
Campbell Soup Co. 75,200 2,313,904
- ----------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.6%
Procter & Gamble Co. (The) 577,400 30,457,850
- ----------------------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.1%
Estee Lauder Cos., Inc. (The), Cl. A 17,400 680,862
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------
ENERGY--6.3%
- ----------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.9%
GlobalSantaFe Corp. 271,300 $ 11,069,040
- ----------------------------------------------------------------------------------------------
Pride International, Inc. 1 76,000 1,953,200
- ----------------------------------------------------------------------------------------------
Schlumberger Ltd. 367,200 27,885,168
- ----------------------------------------------------------------------------------------------
Smith International, Inc. 61,400 3,911,180
- ----------------------------------------------------------------------------------------------
Transocean, Inc. 1 209,500 11,306,715
----------------
56,125,303
- ----------------------------------------------------------------------------------------------
OIL & GAS--3.4%
Apache Corp. 46,300 2,990,980
- ----------------------------------------------------------------------------------------------
Exxon Mobil Corp. 859,400 49,389,718
- ----------------------------------------------------------------------------------------------
Kinder Morgan Management LLC 258,619 11,896,474
- ----------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 7,500 576,975
----------------
64,854,147
- ----------------------------------------------------------------------------------------------
FINANCIALS--8.5%
- ----------------------------------------------------------------------------------------------
COMMERCIAL BANKS--0.6%
Bank of America Corp. 256,400 11,694,404
- ----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.2%
American Express Co. 490,800 26,125,284
- ----------------------------------------------------------------------------------------------
Citigroup, Inc. 1,099,300 50,820,639
- ----------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 175,000 17,853,500
- ----------------------------------------------------------------------------------------------
JPMorgan Chase & Co. 376,028 13,281,309
- ----------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 61,200 6,075,936
- ----------------------------------------------------------------------------------------------
Morgan Stanley 66,200 3,473,514
----------------
117,630,182
- ----------------------------------------------------------------------------------------------
INSURANCE--1.7%
American International Group, Inc. 198,550 11,535,755
- ----------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The) 64,200 4,800,876
- ----------------------------------------------------------------------------------------------
Prudential Financial, Inc. 245,700 16,132,662
----------------
32,469,293
- ----------------------------------------------------------------------------------------------
HEALTH CARE--17.5%
- ----------------------------------------------------------------------------------------------
BIOTECHNOLOGY--3.3%
Amgen, Inc. 1 562,500 34,008,750
- ----------------------------------------------------------------------------------------------
Genentech, Inc. 1 242,100 19,435,788
- ----------------------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 204,300 8,987,157
----------------
62,431,695
- ----------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--4.9%
Medtronic, Inc. 787,700 40,794,983
- ----------------------------------------------------------------------------------------------
Millipore Corp. 1 291,200 16,519,776
- ----------------------------------------------------------------------------------------------
PerkinElmer, Inc. 407,400 7,699,860
- ----------------------------------------------------------------------------------------------
Stryker Corp. 382,400 18,186,944
- ----------------------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1 165,200 6,166,916
- ----------------------------------------------------------------------------------------------
Waters Corp. 1 126,000 4,683,420
----------------
94,051,899
6 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.7%
Aetna, Inc. 140,000 $ 11,594,800
- ----------------------------------------------------------------------------------------------
Laboratory Corp. of America Holdings 1 77,300 3,857,270
- ----------------------------------------------------------------------------------------------
UnitedHealth Group, Inc. 323,800 16,882,932
----------------
32,335,002
- ----------------------------------------------------------------------------------------------
PHARMACEUTICALS--7.6%
Abbott Laboratories 254,000 12,448,540
- ----------------------------------------------------------------------------------------------
Eli Lilly & Co. 125,600 6,997,176
- ----------------------------------------------------------------------------------------------
Johnson & Johnson 692,700 45,025,500
- ----------------------------------------------------------------------------------------------
Merck & Co., Inc. 403,867 12,439,104
- ----------------------------------------------------------------------------------------------
Novartis AG 497,588 23,704,836
- ----------------------------------------------------------------------------------------------
Pfizer, Inc. 804,400 22,185,352
- ----------------------------------------------------------------------------------------------
Teva Pharmaceutical Industries Ltd., Sponsored ADR 707,396 22,028,311
----------------
144,828,819
- ----------------------------------------------------------------------------------------------
INDUSTRIALS--13.4%
- ----------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.8%
Empresa Brasileira de Aeronautica SA, ADR 325,000 10,747,750
- ----------------------------------------------------------------------------------------------
General Dynamics Corp. 52,500 5,750,850
- ----------------------------------------------------------------------------------------------
Honeywell International, Inc. 246,800 9,040,284
- ----------------------------------------------------------------------------------------------
L-3 Communications Holdings, Inc. 159,300 12,199,194
- ----------------------------------------------------------------------------------------------
Lockheed Martin Corp. 284,300 18,442,541
- ----------------------------------------------------------------------------------------------
United Technologies Corp. 325,400 16,709,290
----------------
72,889,909
- ----------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--1.5%
Expeditors International of Washington, Inc. 180,500 8,990,705
- ----------------------------------------------------------------------------------------------
FedEx Corp. 247,800 20,074,278
----------------
29,064,983
- ----------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.6%
Waste Management, Inc. 366,400 10,383,776
- ----------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--6.7%
3M Co. 295,400 21,357,420
- ----------------------------------------------------------------------------------------------
General Electric Co. 2,638,000 91,406,700
- ----------------------------------------------------------------------------------------------
Tyco International Ltd. 542,700 15,846,840
----------------
128,610,960
- ----------------------------------------------------------------------------------------------
MACHINERY--0.8%
Ingersoll-Rand Co., Cl. A 208,800 14,897,880
- ----------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--23.8%
- ----------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--4.7%
Cisco Systems, Inc. 1 2,424,800 46,337,928
- ----------------------------------------------------------------------------------------------
Lucent Technologies, Inc. 2,049,300 5,963,463
- ----------------------------------------------------------------------------------------------
Motorola, Inc. 805,000 14,699,300
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Nokia Corp., Sponsored ADR 1,008,100 $ 16,774,784
- ----------------------------------------------------------------------------------------------
QUALCOMM, Inc. 166,500 5,496,165
----------------
89,271,640
- ----------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--3.2%
Dell, Inc. 1 458,700 18,123,237
- ----------------------------------------------------------------------------------------------
EMC Corp. 1 414,400 5,681,424
- ----------------------------------------------------------------------------------------------
International Business
Machines Corp. 449,300 33,338,060
- ----------------------------------------------------------------------------------------------
Sun Microsystems, Inc. 1 1,080,400 4,029,892
----------------
61,172,613
- ----------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3%
Agilent Technologies, Inc. 1 453,600 10,441,872
- ----------------------------------------------------------------------------------------------
Ingram Micro, Inc., Cl. A 1 418,200 6,549,012
- ----------------------------------------------------------------------------------------------
Tektronix, Inc. 333,200 7,753,564
----------------
24,744,448
- ----------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.3%
Yahoo!, Inc. 1 714,300 24,750,495
- ----------------------------------------------------------------------------------------------
IT SERVICES--1.0%
Automatic Data Processing, Inc. 451,800 18,962,046
- ----------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.7%
Altera Corp. 1 179,600 3,559,672
- ----------------------------------------------------------------------------------------------
Analog Devices, Inc. 251,600 9,387,196
- ----------------------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 568,100 20,173,231
- ----------------------------------------------------------------------------------------------
Fairchild Semiconductor International, Inc., Cl. A 1 90,200 1,330,450
- ----------------------------------------------------------------------------------------------
Intel Corp. 1,502,600 39,157,756
- ----------------------------------------------------------------------------------------------
Texas Instruments, Inc. 601,500 16,884,105
----------------
90,492,410
- ----------------------------------------------------------------------------------------------
SOFTWARE--7.6%
Adobe Systems, Inc. 614,000 17,572,680
- ----------------------------------------------------------------------------------------------
Autodesk, Inc. 212,500 7,303,625
- ----------------------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 438,000 5,983,080
- ----------------------------------------------------------------------------------------------
Citrix Systems, Inc. 1 214,200 4,639,572
- ----------------------------------------------------------------------------------------------
Mercury Interactive Corp. 1 246,200 9,444,232
- ----------------------------------------------------------------------------------------------
Microsoft Corp. 2,953,200 73,357,488
- ----------------------------------------------------------------------------------------------
SAP AG, Sponsored ADR 629,800 27,270,340
----------------
145,571,017
- ----------------------------------------------------------------------------------------------
MATERIALS--3.0%
- ----------------------------------------------------------------------------------------------
CHEMICALS--3.0%
Air Products & Chemicals, Inc. 258,600 15,593,580
- ----------------------------------------------------------------------------------------------
E.I. DuPont de Nemours & Co. 470,100 20,219,001
- ----------------------------------------------------------------------------------------------
Praxair, Inc. 455,600 21,230,960
----------------
57,043,541
7 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.6%
- ----------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.6%
Sprint Corp. 493,800 $ 12,389,442
----------------
Total Common Stocks (Cost $1,764,436,380) 1,863,734,405
UNITS
- ----------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ----------------------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts., Exp. 12/10/07 1 (Cost $0) 84,120 64,772
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.0%
- ----------------------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $200,057) $ 200,057 200,057
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.7%
- ----------------------------------------------------------------------------------------------
Undivided interest of 2.63% in joint repurchase agreement
(Principal Amount/Value $1,234,399,000, with a maturity
value of $1,234,508,724) with UBS Warburg LLC, 3.20%,
dated 6/30/05, to be repurchased at $32,428,882 on
7/1/05, collateralized by Federal Home Loan Mortgage
Corp., 5.50%, 2/1/35, with a value of
$1,260,871,334 (Cost $32,426,000) $32,426,000 $ 32,426,000
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,797,062,437) 99.3% 1,896,425,234
- ----------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.7 12,507,325
--------------------------------
NET ASSETS 100.0% $ 1,908,932,559
================================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $1,797,062,437)--see accompanying statement of investments $ 1,896,425,234
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 9,920,082
Shares of beneficial interest sold 2,267,059
Interest and dividends 1,668,143
Other 27,450
----------------
Total assets 1,910,307,968
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,065,503
Distribution and service plan fees 171,568
Shareholder communications 81,064
Trustees' compensation 31,253
Transfer and shareholder servicing agent fees 1,823
Other 24,198
----------------
Total liabilities 1,375,409
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,908,932,559
================
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 53,342
- ----------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,080,377,789
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 5,928,325
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (276,781,334)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign
currencies 99,354,437
----------------
NET ASSETS $ 1,908,932,559
================
- ----------------------------------------------------------------------------------------------------------------------------------
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 $1,618,091,054
and 45,170,734 shares of beneficial interest outstanding) $ 35.82
- ----------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of $290,841,505
and 8,170,839 shares of beneficial interest outstanding) $ 35.60
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $250,507) $ 12,012,916
- ----------------------------------------------------------------------------------------------------------------------------------
Interest 609,829
----------------
Total investment income 12,622,745
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------------
Management fees 6,185,332
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 324,875
- ----------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,561
Service shares 5,111
- ----------------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 43,207
Service shares 6,764
- ----------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 23,057
- ----------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 16,706
- ----------------------------------------------------------------------------------------------------------------------------------
Other 28,163
----------------
Total expenses 6,638,776
Less reduction to custodian expenses (13,381)
----------------
Net expenses 6,625,395
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,997,350
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 7,934,519
Foreign currency transactions 485,175
----------------
Net realized gain 8,419,694
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (57,230,765)
Translation of assets and liabilities denominated in foreign currencies (3,378,920)
----------------
Net change in unrealized appreciation (60,609,685)
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (46,192,641)
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,997,350 $ 18,471,549
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain 8,419,694 83,060,536
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (60,609,685) 27,361,213
----------------------------------
Net increase (decrease) in net assets resulting from operations (46,192,641) 128,893,298
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (15,541,862) (5,404,905)
Service shares (1,926,965) (357,596)
- ----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (96,517,444) (53,964,830)
Service shares 50,188,747 114,818,206
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (109,990,165) 183,984,173
- ----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,018,922,724 1,834,938,551
----------------------------------
End of period (including accumulated net investment income of $5,928,325 and
$17,399,802, respectively) $ 1,908,932,559 $ 2,018,922,724
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 36.99 $ 34.70 $ 26.62 $ 36.58 $ 46.63 $ 49.84
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .12 1 .35 1 .12 .11 .18 .27
Net realized and unrealized gain
(loss) (.96) 2.05 8.07 (9.89) (5.86) .02
------------------------------------------------------------------------------------------------
Total from investment
operations (.84) 2.40 8.19 (9.78) (5.68) .29
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.33) (.11) (.11) (.18) (.27) (.06)
Distributions from net realized
gain -- -- -- -- (4.10) (3.44)
------------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.33) (.11) (.11) (.18) (4.37) (3.50)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 35.82 $ 36.99 $ 34.70 $ 26.62 $ 36.58 $ 46.63
================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (2.27)% 6.93% 30.94% (26.86)% (12.58)% (0.23)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 1,618,091 $1,770,273 $ 1,715,240 $ 1,338,769 $ 1,975,345 $ 2,095,803
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,674,002 $1,708,511 $ 1,468,297 $ 1,630,430 $ 2,000,314 $ 1,922,099
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.66% 0.99% 0.39% 0.35% 0.51% 0.66%
Total expenses 0.66% 4 0.66% 4 0.67% 4 0.66% 4 0.68% 4 0.67% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 44% 48% 32% 45% 38%
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.
12 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 36.73 $ 34.53 $ 26.53 $ 36.56 $ 31.66
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .07 2 .29 2 .08 .20 -- 3
Net realized and unrealized gain (loss) (.93) 1.99 8.02 (10.05) 4.90
---------------------------------------------------------------------------------
Total from investment operations (.86) 2.28 8.10 (9.85) 4.90
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.08) (.10) (.18) --
Distributions from net realized gain -- -- -- -- --
---------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.27) (.08) (.10) (.18) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 35.60 $ 36.73 $ 34.53 $ 26.53 $ 36.56
=================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 (2.35)% 6.62% 30.69% (27.09)% 15.51%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 290,842 $ 248,649 $ 119,699 $ 18,260 $ 90
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 264,251 $ 184,273 $ 48,178 $ 6,263 $ 16
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income 0.41% 0.85% 0.14% 0.26% 0.11%
Total expenses 0.91% 6 0.91% 6 0.94% 6 0.81% 6,7 0.81% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 44% 48% 32% 45%
1. For the period from September 18, 2001 (inception of offering) to December
31, 2001.
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%.
7. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Capital Appreciation 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 securities of well-known, established 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
14 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $268,670,496. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$8,419,694 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2004, the Fund utilized $83,521,467 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
-----------------------------
2010 $ 83,313,825
2011 193,776,365
-------------
Total $ 277,090,190
=============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
15 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,538,250 $ 91,568,028 5,578,990 $ 194,357,727
Dividends and/or distributions reinvested 429,927 15,541,862 155,940 5,404,905
Redeemed (5,661,304) (203,627,334) (7,294,682) (253,727,462)
---------------------------------------------------------------
Net decrease (2,693,127) $ (96,517,444) (1,559,752) $ (53,964,830)
===============================================================
- -----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 1,801,984 $ 64,434,678 3,992,696 $ 138,774,693
Dividends and/or distributions reinvested 53,616 1,926,965 10,365 357,596
Redeemed (453,849) (16,172,896) (700,538) (24,314,083)
---------------------------------------------------------------
Net increase 1,401,751 $ 50,188,747 3,302,523 $ 114,818,206
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$358,172,348 and $403,036,588, respectively.
16 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2005, the Fund paid
$10,622 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 per annum 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, 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had no outstanding foreign currency
contracts.
17 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005, and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
18 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
19 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio manager and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that were available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of Jane Putnam and the Manager's Growth Equity
investment team and analysts. Ms. Putnam has had over fifteen years of
experience managing equity investments and been primarily responsible for the
day-to-day management of the Fund's portfolio since 1994. Ms. Putnam has been a
Vice President of the Manager since October 1995 and is an officer of two
portfolios in the OppenheimerFunds complex.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other large-cap core funds (including
both funds advised by the Manager and funds advised by other investment
advisers). The Board also receives and reviews comparative performance
information regarding the Fund and other funds at each Board meeting. The Board
noted that the Fund's one-year performance was slightly below its peer group
average. However, its three-year, five-year and ten-year performance was better
than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other large-cap core funds and other funds with comparable assets levels
and distribution features. The Board noted that the Fund's management fees and
total expenses are both lower than its peer group average. In addition, the
Board evaluated the comparability of the fees charged and the services provided
to the Fund to the fees charged and services provided to other types of entities
advised by the Manager.
20 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates and research
provided to the Manager in connection with permissible brokerage arrangements
(soft dollar arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has recently experienced
modest asset growth and that, based on current asset levels, the Fund has passed
its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light
of all of the surrounding circumstances.
21 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
GLOBAL SECURITIES FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 996.80 $3.32
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.47 3.36
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 995.80 4.56
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.23 4.62
- --------------------------------------------------------------------------------
Class 3 shares Actual 1,000.00 996.80 3.32
- --------------------------------------------------------------------------------
Class 3 shares Hypothetical 1,000.00 1,021.47 3.36
- --------------------------------------------------------------------------------
Class 4 shares Actual 1,000.00 995.60 4.66
- --------------------------------------------------------------------------------
Class 4 shares Hypothetical 1,000.00 1,020.13 4.72
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------
Non-Service shares 0.67%
- ----------------------------------
Service shares 0.92
- ----------------------------------
Class 3 shares 0.67
- ----------------------------------
Class 4 shares 0.94
- --------------------------------------------------------------------------------
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.7%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.8%
- --------------------------------------------------------------------------------
AUTOMOBILES--1.3%
Porsche AG, Preferred 18,742 $ 14,046,939
- --------------------------------------------------------------------------------
Toyota Motor Corp. 548,000 19,615,544
----------------
33,662,483
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.6%
Carnival Corp. 212,600 11,597,330
- --------------------------------------------------------------------------------
International Game Technology 622,600 17,526,190
- --------------------------------------------------------------------------------
Starbucks Corp. 1 274,600 14,185,836
----------------
43,309,356
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--2.1%
Koninklijke (Royal) Philips
Electronics NV 1,135,600 28,556,243
- --------------------------------------------------------------------------------
Sony Corp. 815,300 28,080,840
----------------
56,637,083
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--1.7%
Amazon.com, Inc. 1 231,500 7,658,020
- --------------------------------------------------------------------------------
eBay, Inc. 1 938,300 30,973,283
- --------------------------------------------------------------------------------
Great Universal Stores (The) plc 410,200 6,448,668
----------------
45,079,971
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.4%
Nikon Corp. 979,915 11,038,652
- --------------------------------------------------------------------------------
MEDIA--6.0%
Grupo Televisa SA, Sponsored GDR 354,499 22,010,843
- --------------------------------------------------------------------------------
JC Decaux SA 1 408,864 10,365,831
- --------------------------------------------------------------------------------
Pearson plc 1,410,238 16,543,656
- --------------------------------------------------------------------------------
Reed Elsevier plc 1,181,636 11,281,511
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 4,779,840 12,191,661
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 6,535,162 42,347,850
- --------------------------------------------------------------------------------
Television Broadcasts Ltd. 3,444,832 19,460,575
- --------------------------------------------------------------------------------
WPP Group plc 886,660 9,095,718
- --------------------------------------------------------------------------------
Zee Telefilms Ltd. 4,795,700 17,164,138
----------------
160,461,783
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--3.9%
Circuit City Stores, Inc./
Circuit City Group 674,549 11,662,952
- --------------------------------------------------------------------------------
Gap, Inc. (The) 429,100 8,474,725
- --------------------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 1,506,800 53,043,773
- --------------------------------------------------------------------------------
Industria de Diseno Textil SA 1 253,500 6,528,160
- --------------------------------------------------------------------------------
New Dixons Group plc 6,242,695 17,506,189
- --------------------------------------------------------------------------------
Tiffany & Co. 200,100 6,555,276
----------------
103,771,075
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.8%
Coach, Inc. 1 484,100 $ 16,251,237
- --------------------------------------------------------------------------------
LVMH Moet Hennessey
Louis Vuitton 398,690 30,697,398
----------------
46,948,635
- --------------------------------------------------------------------------------
CONSUMER STAPLES--6.6%
- --------------------------------------------------------------------------------
BEVERAGES--1.5%
Companhia de Bebidas das
Americas, ADR 92,703 2,360,218
- --------------------------------------------------------------------------------
Companhia de Bebidas das
Americas, ADR, Preference 463,515 14,322,614
- --------------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 2,353,700 14,062,237
- --------------------------------------------------------------------------------
Grupo Modelo SA de CV, Series C 3,279,000 10,251,356
----------------
40,996,425
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cadbury Schweppes plc 2,748,004 26,159,262
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.6%
Hindustan Lever Ltd. 5,321,600 20,025,618
- --------------------------------------------------------------------------------
Reckitt Benckiser plc 1,644,247 48,310,916
----------------
68,336,534
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.1%
Gillette Co. 421,700 21,350,671
- --------------------------------------------------------------------------------
Shiseido Co. Ltd. 604,000 7,624,200
----------------
28,974,871
- --------------------------------------------------------------------------------
TOBACCO--0.4%
Altria Group, Inc. 110,400 7,138,464
- --------------------------------------------------------------------------------
ITC Ltd. 114,000 4,325,051
----------------
11,463,515
- --------------------------------------------------------------------------------
ENERGY--9.0%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.6%
GlobalSantaFe Corp. 735,100 29,992,080
- --------------------------------------------------------------------------------
Technip SA 574,600 26,673,834
- --------------------------------------------------------------------------------
Transocean, Inc. 1 740,700 39,975,579
----------------
96,641,493
- --------------------------------------------------------------------------------
OIL & GAS--5.4%
BP plc, ADR 335,369 20,920,318
- --------------------------------------------------------------------------------
Burlington Resources, Inc. 266,800 14,738,032
- --------------------------------------------------------------------------------
Chevron Corp. 383,944 21,470,148
- --------------------------------------------------------------------------------
Encana Corp. 586,634 23,140,729
- --------------------------------------------------------------------------------
ENI SpA 441,500 11,334,988
- --------------------------------------------------------------------------------
Husky Energy, Inc. 830,515 33,032,155
- --------------------------------------------------------------------------------
Neste Oil Oyj 11 105,900 2,742,527
- --------------------------------------------------------------------------------
Oil & Natural Gas Corp. Ltd. 187,520 4,402,784
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Total SA, B Shares 47,880 $ 11,212,685
----------------
142,994,366
- --------------------------------------------------------------------------------
FINANCIALS--16.9%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--1.4%
Credit Suisse Group 313,592 12,303,153
- --------------------------------------------------------------------------------
Northern Trust Corp. 568,300 25,908,797
----------------
38,211,950
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--5.9%
Anglo Irish Bank Corp. 1,256,712 15,588,375
- --------------------------------------------------------------------------------
Australia & New Zealand
Banking Group Ltd. 391,050 6,453,417
- --------------------------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank 1 372,609 9,694,670
- --------------------------------------------------------------------------------
HSBC Holdings plc 1 1,651,795 26,569,859
- --------------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 986,050 21,545,193
- --------------------------------------------------------------------------------
Resona Holdings, Inc. 1 4,959,000 9,210,703
- --------------------------------------------------------------------------------
Royal Bank of Scotland Group
plc (The) 1,498,487 45,125,269
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 229,670 23,264,136
----------------
157,451,622
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--5.4%
3i Group plc 961,026 11,674,263
- --------------------------------------------------------------------------------
American Express Co. 476,600 25,369,418
- --------------------------------------------------------------------------------
Citigroup, Inc. 171,266 7,917,627
- --------------------------------------------------------------------------------
Credit Saison Co. Ltd. 395,100 13,092,510
- --------------------------------------------------------------------------------
Investor AB, B Shares 646,652 8,739,687
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 633,263 22,366,849
- --------------------------------------------------------------------------------
MBNA Corp. 633,350 16,568,436
- --------------------------------------------------------------------------------
Morgan Stanley 579,700 30,416,859
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 729,500 8,228,760
----------------
144,374,409
- --------------------------------------------------------------------------------
INSURANCE--4.2%
ACE Ltd. 531,271 23,827,504
- --------------------------------------------------------------------------------
Allianz AG 233,811 26,828,605
- --------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 5,920 16,478,320
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 104,800 9,746,400
- --------------------------------------------------------------------------------
Manulife Financial Corp. 307,613 14,690,203
- --------------------------------------------------------------------------------
Prudential plc 2,120,558 18,751,944
----------------
110,322,976
- --------------------------------------------------------------------------------
HEALTH CARE--13.0%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--4.4%
Affymetrix, Inc. 1 339,000 18,282,270
- --------------------------------------------------------------------------------
Amgen, Inc. 1 376,500 22,763,190
- --------------------------------------------------------------------------------
Applera Corp./
Applied Biosystems Group 407,400 8,013,558
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BIOTECHNOLOGY Continued
Eyetech Pharmaceuticals, Inc. 1 215,600 $ 2,725,184
- --------------------------------------------------------------------------------
Genentech, Inc. 1 217,700 17,476,956
- --------------------------------------------------------------------------------
Genzyme Corp. (General Division) 1 202,700 12,180,243
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 573,260 25,217,707
- --------------------------------------------------------------------------------
Human Genome Sciences, Inc. 1 251,000 2,906,580
- --------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc. 1 241,700 2,240,559
- --------------------------------------------------------------------------------
Wyeth 141,000 6,274,500
----------------
118,080,747
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.6%
Essilor International SA 147,010 10,014,279
- --------------------------------------------------------------------------------
Medtronic, Inc. 120,500 6,240,695
- --------------------------------------------------------------------------------
Nektar Therapeutics 1,2 314,361 4,235,071
- --------------------------------------------------------------------------------
Smith & Nephew plc 2,188,313 21,603,577
----------------
42,093,622
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.8%
Express Scripts, Inc. 1 268,200 13,404,636
- --------------------------------------------------------------------------------
IMS Health, Inc. 437,600 10,839,352
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 447,000 23,811,690
----------------
48,055,678
- --------------------------------------------------------------------------------
PHARMACEUTICALS--5.2%
Chugai Pharmaceutical Co. Ltd. 622,100 9,602,698
- --------------------------------------------------------------------------------
Eli Lilly & Co. 131,500 7,325,865
- --------------------------------------------------------------------------------
Novartis AG 331,768 15,805,257
- --------------------------------------------------------------------------------
Pfizer, Inc. 541,619 14,937,852
- --------------------------------------------------------------------------------
Roche Holdings AG 254,589 32,106,080
- --------------------------------------------------------------------------------
Sanofi-Aventis SA 567,994 46,501,096
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,036,000 13,297,584
----------------
139,576,432
- --------------------------------------------------------------------------------
INDUSTRIALS--7.1%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.2%
Boeing Co. 229,200 15,127,200
- --------------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 784,434 25,941,232
- --------------------------------------------------------------------------------
European Aeronautic Defence
& Space Co. 857,190 27,200,590
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 193,300 12,539,371
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 208,500 11,519,625
- --------------------------------------------------------------------------------
Raytheon Co. 474,400 18,558,528
----------------
110,886,546
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.2%
JGC Corp. 407,000 4,985,826
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.3%
Hutchison Whampoa Ltd. 1,175,000 $ 10,560,501
- --------------------------------------------------------------------------------
Siemens AG 321,212 23,374,679
----------------
33,935,180
- --------------------------------------------------------------------------------
MACHINERY--0.6%
Hyundai Heavy Industries Co. Ltd. 336,820 16,829,817
- --------------------------------------------------------------------------------
MARINE--0.4%
Peninsular & Oriental Steam
Navigation Co. 2,092,659 11,895,008
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.4%
Macquarie Airports 3,683,052 10,043,262
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--19.2%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--5.6%
Cisco Systems, Inc. 1 761,600 14,554,176
- --------------------------------------------------------------------------------
Corning, Inc. 1 1,825,800 30,344,796
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1 352,300 8,870,914
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 566,200 18,690,262
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson,
B Shares 24,038,000 76,794,001
----------------
149,254,149
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.2%
International Business
Machines Corp. 273,417 20,287,541
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 1 2,848,200 10,623,786
----------------
30,911,327
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.1%
Hoya Corp. 123,700 14,210,481
- --------------------------------------------------------------------------------
Keyence Corp. 55,100 12,266,347
- --------------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 184,300 9,316,215
- --------------------------------------------------------------------------------
Nidec Corp. 39,500 4,159,454
- --------------------------------------------------------------------------------
Omron Corp. 111,400 2,455,802
- --------------------------------------------------------------------------------
Tandberg ASA 1,153,550 12,357,636
----------------
54,765,935
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.2%
Yahoo Japan Corp. 3,192 6,667,324
- --------------------------------------------------------------------------------
IT SERVICES--1.3%
Infosys Technologies Ltd. 639,358 34,672,395
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.3%
Canon, Inc. 172,700 9,045,903
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.5 %
Advanced Micro Devices, Inc. 1 1,576,800 27,341,712
- --------------------------------------------------------------------------------
Altera Corp. 1 346,200 6,861,684
- --------------------------------------------------------------------------------
Cree, Inc. 1 221,600 5,644,152
- --------------------------------------------------------------------------------
International Rectifier Corp. 1 147,600 7,043,472
- --------------------------------------------------------------------------------
National Semiconductor Corp. 636,000 14,011,080
- --------------------------------------------------------------------------------
Samsung Electronics Co. 61,710 29,237,739
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Contninued
Silicon Laboratories, Inc. 1 124,900 $ 3,273,629
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd. 14,784,193 25,546,293
----------------
118,959,761
- --------------------------------------------------------------------------------
SOFTWARE--4.0%
Cadence Design Systems, Inc. 1 731,070 9,986,416
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 67,642 3,829,214
- --------------------------------------------------------------------------------
Enix Corp. 95,100 2,898,188
- --------------------------------------------------------------------------------
Intuit, Inc. 1 244,800 11,042,928
- --------------------------------------------------------------------------------
Microsoft Corp. 1,073,900 26,675,676
- --------------------------------------------------------------------------------
Novell, Inc. 1 2,193,226 13,598,001
- --------------------------------------------------------------------------------
SAP AG 173,160 30,138,388
- --------------------------------------------------------------------------------
Trend Micro, Inc. 278,500 9,843,206
----------------
108,012,017
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--7.0%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
France Telecom SA 741,918 21,554,176
- --------------------------------------------------------------------------------
Tele Norte Leste Participacoes
SA, Preference 1,348,784 22,513,451
----------------
44,067,627
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--5.4%
KDDI Corp. 6,986 32,312,848
- --------------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 1,277,460 26,060,184
- --------------------------------------------------------------------------------
Vodafone Group plc 34,955,950 85,177,453
----------------
143,550,485
- --------------------------------------------------------------------------------
UTILITIES--1.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
Energias de Portugal SA 2,905,006 7,312,259
- --------------------------------------------------------------------------------
Fortum Oyj 521,500 8,362,024
----------------
15,674,283
- --------------------------------------------------------------------------------
GAS UTILITIES--0.5%
Gail India Ltd. 318,900 1,663,595
- --------------------------------------------------------------------------------
Hong Kong & China Gas Co. Ltd. 6,593,000 13,404,894
----------------
15,068,489
----------------
Total Common Stocks (Cost $1,961,317,282) 2,633,868,274
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.0%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $31,414) $ 31,414 31,414
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.4%
- --------------------------------------------------------------------------------
Undivided interest of 0.82% in joint repurchase
agreement (Principal Amount/Value $1,234,399,000,
with a maturity value of $1,234,508,724) with UBS
Warburg LLC, 3.20%, dated 6/30/05, to be
repurchased at $10,176,905 on 7/1/05,
collateralized by Federal Home Loan Mortgage
Corp., 5.50%, 2/1/35, with a value
of $1,260,871,334 (Cost $10,176,000) $10,176,000 $ 10,176,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE (COST $1,971,524,696) 99.1% 2,644,075,688
- --------------------------------------------------------------------------------
OTHER ASSETS
NET OF LIABILITIES 0.9 23,107,014
------------------------------
NET ASSETS 100.0% $ 2,667,182,702
==============================
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 June 30, 2005 was $4,235,071, which represents 0.16%
of the Fund's net assets, of which $4,235,071 is considered restricted. See Note
6 of Notes to Financial Statements.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE
OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- --------------------------------------------------------------------------------
United States $ 978,487,728 37.0%
United Kingdom 377,063,611 14.3
Japan 219,724,325 8.3
France 207,484,025 7.8
Sweden 138,577,461 5.2
Germany 104,083,281 3.9
India 103,798,774 3.9
Korea, Republic of South 72,127,740 2.7
Canada 70,863,087 2.7
Brazil 65,137,515 2.5
Switzerland 60,214,490 2.3
Mexico 46,324,436 1.8
Hong Kong 43,425,970 1.6
The Netherlands 28,556,243 1.1
Taiwan 25,546,293 1.0
Australia 16,496,679 0.6
Ireland 15,588,375 0.6
Norway 12,357,636 0.5
Singapore 12,191,661 0.5
Italy 11,334,988 0.4
Finland 11,104,551 0.4
Bermuda 9,746,400 0.4
Portugal 7,312,259 0.3
Spain 6,528,160 0.2
------------------------------
Total $2,644,075,688 100.0%
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- ---------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------
Investments, at value (cost $1,971,524,696)--
see accompanying statement of investments $ 2,644,075,688
- ---------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $5,897,793) 5,910,819
- ---------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 18,090,796
Interest and dividends 5,217,020
Shares of beneficial interest sold 69,637
Other 47,479
-----------------
Total assets 2,673,411,439
- ---------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 30,436
- ---------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 4,199,169
Shares of beneficial interest redeemed 1,187,616
Distribution and service plan fees 262,824
Foreign capital gains tax 243,464
Shareholder communications 71,000
Trustees' compensation 56,065
Transfer and shareholder servicing agent fees 3,542
Other 174,621
-----------------
Total liabilities 6,228,737
- ---------------------------------------------------------------------------------------------------
NET ASSETS $ 2,667,182,702
=================
- ---------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 91,670
- ---------------------------------------------------------------------------------------------------
Additional paid-in capital 1,932,687,201
- ---------------------------------------------------------------------------------------------------
Accumulated net investment income 3,511,443
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 58,608,602
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 672,283,786
-----------------
NET ASSETS $ 2,667,182,702
=================
- ---------------------------------------------------------------------------------------------------
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 $1,925,425,094 and 66,149,266 shares of beneficial interest
outstanding) $ 29.11
- ---------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $392,490,465 and 13,559,847 shares of beneficial interest
outstanding) $ 28.95
- ---------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $290,288,730 and 9,923,314 shares of beneficial interest
outstanding) $ 29.25
- ---------------------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $58,978,413 and 2,037,900 shares of beneficial interest
outstanding) $ 28.94
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $3,019,813) $ 31,457,977
- ---------------------------------------------------------------------------------------------------
Interest 647,966
-----------------
Total investment income 32,105,943
- ---------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------
Management fees 9,033,714
- ---------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 440,821
Class 4 shares 59,197
- ---------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,552
Service shares 5,113
Class 3 shares 5,092
Class 4 shares 5,039
- ---------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 78,052
Service shares 12,703
Class 3 shares 9,675
Class 4 shares 1,718
- ---------------------------------------------------------------------------------------------------
Custodian fees and expenses 370,456
- ---------------------------------------------------------------------------------------------------
Trustees' compensation 30,378
- ---------------------------------------------------------------------------------------------------
Other 52,717
-----------------
Total expenses 10,110,227
Less reduction to custodian expenses (1,063)
-----------------
Net expenses 10,109,164
- ---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 21,996,779
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ---------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 148,320,171
Foreign currency transactions 42,742,893
-----------------
Net realized gain 191,063,064
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (net of foreign capital gains tax of $243,464) (111,288,188)
Translation of assets and liabilities denominated in foreign currencies (141,207,990)
-----------------
Net change in unrealized appreciation (252,496,178)
- ---------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (39,436,335)
=================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ---------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------
Net investment income $ 21,996,779 $ 28,751,119
- ---------------------------------------------------------------------------------------------------------------------
Net realized gain 191,063,064 179,086,396
- ---------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (252,496,178) 331,047,849
-----------------------------------
Net increase (decrease) in net assets resulting from operations (39,436,335) 538,885,364
- ---------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (25,791,077) (30,456,227)
Service shares (3,177,917) (2,439,240)
Class 3 shares (2,857,511) (2,221,201)
Class 4 shares (420,976) --
- ---------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (529,297,380) (177,302,804)
Service shares 50,486,895 130,991,549
Class 3 shares 28,366,420 80,796,251
Class 4 shares 21,613,375 32,377,319
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (500,514,506) 570,631,011
- ---------------------------------------------------------------------------------------------------------------------
Beginning of period 3,167,697,208 2,597,066,197
-----------------------------------
End of period (including accumulated net investment income of $3,511,443
and $13,762,145, respectively) $ 2,667,182,702 $ 3,167,697,208
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.51 $ 25.08 $ 17.70 $ 22.84 $ 30.33 $ 33.41
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .22 1 .26 1 .19 .16 .17 .27
Net realized and unrealized gain (loss) (.32) 4.49 7.34 (5.19) (3.85) 1.82
-----------------------------------------------------------------------------------------
Total from investment operations (.10) 4.75 7.53 (5.03) (3.68) 2.09
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.30) (.32) (.15) (.11) (.19) (.09)
Distributions from net realized gain -- -- -- -- (3.62) (5.08)
-----------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.30) (.32) (.15) (.11) (3.81) (5.17)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.11 $ 29.51 $ 25.08 $ 17.70 $ 22.84 $ 30.33
=========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (0.32)% 19.16% 43.02% (22.13)% (12.04)% 5.09%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,925,425 $2,518,867 $2,280,752 $1,549,993 $1,905,890 $2,136,420
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,215,639 $2,451,188 $1,751,226 $1,776,289 $1,918,335 $2,116,100
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.54% 1.01% 0.99% 0.80% 0.70% 0.83%
Total expenses 0.67% 4 0.66% 4 0.67% 4 0.67% 4 0.70% 4 0.68% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 30% 34% 34% 39% 50%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.33 $ 24.96 $ 17.61 $ 22.78 $ 30.30 $ 32.65
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .20 2 .20 2 .12 .12 .21 .03
Net realized and unrealized gain (loss) (.33) 4.46 7.36 (5.19) (3.92) (2.38)
-----------------------------------------------------------------------------------------
Total from investment operations (.13) 4.66 7.48 (5.07) (3.71) (2.35)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.25) (.29) (.13) (.10) (.19) --
Distributions from net realized gain -- -- -- -- (3.62) --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.25) (.29) (.13) (.10) (3.81) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.95 $ 29.33 $ 24.96 $ 17.61 $ 22.78 $ 30.30
=========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.42)% 18.88% 42.86% (22.37)% (12.17)% (7.20)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 392,491 $ 346,403 $ 168,739 $ 52,830 $ 20,467 $ 983
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 357,574 $ 247,490 $ 91,800 $ 34,847 $ 8,502 $ 325
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.40% 0.77% 0.68% 0.51% 0.44% 0.60%
Total expenses 0.92% 5 0.91% 5 0.93% 5 0.90% 5 0.85% 5 0.83% 5
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 30% 34% 34% 39% 50%
1 For the period from July 13, 2000 (inception of offering) to December 31,
2000.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
CLASS 3 SHARES (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.65 $ 25.19 $ 17.55
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23 2 .26 2 .07
Net realized and unrealized gain (loss) (.33) 4.52 7.57
-------------------------------------------------
Total from investment operations (.10) 4.78 7.64
- --------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.30) (.32) --
Distributions from net realized gain -- -- --
-------------------------------------------------
Total dividends and/or distributions to shareholders (.30) (.32) --
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 29.25 $ 29.65 $ 25.19
=================================================
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.32)% 19.19% 43.53%
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 290,289 $ 265,044 $ 147,576
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 272,344 $ 199,388 $ 80,579
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.64% 1.00% 0.73%
Total expenses 0.67% 5 0.66% 5 0.68% 5
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 30% 34%
1. For the period from May 1, 2003 (inception of offering) to December 31, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
CLASS 4 SHARES (UNAUDITED) 2004 1
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.35 $ 25.21
- ----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 2 .09 2
Net realized and unrealized gain (loss) (.34) 4.05
---------------------------------
Total from investment operations (.13) 4.14
- ----------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) --
Distributions from net realized gain -- --
---------------------------------
Total dividends and/or distributions to shareholders (.28) --
- ----------------------------------------------------------------------------------------
Net asset value, end of period $ 28.94 $ 29.35
=================================
- ----------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.44)% 16.42%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 58,978 $ 37,384
- ----------------------------------------------------------------------------------------
Average net assets (in thousands) $ 47,881 $ 19,774
- ----------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.51% 0.53%
Total expenses 0.94% 5 0.94% 5
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 19% 30%
1. For the period from May 3, 2004 (inception of offering) to December 31, 2004.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Global Securities Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek long-term capital
appreciation by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and special
situations that are considered to have appreciation possibilities. The Trust's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Non-Service, Service, Class 3 and Class 4 shares. All
classes are sold at their offering price, which is the net asset value per
share, to separate investment accounts of participating insurance companies as
an underlying investment for variable life insurance policies, variable annuity
contracts or other investment products. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. The classes of shares
designated as Service shares and Class 4 shares are subject to a distribution
and service plan. The Fund assesses a 1% fee on the proceeds of Class 3 and
Class 4 shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund or other investment option offered through your variable life
insurance or variable annuity contract) within 60 days of their purchase. The
fee, which is retained by the Fund, is accounted for as an addition to paid-in
capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing "bid" and "asked" prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net
17 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
unrealized foreign exchange gains and losses arise from changes in the values of
assets and liabilities, including investments in securities at fiscal period
end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had no estimated unused capital loss
carryforwards available for federal income tax purposes. This estimated capital
loss carryforward represents carryforward as of the end of the last fiscal year,
increased for losses deferred under tax accounting rules to the current fiscal
year and is increased or decreased by capital losses or gains realized in the
first six months of the current fiscal year. During the six months ended June
30, 2005, it is estimated that the Fund will utilize $130,358,556 of capital
loss carryforward to offset realized capital gains. During the year ended
December 31, 2004, the Fund utilized $170,421,832 of capital loss carryforward
to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
-----------------------------
2010 $ 24,452,753
2011 105,905,803
------------
Total $130,358,556
============
Certain foreign countries impose a tax on capital gains which is accrued by the
Fund based on unrealized appreciation, if any, on affected securities. The tax
is paid when the gain is realized.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
18 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004 1
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 5,456,574 $ 155,148,180 23,590,376 $ 610,109,742
Dividends and/or distributions reinvested 895,834 25,791,077 1,203,327 30,456,227
Redeemed (25,558,474) (710,236,637) (30,383,126) (817,868,773)
------------------------------------------------------------------
Net decrease (19,206,066) $ (529,297,380) (5,589,423) $(177,302,804)
==================================================================
- ------------------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 2,833,839 $ 80,497,071 6,516,321 $ 168,136,666
Dividends and/or distributions reinvested 110,922 3,177,917 96,757 2,439,240
Redeemed (1,194,354) (33,188,093) (1,562,747) (39,584,357)
------------------------------------------------------------------
Net increase 1,750,407 $ 50,486,895 5,050,331 $ 130,991,549
==================================================================
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004 1
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 1,160,678 $ 33,265,154 3,286,454 $ 85,761,974
Dividends and/or distributions reinvested 98,739 2,857,511 87,346 2,221,201
Redeemed (273,838) (7,756,245) 2 (293,439) (7,186,924) 3
--------------------------------------------------------------------
Net increase 985,579 $ 28,366,420 3,080,361 $ 80,796,251
====================================================================
- --------------------------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 801,768 $ 22,653,202 1,345,840 $ 34,232,416
Dividends and/or distributions reinvested 14,693 420,976 -- --
Redeemed (52,071) (1,460,803) 2 (72,330) (1,855,097) 3
--------------------------------------------------------------------
Net increase 764,390 $ 21,613,375 1,273,510 $ 32,377,319
====================================================================
1. For the year ended December 31, 2004, for Non-Service, Service and Class 3
shares and for the period from May 3, 2004 (inception of offering) to December
31, 2004, for Class 4 shares.
2. Net of redemption fees of $12 and $667 for Class 3 and Class 4 shares,
respectively.
3. Net of redemption fees of $34,168 and $5,752 for Class 3 and Class 4 shares,
respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, for the
six months ended June 30, 2005, were $549,610,579 and $859,845,435,
respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2005, the Fund paid
$20,709 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 per annum for class level assets of
$10 million or more. Each class is subject to the minimum fee in the event that
the per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE AND CLASS 4 SHARES. The Fund has
adopted a Distribution and Service Plan for Service share class and Class 4
shares to pay OppenheimerFunds Distributor, Inc. (the Distributor), for
distribution related services, personal service and account maintenance for the
Fund's Service class and Class 4 shares. Under the Plan, payments are made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Service share class and Class 4 shares of the Fund. The Distributor currently
uses all of those fees to compensate sponsor(s) of the insurance product that
offers Fund shares, for providing personal service and maintenance of accounts
of their variable contract owners that hold Service class and Class 4 shares.
The impact of the service plan is to increase operating expenses of the Service
class and Class 4 shares, which results in lower performance compared to the
Fund's shares that are not subject to a service fee. Fees incurred by the Fund
under the Plan are detailed in the Statement of Operations.
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had outstanding foreign currency contracts as
follows:
EXPIRATION CONTRACT AMOUNT VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE (000S) JUNE 30, 2005 DEPRECIATION
- --------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Japanese Yen [JPY] 7/1/05 378,682JPY $ 3,414,315 $ 30,436
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2005, 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.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATE COST JUNE 30, 2005 APPRECIATION
- --------------------------------------------------------------------------------------------------------------
Nektar Therapeutics 6/25/03 $ 3,568,000 $ 4,235,071 $ 667,071
- --------------------------------------------------------------------------------
7. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005, and amended on March 4, 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
21 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. LITIGATION Continued
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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
22 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
23 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory
agreement for the current year, the Board evaluated the nature and extent of the
services provided by the Manager and its affiliates. The Manager provides the
Fund with office space, facilities and equipment; administrative, accounting,
clerical, legal and compliance personnel; securities trading services and
oversight of third party service providers and the services of the portfolio
managers and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality
of the portfolio management services to be provided, the Board considered the
experience of William Wilby and Rajeev Bhaman and the Manager's global
investment team and analysts. Messrs. Wilby and Bhaman have been the portfolio
managers of the Fund since 1995 and 2004, respectively, and are the persons
principally responsible for the day-to-day management of the Fund's portfolio.
Mr.Wilby and Mr. Bhaman are each Vice Presidents of the Fund. Mr. Wilby has been
a Senior Vice President of the Manager since October 1992 and also serves as an
officer and portfolio manager for other funds advised by the Manager. Mr. Bhaman
has been a Vice President of the Manager since November 1996 and is a Chartered
Financial Analyst and a portfolio manager of other funds advised by the Manager.
Mr.Wilby has had over 22 years of experience and Mr. Bhaman has had over 15
years of experience managing equity investments.
The Board reviewed information, prepared by the Manager and by the independent
consultant, comparing the Fund's historical performance to relevant market
indices and to the performance of other global growth, global largecap growth
and global multi-cap growth funds (including both funds advised by the Manager
and funds advised by other investment advisers). The Board also receives and
reviews comparative performance information regarding the Fund and other funds
at each Board meeting. The Board noted that the Fund's one-year, three-year,
five-year and tenyear performance were all better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including
comparative information, regarding the fees paid to the Manager and its
affiliates and the other expenses borne by the Fund. The independent consultant
provided comparative data in regard to the fees and expenses of the Fund, other
global large-cap growth and global multi-cap growth funds and other funds with
comparable assets levels and distribution features. The Board
24 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
noted that the Fund's management fees and total expenses are both lower than its
peer group average. In addition, the Board evaluated the comparability of the
fees charged and the services provided to the Fund to the fees charged and
services provided to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information
regarding the cost of services provided by the Manager and its affiliates and
the Manager's profitability. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders. In addition the Board considered
information that was provided regarding the direct and indirect benefits the
Manager receives as a result of its relationship with the Fund, including
compensation paid to the Manager's affiliates and research provided to the
Manager in connection with permissible brokerage arrangements (soft dollar
arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has recently experienced
modest asset growth and that, based on current asset levels, the Fund has passed
its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are both independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described
above, the Board, including a majority of the independent Trustees, concluded
that the nature, extent and quality of the services provided to the Fund by the
Manager are a benefit to the Fund and in the best interest of the Fund's
shareholders and that the amount and structure of the compensation received by
the Manager and its affiliates are reasonable in relation to the services
provided. Accordingly, the Board elected to continue the investment advisory
agreement for another year. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
25 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
HIGH INCOME FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,005.00 $3.74
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.08 3.77
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,003.00 4.98
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.84 5.02
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 0.75%
- ----------------------------------------
Service shares 1.00
- --------------------------------------------------------------------------------
5 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--0.3%
- ------------------------------------------------------------------------------------------------------------------
Consumer Credit Reference Index
Securities Program, Credit Card
Asset-Backed Certificates, Series
2002-B, Cl. FX, 10.421%, 3/22/07 1 $ 500,000 $ 516,195
- ------------------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds,
Series 1A, Cl. C2, 8/13/10 1 1,500,000 1,275,000
----------------
Total Asset-Backed Securities
(Cost $1,997,606) 1,791,195
- ------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--0.0%
- ------------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1,
Cl. D, 7.702%, 4/29/39 1,2 (Cost $283,010) 300,000 302,672
- ------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--80.7%
- ------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--24.4%
- ------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS--2.2%
Accuride Corp., 8.50% Sr. Unsec.
Sub. Nts., 2/1/15 440,000 432,300
- ------------------------------------------------------------------------------------------------------------------
Collins & Aikman Floorcoverings, Inc.,
9.75% Sr. Sub. Nts., Series B, 2/15/10 800,000 832,000
- ------------------------------------------------------------------------------------------------------------------
Cooper Standard Automotive, Inc.,
8.375% Sr. Unsec. Sub. Nts., 12/15/14 1,010,000 802,950
- ------------------------------------------------------------------------------------------------------------------
Dana Corp., 10.125% Nts., 3/15/10 500,000 523,631
- ------------------------------------------------------------------------------------------------------------------
Dura Operating Corp.:
8.625% Sr. Nts., Series B, 4/15/12 1,100,000 995,500
9% Sr. Sub. Nts., Series B, 5/1/09 [EUR] 50,000 40,691
9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 300,000 210,000
- ------------------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc., 9.75% Sr. Nts.,
9/1/13 3,4 1,200,000 834,000
- ------------------------------------------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 1,950,000 1,906,125
9% Sr. Nts., 7/1/15 5 1,445,000 1,426,938
- ------------------------------------------------------------------------------------------------------------------
Keystone Automotive Operations,
Inc., 9.75% Sr. Unsec. Sub. Nts., 11/1/13 200,000 199,000
- ------------------------------------------------------------------------------------------------------------------
Metaldyne Corp.:
10% Sr. Nts., 11/1/13 5 500,000 412,500
11% Sr. Sub. Nts., 6/15/12 538,000 351,045
- ------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 900,000 922,500
- ------------------------------------------------------------------------------------------------------------------
Tenneco Automotive, Inc.:
8.625% Sr. Unsec. Sub. Nts., 11/15/14 1,050,000 1,060,500
10.25% Sr. Sec. Nts., Series B, 7/15/13 900,000 1,021,500
- ------------------------------------------------------------------------------------------------------------------
United Components, Inc., 9.375% Sr.
Sub. Nts., 6/15/13 400,000 405,000
- ------------------------------------------------------------------------------------------------------------------
Visteon Corp., 7% Sr. Unsec. Nts.,
3/10/14 700,000 581,000
----------------
12,957,180
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--0.6%
General Motors Acceptance Corp.:
5.125% Nts., 5/9/08 $ 1,000,000 $ 940,536
5.85% Sr. Unsec. Unsub. Nts., 1/14/09 1,000,000 938,138
6.875% Nts., 9/15/11 1,100,000 1,016,639
- ------------------------------------------------------------------------------------------------------------------
Navistar International Corp., 6.25%
Sr. Nts., 3/1/12 5 445,000 431,650
----------------
3,326,963
- ------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--6.7%
Apcoa, Inc., 9.25% Sr. Unsec. Sub.
Nts., 3/15/08 940,000 925,900
- ------------------------------------------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec. Sub. Nts.,
8/15/11 450,000 491,063
- ------------------------------------------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr. Sub.
Nts., 4/15/12 800,000 873,000
- ------------------------------------------------------------------------------------------------------------------
Carrols Corp., 9% Sr. Sub. Nts., 1/15/13 5 270,000 274,725
- ------------------------------------------------------------------------------------------------------------------
Domino's, Inc., 8.25% Sr. Unsec. Sub.
Nts., 7/1/11 875,000 936,250
- ------------------------------------------------------------------------------------------------------------------
Gaylord Entertainment Co., 8% Sr.
Nts., 11/15/13 500,000 528,125
- ------------------------------------------------------------------------------------------------------------------
Intrawest Corp., 7.50% Sr. Unsec. Nts.,
10/15/13 917,000 945,656
- ------------------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 800,000 808,000
9% Sr. Sub. Nts., 3/15/12 600,000 655,500
- ------------------------------------------------------------------------------------------------------------------
John Q. Hammons Hotels, Inc.,
8.875% Sr. Nts., Series B, 5/15/12 900,000 985,500
- ------------------------------------------------------------------------------------------------------------------
La Quinta Properties, Inc., 7% Sr.
Sec. Nts., 8/15/12 500,000 519,375
- ------------------------------------------------------------------------------------------------------------------
Mandalay Resort Group:
9.375% Sr. Sub. Nts., 2/15/10 41,860 46,988
10.25% Sr. Unsec. Sub. Nts., Series B,
8/1/07 800,000 884,000
- ------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc.:
5.875% Sr. Nts., 2/27/14 600,000 585,750
8.375% Sr. Unsec. Sub. Nts., 2/1/11 2,400,000 2,628,000
9.75% Sr. Unsec. Sub. Nts., 6/1/07 800,000 871,000
- ------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Nts., 2/15/13 5 440,000 446,600
6.375% Sr. Sub. Nts., 7/15/09 800,000 820,000
6.875% Sr. Sub. Nts., 2/15/15 5 615,000 631,913
8% Sr. Sub. Nts., 4/1/12 1,200,000 1,290,000
- ------------------------------------------------------------------------------------------------------------------
NCL Corp., 11.625% Sr. Nts., 7/15/14 5 600,000 634,500
- ------------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp.:
7.875% Sr. Sub. Nts., 3/15/10 1,500,000 1,687,500
9.375% Sr. Unsec. Sub. Nts., 2/15/07 1,500,000 1,616,250
- ------------------------------------------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Sub. Nts., 3/1/15 5 445,000 443,888
6.875% Sr. Sub. Nts., 12/1/11 850,000 875,500
8.875% Sr. Sub. Nts., 3/15/10 600,000 645,000
6 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Pinnacle Entertainment, Inc., 8.25%
Sr. Unsec. Sub. Nts., 3/15/12 $ 1,350,000 $ 1,410,750
- ------------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 8.75%
Sr. Unsub. Nts., 2/2/11 600,000 694,500
- ------------------------------------------------------------------------------------------------------------------
Six Flags, Inc.:
8.875% Sr. Unsec. Nts., 2/1/10 800,000 784,000
9.625% Sr. Nts., 6/1/14 357,000 335,580
9.75% Sr. Nts., 4/15/13 2,950,000 2,798,813
- ------------------------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc., 7.875% Sr. Nts., 5/1/12 1,500,000 1,698,750
- ------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 2,800,000 2,870,000
9.875% Sr. Unsec. Sub. Nts., 7/1/10 600,000 622,218
- ------------------------------------------------------------------------------------------------------------------
Sun International Hotels Ltd., 8.875%
Sr. Unsec. Sub. Nts., 8/15/11 1,000,000 1,075,000
- ------------------------------------------------------------------------------------------------------------------
Universal City Development Partners
Ltd., 11.75% Sr. Nts., 4/1/10 1,000,000 1,152,500
- ------------------------------------------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub. Nts.,
2/15/14 900,000 918,000
- ------------------------------------------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn Las Vegas
Capital Corp., 6.625% Nts., 12/1/14 5 3,600,000 3,519,000
----------------
39,929,094
- ------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.9%
Beazer Homes USA, Inc., 8.375% Sr.
Nts., 4/15/12 500,000 538,750
- ------------------------------------------------------------------------------------------------------------------
Blount, Inc., 8.875% Sr. Sub. Nts., 8/1/12 775,000 833,125
- ------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 9.75% Sr. Sub. Nts.,
9/15/10 300,000 352,723
- ------------------------------------------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.:
7.75% Sr. Unsec. Sub. Nts., 5/15/13 900,000 940,500
8.875% Sr. Sub. Nts., 4/1/12 800,000 870,000
- ------------------------------------------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 150,000 163,368
9.50% Sr. Unsec. Sub. Nts., 2/15/11 350,000 376,075
- ------------------------------------------------------------------------------------------------------------------
Meritage Homes Corp., 6.25% Sr.
Unsec. Nts., 3/15/15 795,000 743,325
- ------------------------------------------------------------------------------------------------------------------
Sealy Mattress Co., 8.25% Sr. Sub.
Nts., 6/15/14 1,400,000 1,421,000
- ------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp.:
7.75% Sr. Nts., 3/15/13 650,000 679,250
9.25% Sr. Sub. Nts., 4/15/12 700,000 773,500
- ------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 500,000 540,000
- ------------------------------------------------------------------------------------------------------------------
WCI Communities, Inc.:
9.125% Sr. Sub. Nts., 5/1/12 800,000 844,000
10.625% Sr. Unsec. Sub. Nts., 2/15/11 600,000 651,000
- ------------------------------------------------------------------------------------------------------------------
William Lyon Homes, Inc., 10.75% Sr.
Nts., 4/1/13 800,000 872,000
- ------------------------------------------------------------------------------------------------------------------
Williams Scotsman, Inc., 9.875% Sr.
Unsec. Nts., 6/1/07 1,000,000 1,005,000
----------------
11,603,616
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Leslie's Poolmart, Inc., 7.75% Sr.
Unsec. Nts., 2/1/13 $ 445,000 $ 451,675
- ------------------------------------------------------------------------------------------------------------------
MEDIA--11.0%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 3,4 360,000 306,000
8.125% Sr. Nts., Series B, 7/15/03 3,4 1,000,000 870,000
8.375% Sr. Nts., Series B, 2/1/08 3,4 1,000,000 875,000
10.25% Sr. Unsec. Sub. Nts., 6/15/11 3,4 1,300,000 1,173,250
10.875% Sr. Unsec. Nts., 10/1/10 3,4 1,000,000 875,000
- ------------------------------------------------------------------------------------------------------------------
Allbritton Communications Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/12 700,000 693,000
- ------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc.:
8% Sr. Unsec. Sub. Nts., 3/1/14 1,050,000 937,125
9.50% Sr. Unsec. Sub. Nts., 2/1/11 1,192,000 1,175,610
- ------------------------------------------------------------------------------------------------------------------
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 900,000 857,250
10.25% Sr. Unsec. Sub. Nts., Series B,
5/1/09 600,000 603,000
- ------------------------------------------------------------------------------------------------------------------
Block Communications, Inc., 9.25%
Sr. Sub. Nts., 4/15/09 600,000 642,000
- ------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8% Sr.
Unsec. Nts., Series B, 4/15/12 600,000 591,000
- ------------------------------------------------------------------------------------------------------------------
Carmike Cinemas, Inc., 7.50% Sr.
Sub. Nts., 2/15/14 850,000 774,563
- ------------------------------------------------------------------------------------------------------------------
CBD Media LLC/CBD Finance, Inc.,
8.625% Sr. Sub. Nts., 6/1/11 200,000 207,000
- ------------------------------------------------------------------------------------------------------------------
Charter Communications Holdings
II LLC, 10.25% Sr. Unsec. Nts., 9/15/10 900,000 914,625
- ------------------------------------------------------------------------------------------------------------------
Charter Communications Holdings
LLC/Charter Communications
Holdings Capital Corp.:
0%/11.75% Sr. Unsec. Sub. Disc. Nts.,
5/15/11 6 2,300,000 1,535,250
8.375% Sr. Nts., Second Lien, 4/30/14 5 5,950,000 5,950,000
- ------------------------------------------------------------------------------------------------------------------
Cinemark USA, Inc., 9% Sr. Unsec.
Sub. Nts., 2/1/13 400,000 413,000
- ------------------------------------------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr. Unsec.
Disc. Nts., 3/15/14 6 1,800,000 1,206,000
- ------------------------------------------------------------------------------------------------------------------
Corus Entertainment, Inc., 8.75% Sr.
Sub. Nts., 3/1/12 800,000 862,000
- ------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.625% Sr. Unsec.
Unsub. Nts., Series B, 4/1/11 1,900,000 1,885,750
- ------------------------------------------------------------------------------------------------------------------
Dex Media East LLC/Dex Media
East Finance Co., 9.875% Sr. Unsec.
Nts., 11/15/09 800,000 886,000
- ------------------------------------------------------------------------------------------------------------------
Dex Media West LLC/
Dex Media West Finance Co.:
5.875% Sr. Nts., 11/15/11 1,200,000 1,191,000
8.50% Sr. Nts., 8/15/10 700,000 766,500
9.875% Sr. Sub. Nts., 8/15/13 1,172,000 1,341,940
- ------------------------------------------------------------------------------------------------------------------
Dex Media, Inc., 8% Unsec. Nts.,
11/15/13 5,150,000 5,497,625
7 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MEDIA Continued
DirecTV Holdings LLC/DirecTV
Financing Co., Inc., 8.375% Sr. Unsec.
Nts., 3/15/13 $ 2,246,000 $ 2,498,675
- ------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 4,000,000 3,970,000
9.125% Sr. Nts., 1/15/09 1,895,000 2,022,913
- ------------------------------------------------------------------------------------------------------------------
Emmis Operating Co., 6.875% Sr.
Unsec. Sub. Nts., 5/15/12 1,200,000 1,194,000
- ------------------------------------------------------------------------------------------------------------------
Entravision Communications Corp.,
8.125% Sr. Sub. Nts., 3/15/09 600,000 627,750
- ------------------------------------------------------------------------------------------------------------------
Granite Broadcasting Corp., 9.75%
Sr. Sec. Nts., 12/1/10 1,057,000 988,295
- ------------------------------------------------------------------------------------------------------------------
Gray Television, Inc., 9.25% Sr. Sub.
Nts., 12/15/11 500,000 545,000
- ------------------------------------------------------------------------------------------------------------------
Lamar Media Corp., 7.25% Sr. Unsec.
Sub. Nts., 1/1/13 200,000 212,000
- ------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 5.70% Sr. Unsec.
Nts., 5/15/13 450,000 419,193
- ------------------------------------------------------------------------------------------------------------------
Liberty Media Group, 8.50% Debs.,
7/15/29 450,000 455,809
- ------------------------------------------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr. Sub.
Nts., 5/15/13 500,000 477,500
- ------------------------------------------------------------------------------------------------------------------
LodgeNet Entertainment Corp.,
9.50% Sr. Sub. Debs., 6/15/13 400,000 438,000
- ------------------------------------------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital
Corp., 9.50% Sr. Unsec. Nts., 1/15/13 1,557,000 1,560,893
- ------------------------------------------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 1,400,000 1,349,250
6.875% Sr. Unsec. Sub. Nts., 10/1/13 800,000 797,000
- ------------------------------------------------------------------------------------------------------------------
News America Holdings, Inc.,
8.875% Sr. Debs., 4/26/23 625,000 818,709
- ------------------------------------------------------------------------------------------------------------------
PanAmSat Corp., 9% Sr. Unsec. Nts.,
8/15/14 1,300,000 1,425,125
- ------------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 1,100,000 1,108,250
8.875% Sr. Unsec. Nts., 5/15/11 57,000 59,993
- ------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Corp., 6.875% Sr. Nts.,
1/15/13 5 1,250,000 1,281,250
- ------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I:
8.875% Sr. Nts., 12/15/10 5 700,000 768,250
10.875% Sr. Sub. Nts., 12/15/12 5 1,000,000 1,167,500
- ------------------------------------------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec.
Sub. Nts., Series B, 7/1/11 800,000 863,000
- ------------------------------------------------------------------------------------------------------------------
Rainbow National Services LLC,
8.75% Sr. Nts., 9/1/12 5 1,600,000 1,756,000
- ------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.,
8% Sr. Unsec. Sub. Nts., 3/15/12 1,600,000 1,648,000
- ------------------------------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc.,
9.625% Sr. Unsec. Sub. Nts., 11/1/09 600,000 630,750
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MEDIA Continued
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 $ 500,000 $ 522,500
10.875% Sr. Unsec. Nts., Series B,
6/15/09 650,000 624,000
- ------------------------------------------------------------------------------------------------------------------
Weekly Reader Corp./
CompassLearning, Inc./
WRC Media, Inc., 12.75% Sr. Sub.
Nts., 11/15/09 1,100,000 1,170,125
- ------------------------------------------------------------------------------------------------------------------
WMG Holdings Corp., 0%/
9.50% Sr. Disc. Nts., 12/15/14 5,6 1,765,000 1,226,675
----------------
65,655,893
- ------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.1%
Saks, Inc.:
8.25% Sr. Unsec. Nts., 11/15/08 250,000 264,063
9.875% Nts., 10/1/11 300,000 326,250
----------------
590,313
- ------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--0.8%
Asbury Automotive Group, Inc.,
9% Sr. Sub. Nts., 6/15/12 600,000 616,500
- ------------------------------------------------------------------------------------------------------------------
Atlantic Broadband Finance LLC,
9.375% Sr. Sub. Nts., 1/15/14 5 500,000 472,500
- ------------------------------------------------------------------------------------------------------------------
AutoNation, Inc., 9% Sr. Unsec. Nts.,
8/1/08 1,200,000 1,317,000
- ------------------------------------------------------------------------------------------------------------------
Boise Cascade LLC, 7.125% Sr. Sub.
Nts., 10/15/14 5 950,000 938,125
- ------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr.
Unsec. Nts., 6/1/12 600,000 543,750
- ------------------------------------------------------------------------------------------------------------------
Petco Animal Supplies, Inc., 10.75%
Sr. Sub. Nts., 11/1/11 750,000 840,000
- ------------------------------------------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr. Unsec.
Sub. Nts., Series B, 5/1/10 350,000 351,750
----------------
5,079,625
- ------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.0%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 5 2,175,000 2,387,063
- ------------------------------------------------------------------------------------------------------------------
Levi Strauss & Co.:
7% Unsec. Nts., 11/1/06 800,000 804,000
7.73% Sr. Unsec. Unsub. Nts., 4/1/12 2 900,000 855,000
12.25% Sr. Nts., 12/15/12 900,000 987,750
- ------------------------------------------------------------------------------------------------------------------
Oxford Industries, Inc., 8.875% Sr.
Nts., 6/1/11 500,000 537,500
- ------------------------------------------------------------------------------------------------------------------
Russell Corp., 9.25% Sr. Nts., 5/1/10 600,000 636,000
----------------
6,207,313
- ------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.1%
- ------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.1%
Constellation Brands, Inc., 8.125%
Sr. Sub. Nts., 1/15/12 500,000 537,500
8 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.6%
Great Atlantic & Pacific Tea Co., Inc.
(The), 9.125% Sr. Nts., 12/15/11 $ 457,000 $ 483,278
- ------------------------------------------------------------------------------------------------------------------
Jean Coutu Group (PJC), Inc. (The):
7.625% Sr. Unsec. Nts., 8/1/12 450,000 466,875
8.50% Sr. Sub. Nts., 8/1/14 1,500,000 1,488,750
- ------------------------------------------------------------------------------------------------------------------
Real Time Data Co., 11% Disc. Nts.,
5/31/09 1,3,4 476,601 --
- ------------------------------------------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 900,000 931,500
9.50% Sr. Sec. Nts., 2/15/11 450,000 481,500
----------------
3,851,903
- ------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--1.8%
American Seafoods Group LLC,
10.125% Sr. Sub. Nts., 4/15/10 500,000 536,250
- ------------------------------------------------------------------------------------------------------------------
Burns Philp Capital Property Ltd.,
9.75% Sr. Unsec. Sub. Nts., 7/15/12 400,000 432,000
- ------------------------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc.,
7.50% Sr. Unsec. Nts., 11/1/14 300,000 280,500
- ------------------------------------------------------------------------------------------------------------------
Del Monte Corp.:
6.75% Sr. Sub. Nts., 2/15/15 5 350,000 358,750
8.625% Sr. Sub. Nts., 12/15/12 1,000,000 1,105,000
- ------------------------------------------------------------------------------------------------------------------
Doane Pet Care Co.:
9.75% Sr. Unsec. Sub. Nts., 5/15/07 400,000 391,000
10.75% Sr. Nts., 3/1/10 1,500,000 1,593,750
- ------------------------------------------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09 687,000 735,090
8.875% Sr. Unsec. Nts., 3/15/11 146,000 156,585
- ------------------------------------------------------------------------------------------------------------------
Hines Nurseries, Inc., 10.25% Sr.
Unsec. Sub. Nts., 10/1/11 600,000 621,000
- ------------------------------------------------------------------------------------------------------------------
Pinnacle Foods Holding Corp.,
8.25% Sr. Sub. Nts., 12/1/13 255,000 229,500
- ------------------------------------------------------------------------------------------------------------------
Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08 925,000 966,625
8% Sr. Nts., Series B, 10/15/09 900,000 976,500
- ------------------------------------------------------------------------------------------------------------------
Swift & Co., 10.125% Sr. Nts., 10/1/09 1,000,000 1,095,000
- ------------------------------------------------------------------------------------------------------------------
United Biscuits Finance plc, 10.625%
Sr. Sub. Nts., 4/15/11 1 [EUR] 1,000,000 1,261,587
----------------
10,739,137
- ------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.5%
Church & Dwight Co., Inc., 6% Sr.
Unsec. Sub. Nts., 12/15/12 900,000 913,500
- ------------------------------------------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 1,000,000 1,073,750
9.375% Sr. Unsec. Sub. Nts., 6/1/11 700,000 740,250
----------------
2,727,500
- ------------------------------------------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.0%
Elizabeth Arden, Inc., 7.75% Sr. Unsec.
Sub. Nts., 1/15/14 300,000 314,250
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
TOBACCO--0.1%
R.J. Reynolds Tobacco Holdings, Inc.,
6.50% Nts., 7/15/10 5 $ 500,000 $ 501,250
- ------------------------------------------------------------------------------------------------------------------
ENERGY--6.3%
- ------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.6%
Dresser, Inc., 9.375% Sr. Sub. Nts.,
4/15/11 400,000 423,000
- ------------------------------------------------------------------------------------------------------------------
Grant Prideco, Inc., 9% Sr. Unsec.
Nts., 12/15/09 300,000 330,000
- ------------------------------------------------------------------------------------------------------------------
Hanover Compressor Co., 8.625%
Sr. Nts., 12/15/10 700,000 743,750
- ------------------------------------------------------------------------------------------------------------------
Hanover Equipment Trust 2001A,
8.50% Sr. Sec. Nts., Series A, 9/1/08 500,000 522,500
- ------------------------------------------------------------------------------------------------------------------
Petroleum Helicopters, Inc.,
9.375% Sr. Nts., 5/1/09 600,000 634,500
- ------------------------------------------------------------------------------------------------------------------
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts., 5/15/10 800,000 840,000
----------------
3,493,750
- ------------------------------------------------------------------------------------------------------------------
OIL & GAS--5.7%
ANR Pipeline Co., 8.875% Sr. Nts.,
3/15/10 400,000 440,771
- ------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Nts., 6/15/15 5 550,000 566,500
6.875% Sr. Unsec. Nts., 1/15/16 1,420,000 1,487,450
- ------------------------------------------------------------------------------------------------------------------
Delta Petroleum Corp., 7% Sr. Nts.,
4/1/15 5 265,000 250,425
- ------------------------------------------------------------------------------------------------------------------
El Paso Corp., 7.875% Sr. Unsec. Nts.,
6/15/12 2,807,000 2,905,245
- ------------------------------------------------------------------------------------------------------------------
El Paso Energy Corp., 7.625% Nts.,
7/15/11 350,000 354,375
- ------------------------------------------------------------------------------------------------------------------
El Paso Production Holding Co.,
7.75% Sr. Unsec. Nts., 6/1/13 3,000,000 3,217,500
- ------------------------------------------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 1,000,000 1,080,000
- ------------------------------------------------------------------------------------------------------------------
Frontier Oil Corp., 6.625% Sr. Unsec.
Nts., 10/1/11 450,000 465,750
- ------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co.:
6.625% Sr. Unsec. Sub. Nts., 9/1/14 1,300,000 1,368,250
8.375% Sr. Sub. Nts., 8/15/12 600,000 658,500
- ------------------------------------------------------------------------------------------------------------------
Plains Exploration & Production Co.,
7.125% Sr. Nts., 6/15/14 600,000 645,000
- ------------------------------------------------------------------------------------------------------------------
Premcor Refining Group, Inc.:
6.75% Sr. Nts., 5/1/14 700,000 757,750
9.50% Sr. Nts., 2/1/13 1,000,000 1,155,000
- ------------------------------------------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 445,000 445,000
7.375% Sr. Sub. Nts., 7/15/13 400,000 428,000
- ------------------------------------------------------------------------------------------------------------------
Southern Natural Gas Co.:
7.35% Nts., 2/15/31 600,000 641,269
8% Sr. Unsub. Nts., 3/1/32 900,000 1,028,064
8.875% Sr. Nts., 3/15/10 700,000 771,350
9 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
OIL & GAS Continued
Stone Energy Corp.:
6.75% Sr. Unsec. Sub. Nts., 12/15/14 $ 560,000 $ 547,400
8.25% Sr. Unsec. Sub. Nts., 12/15/11 1,600,000 1,684,000
- ------------------------------------------------------------------------------------------------------------------
Teekay Shipping Corp., 8.875% Sr.
Nts., 7/15/11 575,000 659,094
- ------------------------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co.,
7.50% Bonds, 4/1/17 2,915,000 3,243,386
- ------------------------------------------------------------------------------------------------------------------
Tesoro Petroleum Corp.:
8% Sr. Sec. Nts., 4/15/08 1,000,000 1,060,000
9.625% Sr. Sub. Nts., 4/1/12 557,000 618,966
- ------------------------------------------------------------------------------------------------------------------
Transcontinental Gas Pipe Line Corp.,
8.875% Sr. Unsub. Nts., Series B, 7/15/12 200,000 239,000
- ------------------------------------------------------------------------------------------------------------------
Whiting Petroleum Corp., 7.25% Sr.
Sub. Nts., 5/1/12 800,000 824,000
- ------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 1,550,000 1,681,750
7.625% Nts., 7/15/19 900,000 1,017,000
8.75% Unsec. Nts., 3/15/32 1,900,000 2,291,875
- ------------------------------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc.,
6.50% Nts., 12/1/08 1 300,000 314,250
- ------------------------------------------------------------------------------------------------------------------
XTO Energy, Inc., 7.50% Sr. Nts., 4/15/12 1,000,000 1,151,701
----------------
33,998,621
- ------------------------------------------------------------------------------------------------------------------
FINANCIALS--2.3%
- ------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--0.4%
American Color Graphics, Inc.,
10% Sr. Sec. Nts., 6/15/10 400,000 290,000
- ------------------------------------------------------------------------------------------------------------------
Berry Plastics Corp., 10.75% Sr. Sub.
Nts., 7/15/12 1,600,000 1,754,000
- ------------------------------------------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc., 12%
Sr. Unsec. Sub. Nts., Series B, 9/30/08 1 1,550,000 620,000
----------------
2,664,000
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--0.2%
Bank Plus Corp., 12% Sr. Nts., 7/18/07 1 517,000 555,775
- ------------------------------------------------------------------------------------------------------------------
Western Financial Bank, 9.625%
Unsec. Sub. Debs., 5/15/12 400,000 438,000
----------------
993,775
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.9%
Affinia Group, Inc., 9% Sr. Sub. Nts.,
11/30/14 5 450,000 380,250
- ------------------------------------------------------------------------------------------------------------------
American Commercial Lines LLC/
American Commercial Lines Finance
Corp., 9.50% Sr. Nts., 2/15/15 5 265,000 280,900
- ------------------------------------------------------------------------------------------------------------------
Crystal US Holdings 3 LLC/Crystal
US Sub 3 Corp.:
0%/10.50% Sr. Unsec. Disc. Nts.,
Series B, 10/1/14 6 1,600,000 1,120,000
9.625% Sr. Sub. Nts., 6/15/14 1,560,000 1,755,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Global Cash Access LLC/Global Cash
Finance Corp., 8.75% Sr. Sub. Nts.,
3/15/12 $ 575,000 $ 628,188
- ------------------------------------------------------------------------------------------------------------------
JSG Funding plc, 7.75% Sr. Sub. Nts.,
4/1/15 5 865,000 713,625
- ------------------------------------------------------------------------------------------------------------------
Universal City Florida:
7.96% Sr. Unsec. Nts., 5/1/10 2 270,000 281,475
8.375% Sr. Unsec. Nts., 5/1/10 270,000 282,825
----------------
5,442,263
- ------------------------------------------------------------------------------------------------------------------
REAL ESTATE--0.8%
American Casino & Entertainment
Properties LLC, 7.85% Sr. Sec. Nts.,
2/1/12 800,000 852,000
- ------------------------------------------------------------------------------------------------------------------
Felcor Lodging LP, 9% Sr. Nts., 6/1/11 837,000 918,608
- ------------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 7.875% Sr.
Nts., Series B, 8/1/08 196,000 199,920
- ------------------------------------------------------------------------------------------------------------------
Host Marriott LP, 6.375% Sr. Nts.,
3/15/15 5 1,025,000 1,019,875
- ------------------------------------------------------------------------------------------------------------------
MeriStar Hospitality Corp.:
9.125% Sr. Unsec. Nts., 1/15/11 457,000 482,135
10.50% Sr. Unsec. Nts., 6/15/09 350,000 376,250
- ------------------------------------------------------------------------------------------------------------------
Trustreet Properties, Inc., 7.50% Sr.
Nts., 4/1/15 5 755,000 775,763
----------------
4,624,551
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE--6.3%
- ------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Titan Petrochemicals Group Ltd.,
8.50% Sr. Unsec. Nts., 3/18/12 5 760,000 695,400
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.4%
Inverness Medical Innovations, Inc.,
8.75% Sr. Sub. Nts., 2/15/12 600,000 598,500
- ------------------------------------------------------------------------------------------------------------------
Sybron Dental Specialties, Inc.,
8.125% Sr. Sub. Nts., 6/15/12 700,000 752,500
- ------------------------------------------------------------------------------------------------------------------
Universal Hospital Services, Inc.,
10.125% Sr. Unsec. Nts., 11/1/11 800,000 812,000
----------------
2,163,000
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--5.7%
Alderwoods Group, Inc., 7.75% Sr.
Nts., 9/15/12 5 950,000 1,012,938
- ------------------------------------------------------------------------------------------------------------------
AmeriPath, Inc., 10.50% Sr. Unsec.
Sub. Nts., 4/1/13 700,000 712,250
- ------------------------------------------------------------------------------------------------------------------
Beverly Enterprises, Inc., 7.875% Sr.
Sub. Nts., 6/15/14 600,000 657,000
- ------------------------------------------------------------------------------------------------------------------
Community Health Systems, Inc.,
6.50% Sr. Unsec. Sub. Nts., 12/15/12 900,000 920,250
- ------------------------------------------------------------------------------------------------------------------
Coventry Health Care, Inc., 6.125%
Sr. Unsec. Nts., 1/15/15 1 440,000 449,900
10 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
DaVita, Inc.:
6.625% Sr. Nts., 3/15/13 5 $ 890,000 $ 923,375
7.25% Sr. Sub. Nts., 3/15/15 5 710,000 733,075
- ------------------------------------------------------------------------------------------------------------------
Extendicare Health Services, Inc.:
6.875% Sr. Sub. Nts., 5/1/14 600,000 598,500
9.50% Sr. Unsec. Sub. Nts., 7/1/10 500,000 542,500
- ------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust II, 7.875% Nts., 2/1/08 1,600,000 1,676,000
- ------------------------------------------------------------------------------------------------------------------
Genesis HealthCare Corp., 8% Sr.
Sub. Nts., 10/15/13 400,000 435,000
- ------------------------------------------------------------------------------------------------------------------
HCA, Inc.:
6.30% Sr. Unsec. Nts., 10/1/12 3,200,000 3,292,749
6.375% Nts., 1/15/15 2,500,000 2,600,270
7.875% Sr. Nts., 2/1/11 305,000 336,351
8.75% Sr. Nts., 9/1/10 2,400,000 2,739,624
- ------------------------------------------------------------------------------------------------------------------
HealthSouth Corp.:
7.625% Nts., 6/1/12 1,900,000 1,852,500
8.375% Unsec. Nts., 10/1/11 700,000 698,250
10.75% Sr. Unsec. Sub. Nts., 10/1/08 357,000 373,065
- ------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 9.375%
Sr. Unsec. Nts., Series A, 11/15/08 1,867,644 1,998,379
- ------------------------------------------------------------------------------------------------------------------
Medquest, Inc., 11.875% Sr. Unsec.
Sub. Nts., Series B, 8/15/12 700,000 665,000
- ------------------------------------------------------------------------------------------------------------------
National Nephrology Assn., 9% Sr.
Sub. Nts., 11/1/11 5 200,000 225,500
- ------------------------------------------------------------------------------------------------------------------
NDCHealth Corp., 10.50% Sr. Unsec.
Sub. Nts., 12/1/12 600,000 640,500
- ------------------------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc.,
10.75% Sr. Unsec. Unsub. Nts., 6/1/09 714,000 788,970
- ------------------------------------------------------------------------------------------------------------------
Psychiatric Solutions, Inc., 7.75% Sr.
Sub. Nts., 7/15/15 5 485,000 486,819
- ------------------------------------------------------------------------------------------------------------------
Quintiles Transnational Corp.,
10% Sr. Sub. Nts., 10/1/13 600,000 660,000
- ------------------------------------------------------------------------------------------------------------------
Rotech Healthcare, Inc., 9.50% Sr.
Unsec. Sub. Nts., 4/1/12 600,000 645,000
- ------------------------------------------------------------------------------------------------------------------
Select Medical Corp., 7.625% Sr.
Sub. Nts., 2/1/15 5 875,000 870,625
- ------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 1,074,000 1,028,355
7.375% Nts., 2/1/13 57,000 56,573
9.875% Sr. Nts., 7/1/14 1,200,000 1,293,000
- ------------------------------------------------------------------------------------------------------------------
Triad Hospitals, Inc.:
7% Sr. Nts., 5/15/12 500,000 523,750
7% Sr. Sub. Nts., 11/15/13 2,120,000 2,188,900
- ------------------------------------------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 650,000 698,750
10.75% Sr. Unsec. Sub. Nts., 8/15/14 650,000 711,750
----------------
34,035,468
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.1%
Valeant Pharmaceuticals International,
Inc., 7% Sr. Nts., 12/15/11 $ 800,000 $ 788,000
- ------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--6.6%
- ------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.1%
Alliant Techsystems, Inc., 8.50% Sr.
Unsec. Sub. Nts., 5/15/11 900,000 965,250
- ------------------------------------------------------------------------------------------------------------------
BE Aerospace, Inc.:
8% Sr. Unsec. Sub. Nts., Series B, 3/1/08 300,000 301,500
8.875% Sr. Unsec. Sub. Nts., 5/1/11 57,000 59,850
- ------------------------------------------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 684,000 666,900
6.125% Sr. Unsec. Sub. Nts., 1/15/14 1,100,000 1,105,500
7.625% Sr. Sub. Nts., 6/15/12 500,000 535,000
- ------------------------------------------------------------------------------------------------------------------
Rexnord Corp., 10.125% Sr. Unsec.
Sub. Nts., 12/15/12 700,000 770,000
- ------------------------------------------------------------------------------------------------------------------
TD Funding Corp., 8.375% Sr. Sub.
Nts., 7/15/11 800,000 852,000
- ------------------------------------------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 580,000 645,250
11% Sr. Sub. Nts., 2/15/13 454,000 524,370
- ------------------------------------------------------------------------------------------------------------------
Vought Aircraft Industries, Inc.,
8% Sr. Nts., 7/15/11 300,000 298,500
----------------
6,724,120
- ------------------------------------------------------------------------------------------------------------------
AIRLINES--0.3%
AMR Corp., 9% Debs., 8/1/12 700,000 553,000
- ------------------------------------------------------------------------------------------------------------------
ATA Holdings Corp., 13% Sr. Unsec.
Nts., 2/1/09 3,4 1,575,000 307,125
- ------------------------------------------------------------------------------------------------------------------
Northwest Airlines Corp., 10% Sr.
Unsec. Nts., 2/1/09 1,400,000 616,000
----------------
1,476,125
- ------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS--0.4%
Associated Materials, Inc., 9.75% Sr.
Sub. Nts., 4/15/12 700,000 728,000
- ------------------------------------------------------------------------------------------------------------------
Goodman Global Holding Co., Inc.,
7.875% Sr. Sub. Nts., 12/15/12 5 360,000 334,800
- ------------------------------------------------------------------------------------------------------------------
Jacuzzi Brands, Inc., 9.625% Sr. Sec.
Nts., 7/1/10 544,000 598,400
- ------------------------------------------------------------------------------------------------------------------
Nortek, Inc., 8.50% Sr. Unsec. Unsub.
Nts., 9/1/14 600,000 561,000
- ------------------------------------------------------------------------------------------------------------------
North America Energy Partners, Inc.,
8.75% Sr. Unsec. Nts., 12/1/11 300,000 259,500
----------------
2,481,700
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.5%
Allied Waste North America, Inc.:
7.25% Sr. Nts., 3/15/15 5 725,000 705,063
7.375% Sr. Sec. Nts., Series B, 4/15/14 2,550,000 2,371,500
8.875% Sr. Nts., Series B, 4/1/08 1,500,000 1,582,500
9.25% Sr. Sec. Debs., Series B, 9/1/12 283,000 307,055
11 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
American Pad & Paper Co., 13% Sr.
Sub. Nts., Series B, 11/15/05 1,3,4 $ 200,000 $ --
- ------------------------------------------------------------------------------------------------------------------
Cenveo Corp., 7.875% Sr. Sub. Nts.,
12/1/13 1,600,000 1,528,000
- ------------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr.
Nts., Series B, 12/1/07 350,000 351,750
- ------------------------------------------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 890,000 887,775
7.50% Sr. Nts., 5/1/11 500,000 523,125
- ------------------------------------------------------------------------------------------------------------------
Mail-Well I Corp., 9.625% Sr. Nts.,
3/15/12 700,000 759,500
----------------
9,016,268
- ------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.5%
Belden & Blake Corp., 8.75% Sec. Nts.,
7/15/12 650,000 640,250
- ------------------------------------------------------------------------------------------------------------------
Dayton Superior Corp., 13% Sr.
Unsec. Sub. Nts., 6/15/09 100,000 88,500
- ------------------------------------------------------------------------------------------------------------------
General Cable Corp., 9.50% Sr. Nts.,
11/15/10 500,000 537,500
- ------------------------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7% Sr.
Unsec. Debs., 10/15/28 1,500,000 1,538,736
----------------
2,804,986
- ------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.0%
Great Lakes Dredge & Dock Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/13 250,000 190,625
- ------------------------------------------------------------------------------------------------------------------
MACHINERY--1.5%
Case New Holland, Inc., 9.25% Sr.
Nts., 8/1/11 5 600,000 633,000
- ------------------------------------------------------------------------------------------------------------------
Douglas Dynamics LLC, 7.75% Sr.
Nts., 1/15/12 5 600,000 591,000
- ------------------------------------------------------------------------------------------------------------------
Greenbrier Cos., Inc. (The),
8.375% Sr. Nts., 5/15/15 5 740,000 756,650
- ------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc. (The):
7.125% Sr. Nts., 11/1/13 150,000 157,500
10.50% Sr. Sub. Nts., 8/1/12 520,000 590,200
- ------------------------------------------------------------------------------------------------------------------
Milacron Escrow Corp., 11.50% Sr.
Sec. Nts., 5/15/11 1,700,000 1,793,500
- ------------------------------------------------------------------------------------------------------------------
Navistar International Corp.,
7.50% Sr. Nts., 6/15/11 800,000 820,000
- ------------------------------------------------------------------------------------------------------------------
NMHG Holding Co., 10% Sr. Nts.,
5/15/09 600,000 633,000
- ------------------------------------------------------------------------------------------------------------------
Terex Corp.:
7.375% Sr. Unsec. Sub. Nts., 1/15/14 500,000 520,000
9.25% Sr. Unsec. Sub. Nts., 7/15/11 800,000 872,000
10.375% Sr. Unsec. Sub. Nts., Series B,
4/1/11 500,000 545,000
- ------------------------------------------------------------------------------------------------------------------
Trinity Industries, Inc., 6.50% Sr. Nts.,
3/15/14 1,000,000 1,000,000
----------------
8,911,850
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MARINE--0.3%
CP Ships Ltd., 10.375% Sr. Nts., 7/15/12 $ 1,000,000 $ 1,125,000
- ------------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc, 10.50%
First Priority Ship Mtg. Nts., 6/30/07 1,3,4 573,000 501,375
- ------------------------------------------------------------------------------------------------------------------
WPO Shipholding Co. LLC,
12% Sr. Sec. Nts., 7/15/05 1,3,4 700,000 3,920
----------------
1,630,295
- ------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.4%
Kansas City Southern Railway Co.
(The), 7.50% Sr. Nts., 6/15/09 500,000 518,750
- ------------------------------------------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 450,000 419,625
7.50% Sr. Unsec. Nts., 11/1/13 928,000 918,720
9.625% Sr. Nts., 12/1/12 600,000 657,000
----------------
2,514,095
- ------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.5%
United Rentals, Inc., 7% Sr. Sub.
Nts., 2/15/14 3,100,000 2,968,250
- ------------------------------------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Horizon Lines LLC, 9% Nts., 11/1/12 5 600,000 631,500
- ------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--3.3%
- ------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.5%
Lucent Technologies, Inc., 6.45%
Unsec. Debs., 3/15/29 2,800,000 2,520,000
- ------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 12.50%
Sr. Unsub. Disc. Nts., 1/15/07 1,3,4 1,150,000 632,500
----------------
3,152,500
- ------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.1%
Seagate Technology Hdd Holdings,
8% Sr. Nts., 5/15/09 700,000 748,125
- ------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.0%
Flextronics International Ltd.,
6.25% Sr. Sub. Nts., 11/15/14 2,000,000 1,995,000
- ------------------------------------------------------------------------------------------------------------------
Ingram Micro, Inc., 9.875% Sr.
Unsec. Sub. Nts., 8/15/08 1,200,000 1,269,000
- ------------------------------------------------------------------------------------------------------------------
LCE Acquisition Corp., 9% Sr.
Sub. Nts., 8/1/14 5 875,000 850,938
- ------------------------------------------------------------------------------------------------------------------
Sanmina-SCI Corp., 6.75% Sub.
Nts., 3/1/13 5 920,000 883,200
- ------------------------------------------------------------------------------------------------------------------
Sensus Metering System, Inc.,
8.625% Sr. Unsec. Sub. Nts., 12/15/13 1,000,000 935,000
----------------
5,933,138
- ------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 1,3,4 [EUR] 846,550 10,245
- ------------------------------------------------------------------------------------------------------------------
NorthPoint Communications
Group, Inc., 12.875% Nts., 2/15/10 1,3,4 240,208 --
12 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES Continued
PSINet, Inc., 10.50% Sr. Unsec. Nts.,
12/1/06 1,3,4 [EUR] $ 1,000,000 $ --
----------------
10,245
- ------------------------------------------------------------------------------------------------------------------
IT SERVICES--0.4%
DynCorp International LLC, 9.50% Sr.
Sub. Nts., 2/15/13 5 1,300,000 1,215,500
- ------------------------------------------------------------------------------------------------------------------
Iron Mountain, Inc., 8.625% Sr. Unsec.
Sub. Nts., 4/1/13 1,000,000 1,040,000
- ------------------------------------------------------------------------------------------------------------------
Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11 400,000 431,000
----------------
2,686,500
- ------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.3%
Advanced Micro Devices, Inc.,
7.75% Sr. Unsec. Nts., 11/1/12 2,250,000 2,227,500
- ------------------------------------------------------------------------------------------------------------------
Amkor Technology, Inc., 9.25% Sr.
Unsec. Sub. Nts., 2/15/08 1,000,000 965,000
- ------------------------------------------------------------------------------------------------------------------
Freescale Semiconductor, Inc.,
7.125% Sr. Unsec. Nts., 7/15/14 1,100,000 1,188,000
- ------------------------------------------------------------------------------------------------------------------
Huntsman International LLC,
7.375% Sr. Sub. Nts., 1/1/15 5 3,000,000 2,977,500
- ------------------------------------------------------------------------------------------------------------------
MagnaChip Semiconductor Ltd.,
8% Sr. Sub. Nts., 12/15/14 5 181,000 174,665
----------------
7,532,665
- ------------------------------------------------------------------------------------------------------------------
MATERIALS--11.1%
- ------------------------------------------------------------------------------------------------------------------
CHEMICALS--3.1%
AEP Industries, Inc., 7.875% Sr. Nts., 3/15/13 5 265,000 266,912
- ------------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec.
Nts., Series B, 12/1/07 1 250,000 167,500
- ------------------------------------------------------------------------------------------------------------------
Compass Minerals Group, Inc.,
10% Sr. Sub. Nts., 8/15/11 335,000 366,825
- ------------------------------------------------------------------------------------------------------------------
Crompton Corp., 9.875% Sr. Nts., 8/1/12 800,000 932,000
- ------------------------------------------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar
Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 400,000 423,000
10.125% Sr. Unsec. Nts., 9/1/08 57,000 61,988
10.625% Sr. Unsec. Nts., 5/1/11 1,400,000 1,552,250
- ------------------------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc:
10.125% Sr. Unsec. Sub. Nts., 7/1/09 1 [EUR] 62,000 76,436
10.125% Sr. Unsec. Sub. Nts., 7/1/09 1,645,000 1,700,519
- ------------------------------------------------------------------------------------------------------------------
Huntsman International LLC,
9.875% Sr. Nts., 3/1/09 2,000,000 2,150,000
- ------------------------------------------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 2 332,000 390,930
11.625% Sr. Unsec. Nts., 10/15/10 37,000 43,521
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
CHEMICALS Continued
IMC Global, Inc.:
7.625% Bonds, 11/1/05 1 $ 3,000 $ 3,045
10.875% Sr. Unsec. Nts., 8/1/13 57,000 67,118
10.875% Sr. Unsec. Nts., Series B, 6/1/08 11,000 12,430
- ------------------------------------------------------------------------------------------------------------------
Innophos, Inc., 8.875% Sr. Sub. Nts., 8/15/14 5 1,000,000 1,025,000
- ------------------------------------------------------------------------------------------------------------------
ISP Chemco, Inc., 10.25% Sr. Unsec.
Sub. Nts., 7/1/11 500,000 547,500
- ------------------------------------------------------------------------------------------------------------------
ISP Holdings, Inc., 10.625% Sr. Sec.
Nts., 12/15/09 300,000 324,000
- ------------------------------------------------------------------------------------------------------------------
KI Holdings, Inc., 0%/9.875% Sr.
Unsec. Sub. Disc. Nts., 11/15/14 6 750,000 438,750
- ------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 57,000 60,919
9.50% Sr. Sec. Nts., 12/15/08 100,000 106,875
9.625% Sr. Sec. Nts., Series A, 5/1/07 1,000,000 1,072,500
9.875% Sec. Nts., Series B, 5/1/07 119,000 122,570
10.50% Sr. Sec. Nts., 6/1/13 800,000 919,000
11.125% Sr. Sec. Nts., 7/15/12 300,000 342,000
- ------------------------------------------------------------------------------------------------------------------
Millennium America, Inc., 9.25% Sr.
Unsec. Sub. Nts., 6/15/08 711,000 773,213
- ------------------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, 10% Sr. Sec.
Nts., 12/31/08 319,909 340,703
- ------------------------------------------------------------------------------------------------------------------
Pioneer Cos., Inc., 6.99% Sr. Sec. Nts.,
12/31/06 2 13,978 14,048
- ------------------------------------------------------------------------------------------------------------------
PolyOne Corp.:
8.875% Sr. Unsec. Nts., 5/1/12 1,000,000 992,500
10.625% Sr. Unsec. Nts., 5/15/10 357,000 379,313
- ------------------------------------------------------------------------------------------------------------------
Resolution Performance Products LLC:
8% Sr. Sec. Nts., 12/15/09 450,000 470,250
13.50% Sr. Unsec. Sub. Nts., 11/15/10 300,000 324,000
- ------------------------------------------------------------------------------------------------------------------
Rhodia SA, 10.25% Sr. Unsec. Nts., 6/1/10 390,000 420,225
- ------------------------------------------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.:
7.50% Sr. Sub. Nts., 11/15/14 5 400,000 399,000
10.625% Sr. Unsec. Sub. Nts., 5/15/11 400,000 443,000
- ------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc., 10% Sr. Sec.
Nts., 12/19/07 1,7 409,135 407,089
- ------------------------------------------------------------------------------------------------------------------
Westlake Chemical Corp., 8.75% Sr.
Nts., 7/15/11 260,000 284,050
----------------
18,420,979
- ------------------------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.3%
NTK Holdings, Inc., 0%/10.75% Sr.
Disc. Nts., 3/1/14 5,6 1,420,000 674,500
- ------------------------------------------------------------------------------------------------------------------
Texas Industries, Inc., 10.25% Sr.
Unsec. Nts., 6/15/11 800,000 931,000
----------------
1,605,500
13 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING--3.0%
Crown Euro Holdings SA, 9.50% Sr.
Sec. Nts., 3/1/11 $ 900,000 $ 999,000
- ------------------------------------------------------------------------------------------------------------------
Graham Packaging Co., Inc.:
8.50% Sr. Nts., 10/15/12 5 350,000 355,250
9.875% Sub. Nts., 10/15/14 5 600,000 604,500
- ------------------------------------------------------------------------------------------------------------------
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11 1,000,000 1,035,000
9.50% Sr. Sub. Nts., 8/15/13 700,000 708,750
- ------------------------------------------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
7.50% Sr. Unsec. Unsub. Nts., 6/1/13 350,000 336,000
8.25% Sr. Unsec. Nts., 10/1/12 900,000 909,000
- ------------------------------------------------------------------------------------------------------------------
MDP Acquisitions plc, 9.625% Sr.
Nts., 10/1/12 800,000 804,000
- ------------------------------------------------------------------------------------------------------------------
Owens-Brockway Glass Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 1,000,000 1,067,500
8.25% Sr. Unsec. Nts., 5/15/13 557,000 607,826
8.75% Sr. Sec. Nts., 11/15/12 1,350,000 1,495,125
8.875% Sr. Sec. Nts., 2/15/09 1,300,000 1,387,750
- ------------------------------------------------------------------------------------------------------------------
Pliant Corp.:
11.125% Sr. Sec. Nts., 9/1/09 600,000 588,000
11.625% Sr. Sec. Nts., 6/15/09 5,7 510,590 548,884
- ------------------------------------------------------------------------------------------------------------------
Solo Cup Co., 8.50% Sr. Sub. Nts., 2/15/14 1,450,000 1,363,000
- ------------------------------------------------------------------------------------------------------------------
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12 750,000 761,250
9.25% Sr. Unsec. Nts., 2/1/08 1,000,000 1,050,000
9.75% Sr. Unsec. Nts., 2/1/11 1,000,000 1,062,500
- ------------------------------------------------------------------------------------------------------------------
Stone Container Finance Co. of
Canada II, 7.375% Sr. Unsec. Nts., 7/15/14 600,000 567,000
- ------------------------------------------------------------------------------------------------------------------
Tekni-Plex, Inc., 10.875% Sr. Sec. Nts.,
8/15/12 5 290,000 314,650
- ------------------------------------------------------------------------------------------------------------------
TriMas Corp., 9.875% Sr. Unsec. Sub. Nts., 6/15/12 1,800,000 1,521,000
----------------
18,085,985
- ------------------------------------------------------------------------------------------------------------------
METALS & MINING--2.7%
AK Steel Corp.:
7.75% Sr. Unsec. Nts., 6/15/12 1,557,000 1,323,450
7.875% Sr. Unsec. Nts., 2/15/09 300,000 274,500
- ------------------------------------------------------------------------------------------------------------------
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 800,000 830,000
- ------------------------------------------------------------------------------------------------------------------
California Steel Industries, Inc.,
6.125% Sr. Nts., 3/15/14 600,000 561,000
- ------------------------------------------------------------------------------------------------------------------
Century Aluminum Co., 7.50% Sr.
Unsec. Nts., 8/15/14 1,000,000 992,500
- ------------------------------------------------------------------------------------------------------------------
Foundation PA Coal Co., 7.25% Sr.
Unsec. Nts., 8/1/14 650,000 685,750
- ------------------------------------------------------------------------------------------------------------------
IMCO Recycling, Inc., 10.375% Sr.
Sec. Nts., 10/15/10 700,000 771,750
- ------------------------------------------------------------------------------------------------------------------
IPSCO, Inc., 8.75% Sr. Nts., 6/1/13 300,000 336,375
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
METALS & MINING Continued
Ispat Inland ULC, 9.75% Sr. Sec. Nts., 4/1/14 $ 1,364,000 $ 1,595,880
- ------------------------------------------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 9.75% Sr.
Sec. Nts., 6/1/12 800,000 868,000
- ------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
10.875% Sr. Nts., Series B, 10/15/06 3,4 1,000,000 915,000
- ------------------------------------------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875% Sr.
Sec. Nts., 10/15/13 900,000 976,500
- ------------------------------------------------------------------------------------------------------------------
Massey Energy Co., 6.625% Sr. Nts., 11/15/10 400,000 414,000
- ------------------------------------------------------------------------------------------------------------------
Northwest Pipeline Corp.,
8.125% Sr. Nts., 3/1/10 200,000 218,000
- ------------------------------------------------------------------------------------------------------------------
Novelis, Inc., 7.25% Sr. Nts., 2/15/15 5 1,315,000 1,326,506
- ------------------------------------------------------------------------------------------------------------------
Oregon Steel Mills, Inc.,
10% Sr. Nts., 7/15/09 1,300,000 1,407,250
- ------------------------------------------------------------------------------------------------------------------
Peabody Energy Corp., 6.875% Sr.
Unsec. Nts., Series B, 3/15/13 1,000,000 1,065,000
- ------------------------------------------------------------------------------------------------------------------
Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09 400,000 427,000
- ------------------------------------------------------------------------------------------------------------------
UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12 400,000 423,000
- ------------------------------------------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts., 5/15/10 505,000 547,925
10.75% Sr. Nts., 8/1/08 389,000 433,735
---------------
16,393,121
- ------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--2.0%
Abitibi-Consolidated, Inc.,
8.55% Nts., 8/1/10 300,000 314,250
- ------------------------------------------------------------------------------------------------------------------
Appleton Papers, Inc., 8.125% Sr.
Nts., 6/15/11 600,000 588,000
- ------------------------------------------------------------------------------------------------------------------
Buckeye Technologies, Inc.,
8.50% Sr. Nts., 10/1/13 350,000 358,750
- ------------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp.:
7.75% Sr. Unsec. Nts., 11/15/29 2,000,000 2,257,500
8.125% Sr. Unsec. Nts., 5/15/11 2,200,000 2,491,500
9.375% Sr. Unsec. Nts., 2/1/13 1,100,000 1,249,875
- ------------------------------------------------------------------------------------------------------------------
Inland Fiber Group LLC, 9.625% Sr.
Unsec. Nts., 11/15/07 1,3,4 1,700,000 756,500
- ------------------------------------------------------------------------------------------------------------------
JSG Holding plc, 11.50% Sr. Nts.,
10/1/15 5,7 [EUR] 275,261 268,152
- ------------------------------------------------------------------------------------------------------------------
Mercer International, Inc., 9.25%
Sr. Nts., 2/15/13 620,000 499,100
- ------------------------------------------------------------------------------------------------------------------
Norske Skog Canada Ltd., 7.375%
Sr. Unsec. Nts., 3/1/14 600,000 591,000
- ------------------------------------------------------------------------------------------------------------------
Tekni-Plex, Inc., 8.75% Sr. Sec. Nts.,
11/15/13 5 1,557,000 1,389,623
- ------------------------------------------------------------------------------------------------------------------
Tembec Industries, Inc.:
7.75% Sr. Nts., 3/15/12 700,000 518,000
8.50% Sr. Unsec. Nts., 2/1/11 57,000 44,318
14 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS Continued
Western Forest Products, Inc.,
15% Sec. Nts., 7/28/09 1,7 $ 417,000 $ 433,680
----------------
11,760,248
- ------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--10.4%
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--4.4%
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 500,000 531,250
9.375% Sr. Nts., 2/1/09 161,000 169,654
- ------------------------------------------------------------------------------------------------------------------
Cincinnati Bell, Inc.:
7% Sr. Nts., 2/15/15 5 475,000 466,688
8.375% Sr. Sub. Nts., 1/15/14 5 305,000 314,150
- ------------------------------------------------------------------------------------------------------------------
Citizens Communications Co.:
6.25% Sr. Nts., 1/15/13 5 200,000 194,500
9.25% Sr. Nts., 5/15/11 600,000 672,750
- ------------------------------------------------------------------------------------------------------------------
Intelsat Bermuda Ltd., 8.625% Sr.
Nts., 1/15/15 5 2,080,000 2,204,800
- ------------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.,
9.125% Sr. Unsec. Nts., 5/1/08 1,900,000 1,586,500
- ------------------------------------------------------------------------------------------------------------------
MCI, Inc.:
6.908% Sr. Unsec. Nts., 5/1/07 2 2,229,000 2,265,221
7.688% Sr. Unsec. Nts., 5/1/09 2 1,500,000 1,565,625
- ------------------------------------------------------------------------------------------------------------------
PanAmSat Holding Corp.,
0%/10.375% Sr. Unsec. Disc. Nts.,
11/1/14 6 750,000 519,375
- ------------------------------------------------------------------------------------------------------------------
Qwest Capital Funding, Inc.,
7.90% Unsec. Nts., 8/15/10 1,557,000 1,557,000
- ------------------------------------------------------------------------------------------------------------------
Qwest Communications International,
Inc., 7.25% Sr. Unsec. Sub. Nts.,
2/15/11 2 600,000 583,500
- ------------------------------------------------------------------------------------------------------------------
Qwest Corp.:
8.875% Nts., 3/15/12 2,5 2,700,000 2,949,750
8.875% Unsec. Unsub. Nts., 3/15/12 2 500,000 546,250
- ------------------------------------------------------------------------------------------------------------------
Qwest Services Corp.:
13.50% Sr. Sec. Sub. Nts., 12/15/10 4,800,000 5,568,000
14% Sr. Sec. Sub. Nts., 12/15/14 1,700,000 2,069,750
- ------------------------------------------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts.,
12/1/07 1,3,4 400,000 --
- ------------------------------------------------------------------------------------------------------------------
Time Warner Telecom Holdings, Inc.,
9.25% Sr. Nts., 2/15/14 5 875,000 848,750
- ------------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC/
Time Warner Telecom, Inc.,
9.75% Sr. Nts., 7/15/08 50,000 50,500
- ------------------------------------------------------------------------------------------------------------------
Time Warner Telecom, Inc.,
10.125% Sr. Unsec. Sub. Nts., 2/1/11 1,100,000 1,105,500
- ------------------------------------------------------------------------------------------------------------------
Valor Telecommunications Enterprises
LLC, 7.75% Sr. Nts., 2/15/15 5 445,000 439,438
- ------------------------------------------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 1,3,4 1,000,000 --
----------------
26,208,951
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--6.0%
Alamosa Delaware, Inc.:
8.50% Sr. Nts., 1/31/12 $ 1,300,000 $ 1,369,875
11% Sr. Unsec. Nts., 7/31/10 57,000 64,196
12.50% Sr. Unsec. Nts., 2/1/11 100,000 113,500
- ------------------------------------------------------------------------------------------------------------------
American Cellular Corp., 10% Sr. Nts.,
Series B, 8/1/11 110,000 112,200
- ------------------------------------------------------------------------------------------------------------------
American Tower Corp., 7.50% Sr. Nts.,
5/1/12 1,650,000 1,769,625
- ------------------------------------------------------------------------------------------------------------------
American Tower Escrow Corp.,
ZCN% Sr. Sub. Disc. Nts., 8/1/08 8 1,400,000 1,081,500
- ------------------------------------------------------------------------------------------------------------------
AT&T Corp.:
9.05% Sr. Unsec. Nts., 11/15/11 2 3,576,000 4,139,220
9.75% Sr. Nts., 11/15/31 2 600,000 783,750
- ------------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., Sr. Unsec.
Disc. Nts., 10/1/07 1,3,4 1,834,000 --
- ------------------------------------------------------------------------------------------------------------------
Centennial Cellular Operating Co.
LLC/Centennial Communications
Corp., 10.125% Sr. Nts., 6/15/13 1,700,000 1,929,500
- ------------------------------------------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 5 470,000 495,850
- ------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.,
8.875% Sr. Nts., 10/1/13 369,000 339,480
- ------------------------------------------------------------------------------------------------------------------
IWO Escrow Co., 6.891% Sr. Sec. Nts.,
1/15/12 2,5 220,000 219,450
- ------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
5.95% Sr. Unsec. Nts., 3/15/14 1,000,000 1,043,750
7.375% Sr. Nts., 8/1/15 7,490,000 8,126,650
- ------------------------------------------------------------------------------------------------------------------
Nextel Partners, Inc.:
8.125% Sr. Nts., 7/1/11 700,000 763,000
12.50% Sr. Nts., 11/15/09 1,162,000 1,268,033
- ------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc.:
6.375% Sec. Nts., 3/1/14 2,100,000 2,147,250
7.50% Sec. Nts., 3/15/15 900,000 983,250
8% Sr. Sub. Nts., 12/15/12 300,000 324,750
- ------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp.:
8.25% Sr. Sec. Nts., 3/15/12 775,000 813,750
9.75% Sr. Sub. Nts., 1/15/10 457,000 427,295
9.875% Sr. Nts., 2/1/10 900,000 933,750
- ------------------------------------------------------------------------------------------------------------------
SBA Communications Corp.,
8.50% Sr. Unsec. Nts., Cl. A, 12/1/12 1,400,000 1,515,500
- ------------------------------------------------------------------------------------------------------------------
SBA Telecommunications, Inc./
SBA Communications Corp.,
0%/9.75% Sr. Disc. Nts., 12/15/11 6 1,849,000 1,710,325
- ------------------------------------------------------------------------------------------------------------------
Triton PCS, Inc., 8.50% Sr. Unsec.
Nts., 6/1/13 1,600,000 1,484,000
- ------------------------------------------------------------------------------------------------------------------
UbiquiTel Operating Co.,
9.875% Sr. Nts., 3/1/11 1,100,000 1,212,750
- ------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., 10% Sr. Sec. Nts.,
6/15/12 500,000 558,750
- ------------------------------------------------------------------------------------------------------------------
Western Wireless Corp., 9.25% Sr.
Unsec. Nts., 7/15/13 529,000 605,044
----------------
36,335,993
15 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
UTILITIES--6.9%
- ------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--5.2%
AES Corp. (The), 8.75% Sr. Sec. Nts.,
5/15/13 5 $ 1,150,000 $ 1,290,875
- ------------------------------------------------------------------------------------------------------------------
Allegheny Energy, Inc., 7.75% Nts.,
8/1/05 300,000 301,050
- ------------------------------------------------------------------------------------------------------------------
Caithness Coso Funding Corp.,
9.05% Sr. Sec. Nts., Series B, 12/15/09 343,381 369,992
- ------------------------------------------------------------------------------------------------------------------
Calpine Corp.:
7.625% Sr. Nts., 4/15/06 274,000 258,245
8.891% Sr. Sec. Nts., 7/15/07 2,5 1,440,345 1,238,697
- ------------------------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25% Sr.
Nts., Series B, 9/1/10 1,600,000 1,777,166
- ------------------------------------------------------------------------------------------------------------------
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 357,000 377,528
7.75% Sr. Nts., 8/1/10 400,000 432,000
9.875% Sr. Unsec. Nts., 10/15/07 1,400,000 1,533,000
- ------------------------------------------------------------------------------------------------------------------
ESI Tractebel Acquisition Corp.,
7.99% Sec. Bonds, Series B, 12/30/11 1 862,000 920,709
- ------------------------------------------------------------------------------------------------------------------
FPL Energy National Wind Power:
5.608% Nts., 3/10/24 5 535,000 547,496
6.125% Nts., 3/25/19 5 310,000 301,548
- ------------------------------------------------------------------------------------------------------------------
Midwest Generation LLC, 8.75% Sr.
Sec. Nts., 5/1/34 3,900,000 4,387,500
- ------------------------------------------------------------------------------------------------------------------
Mirant Americas Generation LLC,
8.30% Sr. Unsec. Nts., 5/1/11 3,4 200,000 230,500
- ------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings II LLC/
MSW Energy Finance Co. II, Inc.,
7.375% Sr. Sec. Nts., Series B, 9/1/10 700,000 721,000
- ------------------------------------------------------------------------------------------------------------------
MSW Energy Holdings LLC/
MSW Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10 400,000 425,000
- ------------------------------------------------------------------------------------------------------------------
NRG Energy, Inc., 8% Sr. Sec. Nts.,
12/15/13 5 2,055,000 2,178,300
- ------------------------------------------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 1,657,000 1,814,415
9.50% Sr. Sec. Nts., 7/15/13 2,100,000 2,341,500
- ------------------------------------------------------------------------------------------------------------------
Teco Energy, Inc., 7.20% Unsec.
Unsub. Nts., 5/1/11 2,900,000 3,161,000
- ------------------------------------------------------------------------------------------------------------------
Texas Genco LLC, 6.875% Sr. Nts.,
12/15/14 5 2,750,000 2,908,125
- ------------------------------------------------------------------------------------------------------------------
TXU Corp., 5.55% Nts., 11/15/14 5 3,750,000 3,655,710
----------------
31,171,356
- ------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.1%
SEMCO Energy, Inc., 7.125% Sr. Nts.,
5/15/08 400,000 409,234
- ------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--1.6%
AES Red Oak LLC:
8.54% Sr. Sec. Bonds, Series A, 11/30/19 1 1,028,166 1,151,546
9.20% Sr. Sec. Bonds, Series B, 11/30/29 1 500,000 570,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER Continued
Calpine Canada Energy Finance ULC,
8.50% Sr. Unsec. Nts., 5/1/08 $ 2,450,000 $ 1,776,250
- ------------------------------------------------------------------------------------------------------------------
Consumers Energy Co., 6.375% Sr.
Sec. Nts., 2/1/08 450,000 471,988
- ------------------------------------------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 901,000 894,243
8.75% Sr. Nts., 2/15/12 424,000 464,280
10.125% Sr. Sec. Nts., 7/15/13 5 2,200,000 2,497,000
- ------------------------------------------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC, 8.625% Sec.
Pass-Through Certificates, Series A,
6/30/12 856,186 890,968
- ------------------------------------------------------------------------------------------------------------------
NorthWestern Corp., 5.875% Sr. Sec.
Nts., 11/1/14 5 580,000 597,400
----------------
9,313,675
- ------------------------------------------------------------------------------------------------------------------
WATER UTILITIES--0.0%
National Waterworks, Inc., 10.50%
Sr. Unsec. Sub. Nts., Series B, 12/1/12 300,000 339,000
----------------
Total Corporate Bonds and Notes
(Cost $474,576,984) 482,829,069
SHARES
- ------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--0.4%
- ------------------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr.
Exchangeable, Non-Vtg. 1,4 13,764 --
- ------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp.,
6% Cv., Series F (converts into Dobson
Communications Corp., Cl. A
common stock), Non-Vtg. 5 800 100,400
- ------------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc.,
12.75% Jr. Redeemable, Non-Vtg. 1,4 498 50
- ------------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75%
Cum. Exchangeable, Series B,
Non-Vtg. 1,4 8,000 10,000
- ------------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25%
Exchangeable, Non-Vtg. 1,4 342 --
- ------------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc., 2.50% Cv., Series A 4 3,258 782
- ------------------------------------------------------------------------------------------------------------------
Pacific & Atlantic Holdings, Inc.,
7.50% Cum. Cv., Series A 1,7 23,546 45,390
- ------------------------------------------------------------------------------------------------------------------
Paxson Communications Corp.,
14.25% Cum. Jr. Exchangeable,
Non-Vtg. 1,7 98 632,345
- ------------------------------------------------------------------------------------------------------------------
PTV, Inc., 10% Cum., Series A, Non-Vtg. 22 44
- ------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum.,
Series B, Non-Vtg. 1,4 293 270,293
- ------------------------------------------------------------------------------------------------------------------
Sovereign Real Estate Investment
Trust, 12% Non-Cum., Series A 1 10,000 1,452,500
----------------
Total Preferred Stocks (Cost $3,700,152) 2,511,804
16 | OPPENHEIMER HIGH INCOME FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.2%
- ------------------------------------------------------------------------------------------------------------------
Broadwing Corp. 494 $ 2,282
- ------------------------------------------------------------------------------------------------------------------
Cebridge Connections Holding LLC 1,4 2,645 --
- ------------------------------------------------------------------------------------------------------------------
Charles River Laboratories International, Inc. 4 8,360 403,370
- ------------------------------------------------------------------------------------------------------------------
Citigroup, Inc. 359 16,597
- ------------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc. 4 20,660 28,924
- ------------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A 4 43,391 184,846
- ------------------------------------------------------------------------------------------------------------------
Globix Corp. 4 11,467 28,323
- ------------------------------------------------------------------------------------------------------------------
Gulfstream Holding, Inc. 1,4 56 --
- ------------------------------------------------------------------------------------------------------------------
Horizon Natural Resources Co. 1,4 20,000 --
- ------------------------------------------------------------------------------------------------------------------
Huntsman Corp. 4 19,570 376,850
- ------------------------------------------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. 4 42,107 176,849
- ------------------------------------------------------------------------------------------------------------------
iPCS, Inc. 4 9,973 324,123
- ------------------------------------------------------------------------------------------------------------------
Leap Wireless International, Inc. 4 1,913 53,086
- ------------------------------------------------------------------------------------------------------------------
Liberty Global, Inc., Series A 4 8,343 389,368
- ------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc. 4 10,104 356,772
- ------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 1,039 42,620
- ------------------------------------------------------------------------------------------------------------------
MCI, Inc. 1,629 41,882
- ------------------------------------------------------------------------------------------------------------------
NTL, Inc. 4 18,902 1,293,275
- ------------------------------------------------------------------------------------------------------------------
Orbital Sciences Corp. 4 2,235 22,127
- ------------------------------------------------------------------------------------------------------------------
Pioneer Cos., Inc. 4 10,688 235,029
- ------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., Cl. A 4 24,040 607,010
- ------------------------------------------------------------------------------------------------------------------
Prandium, Inc. 1,4 62,829 377
- ------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. 1,4 396 14,652
- ------------------------------------------------------------------------------------------------------------------
Telewest Global, Inc. 4 76,326 1,738,706
- ------------------------------------------------------------------------------------------------------------------
Telus Corp. 1,079 36,697
- ------------------------------------------------------------------------------------------------------------------
TVMAX Holdings, Inc. 1,4 7,500 41,250
- ------------------------------------------------------------------------------------------------------------------
Viatel Holding (Bermuda) Ltd. 1,4 2,701 770
- ------------------------------------------------------------------------------------------------------------------
Western Forest Products, Inc. 4 85,047 286,336
- ------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The) 20,000 380,000
- ------------------------------------------------------------------------------------------------------------------
WRC Media Corp. 1,4 1,353 27
- ------------------------------------------------------------------------------------------------------------------
XO Communications, Inc. 4 2,646 7,021
----------------
Total Common Stocks (Cost $6,882,252) 7,089,169
UNITS
- ------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ------------------------------------------------------------------------------------------------------------------
American Tower Corp. Wts., Exp. 8/1/08 4,5 1,400 414,905
- ------------------------------------------------------------------------------------------------------------------
ASAT Finance LLC Wts., Exp. 11/1/06 1,4 500 --
- ------------------------------------------------------------------------------------------------------------------
COLO.com, Inc. Wts., Exp. 3/15/10 1,4 600 --
- ------------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07 1,4 750 --
- ------------------------------------------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 1,4 1,750 --
- ------------------------------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/1/08 1,4 1,500 --
VALUE
UNITS SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES Continued
e.spire Communications, Inc. Wts., Exp. 11/1/05 1,4 475 $ 5
- ------------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 1,4 5,940 --
- ------------------------------------------------------------------------------------------------------------------
ICO Global Communication Holdings Ltd. Wts.:
Exp. 5/16/06 1,4 10,561 422
Exp. 5/16/06 1,4 16 --
- ------------------------------------------------------------------------------------------------------------------
Imperial Credit Industries, Inc. Wts., Exp. 1/31/08 1,4 5,148 --
- ------------------------------------------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/15/07 4,5 765 --
- ------------------------------------------------------------------------------------------------------------------
iPCS, Inc. Wts., Exp. 6/15/10 1,4 750 --
- ------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 4,5 800 --
- ------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07 1,4 800 --
- ------------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc. Wts., Exp. 4/16/07 4 7,220 36
- ------------------------------------------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10 1,4 1,000 --
- ------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc. Rts., Exp. 7/8/05 4 198 --
- ------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 4 20,000 7,400
- ------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts., Exp. 12/19/08 1,4 647 1,359
- ------------------------------------------------------------------------------------------------------------------
XO Communications, Inc., Cl. A Wts., Exp. 1/16/10 4 5,300 1,855
- ------------------------------------------------------------------------------------------------------------------
XO Communications, Inc., Cl. B Wts., Exp. 1/16/10 4 3,975 1,034
- ------------------------------------------------------------------------------------------------------------------
XO Communications, Inc., Cl. C Wts., Exp. 1/16/10 4 3,975 835
----------------
Total Rights, Warrants and Certificates (Cost $97,702) 427,851
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--3.5%
- ------------------------------------------------------------------------------------------------------------------
Dow Jones CDX High Yield Index Pass-Through Certificates:
Series 3-4, 10.50%, 12/29/09 5,9 $ 1,500,000 1,475,625
Series 4-T1, 8.25%, 6/29/10 5,9 15,660,000 15,738,300
- ------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., High Yield Targeted Return Index Securities,
Series 2004-1, 8.218%, 8/1/15 1,9 3,301,952 3,550,160
----------------
Total Structured Notes (Cost $20,529,947) 20,764,085
- ------------------------------------------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.2%
- ------------------------------------------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%, 7/1/05 (Cost $1,026,878) 1,026,878 1,026,878
17 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--12.5% 10
- ------------------------------------------------------------------------------------------------------------------
Undivided interest of 6.05% in joint repurchase
agreement (Principal Amount/Value $1,234,399,000,
with a maturity value of $1,234,508,724) with UBS
Warburg LLC, 3.20%, dated 6/30/05, to be repurchased
at $74,674,637 on 7/1/05, collateralized by
Federal Home Loan Mortgage Corp., 5.50%, 2/1/35,
with a value of $1,260,871,334
(Cost $74,668,000) $ 74,668,000 $ 74,668,000
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $583,762,531) 98.9% 591,410,723
- ------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.1 6,858,457
----------------------------------
NET ASSETS 100.0% $ 598,269,180
==================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
EUR Euro
1. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2005 was $16,953,248, which represents
2.83% of the Fund's net assets, of which $377 is considered restricted. See Note
6 of Notes to Financial Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Issue is in default. See Note 1 of Notes to Financial Statements.
4. Non-income producing security.
5. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $91,968,697 or 15.37% of the Fund's net
assets as of June 30, 2005.
6. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
7. Interest or dividend is paid-in-kind.
8. Zero coupon bond reflects effective yield on the date of purchase.
9. Interest rate represents a weighted average rate comprised of the interest
rates of the underlying securities.
10. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks. See Note 1 of Notes to
Financial Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (including cost and market value of $74,668,000 in repurchase agreements)
(cost $583,762,531)--see accompanying statement of investments $ 591,410,723
- ------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 9,719,229
Investments sold 2,271,186
Shares of beneficial interest sold 405,226
Other 12,977
--------------
Total assets 603,819,341
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,059,320
Shares of beneficial interest redeemed 342,300
Distribution and service plan fees 83,861
Shareholder communications 32,078
Trustees' compensation 14,285
Transfer and shareholder servicing agent fees 1,791
Other 16,526
--------------
Total liabilities 5,550,161
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 598,269,180
==============
- ------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 72,261
- ------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 676,723,346
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 19,000,426
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (105,158,151)
- ------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign
currencies 7,631,298
--------------
NET ASSETS $ 598,269,180
==============
- ------------------------------------------------------------------------------------------------------------------------------
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 $452,509,970
and 54,595,906 shares of beneficial interest outstanding) $ 8.29
- ------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of $145,759,210
and 17,664,635 shares of beneficial interest outstanding) $ 8.25
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 21,700,810
- ------------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,712) 118,596
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 16
--------------
Total investment income 21,819,422
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Management fees 2,102,474
- ------------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 166,658
- ------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,322
Service shares 5,115
- ------------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-service shares 22,170
Service shares 6,536
- ------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 11,761
- ------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,880
- ------------------------------------------------------------------------------------------------------------------------------
Other 23,420
--------------
Total expenses 2,351,336
Less reduction to custodian expenses (11,761)
--------------
Net expenses 2,339,575
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 19,479,847
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 5,470,708
Closing of futures contracts (108,785)
Foreign currency transactions (24,063)
Swap contracts 29,533
--------------
Net realized gain 5,367,393
- ------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (22,141,391)
Translation of assets and liabilities denominated in foreign currencies (495,820)
Futures contracts (82,250)
Swap contracts 90,514
--------------
Net change in unrealized appreciation (22,628,947)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,218,293
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 19,479,847 $ 38,670,671
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 5,367,393 (682,850)
- ------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (22,628,947) 10,279,974
------------------------------
Net increase in net assets resulting from operations 2,218,293 48,267,795
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (29,392,362) (29,416,204)
Service shares (8,541,230) (5,469,874)
- ------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares 725,359 (10,547,360)
Service shares 19,841,399 54,117,983
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (15,148,541) 56,952,340
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 613,417,721 556,465,381
------------------------------
End of period (including accumulated net investment income of $19,000,426 and
$37,454,171, respectively) $ 598,269,180 $ 613,417,721
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER HIGH INCOME FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.80 $ 8.61 $ 7.51 $ 8.54 $ 9.27 $ 10.72
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .29 1 .58 1 .60 .58 .84 1.00
Net realized and unrealized gain (loss) (.24) .15 1.09 (.76) (.62) (1.36)
-------------------------------------------------------------------------------------
Total from investment operations .05 .73 1.69 (.18) .22 (.36)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.56) (.54) (.59) (.85) (.95) (1.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.29 $ 8.80 $ 8.61 $ 7.51 $ 8.54 $ 9.27
=====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 0.50% 8.97% 23.96% (2.40)% 1.97% (3.74)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 452,510 $479,405 $480,112 $345,670 $344,788 $ 333,533
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 453,883 $460,877 $396,858 $335,894 $347,723 $ 329,260
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.73% 6.91% 8.31% 8.29% 9.94% 10.47%
Total expenses 0.75% 4 0.75% 4 0.76% 4 0.77% 4 0.79% 4 0.79% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 31% 51% 48% 75% 46% 31%
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.
22 | OPPENHEIMER HIGH INCOME FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.76 $ 8.58 $ 7.49 $ 8.54 $ 8.40
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 2 .56 2 .61 .88 .20
Net realized and unrealized gain (loss) (.24) .15 1.06 (1.08) (.06)
------------------------------------------------------------------------
Total from investment operations .03 .71 1.67 (.20) .14
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.54) (.53) (.58) (.85) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.25 $ 8.76 $ 8.58 $ 7.49 $ 8.54
========================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 0.30% 8.73% 23.79% (2.67)% 1.67%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 145,759 $134,013 $76,354 $17,705 $ 3
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 134,528 $101,464 $41,246 $ 5,602 $ 2
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 6.48% 6.63% 7.84% 8.91% 12.51%
Total expenses 1.00% 5 1.01% 5 1.04% 5 1.02% 5,6 0.96% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 31% 51% 48% 75% 46%
1. For the period from September 18, 2001 (inception of offering) to December
31, 2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer High Income Fund/VA (the Fund) is a separate series of Oppenheimer
Variable Account Funds (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek a high level of current income from investment
in high-yield fixed-income securities. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures. As of June 30, 2005, the market value
of these securities comprised 3.5% of the Fund's net assets and resulted in
unrealized cumulative gains of $234,138.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of June 30, 2005, securities with an aggregate
market value of $8,290,415, representing 1.39% of the Fund's net assets, were in
default.
24 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $103,125,271. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$5,367,393 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2004, the Fund did not utilize any capital loss
carryforward to offset capital gains realized in that fiscal year.
25 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
As of December 31, 2004, the Fund had available for federal income tax purposes
post-October losses of $1,169,095 and unused capital loss carryforwards as
follows:
EXPIRING
----------------------------------
2006 $ 3,401,577
2007 4,933,260
2008 11,572,833
2009 22,696,701
2010 56,061,391
2011 8,529,303
2012 128,504
------------
Total $107,323,569
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
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.
26 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 6,847,609 $ 57,223,490 23,243,919 $ 196,620,675
Dividends and/or distributions reinvested 3,524,264 29,392,362 3,591,722 29,416,204
Redeemed (10,230,761) (85,890,493) (28,128,136) (236,584,239)
-----------------------------------------------------------
Net increase (decrease) 141,112 $ 725,359 (1,292,495) $ (10,547,360)
===========================================================
- ----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 5,493,008 $ 45,697,088 12,247,468 $ 103,415,502
Dividends and/or distributions reinvested 1,027,825 8,541,230 669,507 5,469,874
Redeemed (4,152,207) (34,396,919) (6,517,361) (54,767,393)
-----------------------------------------------------------
Net increase 2,368,626 $ 19,841,399 6,399,614 $ 54,117,983
===========================================================
- -------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$157,408,643 and $163,124,454, respectively.
- -------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million, 0.60% of the next $200 million and 0.50% of average annual
net assets over $1 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 six months ended June 30, 2005, the Fund paid
$10,379 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 per annum 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, 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.
27 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2005, 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.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST JUNE 30, 2005 DEPRECIATION
- --------------------------------------------------------------------------------
Prandium, Inc. 3/19/99-7/19/02 $738,000 $377 $737,623
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of June 30, 2005, the
Fund had no securities on loan.
28 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
8. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
29 | OPPENHEIMER HIGH INCOME FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
30 | OPPENHEIMER HIGH INCOME FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory
agreement for the current year, the Board evaluated the nature and extent of the
services provided by the Manager and its affiliates. The Manager provides the
Fund with office space, facilities and equipment; administrative, accounting,
clerical, legal and compliance personnel; securities trading services and
oversight of third party service providers and the services of the portfolio
manager and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality
of the portfolio management services to provided, the Board considered the
experience of Dimitrios Kourkoulakos and the Manager's high yield team and
analysts. Mr. Kourkoulakos has been a portfolio manager of the Fund since June
2002 and has been the person primarily responsible for the day-to-day management
of the Fund's portfolio since April 2004. Mr. Kourkoulakos has been a Vice
President of the Manager since December 2001 and was a High Yield Analyst from
1998 to 2001 and a Securities Analyst from 1995 to 1998 with the Manager. He is
also a portfolio manager and an officer of other portfolios in the
OppenheimerFunds complex and has had over 10 years of experience managing fixed
income investments.
The Board reviewed information, prepared by the Manager and by the independent
consultant, comparing the Fund's historical performance to relevant market
indices and to the performance of other high current yield funds (including both
funds advised by the Manager and funds advised by other investment advisers).
The Board also receives and reviews comparative performance information
regarding the Fund and other funds at each Board meeting. The Board noted that
the Fund's one-year, three-year and five-year performance was below its peer
group average. However, its ten-year performance was better than its peer group
average. The Board observed that the Manager had been restructuring its
fixed-income department and, for other fixed income funds, investment
performance has improved. The Board also noted that the Manager advised that it
believes it has the personnel and processes in place to improve the performance
of the Fund. The Board decided that it will allow the Manager additional time to
improve the performance of the Fund and will continue to monitor the performance
of the Fund during the year.
31 | OPPENHEIMER HIGH INCOME FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including
comparative information, regarding the fees paid to the Manager and its
affiliates and the other expenses borne by the Fund. The independent consultant
provided comparative data in regard to the fees and expenses of the Fund, other
high current yield funds and other funds with comparable assets levels and
distribution features. The Board noted that, although the Fund's management fees
are higher than its peer group average, its total expenses are lower than its
peer group average. In addition, the Board evaluated the comparability of the
fees charged and the services provided to the Fund to the fees charged and
services provided to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information
regarding the cost of services provided by the Manager and its affiliates and
the Manager's profitability. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders. In addition the Board considered
information that was provided regarding the direct and indirect benefits the
Manager receives as a result of its relationship with the Fund, including
compensation paid to the Manager's affiliates.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the fund has recently experienced
moderate asset growth and that, based on current asset levels, the Fund is not
yet approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are both independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described
above, the Board, including a majority of the independent Trustees, concluded
that the nature, extent and quality of the services provided to the Fund by the
Manager are a benefit to the Fund and in the best interest of the Fund's
shareholders and that the amount and structure of the compensation received by
the Manager and its affiliates are reasonable in relation to the services
provided. Accordingly, the Board elected to continue the investment advisory
agreement for another year. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
32 | OPPENHEIMER HIGH INCOME FUND/VA
MAIN STREET FUND(R)/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 995.10 $3.32
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.47 3.36
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 994.30 4.46
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.33 4.52
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------------
Non-Service shares 0.67%
- -----------------------------------------
Service shares 0.90
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.3%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.4%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.1%
Autoliv, Inc. 11,500 $ 503,700
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The) 1,2 42,000 625,800
---------------
1,129,500
- --------------------------------------------------------------------------------
AUTOMOBILES--0.3%
Ford Motor Co. 2 407,915 4,177,050
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
Genuine Parts Co. 11,700 480,753
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.5%
Brinker International, Inc. 1 300 12,015
- --------------------------------------------------------------------------------
CEC Entertainment, Inc. 1,2 13,700 576,633
- --------------------------------------------------------------------------------
Choice Hotels International, Inc. 2 3,600 236,520
- --------------------------------------------------------------------------------
CKE Restaurants, Inc. 2 8,700 121,104
- --------------------------------------------------------------------------------
Darden Restaurants, Inc. 27,400 903,652
- --------------------------------------------------------------------------------
Hilton Hotels Corp. 25,000 596,250
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc. 1,2 1,500 39,300
- --------------------------------------------------------------------------------
Jack in the Box, Inc. 1,2 5,800 219,936
- --------------------------------------------------------------------------------
Marriott International, Inc., Cl. A 38,800 2,646,936
- --------------------------------------------------------------------------------
McDonald's Corp. 242,450 6,727,988
- --------------------------------------------------------------------------------
MGM Mirage, Inc. 1,2 104,600 4,140,068
- --------------------------------------------------------------------------------
Penn National Gaming, Inc. 1 13,300 485,450
- --------------------------------------------------------------------------------
Starbucks Corp. 1 2,700 139,482
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc. 37,100 2,172,945
- --------------------------------------------------------------------------------
Wendy's International, Inc. 12,000 571,800
- --------------------------------------------------------------------------------
Yum! Brands, Inc. 78,500 4,088,280
---------------
23,678,359
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.6%
Black & Decker Corp. 2 5,600 503,160
- --------------------------------------------------------------------------------
Cavco Industries, Inc. 1 930 26,209
- --------------------------------------------------------------------------------
Centex Corp. 8,200 579,492
- --------------------------------------------------------------------------------
D.R. Horton, Inc. 88,400 3,324,724
- --------------------------------------------------------------------------------
Furniture Brands International, Inc. 2 12,300 265,803
- --------------------------------------------------------------------------------
KB Home 2 19,200 1,463,616
- --------------------------------------------------------------------------------
MDC Holdings, Inc. 4,200 345,450
- --------------------------------------------------------------------------------
NVR, Inc. 1,2 1,000 810,000
- --------------------------------------------------------------------------------
Pulte Homes, Inc. 3,800 320,150
- --------------------------------------------------------------------------------
Ryland Group, Inc. (The) 2 13,400 1,016,658
- --------------------------------------------------------------------------------
Standard Pacific Corp. 2 4,400 386,980
- --------------------------------------------------------------------------------
Tempur-Pedic International, Inc. 1,2 7,700 170,786
- --------------------------------------------------------------------------------
Toll Brothers, Inc. 1,2 4,000 406,200
- --------------------------------------------------------------------------------
Tupperware Corp. 2 7,200 168,264
---------------
9,787,492
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.1%
eBay, Inc. 1 38,900 $ 1,284,089
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.0%
Action Performance Cos., Inc. 2 11,000 97,020
- --------------------------------------------------------------------------------
Marvel Enterprises, Inc. 1,2 20,400 402,288
- --------------------------------------------------------------------------------
Nautilus, Inc. 2 11,300 322,050
---------------
821,358
- --------------------------------------------------------------------------------
MEDIA--1.9%
Arbitron, Inc. 2 2,700 115,830
- --------------------------------------------------------------------------------
Catalina Marketing Corp. 2 5,500 139,755
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A 1 192,515 5,910,211
- --------------------------------------------------------------------------------
Gannett Co., Inc. 10,100 718,413
- --------------------------------------------------------------------------------
Getty Images, Inc. 1,2 3,300 245,058
- --------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 51,000 519,690
- --------------------------------------------------------------------------------
McGraw-Hill Cos., Inc. (The) 82,600 3,655,050
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 75,100 1,215,118
- --------------------------------------------------------------------------------
NTL, Inc. 1,2 900 61,578
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 10,500 838,530
- --------------------------------------------------------------------------------
Pixar, Inc. 1,2 5,400 270,270
- --------------------------------------------------------------------------------
R.H. Donnelley Corp. 1,2 1,600 99,168
- --------------------------------------------------------------------------------
Time Warner, Inc. 1 448,800 7,499,448
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 158,746 5,083,047
- --------------------------------------------------------------------------------
Walt Disney Co. (The) 148,700 3,744,266
---------------
30,115,432
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.3%
Dillard's, Inc., Cl. A 2 14,800 346,616
- --------------------------------------------------------------------------------
Federated Department Stores, Inc. 72,200 5,290,816
- --------------------------------------------------------------------------------
J.C. Penney Co., Inc. (Holding Co.) 93,500 4,916,230
- --------------------------------------------------------------------------------
Nordstrom, Inc. 2 18,300 1,243,851
- --------------------------------------------------------------------------------
Sears Holdings Corp. 1 2,244 336,308
- --------------------------------------------------------------------------------
Target Corp. 150,500 8,188,705
---------------
20,322,526
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--2.3%
Abercrombie & Fitch Co., Cl. A 2 13,500 927,450
- --------------------------------------------------------------------------------
Advance Auto Parts, Inc. 1,2 10,900 703,595
- --------------------------------------------------------------------------------
American Eagle Outfitters, Inc. 2 38,500 1,180,025
- --------------------------------------------------------------------------------
AutoNation, Inc. 1,2 28,000 574,560
- --------------------------------------------------------------------------------
Barnes & Noble, Inc. 1,2 2,000 77,600
- --------------------------------------------------------------------------------
bebe stores, inc. 2 2,975 78,748
- --------------------------------------------------------------------------------
Bed Bath & Beyond, Inc. 1 46,200 1,930,236
- --------------------------------------------------------------------------------
Best Buy Co., Inc. 4,000 274,200
- --------------------------------------------------------------------------------
Blockbuster, Inc., Cl. B 50,056 429,480
- --------------------------------------------------------------------------------
Borders Group, Inc. 13,300 336,623
- --------------------------------------------------------------------------------
Children's Place Retail Stores, Inc. 1,2 7,700 359,359
6 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SPECIALTY RETAIL Continued
Circuit City Stores, Inc./
Circuit City Group 2 48,200 $ 833,378
- --------------------------------------------------------------------------------
Electronics Boutique
Holdings Corp. 1,2 6,800 431,732
- --------------------------------------------------------------------------------
Finish Line, Inc. (The), Cl. A 2 2,700 51,084
- --------------------------------------------------------------------------------
Gap, Inc. (The) 123,700 2,443,075
- --------------------------------------------------------------------------------
Guitar Center, Inc. 1,2 500 29,185
- --------------------------------------------------------------------------------
Home Depot, Inc. 336,700 13,097,630
- --------------------------------------------------------------------------------
Lowe's Cos., Inc. 87,800 5,111,716
- --------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The) 1,2 13,500 464,803
- --------------------------------------------------------------------------------
Michaels Stores, Inc. 2 27,000 1,116,990
- --------------------------------------------------------------------------------
Movie Gallery, Inc. 2 7,900 208,797
- --------------------------------------------------------------------------------
Office Depot, Inc. 1 3,300 75,372
- --------------------------------------------------------------------------------
Sherwin-Williams Co. 11,400 536,826
- --------------------------------------------------------------------------------
Staples, Inc. 88,250 1,881,490
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 70,800 1,723,980
- --------------------------------------------------------------------------------
Too, Inc. 1,2 10,200 238,374
- --------------------------------------------------------------------------------
Toys R Us, Inc. 1 38,300 1,014,184
- --------------------------------------------------------------------------------
Weight Watchers International, Inc. 1 4,400 227,084
- --------------------------------------------------------------------------------
Zale Corp. 1,2 10,600 335,914
---------------
36,693,490
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Coach, Inc. 1,2 73,300 2,460,681
- --------------------------------------------------------------------------------
Nike, Inc., Cl. B 19,000 1,645,400
- --------------------------------------------------------------------------------
Timberland Co., Cl. A 1,2 28,100 1,088,032
- --------------------------------------------------------------------------------
VF Corp. 1,200 68,664
---------------
5,262,777
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.7%
- --------------------------------------------------------------------------------
BEVERAGES--2.2%
Anheuser-Busch Cos., Inc. 54,700 2,502,525
- --------------------------------------------------------------------------------
Brown-Forman Corp., Cl. B 1,900 114,874
- --------------------------------------------------------------------------------
Coca-Cola Co. (The) 340,000 14,195,000
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. (The) 37,800 1,081,458
- --------------------------------------------------------------------------------
PepsiAmericas, Inc. 2 3,500 89,810
- --------------------------------------------------------------------------------
PepsiCo, Inc. 2 315,650 17,023,005
---------------
35,006,672
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.8%
7-Eleven, Inc. 1,2 8,600 260,064
- --------------------------------------------------------------------------------
Albertson's, Inc. 2 24,900 514,932
- --------------------------------------------------------------------------------
BJ's Wholesale Club, Inc. 1,2 8,900 289,161
- --------------------------------------------------------------------------------
Costco Wholesale Corp. 27,100 1,214,622
- --------------------------------------------------------------------------------
Kroger Co. (The) 1 29,900 568,997
- --------------------------------------------------------------------------------
Longs Drug Stores, Inc. 2 6,900 297,045
- --------------------------------------------------------------------------------
Safeway, Inc. 2 50,700 1,145,313
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING Continued
SUPERVALU, Inc. 2 21,100 $ 688,071
- --------------------------------------------------------------------------------
Sysco Corp. 11,900 430,661
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 384,700 18,542,540
- --------------------------------------------------------------------------------
Walgreen Co. 107,700 4,953,123
---------------
28,904,529
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.9%
Archer-Daniels-Midland Co. 242,300 5,180,374
- --------------------------------------------------------------------------------
Campbell Soup Co. 2 3,700 113,849
- --------------------------------------------------------------------------------
Chiquita Brands International, Inc. 2 12,300 337,758
- --------------------------------------------------------------------------------
Dean Foods Co. 1 4,800 169,152
- --------------------------------------------------------------------------------
General Mills, Inc. 41,100 1,923,069
- --------------------------------------------------------------------------------
Hershey Co. (The) 2 56,800 3,527,280
- --------------------------------------------------------------------------------
Kellogg Co. 4,500 199,980
- --------------------------------------------------------------------------------
Pilgrim's Pride Corp., Cl. B 2 17,800 607,514
- --------------------------------------------------------------------------------
Sara Lee Corp. 77,000 1,525,370
- --------------------------------------------------------------------------------
TreeHouse Foods, Inc. 1 960 27,370
---------------
13,611,716
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.5%
Clorox Co. (The) 2,300 128,156
- --------------------------------------------------------------------------------
Colgate-Palmolive Co. 10,900 544,019
- --------------------------------------------------------------------------------
Energizer Holdings, Inc. 1,2 14,900 926,333
- --------------------------------------------------------------------------------
Kimberly-Clark Corp. 48,800 3,054,392
- --------------------------------------------------------------------------------
Procter & Gamble Co. (The) 356,200 18,789,550
- --------------------------------------------------------------------------------
Spectrum Brands, Inc. 1 8,200 270,600
---------------
23,713,050
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.9%
Avon Products, Inc. 60,200 2,278,570
- --------------------------------------------------------------------------------
Gillette Co. 239,400 12,120,822
---------------
14,399,392
- --------------------------------------------------------------------------------
TOBACCO--1.4%
Altria Group, Inc. 307,500 19,882,950
- --------------------------------------------------------------------------------
Loews Corp./Carolina Group 7,300 243,236
- --------------------------------------------------------------------------------
Reynolds American, Inc. 2 36,500 2,876,200
---------------
23,002,386
- --------------------------------------------------------------------------------
ENERGY--11.7%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.3%
Baker Hughes, Inc. 8,200 419,512
- --------------------------------------------------------------------------------
Cal Dive International, Inc. 1,2 11,200 586,544
- --------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 2 11,300 603,759
- --------------------------------------------------------------------------------
Halliburton Co. 9,500 454,290
- --------------------------------------------------------------------------------
Helmerich & Payne, Inc. 2 14,700 689,724
- --------------------------------------------------------------------------------
Precision Drilling Corp. 1 12,600 496,616
7 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
Todco, Cl. A 1 1,100 $ 28,237
- --------------------------------------------------------------------------------
Transocean, Inc. 1,2 41,900 2,261,343
- --------------------------------------------------------------------------------
Universal Compression
Holdings, Inc. 1,2 3,700 134,088
---------------
5,674,113
- --------------------------------------------------------------------------------
OIL & GAS--11.4%
Amerada Hess Corp. 2 13,500 1,437,885
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 76,200 6,259,830
- --------------------------------------------------------------------------------
Apache Corp. 73,300 4,735,180
- --------------------------------------------------------------------------------
Burlington Resources, Inc. 119,100 6,579,084
- --------------------------------------------------------------------------------
Canadian Natural Resources Ltd. 85,700 3,105,681
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 2 28,800 656,640
- --------------------------------------------------------------------------------
Chevron Corp. 437,200 24,448,224
- --------------------------------------------------------------------------------
Comstock Resources, Inc. 1,2 9,800 247,842
- --------------------------------------------------------------------------------
ConocoPhillips 254,742 14,645,118
- --------------------------------------------------------------------------------
CONSOL Energy, Inc. 2 7,500 401,850
- --------------------------------------------------------------------------------
Devon Energy Corp. 137,900 6,988,772
- --------------------------------------------------------------------------------
EOG Resources, Inc. 2 76,500 4,345,200
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 1,141,516 65,602,948
- --------------------------------------------------------------------------------
Frontier Oil Corp. 2 16,200 475,470
- --------------------------------------------------------------------------------
General Maritime Corp. 2 1,400 59,360
- --------------------------------------------------------------------------------
Holly Corp. 4,400 205,348
- --------------------------------------------------------------------------------
Houston Exploration Co. 1,2 4,800 254,640
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 2 46,723 3,565,432
- --------------------------------------------------------------------------------
Kinder Morgan, Inc. 22,900 1,905,280
- --------------------------------------------------------------------------------
Marathon Oil Corp. 101,000 5,390,370
- --------------------------------------------------------------------------------
Newfield Exploration Co. 1,2 22,600 901,514
- --------------------------------------------------------------------------------
Noble Energy, Inc. 6,100 461,465
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 87,700 6,746,761
- --------------------------------------------------------------------------------
OMI Corp. 2 8,200 155,882
- --------------------------------------------------------------------------------
Paramount Resources Ltd., Cl. A 1 185,100 2,716,371
- --------------------------------------------------------------------------------
Peabody Energy Corp. 2,900 150,916
- --------------------------------------------------------------------------------
Premcor, Inc. 20,600 1,528,108
- --------------------------------------------------------------------------------
Sunoco, Inc. 2 12,400 1,409,632
- --------------------------------------------------------------------------------
Swift Energy Co. 1,2 6,900 247,158
- --------------------------------------------------------------------------------
Talisman Energy, Inc. 81,900 3,068,242
- --------------------------------------------------------------------------------
Tesoro Corp. 2 21,400 995,528
- --------------------------------------------------------------------------------
Trilogy Energy Trust 112,600 1,645,989
- --------------------------------------------------------------------------------
Unocal Corp. 84,200 5,477,210
- --------------------------------------------------------------------------------
Valero Energy Corp. 27,200 2,151,792
- --------------------------------------------------------------------------------
Vintage Petroleum, Inc. 16,300 496,661
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The) 148,800 2,827,200
---------------
182,290,583
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FINANCIALS--23.5%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.4%
Bank of New York Co., Inc. (The) 166,500 $ 4,791,870
- --------------------------------------------------------------------------------
Mellon Financial Corp. 15,100 433,219
- --------------------------------------------------------------------------------
Northern Trust Corp. 12,500 569,875
---------------
5,794,964
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--8.2%
AmSouth Bancorp 2 24,800 644,800
- --------------------------------------------------------------------------------
Astoria Financial Corp. 2 22,450 639,152
- --------------------------------------------------------------------------------
Bank of America Corp. 739,602 33,733,247
- --------------------------------------------------------------------------------
BB&T Corp. 2 76,300 3,049,711
- --------------------------------------------------------------------------------
Comerica, Inc. 44,700 2,583,660
- --------------------------------------------------------------------------------
Compass Bancshares, Inc. 8,400 378,000
- --------------------------------------------------------------------------------
Downey Financial Corp. 3,700 270,840
- --------------------------------------------------------------------------------
Fifth Third Bancorp 34,600 1,425,866
- --------------------------------------------------------------------------------
Golden West Financial Corp. 34,200 2,201,796
- --------------------------------------------------------------------------------
Hibernia Corp., Cl. A 19,100 633,738
- --------------------------------------------------------------------------------
Indymac Mortgage Holdings, Inc. 2 21,200 863,476
- --------------------------------------------------------------------------------
KeyCorp 2 147,000 4,873,050
- --------------------------------------------------------------------------------
M&T Bank Corp. 2 37,500 3,943,500
- --------------------------------------------------------------------------------
Marshall & Ilsley Corp. 2 32,900 1,462,405
- --------------------------------------------------------------------------------
National City Corp. 133,100 4,541,372
- --------------------------------------------------------------------------------
PNC Financial Services Group, Inc. 73,500 4,002,810
- --------------------------------------------------------------------------------
Regions Financial Corp. 2 73,305 2,483,573
- --------------------------------------------------------------------------------
Sterling Financial Corp. 1,2 1,100 41,140
- --------------------------------------------------------------------------------
SunTrust Banks, Inc. 87,300 6,306,552
- --------------------------------------------------------------------------------
SVB Financial Group 1,2 6,200 296,980
- --------------------------------------------------------------------------------
Toronto-Dominion Bank (The) 8,087 360,761
- --------------------------------------------------------------------------------
U.S. Bancorp 472,670 13,801,964
- --------------------------------------------------------------------------------
UnionBanCal Corp. 2 20,500 1,371,860
- --------------------------------------------------------------------------------
Wachovia Corp. 336,700 16,700,320
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 157,400 6,404,606
- --------------------------------------------------------------------------------
Wells Fargo & Co. 278,000 17,119,240
- --------------------------------------------------------------------------------
Zions Bancorp 14,800 1,088,244
---------------
131,222,663
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--8.8%
Affiliated Managers Group, Inc. 1,2 1,850 126,411
- --------------------------------------------------------------------------------
American Capital Strategies Ltd. 2 22,500 812,475
- --------------------------------------------------------------------------------
American Express Co. 159,100 8,468,893
- --------------------------------------------------------------------------------
AmeriCredit Corp. 1,2 36,500 930,750
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 2 48,000 4,989,120
- --------------------------------------------------------------------------------
Capital One Financial Corp. 57,100 4,568,571
- --------------------------------------------------------------------------------
CIT Group, Inc. 25,200 1,082,844
- --------------------------------------------------------------------------------
Citigroup, Inc. 853,988 39,479,865
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 53,200 4,095,336
8 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Goldman Sachs Group, Inc. (The) 45,300 $ 4,621,506
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 550,344 19,438,150
- --------------------------------------------------------------------------------
Legg Mason, Inc. 1,050 109,316
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 74,900 7,436,072
- --------------------------------------------------------------------------------
MBNA Corp. 175,300 4,585,848
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 208,000 11,442,080
- --------------------------------------------------------------------------------
Moody's Corp. 2 40,800 1,834,368
- --------------------------------------------------------------------------------
Morgan Stanley 278,700 14,623,389
- --------------------------------------------------------------------------------
Principal Financial Group, Inc. (The) 115,700 4,847,830
- --------------------------------------------------------------------------------
Providian Financial Corp. 1 18,300 322,629
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 395,100 4,456,728
- --------------------------------------------------------------------------------
SLM Corp. 58,700 2,981,960
---------------
141,254,141
- --------------------------------------------------------------------------------
INSURANCE--4.7%
ACE Ltd. 47,400 2,125,890
- --------------------------------------------------------------------------------
AFLAC, Inc. 30,500 1,320,040
- --------------------------------------------------------------------------------
Allstate Corp. 158,200 9,452,450
- --------------------------------------------------------------------------------
American International Group, Inc. 338,040 19,640,124
- --------------------------------------------------------------------------------
AmerUs Group Co. 2 15,100 725,555
- --------------------------------------------------------------------------------
Aon Corp. 8,300 207,832
- --------------------------------------------------------------------------------
Assurant, Inc. 2 16,900 610,090
- --------------------------------------------------------------------------------
Berkley (W.R.) Corp. 4,700 167,696
- --------------------------------------------------------------------------------
Chubb Corp. 62,700 5,367,747
- --------------------------------------------------------------------------------
Cincinnati Financial Corp. 1,903 75,283
- --------------------------------------------------------------------------------
Fidelity National Financial, Inc. 29,659 1,058,530
- --------------------------------------------------------------------------------
First American Corp. (The) 2 23,400 939,276
- --------------------------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 76,900 5,750,582
- --------------------------------------------------------------------------------
HCC Insurance Holdings, Inc. 2 11,000 416,570
- --------------------------------------------------------------------------------
Jefferson-Pilot Corp. 9,700 489,074
- --------------------------------------------------------------------------------
LandAmerica Financial Group, Inc. 2 8,600 510,582
- --------------------------------------------------------------------------------
Loews Corp. 60,900 4,719,750
- --------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc. 43,700 1,210,490
- --------------------------------------------------------------------------------
MBIA, Inc. 2 6,300 373,653
- --------------------------------------------------------------------------------
MetLife, Inc. 126,800 5,698,392
- --------------------------------------------------------------------------------
Old Republic International Corp. 11,400 288,306
- --------------------------------------------------------------------------------
Partnerre Holdings Ltd. 2 2,500 161,050
- --------------------------------------------------------------------------------
Progressive Corp. 2 41,900 4,140,139
- --------------------------------------------------------------------------------
Protective Life Corp. 2 4,700 198,434
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 55,800 3,663,828
- --------------------------------------------------------------------------------
Reinsurance Group of America, Inc. 2 6,600 306,966
- --------------------------------------------------------------------------------
Safeco Corp. 23,100 1,255,254
- --------------------------------------------------------------------------------
St. Paul Travelers Cos., Inc. (The) 75,600 2,988,468
- --------------------------------------------------------------------------------
StanCorp Financial Group, Inc. 2 5,700 436,506
- --------------------------------------------------------------------------------
Torchmark Corp. 1,900 99,180
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Universal American Financial Corp. 1,2 1,000 $ 22,620
- --------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 2 14,500 1,079,090
---------------
75,499,447
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.4%
Countrywide Financial Corp. 102,698 3,965,170
- --------------------------------------------------------------------------------
Fannie Mae 172,100 10,050,640
- --------------------------------------------------------------------------------
Freddie Mac 113,800 7,423,174
- --------------------------------------------------------------------------------
Fremont General Corp. 2 11,300 274,929
- --------------------------------------------------------------------------------
MGIC Investment Corp. 2,100 136,962
- --------------------------------------------------------------------------------
PMI Group, Inc. (The) 2 5,300 206,594
- --------------------------------------------------------------------------------
Radian Group, Inc. 700 33,054
---------------
22,090,523
- --------------------------------------------------------------------------------
HEALTH CARE--13.2%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.1%
Amgen, Inc. 1 116,900 7,067,774
- --------------------------------------------------------------------------------
Applera Corp./
Applied Biosystems Group 35,100 690,417
- --------------------------------------------------------------------------------
Genentech, Inc. 1 53,600 4,303,008
- --------------------------------------------------------------------------------
Invitrogen Corp. 1,2 4,400 366,476
- --------------------------------------------------------------------------------
Wyeth 128,700 5,727,150
---------------
18,154,825
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.3%
Bausch & Lomb, Inc. 1,900 157,700
- --------------------------------------------------------------------------------
Baxter International, Inc. 92,300 3,424,330
- --------------------------------------------------------------------------------
Becton, Dickinson & Co. 88,200 4,627,854
- --------------------------------------------------------------------------------
Boston Scientific Corp. 1 65,700 1,773,900
- --------------------------------------------------------------------------------
Edwards Lifesciences Corp. 1,2 3,200 137,664
- --------------------------------------------------------------------------------
Guidant Corp. 32,800 2,207,440
- --------------------------------------------------------------------------------
Haemonetics Corp. 1,2 3,800 154,432
- --------------------------------------------------------------------------------
Medtronic, Inc. 166,600 8,628,214
---------------
21,111,534
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.9%
Aetna, Inc. 47,800 3,958,796
- --------------------------------------------------------------------------------
American Healthways, Inc. 1,2 8,600 363,522
- --------------------------------------------------------------------------------
AmerisourceBergen Corp. 2 9,800 677,670
- --------------------------------------------------------------------------------
Beverly Enterprises, Inc. 1,2 7,200 91,728
- --------------------------------------------------------------------------------
Cardinal Health, Inc. 28,600 1,646,788
- --------------------------------------------------------------------------------
Caremark Rx, Inc. 1 60,600 2,697,912
- --------------------------------------------------------------------------------
CIGNA Corp. 50,700 5,426,421
- --------------------------------------------------------------------------------
Community Health Systems, Inc. 1,2 5,100 192,729
- --------------------------------------------------------------------------------
Express Scripts, Inc. 1,2 12,600 629,748
- --------------------------------------------------------------------------------
Genesis HealthCare Corp. 1,2 5,100 236,028
- --------------------------------------------------------------------------------
HCA, Inc. 101,000 5,723,670
9 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Health Net, Inc. 1 9,700 $ 370,152
- --------------------------------------------------------------------------------
Humana, Inc. 1 24,800 985,552
- --------------------------------------------------------------------------------
Kindred Healthcare, Inc. 1,2 10,300 407,983
- --------------------------------------------------------------------------------
LCA-Vision, Inc. 2 9,000 436,140
- --------------------------------------------------------------------------------
Lincare Holdings, Inc. 1,2 13,100 535,004
- --------------------------------------------------------------------------------
Manor Care, Inc. 100 3,973
- --------------------------------------------------------------------------------
McKesson Corp. 101,000 4,523,790
- --------------------------------------------------------------------------------
Medco Health Solutions, Inc. 1 76,581 4,086,362
- --------------------------------------------------------------------------------
PacifiCare Health Systems, Inc. 1,2 11,000 785,950
- --------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. 1,2 4,600 338,284
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 62,600 3,334,702
- --------------------------------------------------------------------------------
Sierra Health Services, Inc. 1,2 11,700 836,082
- --------------------------------------------------------------------------------
Sunrise Senior Living, Inc. 1,2 3,700 199,726
- --------------------------------------------------------------------------------
Triad Hospitals, Inc. 1,2 9,900 540,936
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 298,248 15,550,651
- --------------------------------------------------------------------------------
Universal Health Services, Inc., Cl. B 4,900 304,682
- --------------------------------------------------------------------------------
WellChoice, Inc. 1,2 8,500 590,495
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 91,800 6,392,952
---------------
61,868,428
- --------------------------------------------------------------------------------
PHARMACEUTICALS--6.9%
Abbott Laboratories 225,500 11,051,755
- --------------------------------------------------------------------------------
Allergan, Inc. 23,000 1,960,520
- --------------------------------------------------------------------------------
Barr Pharmaceuticals, Inc. 1 19,900 969,926
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 2 202,400 5,055,952
- --------------------------------------------------------------------------------
Eli Lilly & Co. 51,700 2,880,207
- --------------------------------------------------------------------------------
Forest Laboratories, Inc. 1 800 31,080
- --------------------------------------------------------------------------------
Johnson & Johnson 534,206 34,723,390
- --------------------------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl. A 2 10,200 323,646
- --------------------------------------------------------------------------------
Merck & Co., Inc. 558,000 17,186,400
- --------------------------------------------------------------------------------
Pfizer, Inc. 1,299,900 35,851,242
---------------
110,034,118
- --------------------------------------------------------------------------------
INDUSTRIALS--9.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.6%
Boeing Co. 132,500 8,745,000
- --------------------------------------------------------------------------------
General Dynamics Corp. 30,200 3,308,108
- --------------------------------------------------------------------------------
Goodrich Corp. 15,600 638,976
- --------------------------------------------------------------------------------
Honeywell International, Inc. 73,600 2,695,968
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 95,000 6,162,650
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 108,000 5,967,000
- --------------------------------------------------------------------------------
Precision Castparts Corp. 2 11,300 880,270
- --------------------------------------------------------------------------------
Raytheon Co. 78,700 3,078,744
- --------------------------------------------------------------------------------
Rockwell Collins, Inc. 15,100 719,968
- --------------------------------------------------------------------------------
United Technologies Corp. 193,400 9,931,090
---------------
42,127,774
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.3%
FedEx Corp. 52,800 $ 4,277,328
- --------------------------------------------------------------------------------
United Parcel Service, Inc., Cl. B 14,800 1,023,568
---------------
5,300,896
- --------------------------------------------------------------------------------
AIRLINES--0.0%
Alaska Air Group, Inc. 1,2 9,100 270,725
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.4%
American Standard Cos., Inc. 60,500 2,536,160
- --------------------------------------------------------------------------------
Masco Corp. 120,200 3,817,552
- --------------------------------------------------------------------------------
USG Corp. 1,2 12,500 531,250
---------------
6,884,962
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.3%
Apollo Group, Inc., Cl. A 1 8,800 688,336
- --------------------------------------------------------------------------------
Cendant Corp. 3,000 67,110
- --------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co. 11,600 400,316
- --------------------------------------------------------------------------------
Dun & Bradstreet Corp. 1 700 43,155
- --------------------------------------------------------------------------------
Equifax, Inc. 24,100 860,611
- --------------------------------------------------------------------------------
PHH Corp. 1,2 5,680 146,090
- --------------------------------------------------------------------------------
Pitney Bowes, Inc. 12,300 535,665
- --------------------------------------------------------------------------------
Republic Services, Inc. 18,800 676,988
- --------------------------------------------------------------------------------
Robert Half International, Inc. 2 400 9,988
- --------------------------------------------------------------------------------
Waste Management, Inc. 58,600 1,660,724
---------------
5,088,983
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.0%
Washington Group
International, Inc. 1,2 5,400 276,048
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.3%
Cooper Industries Ltd., Cl. A 2,100 134,190
- --------------------------------------------------------------------------------
Emerson Electric Co. 43,100 2,699,353
- --------------------------------------------------------------------------------
Rockwell Automation, Inc. 19,700 959,587
- --------------------------------------------------------------------------------
Thomas & Betts Corp. 1 3,600 101,664
---------------
3,894,794
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--4.4%
3M Co. 171,300 12,384,990
- --------------------------------------------------------------------------------
General Electric Co. 1,536,600 53,243,190
- --------------------------------------------------------------------------------
Textron, Inc. 55,500 4,209,675
---------------
69,837,855
- --------------------------------------------------------------------------------
MACHINERY--0.9%
Caterpillar, Inc. 63,500 6,052,185
- --------------------------------------------------------------------------------
Deere & Co. 8,100 530,469
- --------------------------------------------------------------------------------
Flowserve Corp. 1,2 4,800 145,248
- --------------------------------------------------------------------------------
Harsco Corp. 2 4,200 229,110
- --------------------------------------------------------------------------------
Illinois Tool Works, Inc. 800 63,744
10 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY Continued
Ingersoll-Rand Co., Cl. A 37,700 $ 2,689,895
- --------------------------------------------------------------------------------
ITT Industries, Inc. 1,000 97,630
- --------------------------------------------------------------------------------
Joy Global, Inc. 9,700 325,823
- --------------------------------------------------------------------------------
Mueller Industries, Inc. 2 5,100 138,210
- --------------------------------------------------------------------------------
Oshkosh Truck Corp. 2 1,700 133,076
- --------------------------------------------------------------------------------
Paccar, Inc. 34,850 2,369,800
- --------------------------------------------------------------------------------
Pall Corp. 2 400 12,144
- --------------------------------------------------------------------------------
Terex Corp. 1,2 10,000 394,000
- --------------------------------------------------------------------------------
Toro Co. (The) 2 19,300 745,173
- --------------------------------------------------------------------------------
Wabash National Corp. 2 2,000 48,460
---------------
13,974,967
- --------------------------------------------------------------------------------
ROAD & RAIL--0.7%
Burlington Northern Santa Fe Corp. 106,000 4,990,480
- --------------------------------------------------------------------------------
CNF Transportation, Inc. 2 13,200 592,680
- --------------------------------------------------------------------------------
CSX Corp. 29,400 1,254,204
- --------------------------------------------------------------------------------
Laidlaw International, Inc. 1,2 17,800 428,980
- --------------------------------------------------------------------------------
Norfolk Southern Corp. 65,800 2,037,168
- --------------------------------------------------------------------------------
Swift Transportation Co., Inc. 1,2 16,800 391,272
- --------------------------------------------------------------------------------
Yellow Roadway Corp. 1,2 15,531 788,975
---------------
10,483,759
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.0%
GATX Corp. 2 9,000 310,500
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--13.5%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.1%
ADTRAN, Inc. 2 15,400 381,766
- --------------------------------------------------------------------------------
Brocade Communications
Systems, Inc. 1,2 94,000 364,720
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 1 1,033,300 19,746,363
- --------------------------------------------------------------------------------
Motorola, Inc. 349,900 6,389,174
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 195,800 6,463,358
---------------
33,345,381
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--4.1%
Apple Computer, Inc. 1 208,100 7,660,161
- --------------------------------------------------------------------------------
Dell, Inc. 1 554,100 21,892,491
- --------------------------------------------------------------------------------
EMC Corp. 1 242,300 3,321,933
- --------------------------------------------------------------------------------
Hewlett-Packard Co. 309,400 7,273,994
- --------------------------------------------------------------------------------
Hutchinson Technology, Inc. 1,2 2,300 88,573
- --------------------------------------------------------------------------------
International Business Machines Corp. 290,000 21,518,000
- --------------------------------------------------------------------------------
NCR Corp. 1 34,900 1,225,688
- --------------------------------------------------------------------------------
Storage Technology Corp. 1 22,000 798,380
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 1 294,600 1,098,858
- --------------------------------------------------------------------------------
Western Digital Corp. 1,2 72,100 967,582
---------------
65,845,660
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.1%
Agilent Technologies, Inc. 1 25,100 $ 577,802
- --------------------------------------------------------------------------------
Amphenol Corp., Cl. A 2 26,900 1,080,573
- --------------------------------------------------------------------------------
Jabil Circuit, Inc. 1,2 21,700 666,841
---------------
2,325,216
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.2%
EarthLink, Inc. 1,2 49,500 428,670
- --------------------------------------------------------------------------------
Internet Security Systems, Inc. 1,2 14,300 290,147
- --------------------------------------------------------------------------------
United Online, Inc. 2 40,100 435,486
- --------------------------------------------------------------------------------
Websense, Inc. 1,2 7,900 379,595
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 70,700 2,449,755
---------------
3,983,653
- --------------------------------------------------------------------------------
IT SERVICES--0.4%
Automatic Data Processing, Inc. 37,700 1,582,269
- --------------------------------------------------------------------------------
CheckFree Corp. 1,2 800 27,248
- --------------------------------------------------------------------------------
CSG Systems International, Inc. 1,2 1,300 24,674
- --------------------------------------------------------------------------------
Electronic Data Systems Corp. 2 100,700 1,938,475
- --------------------------------------------------------------------------------
First Data Corp. 42,400 1,701,936
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 12,800 549,760
- --------------------------------------------------------------------------------
Global Payments, Inc. 2 1,500 101,700
---------------
5,926,062
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.1%
Analog Devices, Inc. 1,100 41,041
- --------------------------------------------------------------------------------
Applied Materials, Inc. 120,200 1,944,836
- --------------------------------------------------------------------------------
ATMI, Inc. 1,2 2,000 58,020
- --------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 1,600 56,816
- --------------------------------------------------------------------------------
Cymer, Inc. 1,2 3,300 86,955
- --------------------------------------------------------------------------------
Freescale Semiconductor, Inc., Cl. B 1 28,343 600,305
- --------------------------------------------------------------------------------
Integrated Device Technology, Inc. 1,2 34,900 375,175
- --------------------------------------------------------------------------------
Intel Corp. 1,332,400 34,722,344
- --------------------------------------------------------------------------------
Lam Research Corp. 1,2 5,400 156,276
- --------------------------------------------------------------------------------
Linear Technology Corp. 12,900 473,301
- --------------------------------------------------------------------------------
Micrel, Inc. 1,2 15,100 173,952
- --------------------------------------------------------------------------------
National Semiconductor Corp. 24,300 535,329
- --------------------------------------------------------------------------------
NVIDIA Corp. 1,2 2,100 56,112
- --------------------------------------------------------------------------------
OmniVision Technologies, Inc. 1,2 20,100 273,159
- --------------------------------------------------------------------------------
Photronics, Inc. 1,2 6,400 149,376
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 315,400 8,853,278
- --------------------------------------------------------------------------------
Varian Semiconductor Equipment
Associates, Inc. 1,2 7,300 270,100
---------------
48,826,375
- --------------------------------------------------------------------------------
SOFTWARE--3.5%
Adobe Systems, Inc. 5,300 151,686
- --------------------------------------------------------------------------------
Autodesk, Inc. 19,700 677,089
11 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
Cadence Design Systems, Inc. 1,2 19,200 $ 262,272
- --------------------------------------------------------------------------------
McAfee, Inc. 1 24,100 630,938
- --------------------------------------------------------------------------------
Microsoft Corp. 1,578,700 39,214,908
- --------------------------------------------------------------------------------
Oracle Corp. 1 1,005,900 13,277,880
- --------------------------------------------------------------------------------
Synopsys, Inc. 1,2 52,400 873,508
- --------------------------------------------------------------------------------
Veritas Software Corp. 1,2 40,600 990,640
---------------
56,078,921
- --------------------------------------------------------------------------------
MATERIALS--2.7%
- --------------------------------------------------------------------------------
CHEMICALS--2.2%
Agrium, Inc. 22,600 443,186
- --------------------------------------------------------------------------------
Air Products & Chemicals, Inc. 36,900 2,225,070
- --------------------------------------------------------------------------------
Dow Chemical Co. 158,700 7,066,911
- --------------------------------------------------------------------------------
E.I. DuPont de Nemours & Co. 247,300 10,636,373
- --------------------------------------------------------------------------------
Eastman Chemical Co. 19,400 1,069,910
- --------------------------------------------------------------------------------
Engelhard Corp. 2 11,300 322,615
- --------------------------------------------------------------------------------
FMC Corp. 1,2 11,200 628,768
- --------------------------------------------------------------------------------
Monsanto Co. 72,700 4,570,649
- --------------------------------------------------------------------------------
PPG Industries, Inc. 56,000 3,514,560
- --------------------------------------------------------------------------------
Praxair, Inc. 17,700 824,820
- --------------------------------------------------------------------------------
Rohm & Haas Co. 75,200 3,484,768
- --------------------------------------------------------------------------------
Scotts Miracle-Gro Co. (The), Cl. A 1 1,000 71,210
- --------------------------------------------------------------------------------
Valspar Corp. (The) 1,700 82,093
---------------
34,940,933
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.1%
Eagle Materials, Inc. 2 2,200 203,698
- --------------------------------------------------------------------------------
Eagle Materials, Inc., Cl. B 2 7,543 682,566
- --------------------------------------------------------------------------------
Lafarge North America, Inc. 1,500 93,660
- --------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 2 7,700 532,224
- --------------------------------------------------------------------------------
Vulcan Materials Co. 2 2,200 142,978
---------------
1,655,126
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.1%
Crown Holdings, Inc. 1 28,800 409,824
- --------------------------------------------------------------------------------
Owens-Illinois, Inc. 1 42,600 1,067,130
---------------
1,476,954
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
Alcoa, Inc. 20,400 533,052
- --------------------------------------------------------------------------------
Carpenter Technology Corp. 2 7,800 404,040
- --------------------------------------------------------------------------------
Commercial Metals Co. 1,800 42,876
- --------------------------------------------------------------------------------
Nucor Corp. 13,800 629,556
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 2 11,200 1,036,000
- --------------------------------------------------------------------------------
Quanex Corp. 6,400 339,264
- --------------------------------------------------------------------------------
Reliance Steel & Aluminum Co. 2 6,000 222,420
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING Continued
Southern Peru Copper Corp. 600 $ 25,704
---------------
3,232,912
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.1%
Georgia-Pacific Corp. 7,000 222,600
- --------------------------------------------------------------------------------
International Paper Co. 10,700 323,247
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 24,300 597,294
- --------------------------------------------------------------------------------
Potlatch Corp. 6,000 313,980
- --------------------------------------------------------------------------------
Weyerhaeuser Co. 11,600 738,340
---------------
2,195,461
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.3%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.4%
Alltel Corp. 2 34,400 2,142,432
- --------------------------------------------------------------------------------
BellSouth Corp. 247,900 6,586,703
- --------------------------------------------------------------------------------
CenturyTel, Inc. 2 32,400 1,122,012
- --------------------------------------------------------------------------------
SBC Communications, Inc. 313,800 7,452,750
- --------------------------------------------------------------------------------
Sprint Corp. 47,900 1,201,811
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 587,056 20,282,785
---------------
38,788,493
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.9%
AT&T Corp. 210,000 3,998,400
- --------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A 1 299,900 9,689,769
- --------------------------------------------------------------------------------
Telephone & Data Systems, Inc.,
Special Shares 1,100 42,174
---------------
13,730,343
- --------------------------------------------------------------------------------
UTILITIES--3.4%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.2%
American Electric Power Co., Inc. 2 124,500 4,590,315
- --------------------------------------------------------------------------------
Cinergy Corp. 8,400 376,488
- --------------------------------------------------------------------------------
CMS Energy Corp. 1,2 21,400 322,284
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc. 27,700 1,598,013
- --------------------------------------------------------------------------------
Dominion Resources, Inc. 46,100 3,383,279
- --------------------------------------------------------------------------------
Duke Energy Corp. 155,700 4,628,961
- --------------------------------------------------------------------------------
Edison International, Inc. 127,700 5,178,235
- --------------------------------------------------------------------------------
Entergy Corp. 39,600 2,991,780
- --------------------------------------------------------------------------------
Exelon Corp. 128,900 6,616,437
- --------------------------------------------------------------------------------
FirstEnergy Corp. 34,400 1,654,984
- --------------------------------------------------------------------------------
FPL Group, Inc. 82,500 3,469,950
- --------------------------------------------------------------------------------
NRG Energy, Inc. 1,2 14,100 530,160
- --------------------------------------------------------------------------------
PG&E Corp. 117,300 4,403,442
- --------------------------------------------------------------------------------
PPL Corp. 19,900 1,181,662
- --------------------------------------------------------------------------------
Progress Energy, Inc. 7,100 321,204
- --------------------------------------------------------------------------------
Progress Energy, Inc.,
Contingent Value Obligation 1,3 32,000 4,320
12 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES Continued
Public Service Enterprise Group, Inc. 62,200 $ 3,783,004
- --------------------------------------------------------------------------------
Southern Co. 2 34,000 1,178,780
- --------------------------------------------------------------------------------
TXU Corp. 48,100 3,996,629
- --------------------------------------------------------------------------------
Wisconsin Energy Corp. 2 3,000 117,000
---------------
50,326,927
- --------------------------------------------------------------------------------
GAS UTILITIES--0.2%
Atmos Energy Corp. 19,200 552,960
- --------------------------------------------------------------------------------
Energen Corp. 400 14,020
- --------------------------------------------------------------------------------
ONEOK, Inc. 2 11,100 362,415
- --------------------------------------------------------------------------------
Sempra Energy 63,200 2,610,792
---------------
3,540,187
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.0%
Energy East Corp. 2 6,400 185,472
---------------
Total Common Stocks
(Cost $1,370,673,834) 1,572,241,249
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Wachovia Corp., Dividend
Equalization Preferred Shares 1,3
(Cost $0) 6,000 30
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Dime Bancorp, Inc. Wts., Exp. 1/2/10 1 31,900 5,742
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 4,837 3,724
---------------
Total Rights, Warrants and Certificates
(Cost $0) 9,466
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.0%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $500,452) $ 500,452 500,452
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.6%
- --------------------------------------------------------------------------------
Undivided interest of 0.82% in joint
repurchase agreement (Principal Amount/Value
$1,234,399,000, with a maturity value of
$1,234,508,724) with UBS Warburg LLC, 3.20%,
dated 6/30/05, to be repurchased at
$10,139,901 on 7/1/05, collateralized by
Federal Home Loan Mortgage Corp., 5.50%,
2/1/35, with a value of $1,260,871,334
(Cost $10,139,000) 10,139,000 10,139,000
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
Investments Purchased with Cash Collateral
from Securities Loaned) (Cost $1,381,313,286) 1,582,890,197
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED--6.4%
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--0.1%
Trust Money Market Securities,
Series A-2, 3.295%, 7/15/05 4 $ 1,000,000 $ 1,000,000
- --------------------------------------------------------------------------------
FUNDING AGREEMENT/GIC--0.1%
Allstate Life Insurance,
3.301%, 7/1/05 4 1,000,000 1,000,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--6.0%
Undivided interest of 0.30% in joint
repurchase agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,386,667) with Nomura Securities,
3.48%, dated 6/30/05, to be repurchased at
$12,098,331 on 7/1/05, collateralized by U.S.
Agency Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value
of $4,160,000,001 4 12,097,162 12,097,162
- --------------------------------------------------------------------------------
Undivided interest of 2.10% in joint
repurchase agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,385,278) with Nomura Securities,
3.4675%, dated 6/30/05, to be repurchased at
$84,008,091 on 7/1/05, collateralized by U.S.
Agency Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value
of $4,160,000,001 4 84,000,000 84,000,000
---------------
96,097,162
- --------------------------------------------------------------------------------
MASTER FLOATING NOTES--0.2%
Bear Stearns, 3.618%, 7/1/05 4 3,500,000 3,500,000
---------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $101,597,162) 101,597,162
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,482,910,448) 105.3% 1,684,487,359
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (5.3) (84,519,205)
--------------------------------
NET ASSETS 100.0% $1,599,968,154
================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security--See Note 7 of Notes to Financial
Statements.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2005 was $4,350, which represents less than 0.005% of the Fund's net assets. See
Note 6 of Notes to Financial Statements.
4. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 7 of Notes to Financial
Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- -------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $99,458,456) (cost $1,482,910,448)
- --see accompanying statement of investments $ 1,684,487,359
- -------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 12,642,833
Investments sold 5,476,496
Interest and dividends 1,834,211
Other 22,077
----------------
Total assets 1,704,462,976
- -------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 101,597,162
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,508,186
Shares of beneficial interest redeemed 1,021,889
Distribution and service plan fees 261,068
Shareholder communications 58,523
Trustees' compensation 24,309
Transfer and shareholder servicing agent fees 1,795
Other 21,890
----------------
Total liabilities 104,494,822
- -------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,599,968,154
================
- -------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 78,325
- -------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,613,310,479
- -------------------------------------------------------------------------------------------------------------
Accumulated net investment income 9,317,386
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (224,315,182)
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 201,577,146
----------------
NET ASSETS $ 1,599,968,154
================
- -------------------------------------------------------------------------------------------------------------
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 $1,142,184,981 and 55,818,320 shares of beneficial interest
outstanding) $ 20.46
- -------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $457,783,173 and 22,507,334 shares of beneficial interest
outstanding) $ 20.34
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $11,785) $ 14,707,932
- -------------------------------------------------------------------------------------------------------------
Interest 185,041
- -------------------------------------------------------------------------------------------------------------
Portfolio lending fees 115,428
----------------
Total investment income 15,008,401
- -------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------
Management fees 5,108,313
- -------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 464,827
- -------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,387
Service shares 5,150
- -------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 31,821
Service shares 10,756
- -------------------------------------------------------------------------------------------------------------
Trustees' compensation 13,764
- -------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 9,730
- -------------------------------------------------------------------------------------------------------------
Other 36,724
----------------
Total expenses 5,686,472
Less reduction to custodian expenses (498)
----------------
Net expenses 5,685,974
- -------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 9,322,427
- -------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 2,070,896
Foreign currency transactions 105,744
----------------
Net realized gain 2,176,640
- -------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (19,497,366)
Translation of assets and liabilities denominated in foreign currencies (198,916)
----------------
Net change in unrealized appreciation (19,696,282)
- -------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (8,197,215)
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- --------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 9,322,427 $ 20,357,629
- --------------------------------------------------------------------------------------------------------------
Net realized gain 2,176,640 111,199,320
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (19,696,282) 4,618,002
-----------------------------------
Net increase (decrease) in net assets resulting from operations (8,197,215) 136,174,951
- --------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (16,043,833) (10,373,133)
Service shares (4,680,411) (1,403,577)
- --------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (73,824,022) (73,484,963)
Service shares 90,920,784 179,202,879
- --------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Total increase (decrease) (11,824,697) 230,116,157
- --------------------------------------------------------------------------------------------------------------
Beginning of period 1,611,792,851 1,381,676,694
-----------------------------------
End of period (including accumulated net investment income of $9,317,386
and $20,719,203, respectively) $ 1,599,968,154 $ 1,611,792,851
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER MAIN STREET FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.84 $ 19.20 $ 15.32 $ 18.99 $ 21.26 $ 24.63
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .27 1 .18 .16 .13 .10
Net realized and unrealized gain (loss) (.23) 1.53 3.86 (3.70) (2.29) (2.14)
----------------------------------------------------------------------------------------
Total from investment operations (.10) 1.80 4.04 (3.54) (2.16) (2.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.28) (.16) (.16) (.13) (.11) (.09)
Distributions from net realized gain -- -- -- -- -- (1.24)
----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.28) (.16) (.16) (.13) (.11) (1.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.46 $ 20.84 $ 19.20 $ 15.32 $ 18.99 $ 21.26
========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (0.49)% 9.46% 26.72% (18.80)% (10.16)% (8.78)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,142,185 $1,238,948 $1,214,960 $ 890,740 $1,074,945 $1,009,823
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,175,481 $1,216,081 $1,003,396 $ 999,275 $1,028,913 $ 809,662
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.25% 1.39% 1.10% 0.94% 0.73% 0.69%
Total expenses 0.67% 4 0.67% 4 0.70% 4 0.69% 4 0.73% 4 0.73%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 47% 82% 85% 98% 69% 63%
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.
17 | OPPENHEIMER MAIN STREET FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 20.70 $ 19.10 $ 15.26 $ 18.95 $ 21.24 $ 24.04
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 2 .25 2 .14 .13 .14 .02
Net realized and unrealized gain (loss) (.22) 1.49 3.85 (3.70) (2.32) (2.82)
---------------------------------------------------------------------------------------
Total investment operations (.12) 1.74 3.99 (3.57) (2.18) (2.80)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.24) (.14) (.15) (.12) (.11) --
Distributions from net realized gain -- -- -- -- -- --
---------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.24) (.14) (.15) (.12) (.11) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.34 $ 20.70 $ 19.10 $ 15.26 $ 18.95 $ 21.24
=======================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.57)% 9.15% 26.44% (18.99)% (10.27)% (11.61)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 457,783 $ 372,845 $ 166,717 $ 51,929 $ 21,545 $ 1,698
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 401,272 $ 262,660 $ 98,210 $ 34,604 $ 10,306 $ 543
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.02% 1.30% 0.83% 0.87% 0.66% 0.50%
Total expenses 0.90% 5 0.92% 5 0.96% 5 0.84% 5 0.88% 5 0.88%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 47% 82% 85% 98% 69% 63%
1. For the period from July 13, 2000 (inception of offering) to December 31,
2000.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Main Street 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
objective is to seek high total return (which includes growth in the value of
its shares as well as current income) from equity and debt securities. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
19 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $208,629,766. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$2,176,640 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2004, the Fund utilized $114,232,007 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
post-October losses of $2,020,771 and unused capital loss carryforwards as
follows:
EXPIRING
---------------------------------
2009 $ 55,468,376
2010 126,747,906
2011 26,569,353
-------------
Total $ 208,785,635
=============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
20 | OPPENHEIMER MAIN STREET FUND/VA
- -------------------------------------------------------------------------------
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:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,466,841 $ 50,150,750 11,955,294 $ 233,322,256
Dividends and/or distributions reinvested 783,008 16,043,833 536,356 10,373,133
Redeemed (6,884,311) (140,018,605) (16,312,427) (317,180,352)
-------------------------------------------------------------------
Net decrease (3,634,462) $ (73,824,022) (3,820,777) $ (73,484,963)
===================================================================
- -----------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 4,894,492 $ 98,894,460 10,163,617 $ 196,313,963
Dividends and/or distributions reinvested 229,657 4,680,411 72,875 1,403,577
Redeemed (624,605) (12,654,087) (955,303) (18,514,661)
-------------------------------------------------------------------
Net increase 4,499,544 $ 90,920,784 9,281,189 $ 179,202,879
===================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$729,760,331 and $732,260,845, respectively.
21 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / 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 and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2005, the Fund paid
$10,490 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 per annum 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, 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had no outstanding foreign currency
contracts.
22 | OPPENHEIMER MAIN STREET FUND/VA
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of June 30, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of June 30, 2005, the
Fund had on loan securities valued at $99,458,456. Collateral of $101,597,162
was received for the loans, all of which was received in cash and subsequently
invested in approved instruments.
- --------------------------------------------------------------------------------
8. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
23 | OPPENHEIMER MAIN STREET FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
24 | OPPENHEIMER MAIN STREET FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that were available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of Nikolaos D. Monoyios and Marc Reinganum and the
Manager's Equity Growth investment team and analysts. The Fund's portfolio is
managed by Mr. Monoyios and Mr. Reinganum who have been primarily responsible
for the day-to-day management of the Fund's investments since May 1999 and
October 2003, respectively. Mr. Monoyios is a Certified Financial Analyst and
has been a Senior Vice President of the Manager since October 2003. He is an
officer of other portfolios in the OppenheimerFunds complex. Mr. Reinganum is a
Vice President of the Fund and of the Manager and an officer and portfolio
manager of other Oppenheimer funds. Mr. Monoyios has had over 27 years of
experience and Mr. Reinganum has had over 25 years of experience managing equity
investments.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other large-cap core funds (including
both funds advised by the Manager and funds advised by other investment
advisers). The Board also receives and reviews comparative performance
information regarding the Fund and other funds at each Board meeting. The Board
noted that the Fund's one-year, three-year and five-year performance were all
better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other large-cap core funds and other funds with comparable assets levels
and distribution features. The Board noted that the Fund's management fees and
total expenses are both lower than its peer group average. In addition, the
Board evaluated the comparability of
25 | OPPENHEIMER MAIN STREET FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
the fees charged and the services provided to the Fund to the fees charged and
services provided to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates and research
provided to the Manager in connection with permissible brokerage arrangements
(soft dollar arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has recently experienced
moderate asset growth and that, based on current asset levels, the Fund has
passed its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
26 | OPPENHEIMER MAIN STREET FUND/VA
MONEY FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur ongoing costs, including
management 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 June 30, 2005.
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, 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, 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 with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Actual $1,000.00 $1,011.50 $2.39
- --------------------------------------------------------------------------------
Hypothetical 1,000.00 1,022.42 2.40
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio, multiplied by the
average account value over the period, multiplied by 181/365 (to reflect the
one-half year period). The annualized expense ratio based on the 6-month period
ended June 30, 2005 is as follows:
EXPENSE RATIO
- -------------
0.48%
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--17.8%
- --------------------------------------------------------------------------------
Barclays Bank plc, New York:
3.19%, 8/12/05 $ 2,000,000 $ 2,000,000
3.245%, 8/26/05 3,000,000 3,000,000
- --------------------------------------------------------------------------------
HBOS Treasury Services, New York:
3.27%, 9/2/05 1,800,000 1,800,000
3.39%, 9/20/05 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Suntrust Bank, 3.38%, 9/1/05 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Svenska Handelsbanken NY,
3.39%, 9/8/05 4,917,000 4,917,000
- --------------------------------------------------------------------------------
Toronto Dominion Bank,
New York, 3.37%, 9/23/05 5,000,000 5,000,000
- --------------------------------------------------------------------------------
UBS AG Stamford CT, 3.25%, 8/19/05 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Washington Mutual Bank FA,
3.21%, 8/16/05 3,000,000 3,000,018
-------------
Total Certificates of Deposit (Cost $31,717,018) 31,717,018
- --------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS--10.6%
- --------------------------------------------------------------------------------
DnB NOR Bank ASA, 3.16%, 8/5/05 1,800,000 1,794,479
- --------------------------------------------------------------------------------
Governor & Co. of the Bank of
Ireland, 3.05%, 7/6/05 1 1,825,000 1,824,227
- --------------------------------------------------------------------------------
LaSalle Bank NA, 3.13%, 7/21/05 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Nordea North America, Inc.:
3.21%, 8/25/05 2,500,000 2,487,740
3.405%, 9/28/05 2,800,000 2,776,430
- --------------------------------------------------------------------------------
Skandinaviska Enskilda Banken AB:
3.045%, 7/1/05 1 2,000,000 2,000,000
3.10%, 7/18/05 1 650,000 649,048
3.40%, 9/16/05 1 2,650,000 2,630,729
- --------------------------------------------------------------------------------
Societe Generale North America,
3.15%, 8/10/05 1,600,000 1,594,400
-------------
Total Direct Bank Obligations
(Cost $18,757,053) 18,757,053
- --------------------------------------------------------------------------------
LETTERS OF CREDIT--2.1%
- --------------------------------------------------------------------------------
Chase Manhattan Bank,
guaranteeing commercial paper
of NATC California LLC, 3.07%,
7/19/05 (Cost $3,764,213) 3,770,000 3,764,213
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--69.0%
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--20.9%
Cable Beach LP, 3.12%, 7/14/05 1 3,000,000 2,996,625
- --------------------------------------------------------------------------------
Chesham Finance LLC:
3.13%, 7/18/05 1 2,000,000 1,997,044
3.46%, 7/1/05 1 1,300,000 1,300,000
- --------------------------------------------------------------------------------
FCAR Owner Trust I, 3.04%, 7/8/05 2,500,000 2,498,522
- --------------------------------------------------------------------------------
FCAR Owner Trust II, 3.39%, 9/14/05 2,000,000 1,985,875
- --------------------------------------------------------------------------------
GOVCO, Inc.:
3.11%, 7/25/05 1 1,615,000 1,611,652
3.115%, 7/28/05 1 3,000,000 2,992,980
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
Lexington Parker Capital Co. LLC:
3.055%, 7/6/05 1 $ 3,000,000 $ 2,998,727
3.14%, 7/26/05 1 2,000,000 1,995,639
- --------------------------------------------------------------------------------
Neptune Funding Corp., 3.42%,
9/23/05 1 2,000,000 1,984,040
- --------------------------------------------------------------------------------
New Center Asset Trust, 3.27%,
8/24/05 2,800,000 2,786,266
- --------------------------------------------------------------------------------
Solitaire Funding LLC:
3.34%, 9/16/05 1 2,000,000 1,985,712
3.35%, 9/8/05 1 2,000,000 1,987,158
- --------------------------------------------------------------------------------
Thornburg Mortgage Capital
Resources, 3.19%, 7/22/05 1 3,500,000 3,493,487
- --------------------------------------------------------------------------------
Victory Receivables Corp.:
3.27%, 7/25/05 1 2,505,000 2,499,539
3.38%, 9/21/05 1 2,000,000 1,984,602
-------------
37,097,868
- --------------------------------------------------------------------------------
AUTOMOBILES--1.1%
Ande Chevrolet Olds, Inc.,
3.49%, 7/3/05 2 2,000,000 2,000,000
- --------------------------------------------------------------------------------
CAPITAL MARKETS--16.6%
Banc of America Securities LLC,
3.28%, 7/1/05 2 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc.:
3.04%, 7/11/05 3,000,000 2,997,467
3.691%, 7/15/05 2 2,000,000 2,000,406
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc., 3.13%, 8/3/05 5,000,000 4,985,654
- --------------------------------------------------------------------------------
First Clearing LLC, 3.37%, 7/1/05 2 6,000,000 6,000,000
- --------------------------------------------------------------------------------
Lehman Brothers, Inc., 3.50%,
12/15/05 2 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Morgan Stanley, 3.28%, 8/18/05 3,500,000 3,484,693
-------------
29,468,220
- --------------------------------------------------------------------------------
CONSUMER FINANCE--2.6%
American Express Credit Corp.:
3.12%, 8/2/05 2,715,000 2,707,470
3.15%, 8/8/05 2,000,000 1,993,350
-------------
4,700,820
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.2%
General Electric Capital Corp.:
3.04%, 7/11/05 1,672,000 1,670,588
3.38%, 9/26/05 1,800,000 1,785,297
- --------------------------------------------------------------------------------
General Electric Capital Services,
3.24%, 8/31/05 2,600,000 2,585,726
- --------------------------------------------------------------------------------
HSBC Finance Corp., 3.35%, 9/16/05 5,000,000 4,964,174
-------------
11,005,785
6 | OPPENHEIMER MONEY FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.3%
Alta Mira LLC, Series 2004, 3.44%,
7/1/05 2 $ 2,250,000 $ 2,250,000
- --------------------------------------------------------------------------------
INSURANCE--10.4%
Jackson National Life Global
Funding, Series 2004-6, 3.26%,
7/15/05 2,3 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding I,
Series 2003-5, 3.28%, 7/15/05 2,3 4,000,000 4,000,000
- --------------------------------------------------------------------------------
Prudential Insurance Co. of
America, 3.14%, 7/1/05 2 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Security Life of Denver Insurance
Co., 3.40%, 7/23/05 2 5,000,000 5,000,000
- --------------------------------------------------------------------------------
United of Omaha Life Insurance
Co., 3.21%, 11/17/05 2,3 4,000,000 4,000,000
-------------
18,500,000
- --------------------------------------------------------------------------------
LEASING & FACTORING--1.1%
Toyota Motor Credit Corp.,
3.36%, 9/22/05 2,000,000 1,984,507
- --------------------------------------------------------------------------------
MUNICIPAL--0.4%
Hayward, CA Multifamily Housing
Revenue Bonds, Lord Tennyson
Apts., 3.70%, 7/1/05 2 710,000 710,000
- --------------------------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL--8.4%
Blue Spice LLC, 3.08%, 7/22/05 1 2,000,000 1,996,407
- --------------------------------------------------------------------------------
Cooperative Assn. of Tractor
Dealers, Inc., Series B, 3.20%, 8/8/05 1,000,000 996,622
- --------------------------------------------------------------------------------
LINKS Finance LLC, 3.17%, 12/15/05 2,4 3,000,000 2,999,588
- --------------------------------------------------------------------------------
Parkland (USA) LLC, 3.24%, 7/18/05 2,4 3,000,000 2,999,835
- --------------------------------------------------------------------------------
RACERS Trust, Series 2004-6-MM,
3.28%, 7/22/05 2 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Sigma Finance, Inc.:
3.17%, 8/4/05 1 2,000,000 1,994,012
3.17%, 12/15/05 2,4 2,900,000 2,899,617
-------------
14,886,081
-------------
Total Short-Term Notes (Cost $122,603,281) 122,603,281
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.1%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $259,121) $ 259,121 $ 259,121
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $177,100,686) 99.6% 177,100,686
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.4 682,895
-----------------------------
NET ASSETS 100.0% $177,783,581
=============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
SHORT-TERM NOTES, DIRECT BANK OBLIGATIONS AND LETTERS OF CREDIT ARE GENERALLY
TRADED ON A DISCOUNT BASIS; THE INTEREST RATE SHOWN IS THE DISCOUNT RATE
RECEIVED BY THE FUND AT THE TIME OF PURCHASE. OTHER SECURITIES NORMALLY BEAR
INTEREST AT THE RATES SHOWN.
1. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $40,921,628, or 23.02% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2005 was $10,500,000, which represents 5.91% of the Fund's net assets. See Note
4 of Notes to Financial Statements.
4. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $8,899,040 or 5.01% of the Fund's net
assets as of June 30, 2005.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value (cost $177,100,686)--see accompanying statement of investments $177,100,686
- -------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 848,604
Interest 174,720
Other 5,129
-------------
Total assets 178,129,139
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 167,673
Dividends 146,877
Shareholder communications 16,406
Trustees' compensation 4,989
Transfer and shareholder servicing agent fees 871
Other 8,742
-------------
Total liabilities 345,558
- -------------------------------------------------------------------------------------------------------
NET ASSETS $177,783,581
=============
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 177,750
- -------------------------------------------------------------------------------------------------------
Additional paid-in capital 177,599,882
- -------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 5,949
-------------
NET ASSETS--applicable to 177,749,862 shares of beneficial interest outstanding $177,783,581
=============
- -------------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------
Interest $ 2,628,013
- -------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------
Management fees 426,016
- -------------------------------------------------------------------------------------------------------
Shareholder communications 7,511
- -------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 5,080
- -------------------------------------------------------------------------------------------------------
Custodian fees and expenses 3,748
- -------------------------------------------------------------------------------------------------------
Trustees' compensation 2,577
- -------------------------------------------------------------------------------------------------------
Other 10,850
-------------
Total expenses 455,782
Less reduction to custodian expenses (1,058)
-------------
Net expenses 454,724
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,173,289
- -------------------------------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 6,151
- -------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,179,440
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER MONEY FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- --------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,173,289 $ 2,111,137
- --------------------------------------------------------------------------------------------------------------------
Net realized gain 6,151 481
------------------------------
Net increase in net assets resulting from operations 2,179,440 2,111,618
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (2,173,289) (2,111,137)
- --------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from beneficial interest transactions (18,725,393) (41,110,557)
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Total decrease (18,719,242) (41,110,076)
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 196,502,823 237,612,899
------------------------------
End of period $ 177,783,581 $ 196,502,823
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER MONEY FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations--net
investment income and net realized gain .01 1 .01 1 .01 .01 .04 .06
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.01) (.01) (.01) (.01) (.04) (.06)
Dividends from net realized gain -- -- -- -- 2 -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.01) (.01) (.01) (.01) (.04) (.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3 1.15% 0.98% 0.79% 1.47% 3.85% 6.26%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 177,784 $ 196,503 $ 237,613 $ 379,969 $ 370,229 $ 215,771
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 190,805 $ 218,243 $ 316,096 $ 386,457 $ 288,106 $ 204,586
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.30% 0.97% 0.80% 1.46% 3.59% 5.98%
Total expenses 0.48% 5 0.48% 5 0.47% 5 0.47% 5 0.52% 5 0.51% 5
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER MONEY FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Money 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 maximum current income from investments in
"money market" securities consistent with low capital risk and the maintenance
of liquidity. The Trust's investment advisor is OppenheimerFunds, Inc. (the
Manager).
Shares of the Fund are only sold 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 following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
- --------------------------------------------------------------------------------
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 to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had no estimated unused capital loss
carryforwards available for federal income tax purposes. This estimated capital
loss carryforward represents carryforward as of the end of the last fiscal year,
increased for losses deferred under tax accounting rules to the current fiscal
year and is increased or decreased by capital losses or gains realized in the
first six months of the current fiscal year. During the six months ended June
30, 2005, it is estimated that the Fund will utilize $202 of capital loss
carryforward to offset realized capital gains. During the year ended December
31, 2004 the Fund utilized $481 of capital loss carryforward to offset realized
capital gains in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
unused capital loss carryforward as follows:
EXPIRING
------------------------
2011 $202
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually but may be paid at other times to maintain the net asset value per
share at $1.00.
- --------------------------------------------------------------------------------
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
12 | OPPENHEIMER MONEY FUND/VA
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:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
Sold 71,301,549 $ 71,301,549 135,559,970 $ 135,559,970
Dividends and/or distributions reinvested 2,139,349 2,139,349 2,042,069 2,042,069
Redeemed (92,166,291) (92,166,291) (178,712,596) (178,712,596)
---------------------------------------------------------------------
Net decrease (18,725,393) $ (18,725,393) (41,110,557) $ (41,110,557)
=====================================================================
- --------------------------------------------------------------------------------
3. 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 0.45% of the first $500 million of average annual net assets,
0.425% of the next $500 million, 0.40% of the next $500 million and 0.375% of
average annual net assets in excess of $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 six months ended June 30, 2005, the Fund paid
$5,053 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per annum for assets of $10 million or more.
The Fund is subject to the minimum fee in the event that the per account fee
does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees to 0.35% of average annual net
assets of the Fund. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
4. ILLIQUID SECURITIES
As of June 30, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 10% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
13 | OPPENHEIMER MONEY FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
14 | OPPENHEIMER MONEY FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
15 | OPPENHEIMER MONEY FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of Carol E. Wolf and Barry D. Weiss and the Manager's
money market investment team and analysts. The Fund's portfolio is managed by
Ms. Wolf and Mr. Weiss, who have been primarily responsible for the day-to-day
management of the Fund's investments since July 1998 and July 2001,
respectively. Ms. Wolf has been a Senior Vice President of the Manager since
June 2000 and of HarbourView Asset Management Corporation since June 2003. She
is an officer of other portfolios in the OppenheimerFunds complex. Mr. Weiss has
been a Vice President of the Manager since July 2001 and of HarbourView Asset
Management Corporation since June 2003. He is also an officer of other
portfolios in the OppenheimerFunds complex. Ms. Wolf has had over 21 years of
experience and Mr. Weiss has had over five years of experience managing money
market investments.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other money market funds (including
both funds advised by the Manager and funds advised by other investment
advisers). The Board also receives and reviews comparative performance
information regarding the Fund and other funds at each Board meeting. The Board
noted that the Fund's one-year, three-year, five-year and ten-year performance
were all better than its peer group average.
16 | OPPENHEIMER MONEY FUND/VA
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other money market funds and other funds with comparable assets levels and
distribution features. The Board noted that the Fund's actual management fees
are higher than its peer group average although its total expenses are lower
than its peer group average.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has not experienced any
recent asset growth and that, based on current asset levels, the Fund is not yet
approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
17 | OPPENHEIMER MONEY FUND/VA
BALANCED FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,015.20 $3.70
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.12 3.72
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,013.50 5.00
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.84 5.02
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- --------------------------------------
Non-Service shares 0.74%
- --------------------------------------
Service shares 1.00
- --------------------------------------------------------------------------------
5 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--51.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--7.4%
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.3%
WCI Communities, Inc. 1 65,500 $ 2,097,965
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.4%
IAC/InterActiveCorp 1 97,400 2,342,470
- --------------------------------------------------------------------------------
MEDIA--6.4%
Liberty Global, Inc., Series A 1 403,421 18,827,658
- --------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 1,516,100 15,449,059
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 124,000 3,970,480
---------------
38,247,197
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.3%
Gap, Inc. (The) 77,400 1,528,650
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.8%
- --------------------------------------------------------------------------------
BEVERAGES--1.0%
Constellation Brands, Inc., Cl. A 1 198,200 5,846,900
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.6%
Tyson Foods, Inc., Cl. A 220,000 3,916,000
- --------------------------------------------------------------------------------
TOBACCO--2.2%
Altria Group, Inc. 199,600 12,906,136
- --------------------------------------------------------------------------------
ENERGY--4.5%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.6%
Halliburton Co. 69,100 3,304,362
- --------------------------------------------------------------------------------
OIL & GAS--3.9%
BP plc, ADR 47,400 2,956,812
- --------------------------------------------------------------------------------
Kinder Morgan, Inc. 32,800 2,728,960
- --------------------------------------------------------------------------------
LUKOIL, Sponsored ADR 166,800 6,118,007
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 76,000 3,504,435
- --------------------------------------------------------------------------------
Talisman Energy, Inc. 129,600 4,855,240
- --------------------------------------------------------------------------------
Total SA, B Shares 1,600 374,693
- --------------------------------------------------------------------------------
TotalFinaElf SA, Sponsored ADR 22,500 2,629,125
---------------
23,167,272
- --------------------------------------------------------------------------------
FINANCIALS--9.3%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.3%
UBS AG 23,559 1,838,393
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.5%
Bank of America Corp. 66,568 3,036,166
- --------------------------------------------------------------------------------
Wachovia Corp. 57,515 2,852,744
- --------------------------------------------------------------------------------
Wells Fargo & Co. 51,400 3,165,212
---------------
9,054,122
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.0%
Alliance Capital Management
Holding LP 36,800 1,720,032
- --------------------------------------------------------------------------------
Capital One Financial Corp. 63,800 5,104,638
- --------------------------------------------------------------------------------
Citigroup, Inc. 154,400 7,137,912
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 94,600 3,341,272
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Lehman Brothers Holdings, Inc. 47,600 $ 4,725,728
- --------------------------------------------------------------------------------
Morgan Stanley 32,600 1,710,522
---------------
23,740,104
- --------------------------------------------------------------------------------
INSURANCE--2.2%
American International Group, Inc. 30,200 1,754,620
- --------------------------------------------------------------------------------
Assured Guaranty Ltd. 69,500 1,623,520
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 33,200 3,087,600
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 209,500 6,333,185
---------------
12,798,925
- --------------------------------------------------------------------------------
REAL ESTATE--0.4%
Host Marriott Corp. 132,100 2,311,750
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.9%
Countrywide Financial Corp. 80,100 3,092,661
- --------------------------------------------------------------------------------
Freddie Mac 35,100 2,289,573
---------------
5,382,234
- --------------------------------------------------------------------------------
HEALTH CARE--6.1%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.3%
MedImmune, Inc. 1 115,800 3,094,176
- --------------------------------------------------------------------------------
Wyeth 102,300 4,552,350
---------------
7,646,526
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.6%
Beckman Coulter, Inc. 57,300 3,642,561
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.8%
Manor Care, Inc. 44,800 1,779,904
- --------------------------------------------------------------------------------
Tenet Healthcare Corp. 1 251,900 3,083,256
---------------
4,863,160
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.4%
GlaxoSmithKline plc, ADR 82,400 3,997,224
- --------------------------------------------------------------------------------
Pfizer, Inc. 195,300 5,386,374
- --------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 74,400 3,049,656
- --------------------------------------------------------------------------------
Schering-Plough Corp. 2 164,800 3,141,088
- --------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. 1 160,600 4,747,336
---------------
20,321,678
- --------------------------------------------------------------------------------
INDUSTRIALS--6.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.0%
Empresa Brasileira de Aeronautica
SA, ADR 101,400 3,353,298
- --------------------------------------------------------------------------------
Honeywell International, Inc. 248,400 9,098,892
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1 680,864 6,740,554
- --------------------------------------------------------------------------------
Raytheon Co. 114,600 4,483,152
---------------
23,675,896
6 | OPPENHEIMER BALANCED FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--2.5%
Cendant Corp. 621,400 $ 13,900,718
- --------------------------------------------------------------------------------
Corinthian Colleges, Inc. 1 54,500 695,965
---------------
14,596,683
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.1%
GrafTech International Ltd. 1 164,200 706,060
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.2%
Tyco International Ltd. 46,800 1,366,560
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--9.6%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.8%
Hewlett-Packard Co. 136,700 3,213,817
- --------------------------------------------------------------------------------
International Business Machines Corp. 103,500 7,679,700
---------------
10,893,517
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.7%
Flextronics International Ltd. 1,3 327,200 4,322,312
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.1%
Net2Phone, Inc. 1 481,500 871,515
- --------------------------------------------------------------------------------
IT SERVICES--0.4%
CSG Systems International, Inc. 1 108,800 2,065,024
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.5%
Freescale Semiconductor, Inc., Cl. A 1 266,100 5,590,761
- --------------------------------------------------------------------------------
Intel Corp. 121,000 3,153,260
---------------
8,744,021
- --------------------------------------------------------------------------------
SOFTWARE--5.1%
Compuware Corp. 1 240,600 1,729,914
- --------------------------------------------------------------------------------
Microsoft Corp. 290,000 7,203,600
- --------------------------------------------------------------------------------
Novell, Inc. 1 627,700 3,891,740
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 162,400 2,707,208
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 587,550 14,953,148
---------------
30,485,610
- --------------------------------------------------------------------------------
MATERIALS--1.1%
- --------------------------------------------------------------------------------
CHEMICALS--0.4%
Praxair, Inc. 55,400 2,581,640
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. 1,4 18 666
---------------
2,582,306
- --------------------------------------------------------------------------------
METALS & MINING--0.5%
Companhia Vale do Rio Doce,
Sponsored ADR 108,900 2,766,060
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.2%
Bowater, Inc. 31,700 1,026,129
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.1%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.1%
IDT Corp., Cl. B 1 494,600 6,508,936
- --------------------------------------------------------------------------------
WorldCom, Inc./WorldCom Group 1,4 375,000 --
---------------
6,508,936
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
UTILITIES--1.5%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.5%
AES Corp. (The) 1 366,800 $ 6,008,184
- --------------------------------------------------------------------------------
Reliant Energy, Inc. 1 245,000 3,033,100
---------------
9,041,284
---------------
Total Common Stocks (Cost $224,339,688) 304,608,318
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09 1,4 2,593 26
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 8,881 6,838
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 1,4 31 65
---------------
Total Rights, Warrants and Certificates
(Cost $38,932) 6,929
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--6.2%
- --------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile
Asset-Backed Certificates, Series
2005-1A, Cl. A2, 3.32%, 4/20/08 4,5 $ 370,000 369,445
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Automobile Loan Certificates:
Series 2004-A, Cl. A2, 1.88%,
10/25/06 384,190 383,534
Series 2005-A, Cl. A2, 3.65%,
12/26/07 1,420,000 1,419,556
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset
Trust, Automobile Mtg.-Backed Nts.:
Series 2004-2, Cl. A3, 3.58%, 1/15/09 1,270,000 1,258,214
Series 2005-1, Cl. A2B, 3.73%, 7/16/07 600,000 600,186
- --------------------------------------------------------------------------------
Centex Home Equity Co. LLC,
Home Equity Loan Asset-Backed Certificates:
Series 2004-D, Cl. AF1, 2.98%,
4/25/20 4 378,235 376,051
Series 2005-B, Cl. AF1, 4.02%,
3/26/35 4 403,429 402,679
Series 2005-C, Cl. AF1, 4.196%,
6/25/35 4 880,000 879,450
- --------------------------------------------------------------------------------
Chase Funding Mortgage Loan
Asset-Backed Certificates, Home
Equity Mtg. Obligations:
Series 2003-1, Cl. 1A3, 3.14%,
7/25/23 70,838 70,715
Series 2003-5, Cl. 1A2, 2.451%,
11/25/18 231,483 230,606
Series 2004-1, Cl. 1A2, 2.427%,
6/25/19 560,000 557,274
7 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Chase Manhattan Auto Owner
Trust, Automobile Loan
Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.24%,
9/15/08 $ 177,230 $ 177,681
Series 2005-A, Cl. A2, 3.72%,
12/15/07 1,020,000 1,018,266
- --------------------------------------------------------------------------------
CIT Equipment Collateral,
Equipment Receivable-Backed
Nts., Series 2004-DFS, Cl. A2,
2.66%, 11/20/06 4 900,000 895,373
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance
Trust, Credit Card Receivable Nts.:
Series 2001-A6, Cl. A6, 5.65%,
6/16/08 1,180,000 1,199,572
Series 2003-C4, Cl. C4, 5%, 6/10/15 180,000 183,470
- --------------------------------------------------------------------------------
CitiFinancial Mortgage Securities,
Inc., Home Equity Collateralized
Mtg. Obligations, Series 2003-3,
Cl. AF1, 3.434%, 8/25/33 5 52,078 52,111
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2002-4, Cl. A1, 3.684%,
2/25/33 5 92,701 93,989
Series 2005-7, Cl. AF1B, 4.317%,
6/1/35 900,000 899,910
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates:
Series 2001-D, Cl. A4, 3.78%, 2/6/07 174,880 174,999
Series 2002-A, Cl. A4, 4.49%, 10/6/08 365,103 366,131
Series 2004-B, Cl. A2, 2.48%, 2/8/07 4 623,741 622,548
Series 2004-C, Cl. A2, 2.62%, 6/8/07 1,514,572 1,509,397
Series 2005-A, Cl. A2, 3.17%, 9/8/07 4 1,550,000 1,546,060
- --------------------------------------------------------------------------------
Equity One ABS, Inc., Home Equity
Mtg. Pass-Through Certificates,
Series 2004-3, Cl. AF2, 3.80%, 7/25/34 230,000 228,327
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates:
Series 2004-A, Cl. A2, 2.13%,
10/15/06 1,113,738 1,110,658
Series 2005-A, Cl. A3, 3.48%,
11/17/08 930,000 924,517
Series 2005-B, Cl. A2, 3.77%,
9/15/07 940,000 939,820
- --------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust,
Motorcycle Receivable Nts., Series
2003-3, Cl. A1, 1.50%, 1/15/08 345,610 344,674
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner
Trust, Automobile Receivable
Obligations:
Series 2003-4, Cl. A2, 1.58%, 7/17/06 $ 160,190 $ 160,160
Series 2005-1, Cl. A2, 3.21%, 5/21/07 4 630,000 628,469
Series 2005-3, Cl. A2, 3.73%, 10/18/07 950,000 950,000
- --------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile
Loan Certificates, Series 2002-1,
Cl. A3, 2.49%, 10/22/07 108,506 108,475
- --------------------------------------------------------------------------------
MBNA Credit Card Master Note
Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 4.57%,
3/15/16 5 1,710,000 1,821,690
- --------------------------------------------------------------------------------
National City Auto Receivables
Trust, Automobile Receivable
Obligations, Series 2004-A,
Cl. A2, 1.50%, 2/15/07 238,716 238,380
- --------------------------------------------------------------------------------
Nissan Auto Lease Trust,
Automobile Lease Obligations,
Series 2004-A, Cl. A2, 2.55%, 1/15/07 763,769 761,502
- --------------------------------------------------------------------------------
Nissan Auto Receivables Owner
Trust, Automobile Receivable Nts.:
Series 2002-A, Cl. A4, 4.28%,
10/16/06 80,795 80,870
Series 2004-A, Cl. A2, 1.40%, 7/17/06 287,938 287,405
- --------------------------------------------------------------------------------
Onyx Acceptance Owner Trust,
Automobile Receivable Obligations,
Series 2002-B, Cl. A4, 4.71%, 3/15/09 750,380 752,544
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2004-3, Cl. A2, 3.464%,
11/25/34 4,5 157,334 157,445
- --------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through
Trust, Home Equity Pass-Through
Certificates:
Series 2004-5, Cl. AF2, 3.735%,
11/10/34 4 340,000 337,008
Series 2005-1, Cl. AF2, 3.914%,
5/25/35 260,000 258,058
Series 2005-2, Cl. AF2, 4.415%,
4/25/35 4 420,000 420,415
- --------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc., Home Equity
Asset-Backed Pass-Through
Certificates, Series 2004-RS7,
Cl. AI3, 4.45%, 7/25/28 750,000 751,995
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Collateralized Mtg. Obligations,
Pass-Through Certificates, Series
2005-4XS, Cl. 3A1, 5.18%, 3/26/35 2,154,916 2,166,307
- --------------------------------------------------------------------------------
Toyota Auto Receivables Owner
Trust, Automobile Mtg.-Backed
Obligations, Series 2002-B,
Cl. A4, 4.39%, 5/15/09 1,572,066 1,575,427
8 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
USAA Auto Owner Trust,
Automobile Loan Asset-Backed Nts.:
Series 2004-1, Cl. A2, 1.43%, 9/15/06 $ 371,596 $ 371,366
Series 2004-2, Cl. A2, 2.41%, 2/15/07 676,649 674,983
Series 2004-3, Cl. A2, 2.79%, 6/15/07 820,000 817,581
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust,
Automobile Lease Asset-Backed
Securities:
Series 2004-A, Cl. A2, 2.47%, 1/22/07 945,617 942,526
Series 2005-A, Cl. A2, 3.52%, 4/20/07 1,080,000 1,078,550
- --------------------------------------------------------------------------------
Wachovia Auto Owner Trust,
Automobile Receivable Nts.,
Series 2004-B, Cl. A2, 2.40%, 5/21/07 585,922 584,008
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 1,082,889 1,074,686
- --------------------------------------------------------------------------------
WFS Financial Owner Trust,
Automobile Receivable Obligations,
Series 2002-2, Cl. A4, 4.50%, 2/20/10 345,206 346,655
- --------------------------------------------------------------------------------
Whole Auto Loan Trust, Automobile
Loan Receivable Certificates, Series
2004-1, Cl. A2A, 2.59%, 5/15/07 984,086 979,950
---------------
Total Asset-Backed Securities
(Cost $37,242,019) 37,161,668
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--29.5%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--24.1%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--24.0%
Federal Home Loan Mortgage Corp.:
6%, 9/1/34 3,713,814 3,811,726
6.50%, 4/1/18-4/1/34 1,729,565 1,797,751
7%, 5/1/29-11/1/32 2,447,658 2,578,226
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through
Certificates:
Series 1669, Cl. G, 6.50%, 2/15/23 134,032 134,377
Series 2055, Cl. ZM, 6.50%, 5/15/28 589,954 612,656
Series 2075, Cl. D, 6.50%, 8/15/28 1,364,358 1,418,694
Series 2080, Cl. Z, 6.50%, 8/15/28 378,984 392,536
Series 2387, Cl. PD, 6%, 4/15/30 654,962 661,461
Series 2456, Cl. BD, 6%, 3/15/30 369,112 371,508
Series 2498, Cl. PC, 5.50%, 10/15/14 63,853 64,076
Series 2500, Cl. FD, 3.72%, 3/15/32 5 214,223 214,962
Series 2526, Cl. FE, 3.62%, 6/15/29 5 271,699 272,588
Series 2550, Cl. QK, 4.50%, 4/15/22 123,745 123,735
Series 2551, Cl. FD, 3.62%, 1/15/33 5 215,972 217,641
Series 2583, Cl. KA, 5.50%, 3/15/22 1,490,236 1,500,183
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 3.686%, 6/1/26 6 $ 391,809 $ 70,244
Series 183, Cl. IO, 1.13%, 4/1/27 6 612,798 110,501
Series 184, Cl. IO, 5.88%, 12/1/26 6 647,580 112,686
Series 192, Cl. IO, 4.038%, 2/1/28 6 173,492 29,462
Series 200, Cl. IO, 2.912%, 1/1/29 6 207,700 35,873
Series 2130, Cl. SC, 7.611%, 3/15/29 6 476,992 41,732
Series 2796, Cl. SD, 13.803%, 7/15/26 6 670,496 61,981
Series 2920, Cl. S, 15.485%, 1/15/35 6 4,075,976 243,991
Series 3000, Cl. SE, 7/15/25 6,7 3,420,000 157,106
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Principal-Only Stripped Mtg.-Backed
Security, Series 176, Cl. PO, 6.249%,
6/1/26 8 172,432 152,198
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 7/17/20 7 7,086,000 7,054,999
5%, 6/1/18-7/1/18 3,387,479 3,429,142
5%, 7/1/20-8/11/35 7 14,706,000 14,739,180
5.50%, 3/1/33-11/1/34 18,647,561 18,924,319
5.50%, 7/17/20-7/1/35 7 6,809,000 6,930,657
6%, 5/1/16 2,496,710 2,583,039
6%, 10/1/16-7/1/35 7 16,497,347 17,004,515
6.50%, 11/1/27-10/1/30 1,160,618 1,205,636
6.50%, 7/1/35 7 37,123,000 38,422,305
7%, 11/1/17 1,252,260 1,312,759
7.50%, 7/1/30-9/1/30 775,831 829,249
8.50%, 7/1/32 43,161 46,920
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Grantor Trust, Commercial Mtg.
Obligations, Trust 2002-T1,
Cl. A2, 7%, 11/25/31 1,309,529 1,384,118
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 1,057,722 1,109,264
Trust 1998-63, Cl. PG, 6%, 3/25/27 143,743 143,867
Trust 2001-50, Cl. NE, 6%, 8/25/30 347,640 350,543
Trust 2001-51, Cl. OD, 6.50%,
10/25/31 1,441,881 1,498,039
Trust 2001-70, Cl. LR, 6%, 9/25/30 357,913 363,106
Trust 2001-72, Cl. NH, 6%, 4/25/30 262,369 264,382
Trust 2001-74, Cl. PD, 6%, 5/25/30 112,065 112,969
Trust 2002-77, Cl. WF, 3.66%,
12/18/32 5 335,829 338,075
Trust 2002-94, Cl. MA, 4.50%,
8/25/09 327,000 326,787
Trust 2003-10, Cl. HP, 5%, 2/25/18 1,660,000 1,696,967
Trust 2003-28, Cl. KG, 5.50%,
4/25/23 1,052,000 1,110,511
Trust 2003-81, Cl. PA, 5%, 2/25/12 36,291 36,232
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,110,000 1,135,881
9 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Interest-Only Stripped Mtg.-Backed
Security:
Trust 2002-47, Cl. NS, 1.647%,
4/25/32 6 $ 831,974 $ 82,625
Trust 2002-51, Cl. S, 1.873%, 8/25/32 6 763,948 76,629
Trust 2005-71, Cl. SA, 7/25/25 6,7 2,190,000 133,453
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security:
Trust 222, Cl. 2, 0.72%, 6/1/23 6 1,278,998 225,475
Trust 233, Cl. 2, 1.256%, 8/1/23 6 1,204,369 246,126
Trust 240, Cl. 2, 3.82%, 9/1/23 6 1,976,176 356,573
Trust 252, Cl. 2, (1.734)%, 11/1/23 6 984,661 188,420
Trust 254, Cl. 2, 1.651%, 1/1/24 6 495,718 91,419
Trust 273, Cl. 2, 3.068%, 7/1/26 6 285,619 50,712
Trust 319, Cl. 2, (3.36)%, 2/1/32 6 379,070 67,761
Trust 321, Cl. 2, (8.53)%, 3/1/32 6 3,909,975 710,785
Trust 329, Cl. 2, (0.524)%, 1/1/33 6 900,705 159,261
Trust 331, Cl. 9, (6.031)%, 12/1/32 6 1,107,239 190,548
Trust 333, Cl. 2, (1.25)%, 3/1/33 6 4,180,622 750,754
Trust 334, Cl. 17, (4.492)%, 2/1/33 6 627,646 102,113
Trust 2001-81, Cl. S, 5.117%, 1/25/32 6 391,003 40,124
Trust 2002-9, Cl. MS, 2.182%,
3/25/32 6 567,482 60,280
Trust 2002-52, Cl. SD, (1.38)%,
9/25/32 6 938,058 102,013
Trust 2002-77, Cl. SH, 9.708%,
12/18/32 6 506,532 54,110
Trust 2003-4, Cl. S, 18.483%, 2/25/33 6 913,712 89,881
Trust 2004-54, Cl. DS, 8.941%,
11/25/30 6 773,610 63,096
Trust 2005-6, Cl. SE, 15.541%,
2/25/35 6 2,777,690 168,857
Trust 2005-19, Cl. SA, 14.04%,
3/25/35 6 11,003,910 685,475
Trust 2005-40, Cl. SA, 18.084%,
5/25/35 6 2,479,946 152,258
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M,
8.765%, 9/25/23 8 409,223 359,415
---------------
142,749,518
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage
Assn., 8%, 4/15/23 233,400 252,637
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
GNMA/GUARANTEED Continued
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, 2.354%,
1/16/27 6 $ 787,058 $ 73,797
Series 2002-15, Cl. SM, (2.418)%,
2/16/32 6 891,369 78,145
Series 2002-76, Cl. SY, 1.395%,
12/16/26 6 1,798,655 172,481
Series 2004-11, Cl. SM, (2.233)%,
1/17/30 6 690,124 57,145
---------------
634,205
- --------------------------------------------------------------------------------
NON-AGENCY--5.4%
- --------------------------------------------------------------------------------
COMMERCIAL--5.0%
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2004-6, Cl. A3, 4.512%,
12/10/42 1,000,000 1,003,899
Series 2005-2, Cl. A4, 4.783%,
7/10/42 1,280,000 1,302,000
Series 2005-3, Cl. A2, 4.501%,
7/10/43 7 1,050,000 1,056,563
- --------------------------------------------------------------------------------
Bank of America Mortgage
Securities, Inc., Collateralized
Mtg. Obligations Pass-Through
Certificates:
Series 2004-2, Cl. 2A1, 6.50%,
7/20/32 1,265,115 1,282,796
Series 2004-8, Cl. 5A1, 6.50%,
5/25/32 981,681 1,006,531
Series 2004-E, Cl. 2A9, 3.712%,
6/25/34 524,389 524,385
Series 2004-G, Cl. 2A1, 2.469%,
8/25/34 5 69,116 69,089
Series 2005-E, Cl. 2A2, 4.994%,
6/25/35 344,919 345,118
- --------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage
Securities, Inc., Commercial Mtg.
Obligations, Series 2005-PWR7,
Cl. A2, 4.945%, 2/11/41 490,000 503,710
- --------------------------------------------------------------------------------
Countrywide Alternative Loan
Trust, Collateralized Mtg. Obligations,
Series 2004-J9, Cl. 1A1, 3.494%,
10/25/34 5 751,306 752,086
- --------------------------------------------------------------------------------
First Union National Bank/
Lehman Brothers/Bank of America
Commercial Mtg. Trust, Pass-Through
Certificates, Series 1998-C2, Cl. A2,
6.56%, 11/18/35 676,996 713,490
- --------------------------------------------------------------------------------
GE Capital Commercial Mortgage
Corp., Commercial Mtg. Obligations,
Series 2005-CA, Cl. A3, 4.578%,
6/10/48 440,000 443,638
10 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg.
Obligations, Series 2004-C3, Cl. A4,
4.547%, 12/10/41 $ 640,000 $ 644,844
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg.
Pass-Through Certificates, Series
1997-C1, Cl. A3, 6.869%, 7/15/29 443,427 463,312
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial Mtg.
Pass-Through Certificates, Series
2005-GG3, Cl. A2, 4.305%, 8/10/42 890,000 890,291
- --------------------------------------------------------------------------------
GS Mortgage Securities Corp. II,
Commercial Mtg. Pass-Through
Certificates:
Series 2004-C1, Cl. A1, 3.659%,
10/10/28 681,516 672,607
Series 2004-GG2, Cl. A3, 4.602%,
8/10/38 410,000 415,154
- --------------------------------------------------------------------------------
GSR Mortgage Loan Trust,
Collateralized Mtg. Obligations,
Series 04-12, Cl. 3A1, 4.495%,
12/25/34 4,5 1,056,130 1,053,611
- --------------------------------------------------------------------------------
J.P. Morgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 2005-LDP2,
Cl. A2, 4.575%, 7/15/42 260,000 262,371
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust,
Pass-Through Collateralized Mtg.
Obligations, Series 2004-6, Cl. 10A1,
6%, 7/25/34 1,597,540 1,631,163
- --------------------------------------------------------------------------------
Mastr Asset Securitization Trust,
Pass-Through Collateralized Mtg.
Obligations, Series 2004-9, Cl. A3,
4.70%, 8/25/34 5 2,476,850 2,480,697
- --------------------------------------------------------------------------------
Mastr Seasoned Securities Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. A1, 6.50%, 8/25/32 7 2,424,883 2,471,866
- --------------------------------------------------------------------------------
Nomura Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl. A1B,
6.59%, 3/15/30 3 780,000 828,363
- --------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II
LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG
2000-C1, Cl. A2, 7.306%, 10/6/15 983,000 1,119,113
- --------------------------------------------------------------------------------
Residential Accredit Loans, Inc.,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2003-QS1,
Cl. A2, 5.75%, 1/25/33 883,898 896,012
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
Wachovia Bank Commercial
Mortgage Trust, Commercial
Mtg. Obligations:
Series 2005-C16, Cl. A2, 4.38%,
10/15/41 $ 1,300,000 $ 1,304,348
Series 2005-C17, Cl. A2, 4.782%,
3/15/42 1,450,000 1,477,188
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., Collateralized
Mtg. Pass-Through Certificates,
Series 2005-AR5, Cl. A1, 4.69%,
5/25/35 5 1,237,040 1,240,583
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed
Securities Trust, Collateralized
Mtg. Obligations:
Series 2004-DD, Cl. 2A1, 4.54%,
1/25/35 5 1,622,897 1,623,347
Series 2004-N, Cl. A10, 3.803%,
8/25/34 4 940,214 941,310
Series 2004-W, Cl. A2, 4.611%,
11/25/34 5 458,128 457,325
---------------
29,876,810
- --------------------------------------------------------------------------------
RESIDENTIAL--0.4%
Countrywide Alternative Loan
Trust, Collateralized Mtg.
Obligations, Series 2005-J1,
Cl. 3A1, 6.50%, 8/25/32 2,087,559 2,133,224
---------------
Total Mortgage-Backed Obligations
(Cost $175,665,125) 175,393,757
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.7%
- --------------------------------------------------------------------------------
Federal Home Loan Bank Unsec.
Bonds, 3.125%, 11/15/06 2,150,000 2,130,001
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
3.625%, 9/15/06 2,535,000 2,530,789
4.125%, 7/12/10 1,707,000 1,714,516
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts.:
3.75%, 5/17/07 3 2,100,000 2,094,559
4.25%, 7/15/07 3 2,215,000 2,235,726
7.25%, 1/15/10 9 3,300,000 3,745,668
7.25%, 5/15/30 775,000 1,079,526
- --------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
4.65%, 6/15/35 1,100,000 1,106,362
Series A, 6.79%, 5/23/12 7,916,000 9,177,343
11 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- --------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.375%,
2/15/31 3 $ 1,027,000 $ 1,212,181
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.625%, 6/15/10 3 1,614,000 1,607,444
3.75%, 3/31/07 2,800,000 2,805,141
3.875%, 5/15/10 80,000 80,481
4%, 2/15/15 3 600,000 602,321
4.125%, 5/15/15 3 1,327,000 1,346,801
5%, 8/15/11 3 750,000 799,835
---------------
Total U.S. Government Obligations
(Cost $34,005,397) 34,268,694
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.1%
- --------------------------------------------------------------------------------
United Mexican States Nts., 7.50%,
1/14/12 3 (Cost $517,504) 475,000 539,838
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--14.5%
- --------------------------------------------------------------------------------
ABN Amro Bank NV (NY Branch),
7.125% Sub. Nts., Series B, 10/15/93 400,000 508,496
- --------------------------------------------------------------------------------
Aetna, Inc., 7.375% Sr. Unsec. Nts.,
3/1/06 1,185,000 1,209,918
- --------------------------------------------------------------------------------
Albertson's, Inc.:
8% Sr. Unsec. Debs., 5/1/31 3 450,000 547,218
8.70% Sr. Unsec. Debs., 5/1/30 310,000 402,481
- --------------------------------------------------------------------------------
Allied Waste North America, Inc.,
8.875% Sr. Nts., Series B, 4/1/08 540,000 569,700
- --------------------------------------------------------------------------------
Allstate Financial Global Funding
LLC, 4.25% Nts., 9/10/08 10 245,000 245,920
- --------------------------------------------------------------------------------
Allstate Life Global Funding II,
3.50% Nts., 7/30/07 330,000 326,262
- --------------------------------------------------------------------------------
American Express Centurion Bank,
4.375% Nts., 7/30/09 435,000 438,567
- --------------------------------------------------------------------------------
AOL Time Warner, Inc., 7.70%
Debs., 5/1/32 495,000 628,205
- --------------------------------------------------------------------------------
AT&T Wireless Services, Inc.,
8.125% Sr. Unsec. Nts., 5/1/12 790,000 947,812
- --------------------------------------------------------------------------------
Bank of America Corp., 4.875% Sr.
Unsec. Nts., 1/15/13 15,000 15,411
- --------------------------------------------------------------------------------
Bankers Trust Corp., 7.375% Unsec.
Sub. Nts., 5/1/08 100,000 108,568
- --------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual
Bond 11 950,000 970,425
- --------------------------------------------------------------------------------
Beazer Homes USA, Inc., 8.625% Sr.
Unsec. Nts., 5/15/11 565,000 601,725
- --------------------------------------------------------------------------------
Boeing Capital Corp., 5.75% Sr. Nts.,
2/15/07 201,000 206,473
- --------------------------------------------------------------------------------
British Telecommunications plc,
8.875% Bonds, 12/15/30 505,000 715,069
- --------------------------------------------------------------------------------
Canadian National Railway Co.,
4.25% Nts., 8/1/09 3 161,000 161,014
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc.:
7.25% Sr. Nts., Series B, 9/1/10 $ 650,000 $ 721,974
8.125% Unsec. Nts., Series B, 7/15/05 270,000 270,284
- --------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr.
Unsec. Nts., 11/1/08 1,155,000 1,242,725
- --------------------------------------------------------------------------------
Chesapeake Energy Corp., 7.50% Sr.
Nts., 6/15/14 610,000 664,900
- --------------------------------------------------------------------------------
CIGNA Corp.:
7% Sr. Unsec. Nts., 1/15/11 395,000 443,245
7.40% Unsec. Nts., 5/15/07 3 810,000 854,778
- --------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec.
Unsub. Nts., 4/2/12 460,000 540,229
- --------------------------------------------------------------------------------
Citigroup, Inc.:
6.625% Unsec. Sub. Nts., 6/15/32 555,000 664,806
6.875% Unsec. Nts., 2/15/98 450,000 553,270
- --------------------------------------------------------------------------------
Citizens Communications Co.,
9.25% Sr. Nts., 5/15/11 291,000 326,284
- --------------------------------------------------------------------------------
Coca-Cola Co. (The), 7.375%
Unsec. Debs., 7/29/93 360,000 507,488
- --------------------------------------------------------------------------------
ConAgra Foods, Inc., 6% Nts.,
9/15/06 610,000 620,566
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc.,
7% Unsec. Nts., 4/1/12 975,000 1,101,366
- --------------------------------------------------------------------------------
Countrywide Financial Corp.,
4.50% Nts., Series A, 6/15/10 620,000 619,913
- --------------------------------------------------------------------------------
Cox Communications, Inc., 7.875%
Unsec. Nts., 8/15/09 145,000 162,611
- --------------------------------------------------------------------------------
Cox Enterprises, Inc., 7.375%
Unsec. Debs., 6/15/09 10 650,000 703,778
- --------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.
(USA), 5.50% Nts., 8/15/13 1,130,000 1,198,610
- --------------------------------------------------------------------------------
CSX Corp., 6.25% Unsec. Nts.,
10/15/08 545,000 576,554
- --------------------------------------------------------------------------------
D.R. Horton, Inc., 6.125% Nts.,
1/15/14 555,000 576,771
- --------------------------------------------------------------------------------
DaimlerChrysler NA Holdings Corp.:
7.20% Unsec. Nts., 9/1/09 600,000 653,701
8% Nts., 6/15/10 456,000 515,969
- --------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub.
Debs., 4/15/31 440,000 551,531
- --------------------------------------------------------------------------------
Delphi Corp., 6.55% Nts., 6/15/06 3 670,000 654,925
- --------------------------------------------------------------------------------
Deutsche Telekom International
Finance BV, 8.50% Unsub. Nts.,
6/15/10 770,000 893,305
- --------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125%
Sr. Unsub. Nts., 6/15/10 530,000 611,292
- --------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub.
Nts., 6/1/06 580,000 591,982
- --------------------------------------------------------------------------------
EOP Operating LP:
6.763% Sr. Unsec. Nts., 6/15/07 180,000 188,060
8.10% Unsec. Nts., 8/1/10 420,000 484,507
8.375% Nts., 3/15/06 425,000 437,641
12 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Federated Department Stores, Inc.,
6.625% Sr. Unsec. Nts., 9/1/08 $ 810,000 $ 864,357
- --------------------------------------------------------------------------------
FedEx Corp., 2.65% Unsec. Nts.,
4/1/07 1,320,000 1,286,143
- --------------------------------------------------------------------------------
FirstEnergy Corp.:
5.50% Sr. Unsub. Nts., Series A,
11/15/06 495,000 503,644
7.375% Sr. Unsub. Nts., Series C,
11/15/31 565,000 692,873
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
6.25% Unsec. Nts., 12/8/05 413,000 415,027
6.50% Unsec. Nts., 1/25/07 640,000 644,829
7.375% Nts., 10/28/09 255,000 249,408
7.60% Nts., 8/1/05 395,000 395,892
- --------------------------------------------------------------------------------
France Telecom SA:
8% Sr. Unsec. Nts., 3/1/11 5 530,000 615,768
8.75% Sr. Unsec. Nts., 3/1/31 5 210,000 293,701
- --------------------------------------------------------------------------------
Franklin Resources, Inc., 3.70% Nts.,
4/15/08 425,000 418,750
- --------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts., 9/15/07 4 685,000 718,875
9.55% Unsub. Nts., 12/15/08 5 141,000 162,695
- --------------------------------------------------------------------------------
General Mills, Inc., 3.875% Nts.,
11/30/07 950,000 942,634
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.125% Nts., 9/15/06 590,000 590,590
7.50% Nts., 7/15/05 1,077,000 1,077,473
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The),
5.70% Sr. Unsec. Nts., 9/1/12 1,105,000 1,177,474
- --------------------------------------------------------------------------------
HCA, Inc., 7.125% Sr. Unsec. Nts.,
6/1/06 85,000 87,247
- --------------------------------------------------------------------------------
Hertz Corp. (The), 6.35% Nts.,
6/15/10 3 940,000 899,893
- --------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr.
Unsec. Nts., 2/15/11 517,000 600,441
- --------------------------------------------------------------------------------
HSBC Finance Corp., 4.75% Sr.
Unsec. Nts., 7/15/13 1,190,000 1,193,768
- --------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr.
Sec. Nts., 11/14/08 4,5 540,000 584,550
- --------------------------------------------------------------------------------
iStar Financial, Inc., 4.875% Sr.
Unsec. Nts., Series B, 1/15/09 815,000 813,614
- --------------------------------------------------------------------------------
J.C. Penney Co., Inc., 7.40% Nts.,
4/1/37 3 660,000 716,100
- --------------------------------------------------------------------------------
John Hancock Global Funding II,
7.90% Nts., 7/2/10 10 947,000 1,102,450
- --------------------------------------------------------------------------------
JPMorgan Capital XV, 5.875% Nts.,
3/15/35 3 820,000 844,650
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
10.875% Sr. Nts., Series B, 10/15/06 1,13 250,000 228,750
- --------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr.
Unsec. Nts., 9/1/12 595,000 656,367
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Kraft Foods, Inc., 5.25% Nts., 6/1/07 $ 1,435,000 $ 1,463,574
- --------------------------------------------------------------------------------
Kroger Co. (The), 7.80% Sr. Nts.,
8/15/07 905,000 967,331
- --------------------------------------------------------------------------------
Lear Corp., 8.11% Sr. Unsec. Nts.,
Series B, 5/15/09 3 1,000,000 1,034,890
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
7% Nts., 2/1/08 765,000 817,272
- --------------------------------------------------------------------------------
Lehman Brothers, Inc., 6.625% Sr.
Sub. Nts., 2/15/08 125,000 132,522
- --------------------------------------------------------------------------------
Lennar Corp., 5.95% Sr. Unsec. Nts.,
3/1/13 580,000 617,329
- --------------------------------------------------------------------------------
Liberty Media Corp., 5.70% Sr.
Unsec. Nts., 5/15/13 3 725,000 675,367
- --------------------------------------------------------------------------------
Liberty Property Trust, 5.65% Sr.
Nts., 8/15/14 615,000 646,567
- --------------------------------------------------------------------------------
Lockheed Martin Corp.:
7.65% Unsec. Unsub. Debs., 5/1/16 455,000 566,599
8.50% Bonds, 12/1/29 105,000 152,111
- --------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc.,
5.875% Sr. Unsec. Bonds, 8/1/33 905,000 865,480
- --------------------------------------------------------------------------------
May Department Stores Co.:
3.95% Nts., 7/15/07 536,000 532,552
7.90% Unsec. Debs., 10/15/07 495,000 529,021
- --------------------------------------------------------------------------------
MBNA Corp., 7.50% Sr. Nts.,
Series F, 3/15/12 895,000 1,044,618
- --------------------------------------------------------------------------------
Mellon Bank NA, 4.75% Unsec.
Sub. Nts., 12/15/14 935,000 950,781
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5% Sr.
Unsub. Nts., Series C, 2/3/14 1,165,000 1,195,595
- --------------------------------------------------------------------------------
MetLife, Inc., 5% Nts., 6/15/15 395,000 401,654
- --------------------------------------------------------------------------------
MidAmerican Energy Holdings Co.,
5.875% Sr. Unsec. Nts., 10/1/12 985,000 1,047,828
- --------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12 570,000 634,599
- --------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts.,
12/15/11 83,000 91,288
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc.,
5.90% Nts., 7/1/12 440,000 475,877
- --------------------------------------------------------------------------------
NiSource Finance Corp.:
3.20% Nts., 11/1/06 180,000 178,088
7.875% Sr. Unsec. Nts., 11/15/10 790,000 908,774
- --------------------------------------------------------------------------------
Northrop Grumman Corp., 7.125%
Sr. Nts., 2/15/11 767,000 868,466
- --------------------------------------------------------------------------------
Pemex Project Funding Master
Trust, 7.875% Unsec. Unsub. Nts.,
2/1/09 405,000 443,475
- --------------------------------------------------------------------------------
PF Export Receivables Master
Trust, 3.748% Sr. Nts., Series B,
6/1/13 10 403,838 390,202
- --------------------------------------------------------------------------------
Portland General Electric Co.,
8.125% First Mortgage Nts.,
2/1/10 10 470,000 537,659
13 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695%
Bonds, Series C, 12/18/23 10 $ 900,000 $ 1,192,216
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 920,000 1,230,811
- --------------------------------------------------------------------------------
PSE&G Energy Holdings LLC,
7.75% Unsec. Nts., 4/16/07 3,4 595,000 617,313
- --------------------------------------------------------------------------------
PSE&G Power LLC, 6.875% Sr.
Unsec. Nts., 4/15/06 560,000 571,725
- --------------------------------------------------------------------------------
R&B Falcon Corp., 9.50% Sr. Unsec.
Nts., 12/15/08 500,000 580,887
- --------------------------------------------------------------------------------
Raytheon Co., 6.50% Unsec. Nts.,
7/15/05 225,000 225,154
- --------------------------------------------------------------------------------
Safeway, Inc., 4.80% Sr. Unsec. Nts.,
7/16/07 1,445,000 1,456,489
- --------------------------------------------------------------------------------
Sempra Energy, 7.95% Sr. Unsec.
Unsub. Nts., 3/1/10 602,000 684,286
- --------------------------------------------------------------------------------
Simon Property Group LP:
5.45% Unsec. Nts., 3/15/13 3 555,000 578,326
5.625% Unsec. Unsub. Nts., 8/15/14 365,000 381,336
- --------------------------------------------------------------------------------
Sprint Capital Corp., 8.75% Nts.,
3/15/32 710,000 990,778
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc., 7.375% Nts., 5/1/07 900,000 945,000
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc., 10% Sr.
Sec. Nts., 12/19/07 3,4,12 221,615 220,507
- --------------------------------------------------------------------------------
SunTrust Banks, Inc.:
4% Nts., 10/15/08 640,000 637,027
7.75% Unsec. Sub. Nts., 5/1/10 57,000 65,499
- --------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr.
Unsec. Debs., 2/1/12 1,095,000 1,396,471
- --------------------------------------------------------------------------------
Telefonos de Mexico SA de CV,
4.75% Nts., 1/27/10 10 770,000 773,203
- --------------------------------------------------------------------------------
Time Warner Entertainment Co. LP,
10.15% Sr. Nts., 5/1/12 500,000 647,218
- --------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts.,
12/1/11 565,000 610,200
- --------------------------------------------------------------------------------
Travelers Property Casualty Corp.,
3.75% Sr. Unsec. Nts., 3/15/08 1,080,000 1,064,059
- --------------------------------------------------------------------------------
TXU Corp., 6.55% Nts., 11/15/34 3,10 775,000 765,020
- --------------------------------------------------------------------------------
Tyco International Group SA:
6.375% Sr. Unsec. Unsub. Nts.,
2/15/06 850,000 861,498
6.75% Sr. Unsub. Nts., 2/15/11 378,000 420,113
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc., 4.875%
Bonds, 3/15/15 348,000 356,074
- --------------------------------------------------------------------------------
Univision Communications, Inc.:
2.875% Sr. Unsec. Nts., 10/15/06 163,000 159,895
3.50% Sr. Unsec. Nts., 10/15/07 845,000 826,894
- --------------------------------------------------------------------------------
Visteon Corp., 7.95% Sr. Unsec.
Nts., 8/1/05 3 356,000 356,534
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr.
Unsec. Unsub. Nts., 6/15/07 $ 1,225,000 $ 1,249,168
- --------------------------------------------------------------------------------
Waste Management, Inc.:
6.875% Sr. Unsec. Nts., 5/15/09 1,050,000 1,137,737
7% Sr. Nts., 7/15/28 220,000 255,945
- --------------------------------------------------------------------------------
Western Forest Products, Inc.,
15% Sec. Nts., 7/28/09 4,12 146,000 151,840
- --------------------------------------------------------------------------------
Yum! Brands, Inc., 8.50% Sr. Unsec.
Nts., 4/15/06 1,230,000 1,271,077
---------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $84,197,523) 86,164,111
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.0%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $193,876) 193,876 193,876
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--6.0%
- --------------------------------------------------------------------------------
Undivided interest of 18.42% in joint
repurchase agreement (Principal Amount/Value
$193,040,000, with a maturity value of
$193,055,711) with DB Alex Brown LLC, 2.93%,
dated 6/30/05, to be repurchased at
$35,568,895 on 7/1/05, collateralized by U.S.
Treasury Bonds, 8.125%--9%, 11/15/18--8/15/21
with a value of $196,993,905 (Cost $35,566,000) 35,566,000 35,566,000
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
Investments Purchased with Cash Collateral
from Securities Loaned) (Cost $591,766,064) 673,903,191
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--2.5%
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.3%
Undivided interest of 0.10% in joint repurchase
agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,386,667) with Nomura Securities,
3.48%, dated 6/30/05, to be repurchased at
$3,974,590 on 7/1/05, collateralized by U.S.
Agency Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value of
$4,160,000,001 14 3,974,206 3,974,206
- --------------------------------------------------------------------------------
Undivided interest of 0.25% in joint
repurchase agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,385,278) with Nomura Securities,
3.4675%, dated 6/30/05, to be repurchased at
$10,000,963 on 7/1/05, collateralized by U.S.
Agency Mortgages, 0.00%--5.959%,
1/15/18--4/1/42, with a value of
$4,160,000,001 14 10,000,000 10,000,000
---------------
13,974,206
14 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MASTER FLOATING NOTES--0.2%
Bear Stearns, 3.618%, 7/1/05 14 $ 500,000 $ 500,000
- --------------------------------------------------------------------------------
Merrill Lynch Mortgage Capital,
3.538%, 7/1/05 14 500,000 500,000
---------------
1,000,000
---------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $14,974,206) 14,974,206
VALUE
SEE NOTE 1
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $606,740,270) 115.7% $ 688,877,397
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (15.7) (93,561,106)
--------------------------------
NET ASSETS 100.0% $ 595,316,291
================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
Schering-Plough Corp. 539 1/23/06 $22.50 $66,159 $18,865
3. Partial or fully-loaned security--See Note 10 of Notes to Financial
Statements.
4. Illiquid security. The aggregate value of illiquid securities as of June 30,
2005 was $10,923,706, which represents 1.83% of the Fund's net assets. See Note
9 of Notes to Financial Statements.
5. Represents the current interest rate for a variable or increasing rate
security.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $6,093,892 or 1.02% of the Fund's net assets
as of June 30, 2005.
7. When-issued security or forward commitment to be delivered and settled after
June 30, 2005. See Note 1 of Notes to Financial Statements.
8. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $511,613 or 0.09% of the Fund's net assets as of June
30, 2005.
9. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $1,475,566. See Note 6 of Notes to Financial
Statements.
10. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $5,710,448 or 0.96% of the Fund's net
assets as of June 30, 2005.
11. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest.
12. Interest or dividend is paid-in-kind.
13. Issue is in default. See Note 1 of Notes to Financial Statements.
14. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 10 of Notes to Financial
Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- ---------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $17,559,208)
(cost $606,740,270)-see accompanying statement of investments $ 688,877,397
- ---------------------------------------------------------------------------------------------------
Collateral for securities loaned 2,867,176
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 10,821
- ---------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $23,981,800 sold on a when-issued
basis or forward commitment) 30,235,073
Interest, dividends and principal paydowns 2,695,899
Shares of beneficial interest sold 203,390
Futures margins 23,315
Other 14,300
----------------
Total assets 724,927,371
- ---------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------
Options written, at value (premiums received $66,159)--see accompanying
statement of investments 18,865
- ---------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 17,841,382
- ---------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $106,249,095 purchased on a when-issued
basis or forward commitment) 111,307,793
Shares of beneficial interest redeemed 328,122
Distribution and service plan fees 42,930
Shareholder communications 40,489
Trustees' compensation 15,507
Transfer and shareholder servicing agent fees 1,756
Other 14,236
----------------
Total liabilities 129,611,080
- ---------------------------------------------------------------------------------------------------
NET ASSETS $ 595,316,291
================
- ---------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 35,721
- ---------------------------------------------------------------------------------------------------
Additional paid-in capital 489,664,245
- ---------------------------------------------------------------------------------------------------
Accumulated net investment income 5,190,039
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions 17,967,613
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 82,458,673
----------------
NET ASSETS $ 595,316,291
================
- ---------------------------------------------------------------------------------------------------
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 $522,880,399 and 31,355,849 shares of
beneficial interest outstanding) $ 16.68
- ---------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $72,435,892 and 4,365,450 shares of
beneficial interest outstanding) $ 16.59
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- ---------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Interest $ 5,584,671
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $77,014) 2,214,684
- ---------------------------------------------------------------------------------------------------
Fee income 45,653
- ---------------------------------------------------------------------------------------------------
Portfolio lending fees 13,699
----------------
Total investment income 7,858,707
- ---------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------
Management fees 2,124,910
- ---------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 81,554
- ---------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,226
Service shares 5,052
- ---------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 15,179
Service shares 1,875
- ---------------------------------------------------------------------------------------------------
Trustees' compensation 7,718
- ---------------------------------------------------------------------------------------------------
Custodian fees and expenses 4,465
- ---------------------------------------------------------------------------------------------------
Other 21,263
----------------
Total expenses 2,267,242
Less reduction to custodian expenses (4,465)
----------------
Net expenses 2,262,777
- ---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,595,930
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 18,041,402
Closing of futures contracts 1,053,628
Foreign currency transactions 261,622
Swap contracts (3,326)
----------------
Net realized gain 19,353,326
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (15,840,432)
Translation of assets and liabilities denominated in foreign currencies (447,194)
Futures contracts (214,323)
Option contracts 47,294
Swap contracts (28,656)
----------------
Net change in unrealized appreciation (16,483,311)
- ---------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,465,945
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER BALANCED FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,595,930 $ 8,957,568
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain 19,353,326 52,689,657
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (16,483,311) (6,010,809)
-----------------------------------
Net increase in net assets resulting from operations 8,465,945 55,636,416
- ----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (9,339,985) (5,486,430)
Service shares (1,047,623) (294,219)
- ----------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (19,081,318) --
Service shares (2,361,220) --
- ----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (3,459,662) (31,808,087)
Service shares 15,199,946 29,880,516
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (11,623,917) 47,928,196
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 606,940,208 559,012,012
-----------------------------------
End of period (including accumulated net investment income of $5,190,039 and
$9,981,717, respectively) $ 595,316,291 $ 606,940,208
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER BALANCED FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.35 $ 15.92 $ 13.16 $ 15.40 $ 16.55 $ 17.46
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .16 1 .26 1 .27 .50 .53 .72
Net realized and unrealized gain (loss) .09 1.33 2.90 (2.02) (.19) .38
----------------------------------------------------------------------------------------
Total from investment operations .25 1.59 3.17 (1.52) .34 1.10
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.30) (.16) (.41) (.51) (.64) (.82)
Distributions from net realized gain (.62) -- -- (.21) (.85) (1.19)
----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.92) (.16) (.41) (.72) (1.49) (2.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.68 $ 17.35 $ 15.92 $ 13.16 $ 15.40 $ 16.55
========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 1.52% 10.10% 24.96% (10.40)% 2.22% 6.44%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 522,880 $ 547,290 $ 533,710 $ 458,848 $ 593,033 $ 589,298
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 529,071 $ 528,655 $ 475,389 $ 517,516 $ 599,324 $ 566,724
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.92% 1.59% 1.82% 3.31% 3.42% 4.36%
Total expenses 0.74% 4 0.74% 4 0.76% 4 0.74% 4 0.76% 4 0.76% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 5 68% 5 248% 42% 30% 42%
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%.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2005 $ 699,039,324 $ 718,189,455
Year Ended December 31, 2004 1,460,076,994 1,473,590,963
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER BALANCED FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 1
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.26 $ 15.87 $ 13.14 $ 14.51
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 2 .23 2 .39 .13
Net realized and unrealized gain (loss) .08 1.31 2.74 (1.50)
-----------------------------------------------------------------
Total from investment operations .22 1.54 3.13 (1.37)
- -------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.27) (.15) (.40) --
Distributions from net realized gain (.62) -- -- --
-----------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.89) (.15) (.40) --
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.59 $ 17.26 $ 15.87 $ 13.14
=================================================================
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.35% 9.79% 24.69% (9.44)%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 72,436 $ 59,650 $ 25,302 $ 2,306
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 65,854 $ 39,851 $ 9,908 $ 1,037
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.68% 1.41% 1.37% 3.30%
Total expenses 1.00% 5 1.02% 5 1.01% 5 0.99% 5
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 6 68% 6 248% 42%
1. For the period from May 1, 2002 (inception of offering) to December 31, 2002.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2005 $ 699,039,324 $ 718,189,455
Year Ended December 31, 2004 1,460,076,994 1,473,590,963
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Balanced Fund/VA (the Fund), formerly Oppenheimer Multiple
Strategies Fund/VA, is a separate series of Oppenheimer Variable Account Funds
(the Trust), an open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund's investment objective is
to seek a high total investment return, which includes current income and
capital appreciation in the value of its shares. The Trust's investment advisor
is OppenheimerFunds, Inc. (the Manager).
The Fund offers two classes of shares. Both classes are sold at their
offering price, which is the net asset value per share, to separate investment
accounts of participating insurance companies as an underlying investment for
variable life insurance policies, variable annuity contracts or other investment
products. The class of shares designated as Service shares is subject to a
distribution and service plan. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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).
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of June 30, 2005, the Fund had purchased $106,249,095
of securities issued on a when-issued basis or forward commitment and sold
$23,981,800 of securities issued on a when-issued basis or forward commitment.
21 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of June 30, 2005, securities with an aggregate
market value of $228,750, representing 0.04% of the Fund's net assets, were in
default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
22 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
During the year ended December 31, 2004, the Fund utilized $28,540,378 of
capital loss carryforward to offset capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
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.
23 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,017,841 $ 17,030,787 2,625,394 $ 42,309,798
Dividends and/or distributions reinvested 1,726,689 28,421,303 342,260 5,486,430
Redeemed (2,930,928) (48,911,752) (4,948,306) (79,604,315)
---------------------------------------------------------------
Net decrease (186,398) $ (3,459,662) (1,980,652) $(31,808,087)
===============================================================
- -----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 906,459 $ 15,142,095 2,003,047 $ 32,170,140
Dividends and/or distributions reinvested 207,983 3,408,843 18,400 294,219
Redeemed (204,354) (3,350,992) (160,331) (2,583,843)
---------------------------------------------------------------
Net increase 910,088 $ 15,199,946 1,861,116 $ 29,880,516
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended June 30, 2005, were $174,525,281 and $178,418,244, respectively. There
were purchases of $20,737,510 and sales of $27,044,221 of U.S. government and
government agency obligations for the six months ended June 30, 2005. In
addition, there were purchases of $699,039,324 and sales of $718,189,455 of To
Be Announced (TBA) mortgage-related securities for the six months ended June 30,
2005.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2005, the Fund paid
$10,231 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 per annum 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, 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
24 | OPPENHEIMER BALANCED FUND/VA
shares that are not subject to a service fee. Fees incurred by the Fund under
the Plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
25 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
As of June 30, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2005 (DEPRECIATION)
- ------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 9/21/05 153 $18,168,750 $ 345,232
-----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr 9/30/05 320 66,460,000 (2,048)
U.S. Treasury Nts., 5 yr 9/21/05 420 45,734,063 (78,881)
U.S. Treasury Nts., 10 yr 9/21/05 14 1,588,563 (1,118)
-----------
(82,047)
-----------
$ 263,185
===========
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the six months ended June 30, 2005 was as follows:
CALL OPTIONS
------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ---------------------------------------------------------------------
Options outstanding as of December 31, 2004 -- $ --
Options written 539 66,159
------------------------
Options outstanding as of June 30, 2005 539 $ 66,159
========================
26 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termination or
settlement. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
As of June 30, 2005, the Fund had entered into the following total return swap
agreements:
PAID BY RECEIVED BY
NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED
SWAP COUNTERPARTY AMOUNT JUNE 30, 2005 JUNE 30, 2005 DATE APPRECIATION
- ------------------------------------------------------------------------------------------------------
One-Month LIBOR
UBS AG $3,530,000 minus 0.25% 1.51% 12/1/05 $10,821
Index abbreviations are as follows:
LIBOR London-Interbank Offered Rate
- --------------------------------------------------------------------------------
9. ILLIQUID SECURITIES
As of June 30, 2005, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
10. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the
collateral. Cash collateral is invested in cash equivalents. The Fund retains a
portion of the interest earned from the collateral. The Fund also continues to
receive interest or dividends paid on the securities loaned. As of June 30,
2005, the Fund had on loan securities valued at $17,559,208. Cash of
$17,841,382 was received as collateral for the loans, of which $14,974,206 was
invested in approved instruments.
- --------------------------------------------------------------------------------
11. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005, and amended on March 4, 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.
27 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. LITIGATION Continued
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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
28 | OPPENHEIMER BALANCED FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
29 | OPPENHEIMER BALANCED FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that were available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of the Fund's portfolio managers and the Manager's
value and fixed-income investment teams and analysts. The equity component of
the Fund's portfolio has been managed by Emmanuel Ferreira and Christopher Leavy
since January 2003. Messrs. Leavy and Ferreira each have had over 11 years of
experience managing equity investments. The Fund's fixed-income component has
been managed by a portfolio management team comprised of Angelo Manioudakis,
Benjamin Gord, Charles Moon, Geoffrey Caan and Antulio N. Bomfim who have been
portfolio managers of the Fund since 2003. Messrs. Manioudakis, Gord, Caan, Moon
and Bomfim have each had between 10 and 15 years of experience managing
fixed-income investments.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other balanced funds (including both
funds advised by the Manager and funds advised by other investment advisers).
The Board also receives and reviews comparative performance information
regarding the Fund and other funds at each Board meeting. The Board noted that
the Fund's one-year, three-year, five-year and ten-year performance were all
better than its peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other balanced funds and other funds with comparable assets levels and
distribution features. The Board noted that the Fund's management fees are
higher than its peer group average. However, the Fund's total expenses are lower
than its peer group average.
30 | OPPENHEIMER BALANCED FUND/VA
In addition, the Board evaluated the comparability of the fees charged and the
services provided to the Fund to the fees charged and services provided to other
types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates and research
provided to the Manager in connection with permissible brokerage arrangements
(soft dollar arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has not experienced any
recent asset growth and that, based on current asset levels, the Fund is not yet
approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
31 | OPPENHEIMER BALANCED FUND/VA
MAIN STREET SMALL CAP FUND(R)/VA
SEMIANNUAL
JUNE 30, 2005
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 June 30, 2005.
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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,004.50 $3.98
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,020.83 4.02
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,003.90 5.13
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.69 5.17
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 0.80%
- ----------------------------------------
Service shares 1.03
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--99.2%
- ------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.4%
- ------------------------------------------------------------------------------------------------------------------
AUTO COMPONENTS--0.7%
Aftermarket Technology Corp. 1 2,300 $ 40,089
- ------------------------------------------------------------------------------------------------------------------
Autoliv, Inc. 7,600 332,880
- ------------------------------------------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The) 1,2 29,000 432,100
- ------------------------------------------------------------------------------------------------------------------
Midas, Inc. 1,2 11,500 264,500
- ------------------------------------------------------------------------------------------------------------------
Modine Manufacturing Co. 4,000 130,240
- ------------------------------------------------------------------------------------------------------------------
Sauer-Danfoss, Inc. 9,000 159,930
- ------------------------------------------------------------------------------------------------------------------
Shiloh Industries, Inc. 1 2,800 34,300
- ------------------------------------------------------------------------------------------------------------------
Spartan Motors, Inc. 2 1,000 10,780
- ------------------------------------------------------------------------------------------------------------------
Standard Motor Products, Inc. 2 4,700 62,040
- ------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. 1 500 3,300
- ------------------------------------------------------------------------------------------------------------------
Tenneco Automotive, Inc. 1 18,100 301,184
----------------
1,771,343
- ------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--0.1%
Winnebago Industries, Inc. 2 2,300 75,325
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTORS--0.1%
Andersons, Inc. (The) 500 17,905
- ------------------------------------------------------------------------------------------------------------------
Handleman Co. 2 7,600 125,476
- ------------------------------------------------------------------------------------------------------------------
Prestige Brands Holdings, Inc. 1 5,700 111,150
----------------
254,531
- ------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.7%
AFC Enterprises, Inc. 8,600 113,348
- ------------------------------------------------------------------------------------------------------------------
Ambassadors Group, Inc. 4,700 174,793
- ------------------------------------------------------------------------------------------------------------------
Ameristar Casinos, Inc. 19,100 498,319
- ------------------------------------------------------------------------------------------------------------------
Applebee's International, Inc. 5,050 133,775
- ------------------------------------------------------------------------------------------------------------------
Argosy Gaming Co. 1 4,700 219,067
- ------------------------------------------------------------------------------------------------------------------
Bluegreen Corp. 1 9,100 158,431
- ------------------------------------------------------------------------------------------------------------------
Bob Evans Farms, Inc. 2 4,700 109,604
- ------------------------------------------------------------------------------------------------------------------
Brinker International, Inc. 1 6,900 276,345
- ------------------------------------------------------------------------------------------------------------------
California Pizza Kitchen, Inc. 1 6,600 179,982
- ------------------------------------------------------------------------------------------------------------------
CBRL Group, Inc. 3,000 116,580
- ------------------------------------------------------------------------------------------------------------------
CEC Entertainment, Inc. 1 19,450 818,651
- ------------------------------------------------------------------------------------------------------------------
Checkers Drive-In Restaurants, Inc. 1 1,900 25,878
- ------------------------------------------------------------------------------------------------------------------
Choice Hotels International, Inc. 3,700 243,090
- ------------------------------------------------------------------------------------------------------------------
CKE Restaurants, Inc. 2 37,900 527,568
- ------------------------------------------------------------------------------------------------------------------
Darden Restaurants, Inc. 14,500 478,210
- ------------------------------------------------------------------------------------------------------------------
Dave & Buster's, Inc. 1,2 7,200 132,768
- ------------------------------------------------------------------------------------------------------------------
Dover Downs Gaming & Entertainment, Inc. 6,400 84,864
- ------------------------------------------------------------------------------------------------------------------
Gravity Co. Ltd., Sponsored ADR 1 1,200 10,320
- ------------------------------------------------------------------------------------------------------------------
Harrah's Entertainment, Inc. 1,149 82,808
- ------------------------------------------------------------------------------------------------------------------
IHOP Corp. 7,900 342,781
- ------------------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc. 1,2 21,200 555,440
- ------------------------------------------------------------------------------------------------------------------
Jack in the Box, Inc. 1 15,100 572,592
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
La Quinta Corp. 1,2 45,700 $ 426,381
- ------------------------------------------------------------------------------------------------------------------
Landry's Restaurants, Inc. 2 12,300 370,107
- ------------------------------------------------------------------------------------------------------------------
Lone Star Steakhouse & Saloon, Inc. 7,100 215,911
- ------------------------------------------------------------------------------------------------------------------
Mikohn Gaming Corp. 1 9,400 138,415
- ------------------------------------------------------------------------------------------------------------------
Monarch Casino & Resort, Inc. 1,2 4,200 92,568
- ------------------------------------------------------------------------------------------------------------------
MTR Gaming Group, Inc. 1 3,600 41,904
- ------------------------------------------------------------------------------------------------------------------
Navigant International, Inc. 1,2 4,400 64,636
- ------------------------------------------------------------------------------------------------------------------
O'Charley's, Inc. 1,2 8,200 144,812
- ------------------------------------------------------------------------------------------------------------------
P.F. Chang's China Bistro, Inc. 1,2 4,900 289,002
- ------------------------------------------------------------------------------------------------------------------
Panera Bread Co., Cl. A 1 300 18,626
- ------------------------------------------------------------------------------------------------------------------
Papa John's International, Inc. 1,2 6,700 267,799
- ------------------------------------------------------------------------------------------------------------------
Penn National Gaming, Inc. 1 10,800 394,200
- ------------------------------------------------------------------------------------------------------------------
Sonic Corp. 1 4,450 135,859
- ------------------------------------------------------------------------------------------------------------------
Steak n Shake Co. (The) 1,2 2,500 46,550
- ------------------------------------------------------------------------------------------------------------------
Sunterra Corp. 1,2 8,100 131,301
- ------------------------------------------------------------------------------------------------------------------
Vail Resorts, Inc. 1,2 14,400 404,640
- ------------------------------------------------------------------------------------------------------------------
Wendy's International, Inc. 4,800 228,720
----------------
9,266,645
- ------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.7%
American Greetings Corp., Cl. A 2 5,200 137,800
- ------------------------------------------------------------------------------------------------------------------
Avatar Holdings, Inc. 1,2 300 15,081
- ------------------------------------------------------------------------------------------------------------------
Beazer Homes USA, Inc. 2 3,100 177,165
- ------------------------------------------------------------------------------------------------------------------
Blount International, Inc. 1 8,700 145,203
- ------------------------------------------------------------------------------------------------------------------
Blyth, Inc. 600 16,830
- ------------------------------------------------------------------------------------------------------------------
Brookfield Homes Corp. 4,400 200,640
- ------------------------------------------------------------------------------------------------------------------
Chromcraft Revington, Inc. 1 500 6,825
- ------------------------------------------------------------------------------------------------------------------
Comstock Homebuilding Cos., Inc., Cl. A 1,2 600 14,532
- ------------------------------------------------------------------------------------------------------------------
CSS Industries, Inc. 750 25,380
- ------------------------------------------------------------------------------------------------------------------
Furniture Brands International, Inc. 2 11,600 250,676
- ------------------------------------------------------------------------------------------------------------------
Hovnanian Enterprises, Inc., Cl. A 1 1,200 78,240
- ------------------------------------------------------------------------------------------------------------------
Interface, Inc., Cl. A 1,2 11,600 93,380
- ------------------------------------------------------------------------------------------------------------------
KB Home 2,800 213,444
- ------------------------------------------------------------------------------------------------------------------
Kimball International, Inc., Cl. B 3,900 51,480
- ------------------------------------------------------------------------------------------------------------------
MDC Holdings, Inc. 3,654 300,542
- ------------------------------------------------------------------------------------------------------------------
Meritage Homes Corp. 1 100 7,950
- ------------------------------------------------------------------------------------------------------------------
Mestek, Inc. 1 700 17,843
- ------------------------------------------------------------------------------------------------------------------
Ryland Group, Inc. (The) 5,300 402,111
- ------------------------------------------------------------------------------------------------------------------
Snap-On, Inc. 3,900 133,770
- ------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp. 4,400 386,980
- ------------------------------------------------------------------------------------------------------------------
Stanley Furniture Co., Inc. 7,500 184,200
- ------------------------------------------------------------------------------------------------------------------
Stanley Works (The) 500 22,770
- ------------------------------------------------------------------------------------------------------------------
Tempur-Pedic International, Inc. 1,2 10,200 226,236
- ------------------------------------------------------------------------------------------------------------------
Tupperware Corp. 26,800 626,316
- ------------------------------------------------------------------------------------------------------------------
Whirlpool Corp. 2,600 182,286
6 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
Yankee Candle, Inc. (The) 9,300 $ 298,530
----------------
4,216,210
- ------------------------------------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.2%
Audible, Inc. 1,2 9,600 166,752
- ------------------------------------------------------------------------------------------------------------------
FTD Group, Inc. 1,2 300 3,405
- ------------------------------------------------------------------------------------------------------------------
GSI Commerce, Inc. 1,2 1,800 30,150
- ------------------------------------------------------------------------------------------------------------------
Insight Enterprises, Inc. 1 8,000 161,440
- ------------------------------------------------------------------------------------------------------------------
Stamps.com, Inc. 1,2 11,200 210,000
----------------
571,747
- ------------------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.8%
Action Performance Cos., Inc. 2 6,300 55,566
- ------------------------------------------------------------------------------------------------------------------
Brunswick Corp. 1,300 56,316
- ------------------------------------------------------------------------------------------------------------------
JAKKS Pacific, Inc. 1,2 12,300 236,283
- ------------------------------------------------------------------------------------------------------------------
Marine Products Corp. 2,700 39,285
- ------------------------------------------------------------------------------------------------------------------
Marvel Enterprises, Inc. 1,2 15,400 303,688
- ------------------------------------------------------------------------------------------------------------------
Nautilus, Inc. 2 25,200 718,200
- ------------------------------------------------------------------------------------------------------------------
Oakley, Inc. 10,500 178,815
- ------------------------------------------------------------------------------------------------------------------
Polaris Industries, Inc. 2 1,300 70,200
- ------------------------------------------------------------------------------------------------------------------
SCP Pool Corp. 2 6,912 242,542
- ------------------------------------------------------------------------------------------------------------------
Steinway Musical Instruments, Inc. 1 4,600 135,056
----------------
2,035,951
- ------------------------------------------------------------------------------------------------------------------
MEDIA--1.9%
4Kids Entertainment, Inc. 1,2 5,900 117,292
- ------------------------------------------------------------------------------------------------------------------
Arbitron, Inc. 13,500 579,150
- ------------------------------------------------------------------------------------------------------------------
Belo Corp., Cl. A 1,500 35,955
- ------------------------------------------------------------------------------------------------------------------
Carmike Cinemas, Inc. 2 1,700 52,156
- ------------------------------------------------------------------------------------------------------------------
Catalina Marketing Corp. 2 23,300 592,053
- ------------------------------------------------------------------------------------------------------------------
Getty Images, Inc. 1 4,000 297,040
- ------------------------------------------------------------------------------------------------------------------
Gray Television, Inc. 10,500 126,630
- ------------------------------------------------------------------------------------------------------------------
Harte-Hanks, Inc. 5,400 160,542
- ------------------------------------------------------------------------------------------------------------------
Insight Communications Co., Inc. 1 5,800 64,090
- ------------------------------------------------------------------------------------------------------------------
Interactive Data Corp. 3,500 72,730
- ------------------------------------------------------------------------------------------------------------------
Journal Communications, Inc. 2,000 33,600
- ------------------------------------------------------------------------------------------------------------------
Liberty Corp. 2 1,700 62,577
- ------------------------------------------------------------------------------------------------------------------
Media General, Inc., Cl. A 3,300 213,708
- ------------------------------------------------------------------------------------------------------------------
Mediacom Communications Corp. 1,2 11,000 75,570
- ------------------------------------------------------------------------------------------------------------------
Meredith Corp. 4,100 201,146
- ------------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc. 1,2 22,700 91,935
- ------------------------------------------------------------------------------------------------------------------
ProQuest Co. 1 9,900 324,621
- ------------------------------------------------------------------------------------------------------------------
R.H. Donnelley Corp. 1 4,400 272,712
- ------------------------------------------------------------------------------------------------------------------
Readers Digest Assn., Inc. (The), Cl. A, Non-Vtg. 25,700 424,050
- ------------------------------------------------------------------------------------------------------------------
Salem Communications Corp., Cl. A 1 1,500 29,760
- ------------------------------------------------------------------------------------------------------------------
Scholastic Corp. 1,2 10,100 389,355
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
MEDIA Continued
Sinclair Broadcast Group, Inc., Cl. A 2 7,100 $ 64,468
- ------------------------------------------------------------------------------------------------------------------
Thomas Nelson, Inc. 2,100 45,696
- ------------------------------------------------------------------------------------------------------------------
Valassis Communications, Inc. 1 4,400 163,020
- ------------------------------------------------------------------------------------------------------------------
Wiley (John) & Sons, Inc., Cl. A 7,200 286,056
- ------------------------------------------------------------------------------------------------------------------
World Wrestling Federation Entertainment, Inc. 2,400 27,408
----------------
4,803,320
- ------------------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.8%
Big Lots, Inc. 1 8,800 116,512
- ------------------------------------------------------------------------------------------------------------------
Dillard's, Inc., Cl. A 10,000 234,200
- ------------------------------------------------------------------------------------------------------------------
Neiman Marcus Group, Inc. (The), Cl. A 500 48,460
- ------------------------------------------------------------------------------------------------------------------
Retail Ventures, Inc. 1 9,500 129,580
- ------------------------------------------------------------------------------------------------------------------
Shopko Stores, Inc. 1 12,000 291,720
- ------------------------------------------------------------------------------------------------------------------
Stage Stores, Inc. 1,2 14,700 640,920
- ------------------------------------------------------------------------------------------------------------------
Stein Mart, Inc. 25,200 554,400
----------------
2,015,792
- ------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--6.6%
Aaron Rents, Inc. 12,100 301,169
- ------------------------------------------------------------------------------------------------------------------
Abercrombie & Fitch Co., Cl. A 5,600 384,720
- ------------------------------------------------------------------------------------------------------------------
Advance Auto Parts, Inc. 1 7,700 497,035
- ------------------------------------------------------------------------------------------------------------------
American Eagle Outfitters, Inc. 12,700 389,255
- ------------------------------------------------------------------------------------------------------------------
AutoNation, Inc. 1 11,400 233,928
- ------------------------------------------------------------------------------------------------------------------
Barnes & Noble, Inc. 1 8,300 322,040
- ------------------------------------------------------------------------------------------------------------------
bebe stores, inc. 2 11,412 302,076
- ------------------------------------------------------------------------------------------------------------------
Big 5 Sporting Goods Corp. 800 22,704
- ------------------------------------------------------------------------------------------------------------------
Blair Corp. 3,000 118,500
- ------------------------------------------------------------------------------------------------------------------
Blockbuster, Inc., Cl. A 2 24,100 219,792
- ------------------------------------------------------------------------------------------------------------------
Borders Group, Inc. 5,600 141,736
- ------------------------------------------------------------------------------------------------------------------
Buckle, Inc. (The) 6,000 266,040
- ------------------------------------------------------------------------------------------------------------------
Building Materials Holding Corp. 7,600 526,604
- ------------------------------------------------------------------------------------------------------------------
Burlington Coat Factory Warehouse Corp. 2 6,600 281,424
- ------------------------------------------------------------------------------------------------------------------
Casual Male Retail Group, Inc. 1 10,000 73,100
- ------------------------------------------------------------------------------------------------------------------
Cato Corp., Cl. A 17,950 370,668
- ------------------------------------------------------------------------------------------------------------------
Charming Shoppes, Inc. 1 76,900 717,477
- ------------------------------------------------------------------------------------------------------------------
Children's Place Retail Stores, Inc. 1,2 13,200 616,044
- ------------------------------------------------------------------------------------------------------------------
Circuit City Stores, Inc./ Circuit City Group 2 12,300 212,667
- ------------------------------------------------------------------------------------------------------------------
Claire's Stores, Inc. 200 4,810
- ------------------------------------------------------------------------------------------------------------------
CSK Auto Corp. 1 3,700 61,716
- ------------------------------------------------------------------------------------------------------------------
Deb Shops, Inc. 700 20,279
- ------------------------------------------------------------------------------------------------------------------
Electronics Boutique Holdings Corp. 1,2 11,500 730,135
- ------------------------------------------------------------------------------------------------------------------
Finish Line, Inc. (The), Cl. A 29,500 558,140
- ------------------------------------------------------------------------------------------------------------------
GameStop Corp. 1,2 13,800 451,398
- ------------------------------------------------------------------------------------------------------------------
GameStop Corp., Cl. B 1 867 25,923
7 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL Continued
Genesco, Inc. 1,2 13,600 $ 504,424
- ------------------------------------------------------------------------------------------------------------------
Goody's Family Clothing, Inc. 5,600 41,300
- ------------------------------------------------------------------------------------------------------------------
Guess?, Inc. 1,2 6,500 107,770
- ------------------------------------------------------------------------------------------------------------------
Guitar Center, Inc. 1,2 9,900 577,863
- ------------------------------------------------------------------------------------------------------------------
Hibbett Sporting Goods, Inc. 1 13,025 492,866
- ------------------------------------------------------------------------------------------------------------------
Jos. A. Banks Clothiers, Inc. 1,2 1,500 64,950
- ------------------------------------------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The) 1 21,550 741,967
- ------------------------------------------------------------------------------------------------------------------
Michaels Stores, Inc. 12,400 512,988
- ------------------------------------------------------------------------------------------------------------------
Movie Gallery, Inc. 2 21,400 565,602
- ------------------------------------------------------------------------------------------------------------------
Office Depot, Inc. 1 5,400 123,336
- ------------------------------------------------------------------------------------------------------------------
Pacific Sunwear of California, Inc. 1 10,175 233,923
- ------------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The) 1 15,300 592,569
- ------------------------------------------------------------------------------------------------------------------
Payless ShoeSource, Inc. 1 31,800 610,560
- ------------------------------------------------------------------------------------------------------------------
Rent-A-Center, Inc. 1 2,500 58,225
- ------------------------------------------------------------------------------------------------------------------
Rent-Way, Inc. 1,2 9,600 94,464
- ------------------------------------------------------------------------------------------------------------------
Restoration Hardware, Inc. 1,2 13,100 107,158
- ------------------------------------------------------------------------------------------------------------------
Select Comfort Corp. 1,2 5,700 122,151
- ------------------------------------------------------------------------------------------------------------------
Shoe Carnival, Inc. 1,2 2,000 43,520
- ------------------------------------------------------------------------------------------------------------------
Sonic Automotive, Inc. 3,900 82,914
- ------------------------------------------------------------------------------------------------------------------
Sports Authority, Inc. (The) 1,2 5,500 174,900
- ------------------------------------------------------------------------------------------------------------------
Steiner Leisure Ltd. 1 6,400 237,248
- ------------------------------------------------------------------------------------------------------------------
Syms Corp. 600 8,814
- ------------------------------------------------------------------------------------------------------------------
Talbots, Inc. (The) 4,700 152,609
- ------------------------------------------------------------------------------------------------------------------
TBC Corp. 1 700 18,991
- ------------------------------------------------------------------------------------------------------------------
Too, Inc. 1 14,300 334,191
- ------------------------------------------------------------------------------------------------------------------
Toys R Us, Inc. 1 11,000 291,280
- ------------------------------------------------------------------------------------------------------------------
Trans World Entertainment Corp. 1 14,400 170,352
- ------------------------------------------------------------------------------------------------------------------
United Auto Group, Inc. 2 16,600 494,680
- ------------------------------------------------------------------------------------------------------------------
Urban Outfitters, Inc. 1 2,700 153,063
- ------------------------------------------------------------------------------------------------------------------
Weight Watchers International, Inc. 1 2,400 123,864
- ------------------------------------------------------------------------------------------------------------------
Wilsons The Leather Experts, Inc. 1 1,600 10,624
- ------------------------------------------------------------------------------------------------------------------
Zale Corp. 1 22,700 719,363
----------------
16,417,909
- ------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.8%
Brown Shoe Co., Inc. 2,100 82,215
- ------------------------------------------------------------------------------------------------------------------
Carter's, Inc. 1 5,500 321,090
- ------------------------------------------------------------------------------------------------------------------
Cherokee, Inc. 4,600 159,252
- ------------------------------------------------------------------------------------------------------------------
Hartmarx Corp. 1 15,600 157,092
- ------------------------------------------------------------------------------------------------------------------
K-Swiss, Inc., Cl. A 19,000 614,460
- ------------------------------------------------------------------------------------------------------------------
Kellwood Co. 11,000 295,900
- ------------------------------------------------------------------------------------------------------------------
OshKosh B'Gosh, Inc., Cl. A 2 200 5,198
- ------------------------------------------------------------------------------------------------------------------
Phillips/Van Heusen Corp. 2 19,100 624,379
- ------------------------------------------------------------------------------------------------------------------
Skechers U.S.A., Inc., Cl. A 1 9,000 128,340
- ------------------------------------------------------------------------------------------------------------------
Stride Rite Corp. 12,200 168,238
- ------------------------------------------------------------------------------------------------------------------
Timberland Co., Cl. A 1 12,100 468,512
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS Continued
Tommy Hilfiger Corp. 1 18,000 $ 247,680
- ------------------------------------------------------------------------------------------------------------------
UniFirst Corp. 3,600 145,944
- ------------------------------------------------------------------------------------------------------------------
Volcom, Inc. 1 2,600 69,602
- ------------------------------------------------------------------------------------------------------------------
Warnaco Group, Inc. (The) 1 6,600 153,450
- ------------------------------------------------------------------------------------------------------------------
Wolverine World Wide, Inc. 33,350 800,734
----------------
4,442,086
- ------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.9%
- ------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.3%
Boston Beer Co., Inc., Cl. A 1 5,000 112,200
- ------------------------------------------------------------------------------------------------------------------
Hansen Natural Corp. 1,2 2,000 169,440
- ------------------------------------------------------------------------------------------------------------------
National Beverage Corp. 1 1,500 11,970
- ------------------------------------------------------------------------------------------------------------------
PepsiAmericas, Inc. 12,700 325,882
----------------
619,492
- ------------------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.2%
7-Eleven, Inc. 1 16,100 486,864
- ------------------------------------------------------------------------------------------------------------------
Arden Group, Inc., Cl. A 2 900 71,352
- ------------------------------------------------------------------------------------------------------------------
BJ's Wholesale Club, Inc. 1 8,200 266,418
- ------------------------------------------------------------------------------------------------------------------
Casey's General Stores, Inc. 3,000 59,460
- ------------------------------------------------------------------------------------------------------------------
Ingles Markets, Inc., Cl. A 2 1,000 13,770
- ------------------------------------------------------------------------------------------------------------------
Longs Drug Stores, Inc. 2 18,500 796,425
- ------------------------------------------------------------------------------------------------------------------
Nash Finch Co. 2 6,500 238,810
- ------------------------------------------------------------------------------------------------------------------
Rite Aid Corp. 1,2 12,300 51,414
- ------------------------------------------------------------------------------------------------------------------
Ruddick Corp. 19,600 500,388
- ------------------------------------------------------------------------------------------------------------------
Spartan Stores, Inc. 1 1,200 17,604
- ------------------------------------------------------------------------------------------------------------------
SUPERVALU, Inc. 12,000 391,320
- ------------------------------------------------------------------------------------------------------------------
Weis Markets, Inc. 2,100 81,459
----------------
2,975,284
- ------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--1.3%
American Italian Pasta Co. 2 400 8,408
- ------------------------------------------------------------------------------------------------------------------
Cal-Maine Foods, Inc. 900 5,445
- ------------------------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc. 26,600 730,436
- ------------------------------------------------------------------------------------------------------------------
Darling International, Inc. 1 37,700 141,375
- ------------------------------------------------------------------------------------------------------------------
Flowers Foods, Inc. 16,800 594,048
- ------------------------------------------------------------------------------------------------------------------
Gold Kist Holdings, Inc. 1,2 4,800 103,584
- ------------------------------------------------------------------------------------------------------------------
Hormel Foods Corp. 3,700 108,521
- ------------------------------------------------------------------------------------------------------------------
Imperial Sugar Co. 1,100 17,039
- ------------------------------------------------------------------------------------------------------------------
J&J Snack Foods Corp. 2,900 151,815
- ------------------------------------------------------------------------------------------------------------------
Lancaster Colony Corp. 8,900 381,988
- ------------------------------------------------------------------------------------------------------------------
Lance, Inc. 2 9,600 165,216
- ------------------------------------------------------------------------------------------------------------------
M&F Worldwide Corp. 1,2 2,400 32,064
- ------------------------------------------------------------------------------------------------------------------
Omega Protein Corp. 1 3,400 21,488
- ------------------------------------------------------------------------------------------------------------------
Pilgrim's Pride Corp., Cl. B 2 8,700 296,931
- ------------------------------------------------------------------------------------------------------------------
Ralcorp Holdings, Inc. 5,300 218,095
- ------------------------------------------------------------------------------------------------------------------
Sanderson Farms, Inc. 2 1,450 65,888
8 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS Continued
Seaboard Corp. 100 $ 166,400
----------------
3,208,741
- ------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.7%
Central Garden & Pet Co. 1,2 3,200 157,184
- ------------------------------------------------------------------------------------------------------------------
Chattem, Inc. 1 11,900 492,660
- ------------------------------------------------------------------------------------------------------------------
Energizer Holdings, Inc. 1 6,700 416,539
- ------------------------------------------------------------------------------------------------------------------
Nu Skin Asia Pacific, Inc., Cl. A 15,400 358,820
- ------------------------------------------------------------------------------------------------------------------
Spectrum Brands, Inc. 1 13,300 438,900
----------------
1,864,103
- ------------------------------------------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.3%
Elizabeth Arden, Inc. 1 10,500 245,595
- ------------------------------------------------------------------------------------------------------------------
Mannatech, Inc. 2 4,100 77,982
- ------------------------------------------------------------------------------------------------------------------
Nature's Sunshine Products, Inc. 9,100 158,704
- ------------------------------------------------------------------------------------------------------------------
Parlux Fragrances, Inc. 1,2 1,900 52,573
- ------------------------------------------------------------------------------------------------------------------
USANA Health Sciences, Inc. 1,2 5,100 215,730
----------------
750,584
- ------------------------------------------------------------------------------------------------------------------
TOBACCO--0.1%
Loews Corp./Carolina Group 7,600 253,232
- ------------------------------------------------------------------------------------------------------------------
Vector Group Ltd. 2 5,900 109,563
----------------
362,795
- ------------------------------------------------------------------------------------------------------------------
ENERGY--8.0%
- ------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.2%
Atwood Oceanics, Inc. 1 5,500 338,580
- ------------------------------------------------------------------------------------------------------------------
Cal Dive International, Inc. 1,2 12,800 670,336
- ------------------------------------------------------------------------------------------------------------------
CHC Helicopter Corp., Cl. A 1,400 27,287
- ------------------------------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 2 5,300 283,179
- ------------------------------------------------------------------------------------------------------------------
Ensign Energy Services, Inc. 14,000 337,888
- ------------------------------------------------------------------------------------------------------------------
Global Industries Ltd. 1 11,000 93,500
- ------------------------------------------------------------------------------------------------------------------
Grant Prideco, Inc. 1 9,300 245,985
- ------------------------------------------------------------------------------------------------------------------
Gulf Island Fabrication, Inc. 4,800 95,424
- ------------------------------------------------------------------------------------------------------------------
Helmerich & Payne, Inc. 7,500 351,900
- ------------------------------------------------------------------------------------------------------------------
Hydril Co. 1 4,800 260,880
- ------------------------------------------------------------------------------------------------------------------
Lone Star Technologies, Inc. 1 1,800 81,900
- ------------------------------------------------------------------------------------------------------------------
Maverick Tube Corp. 1 6,800 202,640
- ------------------------------------------------------------------------------------------------------------------
Offshore Logistics, Inc. 1 4,000 131,360
- ------------------------------------------------------------------------------------------------------------------
Oil States International, Inc. 1 11,600 291,972
- ------------------------------------------------------------------------------------------------------------------
Patterson-UTI Energy, Inc. 1,500 41,745
- ------------------------------------------------------------------------------------------------------------------
Prairie Schooner Petroleum Ltd. 1,3 1,200 12,254
- ------------------------------------------------------------------------------------------------------------------
Precision Drilling Corp. 1 3,000 118,242
- ------------------------------------------------------------------------------------------------------------------
Pride International, Inc. 1 5,100 131,070
- ------------------------------------------------------------------------------------------------------------------
RPC, Inc. 1,800 30,456
- ------------------------------------------------------------------------------------------------------------------
Technicoil Corp. 1 7,100 16,834
- ------------------------------------------------------------------------------------------------------------------
Technicoil Corp. 1 47,900 113,573
- ------------------------------------------------------------------------------------------------------------------
Todco, Cl. A 1 18,600 477,462
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
Total Energy Trust Ltd. 13,700 $ 113,160
- ------------------------------------------------------------------------------------------------------------------
Trican Well Service Ltd. 1 12,300 302,380
- ------------------------------------------------------------------------------------------------------------------
Unit Corp. 1 1,200 52,812
- ------------------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc. 1 11,400 413,136
- ------------------------------------------------------------------------------------------------------------------
Veritas DGC, Inc. 1 11,800 327,332
----------------
5,563,287
- ------------------------------------------------------------------------------------------------------------------
OIL & GAS--5.8%
Alpha Natural Resources, Inc. 1 1,400 33,432
- ------------------------------------------------------------------------------------------------------------------
Atlas Energy Ltd. 1 73,300 248,282
- ------------------------------------------------------------------------------------------------------------------
Bear Ridge Resources Ltd. 1 1,960 5,247
- ------------------------------------------------------------------------------------------------------------------
Berry Petroleum Co., Cl. A 7,000 370,160
- ------------------------------------------------------------------------------------------------------------------
Blizzard Energy, Inc. 1 86,400 191,107
- ------------------------------------------------------------------------------------------------------------------
Callon Petroleum Co. 1 9,000 133,020
- ------------------------------------------------------------------------------------------------------------------
Chamaelo Exploration Ltd. 1 2,080 12,902
- ------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp. 2 6,800 155,040
- ------------------------------------------------------------------------------------------------------------------
Cimarex Energy Co. 1,2 18,681 726,878
- ------------------------------------------------------------------------------------------------------------------
Clear Energy, Inc. 1 36,133 143,034
- ------------------------------------------------------------------------------------------------------------------
Comstock Resources, Inc. 1 20,200 510,858
- ------------------------------------------------------------------------------------------------------------------
CONSOL Energy, Inc. 5,500 294,690
- ------------------------------------------------------------------------------------------------------------------
Crew Energy, Inc. 1 5,666 64,512
- ------------------------------------------------------------------------------------------------------------------
Cyries Energy, Inc. 1 1,940 18,209
- ------------------------------------------------------------------------------------------------------------------
Daylight Energy Trust 17,700 144,466
- ------------------------------------------------------------------------------------------------------------------
Denbury Resources, Inc. 1 3,700 147,149
- ------------------------------------------------------------------------------------------------------------------
Duvernay Oil Corp. 1 4,500 119,772
- ------------------------------------------------------------------------------------------------------------------
Encore Acquisition Co. 1 12,600 516,600
- ------------------------------------------------------------------------------------------------------------------
Energy Partners Ltd. 1 21,200 555,652
- ------------------------------------------------------------------------------------------------------------------
Fairborne Energy Trust 9,400 82,860
- ------------------------------------------------------------------------------------------------------------------
Fairquest Energy Ltd. 1 3,129 17,622
- ------------------------------------------------------------------------------------------------------------------
Find Energy Ltd. 1,4 7,400 24,703
- ------------------------------------------------------------------------------------------------------------------
Find Energy Ltd. 1,4 28,100 93,804
- ------------------------------------------------------------------------------------------------------------------
Forest Oil Corp. 1 7,900 331,800
- ------------------------------------------------------------------------------------------------------------------
Frontier Oil Corp. 2 17,600 516,560
- ------------------------------------------------------------------------------------------------------------------
Galleon Energy, Inc., Cl. A 1 6,900 74,902
- ------------------------------------------------------------------------------------------------------------------
Galleon Energy, Inc.,
Subscription Receipts 1 7,500 80,194
- ------------------------------------------------------------------------------------------------------------------
General Maritime Corp. 2 4,900 207,760
- ------------------------------------------------------------------------------------------------------------------
Highpine Oil & Gas Ltd. 1 1,700 28,791
- ------------------------------------------------------------------------------------------------------------------
Holly Corp. 8,400 392,028
- ------------------------------------------------------------------------------------------------------------------
Houston Exploration Co. 1 11,800 625,990
- ------------------------------------------------------------------------------------------------------------------
Innova Exploration Ltd. 1 3,900 22,760
- ------------------------------------------------------------------------------------------------------------------
KCS Energy, Inc. 1,2 9,200 159,804
- ------------------------------------------------------------------------------------------------------------------
Ketch Resources Trust 2,000 18,609
- ------------------------------------------------------------------------------------------------------------------
Maritrans, Inc. 3,000 81,150
- ------------------------------------------------------------------------------------------------------------------
Midnight Oil Exploration Ltd. 1 45,050 129,061
- ------------------------------------------------------------------------------------------------------------------
Mission Oil & Gas, Inc. 1 5,532 36,121
9 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
OIL & GAS Continued
Mission Oil & Gas, Inc. 1,5 6,400 $ 41,789
- ------------------------------------------------------------------------------------------------------------------
Mission Resources Corp. 1 4,500 36,315
- ------------------------------------------------------------------------------------------------------------------
Newfield Exploration Co. 1 10,400 414,856
- ------------------------------------------------------------------------------------------------------------------
Noble Energy, Inc. 1,900 143,735
- ------------------------------------------------------------------------------------------------------------------
OMI Corp. 2 13,700 260,437
- ------------------------------------------------------------------------------------------------------------------
Overseas Shipholding Group, Inc. 2,500 149,125
- ------------------------------------------------------------------------------------------------------------------
Paramount Resources Ltd., Cl. A 1 25,200 369,814
- ------------------------------------------------------------------------------------------------------------------
Penn Virginia Corp. 300 13,401
- ------------------------------------------------------------------------------------------------------------------
Petroleum Development Corp. 1 12,100 385,385
- ------------------------------------------------------------------------------------------------------------------
Pogo Producing Co. 900 46,728
- ------------------------------------------------------------------------------------------------------------------
ProEx Energy Ltd. 1 1,940 16,863
- ------------------------------------------------------------------------------------------------------------------
ProspEx Resources Ltd. 1 33,020 93,519
- ------------------------------------------------------------------------------------------------------------------
Real Resources, Inc. 1 11,900 160,260
- ------------------------------------------------------------------------------------------------------------------
Remington Oil & Gas Corp. 1 14,900 531,930
- ------------------------------------------------------------------------------------------------------------------
Resource America, Inc., Cl. A 5,000 192,650
- ------------------------------------------------------------------------------------------------------------------
Sequoia Oil & Gas Trust 275 3,519
- ------------------------------------------------------------------------------------------------------------------
Sequoia Oil & Gas Trust 3,600 46,072
- ------------------------------------------------------------------------------------------------------------------
St. Mary Land & Exploration Co. 2 22,500 652,050
- ------------------------------------------------------------------------------------------------------------------
Stone Energy Corp. 1 6,500 317,850
- ------------------------------------------------------------------------------------------------------------------
Sunoco, Inc. 1,400 159,152
- ------------------------------------------------------------------------------------------------------------------
Swift Energy Co. 1,2 19,400 694,908
- ------------------------------------------------------------------------------------------------------------------
Tesoro Corp. 8,700 404,724
- ------------------------------------------------------------------------------------------------------------------
Thunder Energy, Inc. 1 23,666 163,220
- ------------------------------------------------------------------------------------------------------------------
TKE Energy Trust 14,000 110,953
- ------------------------------------------------------------------------------------------------------------------
TransMontaigne, Inc. 1,2 7,900 82,950
- ------------------------------------------------------------------------------------------------------------------
Trilogy Energy Trust 17,200 251,430
- ------------------------------------------------------------------------------------------------------------------
True Energy, Inc. 1 15,000 50,563
- ------------------------------------------------------------------------------------------------------------------
Tusk Energy Corp. 1 26,300 114,413
- ------------------------------------------------------------------------------------------------------------------
Tusk Energy Corp. 1,5 21,300 92,662
- ------------------------------------------------------------------------------------------------------------------
USEC, Inc. 2 9,200 134,688
- ------------------------------------------------------------------------------------------------------------------
Vault Energy Trust 5,200 44,352
- ------------------------------------------------------------------------------------------------------------------
Vintage Petroleum, Inc. 16,800 511,896
- ------------------------------------------------------------------------------------------------------------------
W&T Offshore, Inc. 2,800 67,396
- ------------------------------------------------------------------------------------------------------------------
West Energy Ltd. 1 13,100 50,788
- ------------------------------------------------------------------------------------------------------------------
White Fire Energy Ltd. 1 275 590
- ------------------------------------------------------------------------------------------------------------------
White Fire Energy Ltd. 1 3,600 7,728
- ------------------------------------------------------------------------------------------------------------------
Whiting Petroleum Corp. 1,2 8,800 319,528
----------------
14,453,768
- ------------------------------------------------------------------------------------------------------------------
FINANCIALS--15.9%
- ------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--0.2%
National Financial Partners Corp. 12,000 469,680
- ------------------------------------------------------------------------------------------------------------------
SWS Group, Inc. 8,600 147,748
----------------
617,428
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--5.1%
Amcore Financial, Inc. 1,300 $ 38,844
- ------------------------------------------------------------------------------------------------------------------
AmericanWest Bancorporation 1,2 1,810 36,110
- ------------------------------------------------------------------------------------------------------------------
Anchor BanCorp Wisconsin, Inc. 2 3,100 93,806
- ------------------------------------------------------------------------------------------------------------------
Associated Banc-Corp. 3,813 128,346
- ------------------------------------------------------------------------------------------------------------------
Astoria Financial Corp. 14,150 402,851
- ------------------------------------------------------------------------------------------------------------------
BancFirst Corp. 200 17,398
- ------------------------------------------------------------------------------------------------------------------
BancorpSouth, Inc. 7,300 172,280
- ------------------------------------------------------------------------------------------------------------------
Bank of Hawaii Corp. 5,900 299,425
- ------------------------------------------------------------------------------------------------------------------
Bank of the Ozarks, Inc. 2 600 19,704
- ------------------------------------------------------------------------------------------------------------------
Banner Corp. 1,100 30,811
- ------------------------------------------------------------------------------------------------------------------
Berkshire Hills Bancorp, Inc. 2 1,300 43,316
- ------------------------------------------------------------------------------------------------------------------
BOK Financial Corp. 1,000 46,120
- ------------------------------------------------------------------------------------------------------------------
Camden National Corp. 300 9,825
- ------------------------------------------------------------------------------------------------------------------
Capital Corp. of the West 2 720 19,980
- ------------------------------------------------------------------------------------------------------------------
Capitol Bancorp Ltd. 600 20,166
- ------------------------------------------------------------------------------------------------------------------
Cathay Bancorp, Inc. 2 600 20,226
- ------------------------------------------------------------------------------------------------------------------
Central Pacific Financial Corp. 3,300 117,480
- ------------------------------------------------------------------------------------------------------------------
Chemical Financial Corp. 1,491 49,367
- ------------------------------------------------------------------------------------------------------------------
Chittenden Corp. 5,900 160,480
- ------------------------------------------------------------------------------------------------------------------
Citizens First Bancorp, Inc. 2,700 55,755
- ------------------------------------------------------------------------------------------------------------------
City Holding Co. 6,300 230,076
- ------------------------------------------------------------------------------------------------------------------
City National Corp. 3,600 258,156
- ------------------------------------------------------------------------------------------------------------------
Columbia Banking System, Inc. 5,790 142,550
- ------------------------------------------------------------------------------------------------------------------
Commerce Bancshares, Inc. 1,300 65,533
- ------------------------------------------------------------------------------------------------------------------
Commercial Federal Corp. 3,500 117,880
- ------------------------------------------------------------------------------------------------------------------
Community Bank System, Inc. 2 21,100 514,629
- ------------------------------------------------------------------------------------------------------------------
Community Trust Bancorp, Inc. 1,515 49,571
- ------------------------------------------------------------------------------------------------------------------
Corus Bankshares, Inc. 3,300 183,117
- ------------------------------------------------------------------------------------------------------------------
Dime Community Bancshares, Inc. 4,512 68,582
- ------------------------------------------------------------------------------------------------------------------
Downey Financial Corp. 5,000 366,000
- ------------------------------------------------------------------------------------------------------------------
F.N.B. Corp. 2 900 17,685
- ------------------------------------------------------------------------------------------------------------------
Fidelity Bankshares, Inc. 1,524 40,416
- ------------------------------------------------------------------------------------------------------------------
First BanCorp 2 3,550 142,533
- ------------------------------------------------------------------------------------------------------------------
First Citizens BancShares, Inc., Cl. A 900 130,095
- ------------------------------------------------------------------------------------------------------------------
First Commonwealth Financial Corp. 25,000 342,500
- ------------------------------------------------------------------------------------------------------------------
First Community Bancorp 1,400 66,500
- ------------------------------------------------------------------------------------------------------------------
First Defiance Financial Corp. 1,700 45,373
- ------------------------------------------------------------------------------------------------------------------
First Financial Bancorp 2 3,000 56,700
- ------------------------------------------------------------------------------------------------------------------
First Financial Corp. 2 600 17,238
- ------------------------------------------------------------------------------------------------------------------
First Financial Holdings, Inc. 2,900 86,739
- ------------------------------------------------------------------------------------------------------------------
First Midwest Bancorp, Inc. 2 3,400 119,578
- ------------------------------------------------------------------------------------------------------------------
First Place Financial Corp. 5,700 114,513
- ------------------------------------------------------------------------------------------------------------------
First Republic Bank 8,200 289,706
- ------------------------------------------------------------------------------------------------------------------
First South Bancorp, Inc. 400 12,752
- ------------------------------------------------------------------------------------------------------------------
FirstFed Financial Corp. 1,2 8,700 518,607
10 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
GB&T Bancshares, Inc. 2 800 $ 19,008
- ------------------------------------------------------------------------------------------------------------------
Greater Bay Bancorp 7,700 203,049
- ------------------------------------------------------------------------------------------------------------------
Greene County Bancshares, Inc. 1,600 43,712
- ------------------------------------------------------------------------------------------------------------------
Harbor Florida Bancshares, Inc. 2 7,600 284,544
- ------------------------------------------------------------------------------------------------------------------
Hibernia Corp., Cl. A 6,000 199,080
- ------------------------------------------------------------------------------------------------------------------
Horizon Financial Corp. 200 4,440
- ------------------------------------------------------------------------------------------------------------------
Independent Bank Corp. 8,843 251,495
- ------------------------------------------------------------------------------------------------------------------
Indymac Mortgage Holdings, Inc. 10,200 415,446
- ------------------------------------------------------------------------------------------------------------------
ITLA Capital Corp. 1 800 43,120
- ------------------------------------------------------------------------------------------------------------------
MAF Bancorp, Inc. 4,400 187,572
- ------------------------------------------------------------------------------------------------------------------
MainSource Financial Group, Inc. 2 3,583 64,816
- ------------------------------------------------------------------------------------------------------------------
Mercantile Bankshares Corp. 1,100 56,683
- ------------------------------------------------------------------------------------------------------------------
NASB Financial, Inc. 2 600 26,310
- ------------------------------------------------------------------------------------------------------------------
National Bankshares, Inc. 400 17,812
- ------------------------------------------------------------------------------------------------------------------
NBT Bancorp, Inc. 2 1,500 35,460
- ------------------------------------------------------------------------------------------------------------------
Net.B@nk, Inc. 11,900 110,908
- ------------------------------------------------------------------------------------------------------------------
Oak Hill Financial, Inc. 200 5,838
- ------------------------------------------------------------------------------------------------------------------
Old National Bancorp 2 700 14,980
- ------------------------------------------------------------------------------------------------------------------
Pacific Capital Bancorp 2 23,610 875,459
- ------------------------------------------------------------------------------------------------------------------
Parkvale Financial Corp. 400 10,860
- ------------------------------------------------------------------------------------------------------------------
PennRock Financial Services Corp. 1,220 43,786
- ------------------------------------------------------------------------------------------------------------------
People's Bank 4,750 143,640
- ------------------------------------------------------------------------------------------------------------------
PFF Bancorp, Inc. 13,110 397,102
- ------------------------------------------------------------------------------------------------------------------
Preferred Bank, Los Angeles 300 11,910
- ------------------------------------------------------------------------------------------------------------------
PrivateBancorp, Inc. 2 900 31,842
- ------------------------------------------------------------------------------------------------------------------
Provident Bankshares Corp. 10,351 330,300
- ------------------------------------------------------------------------------------------------------------------
Provident Financial Holdings, Inc. 900 25,299
- ------------------------------------------------------------------------------------------------------------------
Republic Bancorp, Inc. 3,057 45,794
- ------------------------------------------------------------------------------------------------------------------
Republic Bancorp, Inc., Cl. A 3,738 81,152
- ------------------------------------------------------------------------------------------------------------------
Seacoast Banking Corp. of Florida 2,030 39,971
- ------------------------------------------------------------------------------------------------------------------
Sound Federal Bancorp, Inc. 2 300 4,848
- ------------------------------------------------------------------------------------------------------------------
Southside Bancshares, Inc. 2 331 6,786
- ------------------------------------------------------------------------------------------------------------------
Southwest Bancorp, Inc. 2 2,500 51,200
- ------------------------------------------------------------------------------------------------------------------
State Bancorp, Inc. 2 1,162 26,284
- ------------------------------------------------------------------------------------------------------------------
State Financial Services Corp. 7,100 285,846
- ------------------------------------------------------------------------------------------------------------------
Sterling Bancorp 3,060 65,331
- ------------------------------------------------------------------------------------------------------------------
Sterling Bancshares, Inc. 3,100 48,236
- ------------------------------------------------------------------------------------------------------------------
Sterling Financial Corp. 1 18,317 685,056
- ------------------------------------------------------------------------------------------------------------------
SVB Financial Group 1,2 14,200 680,180
- ------------------------------------------------------------------------------------------------------------------
TierOne Corp. 5,000 135,650
- ------------------------------------------------------------------------------------------------------------------
UMB Financial Corp. 100 5,703
- ------------------------------------------------------------------------------------------------------------------
Union Bankshares Corp. 2 900 34,758
- ------------------------------------------------------------------------------------------------------------------
United Community Financial Corp. 900 9,846
- ------------------------------------------------------------------------------------------------------------------
Vineyard National Bancorp Co. 2 500 15,780
- ------------------------------------------------------------------------------------------------------------------
W. Holding Co., Inc. 6,100 62,342
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Washington Federal, Inc. 800 $ 18,816
- ------------------------------------------------------------------------------------------------------------------
Webster Financial Corp. 4,900 228,781
- ------------------------------------------------------------------------------------------------------------------
WesBanco, Inc. 2,400 72,048
- ------------------------------------------------------------------------------------------------------------------
Whitney Holding Corp. 3,650 119,100
- ------------------------------------------------------------------------------------------------------------------
Wilmington Trust Corp. 1,700 61,217
- ------------------------------------------------------------------------------------------------------------------
WSFS Financial Corp. 4,200 229,782
- ------------------------------------------------------------------------------------------------------------------
12,648,297
----------------
- ------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.2%
ASTA Funding, Inc. 2 8,900 247,242
- ------------------------------------------------------------------------------------------------------------------
Dollar Financial Corp. 1,2 900 9,549
- ------------------------------------------------------------------------------------------------------------------
Nelnet, Inc., Cl. A 1 3,700 123,099
- ------------------------------------------------------------------------------------------------------------------
379,890
----------------
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.0%
Advanta Corp., Cl. B 2 9,900 278,784
- ------------------------------------------------------------------------------------------------------------------
Affiliated Managers Group, Inc. 1,2 7,900 539,807
- ------------------------------------------------------------------------------------------------------------------
American Capital Strategies Ltd. 2 11,800 426,098
- ------------------------------------------------------------------------------------------------------------------
AmeriCredit Corp. 1 16,000 408,000
- ------------------------------------------------------------------------------------------------------------------
Apollo Investment Corp. 12,400 228,532
- ------------------------------------------------------------------------------------------------------------------
Cash America International, Inc. 4,300 86,516
- ------------------------------------------------------------------------------------------------------------------
CompuCredit Corp. 1,2 17,000 582,760
- ------------------------------------------------------------------------------------------------------------------
E*TRADE Financial Corp. 1 6,000 83,940
- ------------------------------------------------------------------------------------------------------------------
Encore Capital Group, Inc. 1 2,100 35,700
- ------------------------------------------------------------------------------------------------------------------
First Cash Financial Services, Inc. 1 3,200 68,384
- ------------------------------------------------------------------------------------------------------------------
Gabelli Asset Management, Inc. 4,400 194,436
- ------------------------------------------------------------------------------------------------------------------
Investment Technology Group, Inc. 1 26,500 557,030
- ------------------------------------------------------------------------------------------------------------------
Jefferies Group, Inc. 2 1,300 49,257
- ------------------------------------------------------------------------------------------------------------------
Ladenburg Thalmann Financial
Services, Inc. 1 768 438
- ------------------------------------------------------------------------------------------------------------------
Lazard Ltd., Cl. A 1 3,800 88,350
- ------------------------------------------------------------------------------------------------------------------
Medallion Financial Corp. 1,100 10,395
- ------------------------------------------------------------------------------------------------------------------
Metris Cos., Inc. 1 12,800 185,088
- ------------------------------------------------------------------------------------------------------------------
Nasdaq Stock Market, Inc. 1 800 15,088
- ------------------------------------------------------------------------------------------------------------------
Piper Jaffray Cos., Inc. 1 2,900 88,247
- ------------------------------------------------------------------------------------------------------------------
Providian Financial Corp. 1 12,200 215,086
- ------------------------------------------------------------------------------------------------------------------
Raymond James Financial, Inc. 2,100 59,325
- ------------------------------------------------------------------------------------------------------------------
Sanders Morris Harris Group, Inc. 2 3,900 67,080
- ------------------------------------------------------------------------------------------------------------------
Student Loan Corp. (The) 1,100 241,780
- ------------------------------------------------------------------------------------------------------------------
United PanAm Financial Corp. 1,2 700 19,187
- ------------------------------------------------------------------------------------------------------------------
WFS Financial, Inc. 4,300 218,053
- ------------------------------------------------------------------------------------------------------------------
World Acceptance Corp. 1 8,100 243,405
----------------
4,990,766
- ------------------------------------------------------------------------------------------------------------------
INSURANCE--6.0%
21st Century Insurance Group 900 13,356
- ------------------------------------------------------------------------------------------------------------------
Affirmative Insurance Holdings, Inc. 3,100 49,135
11 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
INSURANCE Continued
Alfa Corp. 6,800 $ 100,096
- ------------------------------------------------------------------------------------------------------------------
Allmerica Financial Corp. 1 6,400 237,376
- ------------------------------------------------------------------------------------------------------------------
American Equity Investment
Life Holding Co. 2 9,000 106,920
- ------------------------------------------------------------------------------------------------------------------
American Financial Group, Inc. 5,400 181,008
- ------------------------------------------------------------------------------------------------------------------
American Physicians Capital, Inc. 1 3,600 133,740
- ------------------------------------------------------------------------------------------------------------------
AmerUs Group Co. 12,000 576,600
- ------------------------------------------------------------------------------------------------------------------
Arch Capital Group Ltd. 1 8,500 382,925
- ------------------------------------------------------------------------------------------------------------------
Argonaut Group, Inc. 1,2 6,300 145,467
- ------------------------------------------------------------------------------------------------------------------
Aspen Insurance Holdings Ltd. 10,400 286,624
- ------------------------------------------------------------------------------------------------------------------
Assurant, Inc. 9,900 357,390
- ------------------------------------------------------------------------------------------------------------------
Baldwin & Lyons, Inc., Cl. B, Non-Vtg. 600 14,460
- ------------------------------------------------------------------------------------------------------------------
Berkley (W.R.) Corp. 7,500 267,600
- ------------------------------------------------------------------------------------------------------------------
Bristol West Holdings, Inc. 3,300 60,390
- ------------------------------------------------------------------------------------------------------------------
Clark, Inc. 700 10,031
- ------------------------------------------------------------------------------------------------------------------
Commerce Group, Inc. (The) 5,900 366,449
- ------------------------------------------------------------------------------------------------------------------
Delphi Financial Group, Inc., Cl. A 8,800 388,520
- ------------------------------------------------------------------------------------------------------------------
Direct General Corp. 2 1,800 33,498
- ------------------------------------------------------------------------------------------------------------------
Donegal Group, Inc., Cl. A 2 5,401 107,804
- ------------------------------------------------------------------------------------------------------------------
Fidelity National Financial, Inc. 779 27,803
- ------------------------------------------------------------------------------------------------------------------
First American Corp. (The) 9,700 389,358
- ------------------------------------------------------------------------------------------------------------------
FPIC Insurance Group, Inc. 1 5,500 161,315
- ------------------------------------------------------------------------------------------------------------------
Great American Financial
Resources, Inc. 2,600 51,506
- ------------------------------------------------------------------------------------------------------------------
HCC Insurance Holdings, Inc. 9,200 348,404
- ------------------------------------------------------------------------------------------------------------------
Hilb, Rogal & Hamilton Co. 2 8,500 292,400
- ------------------------------------------------------------------------------------------------------------------
Horace Mann Educators Corp. 26,100 491,202
- ------------------------------------------------------------------------------------------------------------------
Independence Holding Co. 640 11,296
- ------------------------------------------------------------------------------------------------------------------
Infinity Property & Casualty Corp. 10,100 352,288
- ------------------------------------------------------------------------------------------------------------------
IPC Holdings Ltd. 800 31,696
- ------------------------------------------------------------------------------------------------------------------
LandAmerica Financial Group, Inc. 2 12,300 730,251
- ------------------------------------------------------------------------------------------------------------------
Markel Corp. 1 600 203,400
- ------------------------------------------------------------------------------------------------------------------
Mercury General Corp. 1,400 76,328
- ------------------------------------------------------------------------------------------------------------------
National Western Life Insurance
Co., Cl. A 1 500 96,945
- ------------------------------------------------------------------------------------------------------------------
Odyssey Re Holdings Corp. 2 13,200 325,776
- ------------------------------------------------------------------------------------------------------------------
Ohio Casualty Corp. 27,600 667,368
- ------------------------------------------------------------------------------------------------------------------
Old Republic International Corp. 10,900 275,661
- ------------------------------------------------------------------------------------------------------------------
Partnerre Holdings Ltd. 2,300 148,166
- ------------------------------------------------------------------------------------------------------------------
Philadelphia Consolidated Holding Co. 1 5,100 432,276
- ------------------------------------------------------------------------------------------------------------------
Phoenix Cos., Inc. (The) 2 18,900 224,910
- ------------------------------------------------------------------------------------------------------------------
Presidential Life Corp. 2 1,100 18,821
- ------------------------------------------------------------------------------------------------------------------
ProAssurance Corp. 1 6,500 271,440
- ------------------------------------------------------------------------------------------------------------------
ProCentury Corp. 10,500 105,315
- ------------------------------------------------------------------------------------------------------------------
Protective Life Corp. 5,400 227,988
- ------------------------------------------------------------------------------------------------------------------
Pxre Group Ltd. 800 20,176
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
INSURANCE Continued
Reinsurance Group of America, Inc. 3,000 $ 139,530
- ------------------------------------------------------------------------------------------------------------------
RLI Corp. 2 11,600 517,360
- ------------------------------------------------------------------------------------------------------------------
Safety Insurance Group, Inc. 6,500 219,440
- ------------------------------------------------------------------------------------------------------------------
Selective Insurance Group, Inc. 13,800 683,790
- ------------------------------------------------------------------------------------------------------------------
StanCorp Financial Group, Inc. 6,600 505,428
- ------------------------------------------------------------------------------------------------------------------
State Auto Financial Corp. 8,100 251,424
- ------------------------------------------------------------------------------------------------------------------
Stewart Information Services Corp. 8,800 369,600
- ------------------------------------------------------------------------------------------------------------------
Triad Guaranty, Inc. 1 1,000 50,390
- ------------------------------------------------------------------------------------------------------------------
UICI 8,100 241,137
- ------------------------------------------------------------------------------------------------------------------
United America Indemnity Ltd., Cl. A 1 1,206 20,731
- ------------------------------------------------------------------------------------------------------------------
United Fire & Casualty Co. 9,700 430,874
- ------------------------------------------------------------------------------------------------------------------
Unitrin, Inc. 7,300 358,430
- ------------------------------------------------------------------------------------------------------------------
Universal American Financial Corp. 1 31,800 719,316
- ------------------------------------------------------------------------------------------------------------------
Vesta Insurance Group, Inc. 2 3,200 8,320
- ------------------------------------------------------------------------------------------------------------------
Zenith National Insurance Corp. 10,100 685,386
----------------
15,002,634
- ------------------------------------------------------------------------------------------------------------------
REAL ESTATE--2.0%
Acadia Realty Trust 1,100 20,515
- ------------------------------------------------------------------------------------------------------------------
Agree Realty Corp. 4,600 139,150
- ------------------------------------------------------------------------------------------------------------------
Alexandria Real Estate Equities, Inc. 1,100 80,795
- ------------------------------------------------------------------------------------------------------------------
Amli Residential Properties Trust 2 800 25,008
- ------------------------------------------------------------------------------------------------------------------
Arden Realty, Inc. 2,500 89,950
- ------------------------------------------------------------------------------------------------------------------
Associated Estates Realty Corp. 2,000 18,460
- ------------------------------------------------------------------------------------------------------------------
Brandywine Realty Trust 4,600 140,990
- ------------------------------------------------------------------------------------------------------------------
Camden Property Trust 800 43,000
- ------------------------------------------------------------------------------------------------------------------
Capital Automotive REIT 1,500 57,255
- ------------------------------------------------------------------------------------------------------------------
Capstead Mortgage Corp. 2 1,100 9,108
- ------------------------------------------------------------------------------------------------------------------
CarrAmerica Realty Corp. 1,900 68,742
- ------------------------------------------------------------------------------------------------------------------
CBL & Associates Properties, Inc. 2,800 120,596
- ------------------------------------------------------------------------------------------------------------------
Colonial Properties Trust 2 1,454 63,976
- ------------------------------------------------------------------------------------------------------------------
Consolidated-Tomoka Land Co. 1,400 120,400
- ------------------------------------------------------------------------------------------------------------------
Corporate Office Properties Trust 3,100 91,295
- ------------------------------------------------------------------------------------------------------------------
Correctional Properties Trust 1,300 36,790
- ------------------------------------------------------------------------------------------------------------------
CRT Properties, Inc. 1,500 40,950
- ------------------------------------------------------------------------------------------------------------------
Entertainment Properties Trust 600 27,600
- ------------------------------------------------------------------------------------------------------------------
Equity Inns, Inc. 9,200 122,360
- ------------------------------------------------------------------------------------------------------------------
Federal Realty Investment Trust 1,300 76,700
- ------------------------------------------------------------------------------------------------------------------
First Industrial Realty Trust, Inc. 2 2,800 111,720
- ------------------------------------------------------------------------------------------------------------------
Forest City Enterprises, Inc., Cl. A 900 63,900
- ------------------------------------------------------------------------------------------------------------------
Friedman, Billings, Ramsey
Group, Inc., Cl. A 2 3,800 54,340
- ------------------------------------------------------------------------------------------------------------------
Getty Realty Corp. 2 2,100 58,170
- ------------------------------------------------------------------------------------------------------------------
Glenborough Realty Trust, Inc. 800 16,472
- ------------------------------------------------------------------------------------------------------------------
Glimcher Realty Trust 2 2,100 58,275
12 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
REAL ESTATE Continued
Health Care REIT, Inc. 3,000 $ 113,070
- ------------------------------------------------------------------------------------------------------------------
Healthcare Realty Trust, Inc. 2 3,100 119,691
- ------------------------------------------------------------------------------------------------------------------
Heritage Property Investment Trust 2 2,100 73,542
- ------------------------------------------------------------------------------------------------------------------
Highwoods Properties, Inc. 2,300 68,448
- ------------------------------------------------------------------------------------------------------------------
HRPT Properties Trust 4,300 53,449
- ------------------------------------------------------------------------------------------------------------------
Jones Lang LaSalle, Inc. 1 12,300 544,029
- ------------------------------------------------------------------------------------------------------------------
Kilroy Realty Corp. 2,200 104,478
- ------------------------------------------------------------------------------------------------------------------
Lexington Corporate Properties Trust 5,700 138,567
- ------------------------------------------------------------------------------------------------------------------
LTC Properties, Inc. 1,000 20,700
- ------------------------------------------------------------------------------------------------------------------
Macerich Co. (The) 600 40,230
- ------------------------------------------------------------------------------------------------------------------
Mack-Cali Realty Corp. 1,500 67,950
- ------------------------------------------------------------------------------------------------------------------
Maguire Properties, Inc. 1,400 39,676
- ------------------------------------------------------------------------------------------------------------------
Mid-America Apartment Communities, Inc. 2,200 99,924
- ------------------------------------------------------------------------------------------------------------------
Mills Corp. 1,900 115,501
- ------------------------------------------------------------------------------------------------------------------
Nationwide Health Properties, Inc. 3,800 89,718
- ------------------------------------------------------------------------------------------------------------------
Omega Healthcare Investors, Inc. 1,100 14,146
- ------------------------------------------------------------------------------------------------------------------
Pan Pacific Retail Properties, Inc. 1,300 86,294
- ------------------------------------------------------------------------------------------------------------------
Parkway Properties, Inc. 500 25,005
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania Real Estate Investment Trust 2 3,100 147,250
- ------------------------------------------------------------------------------------------------------------------
Prentiss Properties Trust 600 21,864
- ------------------------------------------------------------------------------------------------------------------
PS Business Parks, Inc. 500 22,225
- ------------------------------------------------------------------------------------------------------------------
RAIT Investment Trust 600 17,970
- ------------------------------------------------------------------------------------------------------------------
Ramco-Gershenson Properties Trust 2,100 61,488
- ------------------------------------------------------------------------------------------------------------------
Realty Income Corp. 1,500 37,560
- ------------------------------------------------------------------------------------------------------------------
Redwood Trust, Inc. 2 800 41,280
- ------------------------------------------------------------------------------------------------------------------
Regency Centers Corp. 800 45,760
- ------------------------------------------------------------------------------------------------------------------
Senior Housing Properties Trust 2 3,200 60,512
- ------------------------------------------------------------------------------------------------------------------
Simon Property Group, Inc. 158 11,453
- ------------------------------------------------------------------------------------------------------------------
SL Green Realty Corp. 1,100 70,950
- ------------------------------------------------------------------------------------------------------------------
Spirit Finance Corp. 12,400 145,700
- ------------------------------------------------------------------------------------------------------------------
Stratus Properties, Inc. 1 1,500 26,700
- ------------------------------------------------------------------------------------------------------------------
Tanger Factory Outlet Centers, Inc. 4,800 129,264
- ------------------------------------------------------------------------------------------------------------------
Town & Country Trust 2 900 25,659
- ------------------------------------------------------------------------------------------------------------------
Trammell Crow Co. 1 13,600 329,664
- ------------------------------------------------------------------------------------------------------------------
Trizec Properties, Inc. 1,600 32,912
- ------------------------------------------------------------------------------------------------------------------
United Capital Corp. 1 400 10,380
- ------------------------------------------------------------------------------------------------------------------
United Dominion Realty Trust, Inc. 2,400 57,720
- ------------------------------------------------------------------------------------------------------------------
Ventas, Inc. 1,900 57,380
- ------------------------------------------------------------------------------------------------------------------
W.P. Carey & Co. LLC 1,500 43,920
- ------------------------------------------------------------------------------------------------------------------
Weingarten Realty Investors 1,900 74,518
----------------
5,043,064
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.4%
Accredited Home Lenders Holding Co. 1,2 6,500 $ 286,000
- ------------------------------------------------------------------------------------------------------------------
Bank Mutual Corp. 2 14,136 156,344
- ------------------------------------------------------------------------------------------------------------------
Clifton Savings Bancorp, Inc. 900 9,504
- ------------------------------------------------------------------------------------------------------------------
Fremont General Corp. 2 12,000 291,960
- ------------------------------------------------------------------------------------------------------------------
PMI Group, Inc. (The) 1,000 38,980
- ------------------------------------------------------------------------------------------------------------------
Radian Group, Inc. 3,800 179,436
----------------
962,224
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE--11.6%
- ------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--0.9%
Affymetrix, Inc. 1,2 1,100 59,323
- ------------------------------------------------------------------------------------------------------------------
Albany Molecular Research, Inc. 1,2 2,600 36,400
- ------------------------------------------------------------------------------------------------------------------
Alexion Pharmaceuticals, Inc. 1,2 2,300 52,992
- ------------------------------------------------------------------------------------------------------------------
Applera Corp./Applied Biosystems Group 16,100 316,687
- ------------------------------------------------------------------------------------------------------------------
Arena Pharmaceuticals, Inc. 1 6,300 42,966
- ------------------------------------------------------------------------------------------------------------------
Array BioPharma, Inc. 1,2 19,700 124,110
- ------------------------------------------------------------------------------------------------------------------
BioMarin Pharmaceutical, Inc. 1 3,600 26,964
- ------------------------------------------------------------------------------------------------------------------
Bone Care International, Inc. 1 2,000 65,940
- ------------------------------------------------------------------------------------------------------------------
Caliper Life Sciences, Inc. 1 100 560
- ------------------------------------------------------------------------------------------------------------------
Enzo Biochem, Inc. 2 1,300 23,309
- ------------------------------------------------------------------------------------------------------------------
ID Biomedical Corp. 1,2 4,900 80,066
- ------------------------------------------------------------------------------------------------------------------
ImmunoGen, Inc. 1 2,800 16,212
- ------------------------------------------------------------------------------------------------------------------
Invitrogen Corp. 1 4,400 366,476
- ------------------------------------------------------------------------------------------------------------------
Medarex, Inc. 1,2 2,300 19,159
- ------------------------------------------------------------------------------------------------------------------
Myriad Genetics, Inc. 1,2 6,300 98,595
- ------------------------------------------------------------------------------------------------------------------
Northfield Laboratories, Inc. 1 1,500 21,465
- ------------------------------------------------------------------------------------------------------------------
Orchid Cellmark, Inc. 1 6,000 64,860
- ------------------------------------------------------------------------------------------------------------------
Techne Corp. 1 7,200 330,552
- ------------------------------------------------------------------------------------------------------------------
Third Wave Technologies, Inc. 1 20,500 80,565
- ------------------------------------------------------------------------------------------------------------------
United Therapeutics Corp. 1,2 7,300 351,860
- ------------------------------------------------------------------------------------------------------------------
Vertex Pharmaceuticals, Inc. 1 2,000 33,680
----------------
2,212,741
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--3.2%
ABIOMED, Inc. 1 100 855
- ------------------------------------------------------------------------------------------------------------------
Adeza Biomedical Corp. 1,2 1,600 27,168
- ------------------------------------------------------------------------------------------------------------------
Advanced Medical Optics, Inc. 1 5,332 211,947
- ------------------------------------------------------------------------------------------------------------------
American Medical Systems Holdings, Inc. 1 18,700 386,155
- ------------------------------------------------------------------------------------------------------------------
Analogic Corp. 700 35,224
- ------------------------------------------------------------------------------------------------------------------
Anika Therapeutics, Inc. 1 6,700 76,983
- ------------------------------------------------------------------------------------------------------------------
Arrow International, Inc. 4,700 149,930
- ------------------------------------------------------------------------------------------------------------------
Aspect Medical Systems, Inc. 1,2 10,400 309,296
- ------------------------------------------------------------------------------------------------------------------
Bausch & Lomb, Inc. 3,900 323,700
- ------------------------------------------------------------------------------------------------------------------
Bio-Rad Laboratories, Inc., Cl. A 1 2,400 142,104
13 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES Continued
ConMed Corp. 1,2 13,200 $ 406,164
- ------------------------------------------------------------------------------------------------------------------
Conor Medsystems, Inc. 1,2 1,600 24,560
- ------------------------------------------------------------------------------------------------------------------
Cutera, Inc. 1,2 2,700 46,845
- ------------------------------------------------------------------------------------------------------------------
Dade Behring Holdings, Inc. 3,500 227,535
- ------------------------------------------------------------------------------------------------------------------
Dentsply International, Inc. 2,600 140,400
- ------------------------------------------------------------------------------------------------------------------
DJ Orthopedics, Inc. 1 9,000 246,870
- ------------------------------------------------------------------------------------------------------------------
Edwards Lifesciences Corp. 1 6,500 279,630
- ------------------------------------------------------------------------------------------------------------------
Haemonetics Corp. 1,2 12,000 487,680
- ------------------------------------------------------------------------------------------------------------------
HealthTronics, Inc. 1,2 6,600 85,734
- ------------------------------------------------------------------------------------------------------------------
Hologic, Inc. 1,2 11,200 445,200
- ------------------------------------------------------------------------------------------------------------------
ICU Medical, Inc. 1,2 500 16,085
- ------------------------------------------------------------------------------------------------------------------
Inamed Corp. 1 1,050 70,319
- ------------------------------------------------------------------------------------------------------------------
Intuitive Surgical, Inc. 1,2 8,600 401,104
- ------------------------------------------------------------------------------------------------------------------
Kensey Nash Corp. 1,2 1,200 36,288
- ------------------------------------------------------------------------------------------------------------------
Lifecore Biomedical, Inc. 1 200 2,180
- ------------------------------------------------------------------------------------------------------------------
Lifeline Systems, Inc. 1,2 4,800 154,176
- ------------------------------------------------------------------------------------------------------------------
Matthews International Corp., Cl. A 5,000 194,800
- ------------------------------------------------------------------------------------------------------------------
Medical Action Industries, Inc. 1 1,900 33,915
- ------------------------------------------------------------------------------------------------------------------
Mentor Corp. 12,900 535,092
- ------------------------------------------------------------------------------------------------------------------
Meridian Bioscience, Inc. 13,100 248,245
- ------------------------------------------------------------------------------------------------------------------
NuVasive, Inc. 1,2 2,400 39,888
- ------------------------------------------------------------------------------------------------------------------
OraSure Technologies, Inc. 1 5,400 53,946
- ------------------------------------------------------------------------------------------------------------------
Palomar Medical Technologies, Inc. 1,2 1,500 35,880
- ------------------------------------------------------------------------------------------------------------------
ResMed, Inc. 1,2 1,600 105,584
- ------------------------------------------------------------------------------------------------------------------
Respironics, Inc. 1 2,800 101,108
- ------------------------------------------------------------------------------------------------------------------
SonoSite, Inc. 1,2 3,300 102,432
- ------------------------------------------------------------------------------------------------------------------
SurModics, Inc. 1,2 2,600 112,762
- ------------------------------------------------------------------------------------------------------------------
Sybron Dental Specialties, Inc. 1 11,900 447,678
- ------------------------------------------------------------------------------------------------------------------
Thermo Electron Corp. 1 3,300 88,671
- ------------------------------------------------------------------------------------------------------------------
Thoratec Corp. 1 800 12,272
- ------------------------------------------------------------------------------------------------------------------
Varian, Inc. 1 5,500 207,845
- ------------------------------------------------------------------------------------------------------------------
Ventana Medical Systems, Inc. 1,2 10,000 402,300
- ------------------------------------------------------------------------------------------------------------------
Viasys Healthcare, Inc. 1 8,400 189,756
- ------------------------------------------------------------------------------------------------------------------
Vital Signs, Inc. 1,100 47,652
- ------------------------------------------------------------------------------------------------------------------
West Pharmaceutical Services, Inc. 5,900 165,495
----------------
7,859,453
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--6.6%
Advisory Board Co. (The) 1 1,000 48,740
- ------------------------------------------------------------------------------------------------------------------
Alderwoods Group, Inc. 1 300 4,311
- ------------------------------------------------------------------------------------------------------------------
Allscripts Healthcare Solutions, Inc. 1,2 25,400 421,894
- ------------------------------------------------------------------------------------------------------------------
America Service Group, Inc. 1 2,050 32,493
- ------------------------------------------------------------------------------------------------------------------
American Healthways, Inc. 1,2 17,900 756,633
- ------------------------------------------------------------------------------------------------------------------
American Retirement Corp. 1,2 7,900 115,498
- ------------------------------------------------------------------------------------------------------------------
AMERIGROUP Corp. 1 1,100 44,220
- ------------------------------------------------------------------------------------------------------------------
AMN Healthcare Services, Inc. 1 5,600 84,168
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
AmSurg Corp. 1,2 7,000 $ 193,830
- ------------------------------------------------------------------------------------------------------------------
Apria Healthcare Group, Inc. 1 16,100 557,704
- ------------------------------------------------------------------------------------------------------------------
Beverly Enterprises, Inc. 1,2 43,400 552,916
- ------------------------------------------------------------------------------------------------------------------
Bio-Reference Laboratories, Inc. 1 4,900 68,012
- ------------------------------------------------------------------------------------------------------------------
Cantel Medical Corp. 1,2 2,650 43,354
- ------------------------------------------------------------------------------------------------------------------
Cerner Corp. 1,2 4,000 271,880
- ------------------------------------------------------------------------------------------------------------------
Chemed Corp. 11,700 478,296
- ------------------------------------------------------------------------------------------------------------------
Community Health Systems, Inc. 1 7,100 268,309
- ------------------------------------------------------------------------------------------------------------------
Computer Programs & Systems, Inc. 6,500 242,255
- ------------------------------------------------------------------------------------------------------------------
CorVel Corp. 1 300 7,536
- ------------------------------------------------------------------------------------------------------------------
Covance, Inc. 1 3,600 161,532
- ------------------------------------------------------------------------------------------------------------------
Coventry Health Care, Inc. 1 400 28,300
- ------------------------------------------------------------------------------------------------------------------
Cross Country Healthcare, Inc. 1,2 6,500 110,500
- ------------------------------------------------------------------------------------------------------------------
Dendrite International, Inc. 1,2 2,900 40,020
- ------------------------------------------------------------------------------------------------------------------
Emageon, Inc. 1 2,700 37,827
- ------------------------------------------------------------------------------------------------------------------
Genesis HealthCare Corp. 1,2 15,600 721,968
- ------------------------------------------------------------------------------------------------------------------
Gentiva Health Services, Inc. 1 13,100 233,966
- ------------------------------------------------------------------------------------------------------------------
Health Net, Inc. 1 9,100 347,256
- ------------------------------------------------------------------------------------------------------------------
HealthExtras, Inc. 1,2 1,400 28,098
- ------------------------------------------------------------------------------------------------------------------
Horizon Health Corp. 1 400 9,356
- ------------------------------------------------------------------------------------------------------------------
Humana, Inc. 1 6,500 258,310
- ------------------------------------------------------------------------------------------------------------------
IDX Systems Corp. 1 3,600 108,504
- ------------------------------------------------------------------------------------------------------------------
Kindred Healthcare, Inc. 1,2 19,300 764,473
- ------------------------------------------------------------------------------------------------------------------
LCA-Vision, Inc. 2 13,700 663,902
- ------------------------------------------------------------------------------------------------------------------
LHC Group, Inc. 1 10,100 183,618
- ------------------------------------------------------------------------------------------------------------------
Lincare Holdings, Inc. 1 8,500 347,140
- ------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc. 1 700 24,717
- ------------------------------------------------------------------------------------------------------------------
Manor Care, Inc. 5,300 210,569
- ------------------------------------------------------------------------------------------------------------------
Matria Healthcare, Inc. 1,2 7,300 235,279
- ------------------------------------------------------------------------------------------------------------------
MedCath Corp. 1,2 7,900 219,541
- ------------------------------------------------------------------------------------------------------------------
Merge Technologies, Inc. 1,2 3,500 65,625
- ------------------------------------------------------------------------------------------------------------------
National HealthCare Corp. 2 1,300 45,903
- ------------------------------------------------------------------------------------------------------------------
National Medical Health Card Systems, Inc. 1 1,100 26,466
- ------------------------------------------------------------------------------------------------------------------
Option Care, Inc. 2 21,450 302,445
- ------------------------------------------------------------------------------------------------------------------
Owens & Minor, Inc. 17,600 569,360
- ------------------------------------------------------------------------------------------------------------------
PacifiCare Health Systems, Inc. 1 4,500 321,525
- ------------------------------------------------------------------------------------------------------------------
Parexel International Corp. 1,2 8,600 170,710
- ------------------------------------------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. 1 10,200 750,108
- ------------------------------------------------------------------------------------------------------------------
Per-Se Technologies, Inc. 1,2 13,800 290,076
- ------------------------------------------------------------------------------------------------------------------
Pharmaceutical Product Development, Inc. 1 2,000 93,720
- ------------------------------------------------------------------------------------------------------------------
PRA International 1 600 16,068
- ------------------------------------------------------------------------------------------------------------------
PSS World Medical, Inc. 1,2 9,100 113,295
- ------------------------------------------------------------------------------------------------------------------
RehabCare Group, Inc. 1 8,700 232,551
- ------------------------------------------------------------------------------------------------------------------
Res-Care, Inc. 1 7,300 98,988
14 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Service Corp. International 28,500 $ 228,570
- -------------------------------------------------------------------------------------------------------------------
Sierra Health Services, Inc. 1 11,100 793,206
- -------------------------------------------------------------------------------------------------------------------
Stewart Enterprises, Inc. 42,000 274,680
- -------------------------------------------------------------------------------------------------------------------
Sunrise Senior Living, Inc. 1,2 12,500 674,750
- -------------------------------------------------------------------------------------------------------------------
Triad Hospitals, Inc. 1 7,800 426,192
- -------------------------------------------------------------------------------------------------------------------
Trizetto Group, Inc. 1 11,800 165,318
- -------------------------------------------------------------------------------------------------------------------
U.S. Physical Therapy, Inc. 1 600 11,508
- -------------------------------------------------------------------------------------------------------------------
United Surgical Partners
International, Inc. 1,2 16,700 869,725
- -------------------------------------------------------------------------------------------------------------------
Universal Health Services, Inc., Cl. B 4,600 286,028
- -------------------------------------------------------------------------------------------------------------------
VCA Antech, Inc. 1 18,000 436,500
- -------------------------------------------------------------------------------------------------------------------
WellChoice, Inc. 1 3,800 263,986
----------------
16,454,228
- -------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.9%
Alpharma, Inc., Cl. A 8,300 120,101
- -------------------------------------------------------------------------------------------------------------------
Barr Pharmaceuticals, Inc. 1 7,800 380,172
- -------------------------------------------------------------------------------------------------------------------
Caraco Pharmaceutical
Laboratories Ltd. 1 1,800 15,444
- -------------------------------------------------------------------------------------------------------------------
CNS, Inc. 4,300 98,255
- -------------------------------------------------------------------------------------------------------------------
DOV Pharmaceutical, Inc. 1,2 700 13,062
- -------------------------------------------------------------------------------------------------------------------
Encysive Pharmaceuticals, Inc. 1 12,200 131,882
- -------------------------------------------------------------------------------------------------------------------
Endo Pharmaceuticals Holdings, Inc. 1,2 3,800 99,864
- -------------------------------------------------------------------------------------------------------------------
First Horizon Pharmaceutical Corp. 1,2 13,400 255,136
- -------------------------------------------------------------------------------------------------------------------
Hi-Tech Pharmacal Co., Inc. 1 7,200 229,392
- -------------------------------------------------------------------------------------------------------------------
Kos Pharmaceuticals, Inc. 1 3,900 255,450
- -------------------------------------------------------------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl. A 2 23,400 742,482
- -------------------------------------------------------------------------------------------------------------------
Perrigo Co. 100 1,394
----------------
2,342,634
- -------------------------------------------------------------------------------------------------------------------
INDUSTRIALS--16.7%
- -------------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.2%
AAR Corp. 1 5,100 80,121
- -------------------------------------------------------------------------------------------------------------------
Astronics Corp., Cl. B 1 650 5,753
- -------------------------------------------------------------------------------------------------------------------
Aviall, Inc. 1 11,900 375,921
- -------------------------------------------------------------------------------------------------------------------
BE Aerospace, Inc. 1 5,900 92,217
- -------------------------------------------------------------------------------------------------------------------
DRS Technologies, Inc. 7,100 364,088
- -------------------------------------------------------------------------------------------------------------------
ESCO Technologies, Inc. 1,2 6,100 614,880
- -------------------------------------------------------------------------------------------------------------------
Goodrich Corp. 9,900 405,504
- -------------------------------------------------------------------------------------------------------------------
HEICO Corp., Cl. A 30 541
- -------------------------------------------------------------------------------------------------------------------
Innovative Solutions & Support, Inc. 1,2 9,000 302,130
- -------------------------------------------------------------------------------------------------------------------
Moog, Inc., Cl. A 1 7,000 220,430
- -------------------------------------------------------------------------------------------------------------------
Precision Castparts Corp. 1,500 116,850
- -------------------------------------------------------------------------------------------------------------------
Teledyne Technologies, Inc. 1 12,800 417,024
- -------------------------------------------------------------------------------------------------------------------
Triumph Group, Inc. 1,2 200 6,952
----------------
3,002,411
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.1%
ABX Air, Inc. 1 15,800 $ 128,770
- -------------------------------------------------------------------------------------------------------------------
Dynamex, Inc. 1 3,100 52,824
- -------------------------------------------------------------------------------------------------------------------
Forward Air Corp. 2,850 80,570
- -------------------------------------------------------------------------------------------------------------------
Hub Group, Inc., Cl. A 1 600 15,030
- -------------------------------------------------------------------------------------------------------------------
Park-Ohio Holdings Corp. 1 400 6,668
-----------------
283,862
- -------------------------------------------------------------------------------------------------------------------
AIRLINES--0.6%
Alaska Air Group, Inc. 1,2 19,200 571,200
- -------------------------------------------------------------------------------------------------------------------
AMR Corp. 1,2 10,500 127,155
- -------------------------------------------------------------------------------------------------------------------
Continental Airlines, Inc., Cl. B 1,2 11,800 156,704
- -------------------------------------------------------------------------------------------------------------------
ExpressJet Holdings, Inc. 1,2 16,400 139,564
- -------------------------------------------------------------------------------------------------------------------
Frontier Airlines, Inc. 1,2 10,900 112,597
- -------------------------------------------------------------------------------------------------------------------
Hawaiian Holdings, Inc. 1 5,200 21,112
- -------------------------------------------------------------------------------------------------------------------
Mesa Air Group, Inc. 1,2 20,200 135,542
- -------------------------------------------------------------------------------------------------------------------
Pinnacle Airlines Corp. 1,2 2,600 22,334
- -------------------------------------------------------------------------------------------------------------------
SkyWest, Inc. 9,100 165,438
- -------------------------------------------------------------------------------------------------------------------
World Air Holdings, Inc. 1 4,700 55,084
-----------------
1,506,730
- -------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS--1.0%
Apogee Enterprises, Inc. 8,500 130,645
- -------------------------------------------------------------------------------------------------------------------
Builders FirstSource, Inc. 1 32,000 518,400
- -------------------------------------------------------------------------------------------------------------------
Crane Co. 4,500 118,350
- -------------------------------------------------------------------------------------------------------------------
Lennox International, Inc. 2 29,200 618,164
- -------------------------------------------------------------------------------------------------------------------
NCI Building Systems, Inc. 1,2 2,000 65,600
- -------------------------------------------------------------------------------------------------------------------
Universal Forest Products, Inc. 2 7,500 310,875
- -------------------------------------------------------------------------------------------------------------------
USG Corp. 1,2 11,500 488,750
- -------------------------------------------------------------------------------------------------------------------
Watsco, Inc. 6,700 285,420
-----------------
2,536,204
- -------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--5.3%
ABM Industries, Inc. 8,200 159,900
- -------------------------------------------------------------------------------------------------------------------
Adesa, Inc. 7,500 163,275
- -------------------------------------------------------------------------------------------------------------------
Administaff, Inc. 2 15,500 368,280
- -------------------------------------------------------------------------------------------------------------------
American Reprographics Co. 1 3,200 51,488
- -------------------------------------------------------------------------------------------------------------------
Asset Acceptance Capital Corp. 1,2 4,000 103,640
- -------------------------------------------------------------------------------------------------------------------
Banta Corp. 11,200 508,032
- -------------------------------------------------------------------------------------------------------------------
Brady Corp., Cl. A 2 12,400 384,400
- -------------------------------------------------------------------------------------------------------------------
Bright Horizons Family Solutions, Inc. 1,2 13,600 553,792
- -------------------------------------------------------------------------------------------------------------------
Brink's Co. (The) 3,300 118,800
- -------------------------------------------------------------------------------------------------------------------
Clean Harbors, Inc. 1,2 10,400 225,472
- -------------------------------------------------------------------------------------------------------------------
CompX International, Inc. 2 600 10,050
- -------------------------------------------------------------------------------------------------------------------
Consolidated Graphics, Inc. 1 10,400 424,008
- -------------------------------------------------------------------------------------------------------------------
Copart, Inc. 1 4,900 116,620
- -------------------------------------------------------------------------------------------------------------------
Corporate Executive Board Co. 2,400 187,992
- -------------------------------------------------------------------------------------------------------------------
CPI Corp. 600 10,830
15 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
DeVry, Inc 1 2,200 $ 43,780
- -------------------------------------------------------------------------------------------------------------------
DiamondCluster International, Inc. 1 12,700 143,510
- -------------------------------------------------------------------------------------------------------------------
Dun & Bradstreet Corp. 1 4,600 283,590
- -------------------------------------------------------------------------------------------------------------------
Duratek, Inc. 1,2 3,800 88,084
- -------------------------------------------------------------------------------------------------------------------
Equifax, Inc. 11,400 407,094
- -------------------------------------------------------------------------------------------------------------------
Exponent, Inc. 1 4,800 137,184
- -------------------------------------------------------------------------------------------------------------------
G&K Services, Inc., Cl. A 4,600 173,558
- -------------------------------------------------------------------------------------------------------------------
General Binding Corp. 1 1,500 32,880
- -------------------------------------------------------------------------------------------------------------------
Geo Group, Inc. (The) 1 2,300 57,615
- -------------------------------------------------------------------------------------------------------------------
Harland (John H.) Co. 15,700 596,600
- -------------------------------------------------------------------------------------------------------------------
Healthcare Services Group, Inc. 2 14,474 290,638
- -------------------------------------------------------------------------------------------------------------------
Heidrick & Struggles
International, Inc. 1,2 10,500 273,840
- -------------------------------------------------------------------------------------------------------------------
HNI Corp. 6,400 327,360
- -------------------------------------------------------------------------------------------------------------------
Hudson Highland Group, Inc. 1,2 5,300 82,627
- -------------------------------------------------------------------------------------------------------------------
Ikon Office Solutions, Inc. 8,800 83,688
- -------------------------------------------------------------------------------------------------------------------
Imagistics International, Inc. 1,2 900 25,200
- -------------------------------------------------------------------------------------------------------------------
Integrated Alarm Services Group, Inc. 1,2 9,600 42,144
- -------------------------------------------------------------------------------------------------------------------
ITT Educational Services, Inc. 1 700 37,394
- -------------------------------------------------------------------------------------------------------------------
Jackson Hewitt Tax Service, Inc. 17,400 411,336
- -------------------------------------------------------------------------------------------------------------------
Knoll, Inc. 12,200 208,742
- -------------------------------------------------------------------------------------------------------------------
Korn-Ferry International 1,2 26,600 472,150
- -------------------------------------------------------------------------------------------------------------------
Labor Ready, Inc. 1,2 31,400 731,934
- -------------------------------------------------------------------------------------------------------------------
McGrath RentCorp 5,900 139,830
- -------------------------------------------------------------------------------------------------------------------
Miller (Herman), Inc. 6,500 200,460
- -------------------------------------------------------------------------------------------------------------------
Mobile Mini, Inc. 1,2 2,700 93,096
- -------------------------------------------------------------------------------------------------------------------
PHH Corp. 1,2 17,300 444,956
- -------------------------------------------------------------------------------------------------------------------
Portfolio Recovery Associates, Inc. 1,2 10,600 445,412
- -------------------------------------------------------------------------------------------------------------------
Pre-Paid Legal Services, Inc. 2 4,100 183,065
- -------------------------------------------------------------------------------------------------------------------
PRG-Schultz International, Inc. 1 7,800 21,996
- -------------------------------------------------------------------------------------------------------------------
Republic Services, Inc. 9,100 327,691
- -------------------------------------------------------------------------------------------------------------------
Resources Connection, Inc. 1,2 9,400 218,362
- -------------------------------------------------------------------------------------------------------------------
Robert Half International, Inc. 4,300 107,371
- -------------------------------------------------------------------------------------------------------------------
Rollins, Inc. 11,100 222,444
- -------------------------------------------------------------------------------------------------------------------
Rush Enterprises, Inc., Cl. A 1,2 3,600 48,024
- -------------------------------------------------------------------------------------------------------------------
ServiceMaster Co. (The) 16,200 217,080
- -------------------------------------------------------------------------------------------------------------------
SITEL Corp. 1 5,300 11,183
- -------------------------------------------------------------------------------------------------------------------
Sotheby's Holdings, Inc., Cl. A 1 20,100 275,370
- -------------------------------------------------------------------------------------------------------------------
Spherion Corp. 1,2 12,900 85,140
- -------------------------------------------------------------------------------------------------------------------
Steelcase, Inc., Cl. A 9,400 130,190
- -------------------------------------------------------------------------------------------------------------------
TeleTech Holdings, Inc. 1,2 33,000 268,950
- -------------------------------------------------------------------------------------------------------------------
United Stationers, Inc. 1 7,900 387,890
- -------------------------------------------------------------------------------------------------------------------
Vertrue, Inc. 1 2,100 81,816
- -------------------------------------------------------------------------------------------------------------------
Viad Corp. 9,800 277,732
- -------------------------------------------------------------------------------------------------------------------
Volt Information Sciences, Inc. 1 2,600 61,698
- -------------------------------------------------------------------------------------------------------------------
Waste Connections, Inc. 1,2 9,100 339,339
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
Waste Industries USA, Inc. 200 $ 2,828
- -------------------------------------------------------------------------------------------------------------------
Watson Wyatt & Co. Holdings 2,900 74,327
- -------------------------------------------------------------------------------------------------------------------
West Corp. 1 3,900 149,760
-----------------
13,153,537
- -------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--1.3%
Comfort Systems USA, Inc. 1 8,700 57,246
- -------------------------------------------------------------------------------------------------------------------
EMCOR Group, Inc. 1 11,200 547,680
- -------------------------------------------------------------------------------------------------------------------
Granite Construction, Inc. 3,800 106,780
- -------------------------------------------------------------------------------------------------------------------
Insituform Technologies, Inc., Cl. A 1,2 3,300 52,899
- -------------------------------------------------------------------------------------------------------------------
McDermott International, Inc. 1 15,100 317,100
- -------------------------------------------------------------------------------------------------------------------
Perini Corp. 1 10,900 178,978
- -------------------------------------------------------------------------------------------------------------------
Quanta Services, Inc. 1,2 19,400 170,720
- -------------------------------------------------------------------------------------------------------------------
Shaw Group, Inc. (The) 1,2 16,100 346,311
- -------------------------------------------------------------------------------------------------------------------
URS Corp. 1 20,600 769,410
- -------------------------------------------------------------------------------------------------------------------
Washington Group International, Inc. 1,2 15,200 777,024
-----------------
3,324,148
- -------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.0%
Active Power, Inc. 1 400 1,300
- -------------------------------------------------------------------------------------------------------------------
Acuity Brands, Inc. 8,200 210,658
- -------------------------------------------------------------------------------------------------------------------
American Power Conversion Corp. 11,500 271,285
- -------------------------------------------------------------------------------------------------------------------
AMETEK, Inc. 900 37,665
- -------------------------------------------------------------------------------------------------------------------
Baldor Electric Co. 2 3,100 75,392
- -------------------------------------------------------------------------------------------------------------------
Energy Conversion Devices, Inc. 1,2 10,300 230,514
- -------------------------------------------------------------------------------------------------------------------
Evergreen Solar, Inc. 1,2 4,700 30,221
- -------------------------------------------------------------------------------------------------------------------
General Cable Corp. 1,2 13,000 192,790
- -------------------------------------------------------------------------------------------------------------------
Genlyte Group, Inc. (The) 1 9,500 463,030
- -------------------------------------------------------------------------------------------------------------------
II-VI, Inc. 1,2 1,500 27,585
- -------------------------------------------------------------------------------------------------------------------
LSI Industries, Inc. 1,300 18,122
- -------------------------------------------------------------------------------------------------------------------
Preformed Line Products Co. 600 24,480
- -------------------------------------------------------------------------------------------------------------------
Smith (A.O.) Corp. 5,600 149,576
- -------------------------------------------------------------------------------------------------------------------
Thomas & Betts Corp. 1 11,100 313,464
- -------------------------------------------------------------------------------------------------------------------
Vicor Corp. 2 6,700 91,120
- -------------------------------------------------------------------------------------------------------------------
Woodward Governor Co. 3,300 277,299
-----------------
2,414,501
- -------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.3%
Alleghany Corp. 600 178,200
- -------------------------------------------------------------------------------------------------------------------
Carlisle Cos., Inc. 2,200 150,986
- -------------------------------------------------------------------------------------------------------------------
Raven Industries, Inc. 2 6,000 140,520
- -------------------------------------------------------------------------------------------------------------------
Teleflex, Inc. 1,500 89,055
- -------------------------------------------------------------------------------------------------------------------
Tredegar Corp. 4,000 62,400
-----------------
621,161
16 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
MACHINERY--3.2%
Alamo Group, Inc. 500 $ 9,335
- -------------------------------------------------------------------------------------------------------------------
Albany International Corp., Cl. A 14,000 449,540
- -------------------------------------------------------------------------------------------------------------------
American Science & Engineering, Inc. 1 2,200 97,592
- -------------------------------------------------------------------------------------------------------------------
Ampco-Pittsburgh Corp. 1,000 12,000
- -------------------------------------------------------------------------------------------------------------------
Astec Industries, Inc. 1 8,600 199,434
- -------------------------------------------------------------------------------------------------------------------
Barnes Group, Inc. 3,900 129,090
- -------------------------------------------------------------------------------------------------------------------
Bucyrus International, Inc., Cl. A 2 8,900 338,022
- -------------------------------------------------------------------------------------------------------------------
Cascade Corp. 2,700 116,775
- -------------------------------------------------------------------------------------------------------------------
Chicago Bridge & Iron Co. NV 12,700 290,322
- -------------------------------------------------------------------------------------------------------------------
CIRCOR International, Inc. 2,400 59,208
- -------------------------------------------------------------------------------------------------------------------
Cummins, Inc. 4,500 335,745
- -------------------------------------------------------------------------------------------------------------------
EnPro Industries, Inc. 1 3,000 86,610
- -------------------------------------------------------------------------------------------------------------------
Flanders Corp. 1 1,500 13,500
- -------------------------------------------------------------------------------------------------------------------
Flowserve Corp. 1 23,400 708,084
- -------------------------------------------------------------------------------------------------------------------
Freightcar America, Inc. 1 8,800 174,504
- -------------------------------------------------------------------------------------------------------------------
Harsco Corp. 5,800 316,390
- -------------------------------------------------------------------------------------------------------------------
Hexcel Corp. 1 12,600 213,192
- -------------------------------------------------------------------------------------------------------------------
Idex Corp. 600 23,166
- -------------------------------------------------------------------------------------------------------------------
JLG Industries, Inc. 8,700 239,076
- -------------------------------------------------------------------------------------------------------------------
Joy Global, Inc. 7,873 264,454
- -------------------------------------------------------------------------------------------------------------------
Kadant, Inc. 1 200 4,386
- -------------------------------------------------------------------------------------------------------------------
Lincoln Electric Holdings, Inc. 2 700 23,205
- -------------------------------------------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 600 24,612
- -------------------------------------------------------------------------------------------------------------------
Middleby Corp. (The) 1,2 1,200 63,432
- -------------------------------------------------------------------------------------------------------------------
Mueller Industries, Inc. 12,600 341,460
- -------------------------------------------------------------------------------------------------------------------
NACCO Industries, Inc., Cl. A 3,600 385,992
- -------------------------------------------------------------------------------------------------------------------
Nordson Corp. 2,200 75,416
- -------------------------------------------------------------------------------------------------------------------
Oshkosh Truck Corp. 3,500 273,980
- -------------------------------------------------------------------------------------------------------------------
Pall Corp. 11,000 333,960
- -------------------------------------------------------------------------------------------------------------------
Stewart & Stevenson Services, Inc. 25,700 582,362
- -------------------------------------------------------------------------------------------------------------------
Sun Hydraulics Corp. 2 1,400 50,946
- -------------------------------------------------------------------------------------------------------------------
Terex Corp. 1 9,000 354,600
- -------------------------------------------------------------------------------------------------------------------
Thomas Industries, Inc. 1,200 47,952
- -------------------------------------------------------------------------------------------------------------------
Titan International, Inc. 9,900 138,402
- -------------------------------------------------------------------------------------------------------------------
Toro Co. (The) 15,900 613,899
- -------------------------------------------------------------------------------------------------------------------
Wabash National Corp. 12,800 310,144
- -------------------------------------------------------------------------------------------------------------------
Wabtec Corp. 15,600 335,088
-----------------
8,035,875
- -------------------------------------------------------------------------------------------------------------------
MARINE--0.2%
Alexander & Baldwin, Inc. 7,400 342,990
- -------------------------------------------------------------------------------------------------------------------
Frozen Food Express Industries, Inc. 1 600 6,792
- -------------------------------------------------------------------------------------------------------------------
Kirby Corp. 1 2,500 112,750
- -------------------------------------------------------------------------------------------------------------------
Sea Containers Ltd., Cl. A 1,300 20,761
-----------------
483,293
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
ROAD & RAIL--1.6%
Amerco, Inc. 2,900 $ 155,295
- -------------------------------------------------------------------------------------------------------------------
Arkansas Best Corp. 2 10,700 340,367
- -------------------------------------------------------------------------------------------------------------------
C.H. Robinson Worldwide, Inc. 1,600 93,120
- -------------------------------------------------------------------------------------------------------------------
CNF Transportation, Inc. 8,800 395,120
- -------------------------------------------------------------------------------------------------------------------
Dollar Thrifty Automotive Group, Inc. 1,2 9,800 372,204
- -------------------------------------------------------------------------------------------------------------------
Florida East Coast Industries, Inc., Cl. A 4,800 207,840
- -------------------------------------------------------------------------------------------------------------------
Genesee & Wyoming, Inc., Cl. A 1,2 7,050 191,831
- -------------------------------------------------------------------------------------------------------------------
Heartland Express, Inc. 2 4,900 95,207
- -------------------------------------------------------------------------------------------------------------------
Hunt (J.B.) Transport Services, Inc. 3,100 59,830
- -------------------------------------------------------------------------------------------------------------------
Kansas City Southern 1,2 6,200 125,116
- -------------------------------------------------------------------------------------------------------------------
Laidlaw International, Inc. 1 18,500 445,850
- -------------------------------------------------------------------------------------------------------------------
Mullen Transportation, Inc. 1,300 65,255
- -------------------------------------------------------------------------------------------------------------------
Overnite Corp. 4,800 206,304
- -------------------------------------------------------------------------------------------------------------------
Pacer International, Inc. 1 12,200 265,838
- -------------------------------------------------------------------------------------------------------------------
SCS Transportation, Inc. 1 4,100 72,980
- -------------------------------------------------------------------------------------------------------------------
Swift Transportation Co., Inc. 1 29,400 684,726
- -------------------------------------------------------------------------------------------------------------------
Universal Truckload Services, Inc. 1 4,300 72,627
- -------------------------------------------------------------------------------------------------------------------
USA Truck, Inc. 1 300 7,425
- -------------------------------------------------------------------------------------------------------------------
Werner Enterprises, Inc. 700 13,748
- -------------------------------------------------------------------------------------------------------------------
Yellow Roadway Corp. 1 3,026 153,721
-----------------
4,024,404
- -------------------------------------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.9%
Applied Industrial Technologies, Inc. 21,450 692,621
- -------------------------------------------------------------------------------------------------------------------
BlueLinx Holdings, Inc. 8,200 86,756
- -------------------------------------------------------------------------------------------------------------------
GATX Corp. 24,900 859,050
- -------------------------------------------------------------------------------------------------------------------
Lawson Products, Inc. 500 19,410
- -------------------------------------------------------------------------------------------------------------------
UAP Holding Corp. 14,900 247,340
- -------------------------------------------------------------------------------------------------------------------
United Rentals, Inc. 1,2 11,400 230,394
- -------------------------------------------------------------------------------------------------------------------
WESCO International, Inc. 1 3,400 106,692
-----------------
2,242,263
- -------------------------------------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.0%
Interpool, Inc. 1,400 29,932
- -------------------------------------------------------------------------------------------------------------------
Macquarie Infrastructure Co. Trust 1,400 39,732
-----------------
69,664
- -------------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--15.4%
- -------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.4%
ADTRAN, Inc. 21,500 532,985
- -------------------------------------------------------------------------------------------------------------------
Anaren Microwave, Inc. 1 1,100 14,465
- -------------------------------------------------------------------------------------------------------------------
Black Box Corp. 2 5,500 194,700
- -------------------------------------------------------------------------------------------------------------------
Brocade Communications Systems, Inc. 1 63,700 247,156
- -------------------------------------------------------------------------------------------------------------------
Brooktrout, Inc. 1 100 1,116
- -------------------------------------------------------------------------------------------------------------------
CommScope, Inc. 1,2 5,300 92,273
- -------------------------------------------------------------------------------------------------------------------
Comtech Telecommunications Corp. 1,2 13,000 424,190
17 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Comverse Technology, Inc. 1 7,900 $ 186,835
- -------------------------------------------------------------------------------------------------------------------
Digi International, Inc. 1,2 17,700 209,922
- -------------------------------------------------------------------------------------------------------------------
Echelon Corp. 1 600 4,128
- -------------------------------------------------------------------------------------------------------------------
F5 Networks, Inc. 1,2 4,000 188,940
- -------------------------------------------------------------------------------------------------------------------
Foundry Networks, Inc. 1,2 8,400 72,492
- -------------------------------------------------------------------------------------------------------------------
Harris Corp. 8,500 265,285
- -------------------------------------------------------------------------------------------------------------------
Netgear, Inc. 1,2 20,200 375,720
- -------------------------------------------------------------------------------------------------------------------
Packeteer, Inc. 1 10,700 150,870
- -------------------------------------------------------------------------------------------------------------------
Paradyne Networks, Inc. 1 3,000 5,430
- -------------------------------------------------------------------------------------------------------------------
Performance Technologies, Inc. 1 8,600 47,558
- -------------------------------------------------------------------------------------------------------------------
SiRF Technology Holdings, Inc. 1 1,700 30,056
- -------------------------------------------------------------------------------------------------------------------
SpectraLink Corp. 2 7,300 76,796
- -------------------------------------------------------------------------------------------------------------------
Symmetricom, Inc. 1,2 32,900 341,173
-----------------
3,462,090
- -------------------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.5%
Electronics for Imaging, Inc. 1 27,500 578,600
- -------------------------------------------------------------------------------------------------------------------
Hutchinson Technology, Inc. 1,2 12,500 481,375
- -------------------------------------------------------------------------------------------------------------------
Imation Corp. 11,600 449,964
- -------------------------------------------------------------------------------------------------------------------
InFocus Corp. 1,2 3,000 12,420
- -------------------------------------------------------------------------------------------------------------------
Intergraph Corp. 1,2 16,600 572,036
- -------------------------------------------------------------------------------------------------------------------
M-Systems Flash Disk Pioneers Ltd. 1 8,200 157,194
- -------------------------------------------------------------------------------------------------------------------
Maxtor Corp. 1 4,500 23,400
- -------------------------------------------------------------------------------------------------------------------
NCR Corp. 1 6,500 228,280
- -------------------------------------------------------------------------------------------------------------------
Pinnacle Systems, Inc. 1 11,900 65,450
- -------------------------------------------------------------------------------------------------------------------
Quantum Corp. 1,2 25,400 75,438
- -------------------------------------------------------------------------------------------------------------------
Rimage Corp. 1 500 10,615
- -------------------------------------------------------------------------------------------------------------------
SimpleTech, Inc. 1 7,700 29,491
- -------------------------------------------------------------------------------------------------------------------
Storage Technology Corp. 1 10,600 384,674
- -------------------------------------------------------------------------------------------------------------------
Stratasys, Inc. 1,2 600 19,608
- -------------------------------------------------------------------------------------------------------------------
Western Digital Corp. 1 48,500 650,870
-----------------
3,739,415
- -------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.8%
Agilysys, Inc. 2 12,100 189,970
- -------------------------------------------------------------------------------------------------------------------
Amphenol Corp., Cl. A 10,500 421,785
- -------------------------------------------------------------------------------------------------------------------
Anixter International, Inc. 1 5,200 193,284
- -------------------------------------------------------------------------------------------------------------------
BEI Technologies, Inc. 500 13,340
- -------------------------------------------------------------------------------------------------------------------
Belden CDT, Inc. 2 8,400 178,080
- -------------------------------------------------------------------------------------------------------------------
Bell Microproducts, Inc. 1,2 2,800 26,320
- -------------------------------------------------------------------------------------------------------------------
Brightpoint, Inc. 1,2 7,000 155,330
- -------------------------------------------------------------------------------------------------------------------
Coherent, Inc. 1,2 19,500 702,195
- -------------------------------------------------------------------------------------------------------------------
CyberOptics Corp. 1,2 600 7,800
- -------------------------------------------------------------------------------------------------------------------
Dionex Corp. 1,2 1,400 61,054
- -------------------------------------------------------------------------------------------------------------------
Electro Scientific Industries, Inc. 1,2 13,100 234,228
- -------------------------------------------------------------------------------------------------------------------
Fargo Electronics, Inc. 1 1,400 27,986
VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS Continued
Hypercom Corp. 1 13,200 $ 85,404
- -------------------------------------------------------------------------------------------------------------------
Identix, Inc. 1,2 9,200 46,276
- -------------------------------------------------------------------------------------------------------------------
Ingram Micro, Inc., Cl. A 1 4,400 68,904
- -------------------------------------------------------------------------------------------------------------------
Keithley Instruments, Inc. 8,700 134,067
- -------------------------------------------------------------------------------------------------------------------
Komag, Inc. 1,2 3,600 102,132
- -------------------------------------------------------------------------------------------------------------------
LoJack Corp. 1 3,300 57,948
- -------------------------------------------------------------------------------------------------------------------
Methode Electronics, Inc., Cl. A 1,300 15,431
- -------------------------------------------------------------------------------------------------------------------
Mettler-Toledo International, Inc. 1 2,800 130,424
- -------------------------------------------------------------------------------------------------------------------
MTS Systems Corp. 2 8,900 298,862
- -------------------------------------------------------------------------------------------------------------------
PAR Technology Corp. 1 1,000 32,000
- -------------------------------------------------------------------------------------------------------------------
Park Electrochemical Corp. 9,500 239,400
- -------------------------------------------------------------------------------------------------------------------
Paxar Corp. 1 18,500 328,375
- -------------------------------------------------------------------------------------------------------------------
PC Connection, Inc. 1 5,000 31,100
- -------------------------------------------------------------------------------------------------------------------
RadiSys Corp. 1 5,200 83,980
- -------------------------------------------------------------------------------------------------------------------
Rofin-Sinar Technologies, Inc. 1 1,000 32,800
- -------------------------------------------------------------------------------------------------------------------
Trimble Navigation Ltd. 1 5,650 220,181
- -------------------------------------------------------------------------------------------------------------------
UNOVA, Inc. 1,2 11,300 300,919
- -------------------------------------------------------------------------------------------------------------------
Zygo Corp. 1 3,700 36,260
-----------------
4,455,835
- -------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.6%
AsiaInfo Holdings, Inc. 1,2 14,000 77,140
- -------------------------------------------------------------------------------------------------------------------
Blue Coat Systems, Inc. 1 1,600 47,808
- -------------------------------------------------------------------------------------------------------------------
Corillian Corp. 1 8,900 27,590
- -------------------------------------------------------------------------------------------------------------------
Covansys Corp. 1 3,200 41,120
- -------------------------------------------------------------------------------------------------------------------
CyberSource Corp. 1 17,700 129,387
- -------------------------------------------------------------------------------------------------------------------
Digital Insight Corp. 1 13,700 327,704
- -------------------------------------------------------------------------------------------------------------------
EarthLink, Inc. 1 72,900 631,314
- -------------------------------------------------------------------------------------------------------------------
InfoSpace, Inc. 1,2 800 26,344
- -------------------------------------------------------------------------------------------------------------------
Internet Security Systems, Inc. 1 27,900 566,091
- -------------------------------------------------------------------------------------------------------------------
Interwoven, Inc. 1 16,200 121,986
- -------------------------------------------------------------------------------------------------------------------
j2 Global Communications, Inc. 1 1,600 55,104
- -------------------------------------------------------------------------------------------------------------------
MicroStrategy, Inc., Cl. A 1,2 2,800 148,512
- -------------------------------------------------------------------------------------------------------------------
Online Resources &
Communications Corp. 1 9,900 111,969
- -------------------------------------------------------------------------------------------------------------------
Salesforce.com, Inc. 1 1,900 38,912
- -------------------------------------------------------------------------------------------------------------------
SeeBeyond Technology Corp. 1 1,200 5,016
- -------------------------------------------------------------------------------------------------------------------
Selectica, Inc. 1 1,800 5,526
- -------------------------------------------------------------------------------------------------------------------
SonicWALL, Inc. 1 33,500 180,565
- -------------------------------------------------------------------------------------------------------------------
United Online, Inc. 44,800 486,528
- -------------------------------------------------------------------------------------------------------------------
ValueClick, Inc. 1,2 25,800 318,114
- -------------------------------------------------------------------------------------------------------------------
WebEx Communications, Inc. 1 7,300 192,793
- -------------------------------------------------------------------------------------------------------------------
Websense, Inc. 1,2 11,400 547,770
-----------------
4,087,293
18 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
IT SERVICES--1.6%
American Software, Inc. 700 $ 4,046
- ------------------------------------------------------------------------------------------------------------------
Anteon International Corp. 1 8,700 396,894
- ------------------------------------------------------------------------------------------------------------------
Aquantive, Inc. 1,2 3,500 62,020
- ------------------------------------------------------------------------------------------------------------------
CACI International, Inc., Cl. A 1 4,500 284,220
- ------------------------------------------------------------------------------------------------------------------
CheckFree Corp. 1 5,400 183,924
- ------------------------------------------------------------------------------------------------------------------
CSG Systems International, Inc. 1 27,900 529,542
- ------------------------------------------------------------------------------------------------------------------
eFunds Corp. 1 18,200 327,418
- ------------------------------------------------------------------------------------------------------------------
Euronet Worldwide, Inc. 1 600 17,442
- ------------------------------------------------------------------------------------------------------------------
Fastclick, Inc. 1 7,800 70,980
- ------------------------------------------------------------------------------------------------------------------
Forrester Research, Inc. 1 400 7,132
- ------------------------------------------------------------------------------------------------------------------
Global Payments, Inc. 3,100 210,180
- ------------------------------------------------------------------------------------------------------------------
Information Resources, Inc. 1 500 300
- ------------------------------------------------------------------------------------------------------------------
infoUSA, Inc. 2 19,000 222,300
- ------------------------------------------------------------------------------------------------------------------
Integral Systems, Inc. 100 2,263
- ------------------------------------------------------------------------------------------------------------------
Intrado, Inc. 1,2 1,700 25,432
- ------------------------------------------------------------------------------------------------------------------
iPayment Holdings, Inc. 1,2 200 7,304
- ------------------------------------------------------------------------------------------------------------------
Keane, Inc. 1 10,400 142,480
- ------------------------------------------------------------------------------------------------------------------
ManTech International Corp. 1 11,100 344,544
- ------------------------------------------------------------------------------------------------------------------
Maximus, Inc. 5,800 204,682
- ------------------------------------------------------------------------------------------------------------------
Pegasus Solutions, Inc. 1,2 3,000 33,450
- ------------------------------------------------------------------------------------------------------------------
Perot Systems Corp., Cl. A 1 16,400 233,208
- ------------------------------------------------------------------------------------------------------------------
Sabre Holdings Corp. 1,500 29,925
- ------------------------------------------------------------------------------------------------------------------
SI International, Inc. 1,2 1,000 29,960
- ------------------------------------------------------------------------------------------------------------------
SRA International, Inc., Cl. A 1,2 7,500 260,400
- ------------------------------------------------------------------------------------------------------------------
SS&C Technologies, Inc. 3,600 114,048
- ------------------------------------------------------------------------------------------------------------------
Startek, Inc. 2 1,800 29,556
- ------------------------------------------------------------------------------------------------------------------
Sykes Enterprises, Inc. 1 2,800 26,544
- ------------------------------------------------------------------------------------------------------------------
Vasco Data Security International, Inc. 1,2 11,100 107,670
----------------
3,907,864
- ------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.5%
ADE Corp. 1 11,900 333,795
- ------------------------------------------------------------------------------------------------------------------
Advanced Energy Industries, Inc. 1,2 9,000 70,740
- ------------------------------------------------------------------------------------------------------------------
AMIS Holdings, Inc. 1,2 2,100 28,014
- ------------------------------------------------------------------------------------------------------------------
ATMI, Inc. 1,2 18,900 548,289
- ------------------------------------------------------------------------------------------------------------------
Axcelis Technologies, Inc. 1 40,900 280,574
- ------------------------------------------------------------------------------------------------------------------
Cabot Microelectronics Corp. 1,2 4,700 136,253
- ------------------------------------------------------------------------------------------------------------------
Cascade Microtech, Inc. 1 3,500 51,100
- ------------------------------------------------------------------------------------------------------------------
Cohu, Inc. 3,100 62,155
- ------------------------------------------------------------------------------------------------------------------
Cree, Inc. 1,2 12,600 320,922
- ------------------------------------------------------------------------------------------------------------------
Cymer, Inc. 1,2 17,200 453,220
- ------------------------------------------------------------------------------------------------------------------
Cypress Semiconductor Corp. 1,2 21,300 268,167
- ------------------------------------------------------------------------------------------------------------------
Diodes, Inc. 1,2 5,950 185,640
- ------------------------------------------------------------------------------------------------------------------
DSP Group, Inc. 1 8,000 190,960
- ------------------------------------------------------------------------------------------------------------------
Entegris, Inc. 1,2 4,800 47,520
- ------------------------------------------------------------------------------------------------------------------
FEI Co. 1,2 6,600 150,546
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued
Freescale Semiconductor, Inc., Cl. A 1 1,200 $ 25,212
- ------------------------------------------------------------------------------------------------------------------
Genesis Microchip, Inc. 1 1,600 29,536
- ------------------------------------------------------------------------------------------------------------------
Helix Technology Corp. 3,400 45,152
- ------------------------------------------------------------------------------------------------------------------
Integrated Device Technology, Inc. 1 58,800 632,100
- ------------------------------------------------------------------------------------------------------------------
International Rectifier Corp. 1 1,400 66,808
- ------------------------------------------------------------------------------------------------------------------
Intersil Corp., Cl. A 6,600 123,882
- ------------------------------------------------------------------------------------------------------------------
IXYS Corp. 1 7,700 109,186
- ------------------------------------------------------------------------------------------------------------------
Lam Research Corp. 1 10,100 292,294
- ------------------------------------------------------------------------------------------------------------------
LSI Logic Corp. 1 37,500 318,375
- ------------------------------------------------------------------------------------------------------------------
MEMC Electronic Materials, Inc. 1 14,400 227,088
- ------------------------------------------------------------------------------------------------------------------
Micrel, Inc. 1 54,100 623,232
- ------------------------------------------------------------------------------------------------------------------
Microsemi Corp. 1 29,300 550,840
- ------------------------------------------------------------------------------------------------------------------
Microtune, Inc. 1,2 16,500 82,748
- ------------------------------------------------------------------------------------------------------------------
MIPS Technologies, Inc., Cl. A 1 18,600 133,920
- ------------------------------------------------------------------------------------------------------------------
Mykrolis Corp. 1 11,700 166,257
- ------------------------------------------------------------------------------------------------------------------
Nanometrics, Inc. 1 400 4,996
- ------------------------------------------------------------------------------------------------------------------
NVIDIA Corp. 1 7,500 200,400
- ------------------------------------------------------------------------------------------------------------------
OmniVision Technologies, Inc. 1,2 41,800 568,062
- ------------------------------------------------------------------------------------------------------------------
PDF Solutions, Inc. 1 7,500 98,400
- ------------------------------------------------------------------------------------------------------------------
Photronics, Inc. 1 23,300 543,822
- ------------------------------------------------------------------------------------------------------------------
Rudolph Technologies, Inc. 1,2 1,100 15,763
- ------------------------------------------------------------------------------------------------------------------
Silicon Storage Technology, Inc. 2 6,000 24,180
- ------------------------------------------------------------------------------------------------------------------
Skyworks Solutions, Inc. 1,2 4,600 33,902
- ------------------------------------------------------------------------------------------------------------------
Supertex, Inc. 1,2 300 5,298
- ------------------------------------------------------------------------------------------------------------------
Trident Microsystems, Inc. 1,2 5,400 122,526
- ------------------------------------------------------------------------------------------------------------------
Ultra Clean Holdings, Inc. 1 1,700 12,665
- ------------------------------------------------------------------------------------------------------------------
Varian Semiconductor Equipment
Associates, Inc. 1,2 15,500 573,500
- ------------------------------------------------------------------------------------------------------------------
Virage Logic Corp. 1 2,400 24,720
----------------
8,782,759
- ------------------------------------------------------------------------------------------------------------------
SOFTWARE--4.0%
Activision, Inc. 1 10,633 175,663
- ------------------------------------------------------------------------------------------------------------------
Ansoft Corp. 1,2 6,600 159,456
- ------------------------------------------------------------------------------------------------------------------
Ansys, Inc. 1,2 18,800 667,588
- ------------------------------------------------------------------------------------------------------------------
Aspect Communications Corp. 1 14,000 157,220
- ------------------------------------------------------------------------------------------------------------------
Atari, Inc. 1 5,700 15,846
- ------------------------------------------------------------------------------------------------------------------
BEA Systems, Inc. 1 10,400 91,312
- ------------------------------------------------------------------------------------------------------------------
Blackbaud, Inc. 6,900 93,150
- ------------------------------------------------------------------------------------------------------------------
Borland Software Corp. 1 31,200 214,032
- ------------------------------------------------------------------------------------------------------------------
Bottomline Technologies, Inc. 1 10,000 149,700
- ------------------------------------------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 17,100 233,586
- ------------------------------------------------------------------------------------------------------------------
Captiva Software Corp. 1 1,800 25,992
- ------------------------------------------------------------------------------------------------------------------
Catapult Communications Corp. 1 9,100 155,246
- ------------------------------------------------------------------------------------------------------------------
CCC Information Services Group, Inc. 1 2,400 57,480
- ------------------------------------------------------------------------------------------------------------------
Compuware Corp. 1 27,800 199,882
19 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
SOFTWARE Continued
Entrust Technologies, Inc. 1 20,200 $ 96,758
- ------------------------------------------------------------------------------------------------------------------
EPIQ Systems, Inc. 1 1,000 16,360
- ------------------------------------------------------------------------------------------------------------------
ePlus, inc. 1 1,400 16,100
- ------------------------------------------------------------------------------------------------------------------
FactSet Research Systems, Inc. 2 5,650 202,496
- ------------------------------------------------------------------------------------------------------------------
Fair Isaac Corp. 2,700 98,550
- ------------------------------------------------------------------------------------------------------------------
FileNet Corp. 1,2 16,200 407,268
- ------------------------------------------------------------------------------------------------------------------
Informatica Corp. 1,2 37,700 316,303
- ------------------------------------------------------------------------------------------------------------------
InterVideo, Inc. 1 2,000 28,760
- ------------------------------------------------------------------------------------------------------------------
InterVoice-Brite, Inc. 1,2 10,000 86,300
- ------------------------------------------------------------------------------------------------------------------
Macromedia, Inc. 1 3,200 122,304
- ------------------------------------------------------------------------------------------------------------------
Macrovision Corp. 1 8,700 196,098
- ------------------------------------------------------------------------------------------------------------------
McAfee, Inc. 1 17,500 458,150
- ------------------------------------------------------------------------------------------------------------------
Micromuse, Inc. 1 3,800 21,508
- ------------------------------------------------------------------------------------------------------------------
MICROS Systems, Inc. 1 13,100 586,225
- ------------------------------------------------------------------------------------------------------------------
Mobius Management Systems, Inc. 1 200 1,320
- ------------------------------------------------------------------------------------------------------------------
Moldflow Corp. 1,2 200 2,590
- ------------------------------------------------------------------------------------------------------------------
MRO Software, Inc. 1 10,400 151,944
- ------------------------------------------------------------------------------------------------------------------
MSC.Software Corp. 1,2 2,700 37,125
- ------------------------------------------------------------------------------------------------------------------
Parametric Technology Corp. 1 138,100 881,078
- ------------------------------------------------------------------------------------------------------------------
Pervasive Software, Inc. 1 200 847
- ------------------------------------------------------------------------------------------------------------------
Progress Software Corp. 1 18,500 557,775
- ------------------------------------------------------------------------------------------------------------------
Quality Systems, Inc. 2 1,200 56,856
- ------------------------------------------------------------------------------------------------------------------
Quest Software, Inc. 1 19,600 267,148
- ------------------------------------------------------------------------------------------------------------------
Radiant Systems, Inc. 1 9,900 112,860
- ------------------------------------------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 1,300 35,139
- ------------------------------------------------------------------------------------------------------------------
Smith Micro Software, Inc. 1 200 876
- ------------------------------------------------------------------------------------------------------------------
SPSS, Inc. 1 900 17,289
- ------------------------------------------------------------------------------------------------------------------
Sybase, Inc. 1 12,400 227,540
- ------------------------------------------------------------------------------------------------------------------
Synopsys, Inc. 1 21,300 355,071
- ------------------------------------------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1,2 16,750 426,288
- ------------------------------------------------------------------------------------------------------------------
TALX Corp. 1,600 46,256
- ------------------------------------------------------------------------------------------------------------------
THQ, Inc. 1 11,500 336,605
- ------------------------------------------------------------------------------------------------------------------
Transaction Systems Architects,
Inc., Cl. A 1 29,400 724,122
- ------------------------------------------------------------------------------------------------------------------
Ulticom, Inc. 1 1,300 13,793
- ------------------------------------------------------------------------------------------------------------------
Ultimate Software Group, Inc. (The) 1,2 9,500 155,800
- ------------------------------------------------------------------------------------------------------------------
Verint Systems, Inc. 1 800 25,728
- ------------------------------------------------------------------------------------------------------------------
Wind River Systems, Inc. 1 21,200 332,416
- ------------------------------------------------------------------------------------------------------------------
Witness Systems, Inc. 1,2 11,600 211,468
----------------
10,027,267
- ------------------------------------------------------------------------------------------------------------------
MATERIALS--6.0%
- ------------------------------------------------------------------------------------------------------------------
CHEMICALS--2.1%
Agrium, Inc. 21,600 423,576
- ------------------------------------------------------------------------------------------------------------------
Cabot Corp. 1,500 49,500
- ------------------------------------------------------------------------------------------------------------------
Compass Minerals International, Inc. 10,900 255,060
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
CHEMICALS Continued
Crompton Corp. 25,700 $ 363,655
- ------------------------------------------------------------------------------------------------------------------
Eastman Chemical Co. 7,700 424,655
- ------------------------------------------------------------------------------------------------------------------
Engelhard Corp. 9,100 259,805
- ------------------------------------------------------------------------------------------------------------------
FMC Corp. 1 11,000 617,540
- ------------------------------------------------------------------------------------------------------------------
Fuller (H.B.) Co. 18,800 640,328
- ------------------------------------------------------------------------------------------------------------------
Georgia Gulf Corp. 8,600 267,030
- ------------------------------------------------------------------------------------------------------------------
Great Lakes Chemical Corp. 5,300 166,791
- ------------------------------------------------------------------------------------------------------------------
Hercules, Inc. 1 100 1,415
- ------------------------------------------------------------------------------------------------------------------
MacDermid, Inc. 9,400 292,904
- ------------------------------------------------------------------------------------------------------------------
NL Industries, Inc. 6,000 92,340
- ------------------------------------------------------------------------------------------------------------------
NOVA Chemicals Corp. 2,500 76,400
- ------------------------------------------------------------------------------------------------------------------
OM Group, Inc. 1 11,000 271,590
- ------------------------------------------------------------------------------------------------------------------
PolyOne Corp. 1 23,400 154,908
- ------------------------------------------------------------------------------------------------------------------
Scotts Miracle-Gro Co. (The), Cl. A 1 3,600 256,356
- ------------------------------------------------------------------------------------------------------------------
Sensient Technologies Corp. 1,500 30,915
- ------------------------------------------------------------------------------------------------------------------
Stepan Co. 1,400 30,940
- ------------------------------------------------------------------------------------------------------------------
Valhi, Inc. 2 1,800 31,500
- ------------------------------------------------------------------------------------------------------------------
Valspar Corp. (The) 3,200 154,528
- ------------------------------------------------------------------------------------------------------------------
W.R. Grace & Co. 1,2 26,800 208,772
- ------------------------------------------------------------------------------------------------------------------
Wellman, Inc. 20,600 209,914
----------------
5,280,422
- ------------------------------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.7%
AMCOL International Corp. 100 1,879
- ------------------------------------------------------------------------------------------------------------------
Eagle Materials, Inc. 2 7,600 703,684
- ------------------------------------------------------------------------------------------------------------------
Eagle Materials, Inc., Cl. B 2 100 9,049
- ------------------------------------------------------------------------------------------------------------------
Florida Rock Industries, Inc. 1,500 110,025
- ------------------------------------------------------------------------------------------------------------------
Lafarge North America, Inc. 3,400 212,296
- ------------------------------------------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 6,400 442,368
- ------------------------------------------------------------------------------------------------------------------
Texas Industries, Inc. 2,400 134,952
- ------------------------------------------------------------------------------------------------------------------
Vulcan Materials Co. 1,400 90,986
----------------
1,705,239
- ------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING--1.0%
Ball Corp. 3,500 125,860
- ------------------------------------------------------------------------------------------------------------------
Caraustar Industries, Inc. 1,2 9,900 103,950
- ------------------------------------------------------------------------------------------------------------------
Crown Holdings, Inc. 1 28,600 406,978
- ------------------------------------------------------------------------------------------------------------------
Graphic Packaging Corp. 1,2 5,800 21,170
- ------------------------------------------------------------------------------------------------------------------
Greif, Inc., Cl. A 8,900 543,790
- ------------------------------------------------------------------------------------------------------------------
Longview Fibre Co. 8,000 164,400
- ------------------------------------------------------------------------------------------------------------------
Myers Industries, Inc. 2 1,300 16,250
- ------------------------------------------------------------------------------------------------------------------
Owens-Illinois, Inc. 1 18,200 455,910
- ------------------------------------------------------------------------------------------------------------------
Pactiv Corp. 1 3,700 79,846
- ------------------------------------------------------------------------------------------------------------------
Silgan Holdings, Inc. 10,600 596,144
----------------
2,514,298
20 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
METALS & MINING--1.7%
AK Steel Holding Corp. 1,2 10,000 $ 64,100
- ------------------------------------------------------------------------------------------------------------------
Aleris International, Inc. 1 10,400 234,520
- ------------------------------------------------------------------------------------------------------------------
Amerigo Resources Ltd. 1 66,000 96,964
- ------------------------------------------------------------------------------------------------------------------
Carpenter Technology Corp. 13,800 714,840
- ------------------------------------------------------------------------------------------------------------------
Castle (A.M.) & Co. 1,2 3,800 58,748
- ------------------------------------------------------------------------------------------------------------------
Commercial Metals Co. 15,900 378,738
- ------------------------------------------------------------------------------------------------------------------
Desert Sun Mining Corp. 1 15,700 25,628
- ------------------------------------------------------------------------------------------------------------------
Dynatec Corp. 1 73,900 78,412
- ------------------------------------------------------------------------------------------------------------------
FNX Mining Co., Inc. 1 3,100 28,718
- ------------------------------------------------------------------------------------------------------------------
Goldcorp, Inc. 2,425 38,576
- ------------------------------------------------------------------------------------------------------------------
HudBay Minerals, Inc. 1 26,100 54,748
- ------------------------------------------------------------------------------------------------------------------
Inmet Mining Corp. 1 8,800 113,843
- ------------------------------------------------------------------------------------------------------------------
LionOre Mining International Ltd. 1 24,300 124,753
- ------------------------------------------------------------------------------------------------------------------
Meridian Gold, Inc. 1 900 16,161
- ------------------------------------------------------------------------------------------------------------------
Metal Management, Inc. 2 12,700 245,745
- ------------------------------------------------------------------------------------------------------------------
Oregon Steel Mills, Inc. 1,2 9,200 158,332
- ------------------------------------------------------------------------------------------------------------------
Quanex Corp. 2 15,650 829,607
- ------------------------------------------------------------------------------------------------------------------
Reliance Steel & Aluminum Co. 12,100 448,547
- ------------------------------------------------------------------------------------------------------------------
Roanoke Electric Steel Corp. 1,000 16,520
- ------------------------------------------------------------------------------------------------------------------
RTI International Metals, Inc. 1 1,700 53,397
- ------------------------------------------------------------------------------------------------------------------
Schnitzer Steel Industries, Inc. 2 1,800 42,660
- ------------------------------------------------------------------------------------------------------------------
Southern Peru Copper Corp. 2,000 85,680
- ------------------------------------------------------------------------------------------------------------------
Steel Dynamics, Inc. 2 12,000 315,000
- ------------------------------------------------------------------------------------------------------------------
United States Steel Corp. 1,200 41,244
- ------------------------------------------------------------------------------------------------------------------
Worthington Industries, Inc. 6,100 96,380
----------------
4,361,861
- ------------------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.5%
Buckeye Technologies, Inc. 1,2 11,700 93,249
- ------------------------------------------------------------------------------------------------------------------
Deltic Timber Corp. 2 400 15,212
- ------------------------------------------------------------------------------------------------------------------
Glatfelter 13,700 169,880
- ------------------------------------------------------------------------------------------------------------------
Louisiana-Pacific Corp. 2 9,700 238,426
- ------------------------------------------------------------------------------------------------------------------
Neenah Paper, Inc. 2 2,000 61,940
- ------------------------------------------------------------------------------------------------------------------
Pope & Talbot, Inc. 2 9,700 107,670
- ------------------------------------------------------------------------------------------------------------------
Potlatch Corp. 10,200 533,766
----------------
1,220,143
- ------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.7%
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.5%
Alaska Communications Systems
Group, Inc. 2 18,800 186,308
- ------------------------------------------------------------------------------------------------------------------
CenturyTel, Inc. 11,100 384,393
- ------------------------------------------------------------------------------------------------------------------
Commonwealth Telephone
Enterprises, Inc. 3,000 125,730
- ------------------------------------------------------------------------------------------------------------------
CT Communications, Inc. 3,300 43,065
- ------------------------------------------------------------------------------------------------------------------
FairPoint Communications, Inc. 2,300 37,145
- ------------------------------------------------------------------------------------------------------------------
North Pittsburgh Systems, Inc. 2 5,700 111,492
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Premiere Global Services, Inc. 1 22,300 $ 251,767
- ------------------------------------------------------------------------------------------------------------------
Shenandoah Telecommunications Co. 2 500 19,875
- ------------------------------------------------------------------------------------------------------------------
Talk America Holdings, Inc. 1 3,200 32,032
----------------
1,191,807
- ------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.2%
Centennial Communications Corp. 1 2,900 40,252
- ------------------------------------------------------------------------------------------------------------------
Telephone & Data Systems, Inc.,
Special Shares 1,900 72,846
- ------------------------------------------------------------------------------------------------------------------
UbiquiTel, Inc. 1,2 30,400 248,064
- ------------------------------------------------------------------------------------------------------------------
United States Cellular Corp. 1 1,800 89,892
- ------------------------------------------------------------------------------------------------------------------
US Unwired, Inc., Cl. A 1 2,600 15,132
----------------
466,186
- ------------------------------------------------------------------------------------------------------------------
UTILITIES--2.6%
- ------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.4%
ALLETE, Inc. 2 7,900 394,210
- ------------------------------------------------------------------------------------------------------------------
Black Hills Corp. 4,600 169,510
- ------------------------------------------------------------------------------------------------------------------
Canadian Hydro Developers, Inc. 1 14,000 45,593
- ------------------------------------------------------------------------------------------------------------------
CenterPoint Energy, Inc. 12,100 159,841
- ------------------------------------------------------------------------------------------------------------------
CH Energy Group, Inc. 2 7,200 350,136
- ------------------------------------------------------------------------------------------------------------------
Cleco Corp. 1,000 21,570
- ------------------------------------------------------------------------------------------------------------------
CMS Energy Corp. 1,2 44,500 670,170
- ------------------------------------------------------------------------------------------------------------------
Green Mountain Power Corp. 1,000 29,840
- ------------------------------------------------------------------------------------------------------------------
IDACORP, Inc. 600 18,378
- ------------------------------------------------------------------------------------------------------------------
Northeast Utilities Co. 3,800 79,268
- ------------------------------------------------------------------------------------------------------------------
NRG Energy, Inc. 1,2 8,900 334,640
- ------------------------------------------------------------------------------------------------------------------
NSTAR, Inc. 3,200 98,656
- ------------------------------------------------------------------------------------------------------------------
Ormat Technologies, Inc. 2 17,000 324,700
- ------------------------------------------------------------------------------------------------------------------
PNM Resources, Inc. 10,300 296,743
- ------------------------------------------------------------------------------------------------------------------
UIL Holdings Corp. 1,700 91,477
- ------------------------------------------------------------------------------------------------------------------
Wisconsin Energy Corp. 7,900 308,100
- ------------------------------------------------------------------------------------------------------------------
WPS Resources Corp. 3,200 180,000
----------------
3,572,832
- ------------------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.9%
Atmos Energy Corp. 13,500 388,800
- ------------------------------------------------------------------------------------------------------------------
Chesapeake Utilities Corp. 1,100 33,605
- ------------------------------------------------------------------------------------------------------------------
Energen Corp. 2,800 98,140
- ------------------------------------------------------------------------------------------------------------------
New Jersey Resources Corp. 400 19,300
- ------------------------------------------------------------------------------------------------------------------
Nicor, Inc. 2 5,400 222,318
- ------------------------------------------------------------------------------------------------------------------
Northwest Natural Gas Co. 3,800 145,312
- ------------------------------------------------------------------------------------------------------------------
ONEOK, Inc. 9,300 303,645
- ------------------------------------------------------------------------------------------------------------------
Peoples Energy Corp. 1,400 60,844
- ------------------------------------------------------------------------------------------------------------------
South Jersey Industries, Inc. 1,100 67,232
- ------------------------------------------------------------------------------------------------------------------
Southwest Gas Corp. 7,600 193,876
- ------------------------------------------------------------------------------------------------------------------
UGI Corp. 6,900 192,510
21 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
GAS UTILITIES Continued
WGL Holdings, Inc. 2 12,900 $ 433,956
----------------
2,159,538
- ------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.3%
Avista Corp. 1,100 20,449
- ------------------------------------------------------------------------------------------------------------------
Energy East Corp. 10,700 310,086
- ------------------------------------------------------------------------------------------------------------------
MDU Resources Group, Inc. 2,200 61,974
- ------------------------------------------------------------------------------------------------------------------
Sierra Pacific Resources 1,2 40,000 498,000
----------------
890,509
----------------
Total Common Stocks (Cost $211,132,408) 247,705,683
- ------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- ------------------------------------------------------------------------------------------------------------------
Simon Property Group Inc., 6% Cv.,
Non-Vtg. (Cost $3,213) 60 3,720
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--0.0%
- ------------------------------------------------------------------------------------------------------------------
Mueller Industries, Inc., 6% Sub. Nts.,
11/1/14 2 (Cost $51,000) $ 51,000 50,745
- ------------------------------------------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.1%
- ------------------------------------------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $226,538) 226,538 226,538
- ------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.0%
- ------------------------------------------------------------------------------------------------------------------
Undivided interest of 0.80% in joint repurchase agreement (Principal
Amount/Value $1,234,399,000, with a maturity value of $1,234,508,724) with
UBS Warburg LLC, 3.20%, dated 6/30/05, to be repurchased at $9,823,873 on
7/1/05, collateralized by Federal Home Loan Mortgage Corp., 5.50%, 2/1/35,
with a value of $1,260,871,334 (Cost $9,823,000) 9,823,000 9,823,000
- ------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments Purchased with Cash
Collateral from Securities Loaned) (Cost $221,236,159) 257,809,686
- ------------------------------------------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--21.2%
- ------------------------------------------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTE--0.9%
Whitehawk CDO Funding Corp., 3.48%, 9/15/05 6 2,250,000 2,250,000
- ------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--19.6%
Undivided interest of 0.17% in joint repurchase agreement
(Principal Amount/Value $4,000,000,000, with a maturity
value of $4,000,386,667) with Nomura Securities, 3.48%,
dated 6/30/05, to be repurchased at $6,922,944 on
7/1/05, collateralized by U.S. Agency Mortgages,
0.00%--5.959%, 1/15/18--4/1/42, with
a value of $4,160,000,001 6 6,922,275 6,922,275
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 1.05% in joint repurchase agreement (Principal
Amount/Value $4,000,000,000, with a maturity value of $4,000,385,278) with
Nomura Securities, 3.4675%, dated 6/30/05, to be repurchased at
$42,004,045 on 7/1/05, collateralized by U.S. Agency Mortgages,
0.00%--5.959%, 1/15/18--4/1/42, with a value of $4,160,000,001 6,7 $ 42,000,000 $ 42,000,000
----------------
48,922,275
- ------------------------------------------------------------------------------------------------------------------
MASTER FLOATING NOTES--0.7%
Bear Stearns, 3.618%, 7/1/05 6 250,000 250,000
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Capital,
3.538%, 7/1/05 6 1,500,000 1,500,000
----------------
1,750,000
----------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $52,922,275) 52,922,275
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $274,158,434) 124.5% 310,731,961
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (24.5) (61,110,461)
----------------------------------
NET ASSETS 100.0% $ 249,621,500
==================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security--See Note 7 of Notes to Financial
Statements.
3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $12,254 or less than 0.005% of the Fund's
net assets as of June 30, 2005.
4. The Fund holds securities which have been issued by the same entity and that
trade on separate exchanges.
5. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2005 was $134,451, which represents 0.05%
of the Fund's net assets, of which $134,451 is considered restricted. See Note 6
of Notes to Financial Statements.
6. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 7 of Notes to Financial
Statements.
7. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks. See Note 1 of Notes to
Financial Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $51,724,323) (cost $274,158,434)--
see accompanying statement of investments $ 310,731,961
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 3,367,206
Shares of beneficial interest sold 804,889
Interest and dividends 143,789
Other 5,423
--------------
Total assets 315,053,268
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 52,922,275
- ----------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 11,020,711
Shares of beneficial interest redeemed 1,343,068
Distribution and service plan fees 117,602
Shareholder communications 9,887
Trustees' compensation 5,624
Transfer and shareholder servicing agent fees 1,759
Other 10,842
--------------
Total liabilities 65,431,768
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 249,621,500
==============
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 15,978
- ----------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 212,900,727
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (24,675)
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 155,732
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign
currencies 36,573,738
--------------
NET ASSETS $ 249,621,500
==============
- ----------------------------------------------------------------------------------------------------------------------------------
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 $39,569,583 and
2,519,749 shares of beneficial interest outstanding) $ 15.70
- ----------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of $210,051,917 and
13,458,124 shares of beneficial interest outstanding) $ 15.61
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $7,410) $ 936,107
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 111,554
- ----------------------------------------------------------------------------------------------------------------------------------
Interest 56,012
--------------
Total investment income 1,103,673
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------------
Management fees 811,741
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 223,502
- ----------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,080
Service shares 5,277
- ----------------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 985
Service shares 4,705
- ----------------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 3,580
- ----------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 1,680
- ----------------------------------------------------------------------------------------------------------------------------------
Other 19,648
--------------
Total expenses 1,076,198
Less reduction to custodian expenses (406)
--------------
Net expenses 1,075,792
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 27,881
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 218,984
Foreign currency transactions 39,773
--------------
Net realized gain 258,757
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 1,471,084
Translation of assets and liabilities denominated in foreign currencies (89,906)
--------------
Net change in unrealized appreciation 1,381,178
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,667,816
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 27,881 $ (134,635)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain 258,757 9,579,604
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 1,381,178 20,104,091
------------------------------
Net increase in net assets resulting from operations 1,667,816 29,549,060
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (1,015,976) --
Service shares (4,826,305) --
- ----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Non-Service shares 1,915,467 5,097,638
Service shares 39,633,339 87,389,394
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase 37,374,341 122,036,092
- ----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 212,247,159 90,211,067
------------------------------
End of period (including accumulated net investment loss of $24,675 and $52,556, respectively) $ 249,621,500 $ 212,247,159
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 16.05 $ 13,44 $ 9,31 $ 11.05 $ 11.09 $ 14.07
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .02 1 .01 1 (.03) (.01) -- 2 (.03)
Net realized and unrealized gain (loss) .05 2.60 4.16 (1.73) (.04) (2.35)
--------------------------------------------------------------------------------------
Total from investment operations .07 2.61 4.13 (1.74) (.04) (2.38)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Distributions from net realized gain (.42) -- -- -- -- (.60)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.70 $ 16.05 $ 13.44 $ 9.31 $ 11.05 $ 11.09
======================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 0.45% 19.42% 44.36% (15.75)% (0.36)% (18.34)%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 39,570 $ 38,636 $ 27,551 $ 19,577 $ 18,514 $ 14,599
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 37,180 $ 30,871 $ 20,271 $ 20,505 $ 15,307 $ 12,576
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.21% 0.06% (0.30)% (0.09)% (0.01)% (0.29)%
Total expenses 0.80% 0.83% 1.01% 1.00% 1.05% 1.37%
Expenses after payments and waivers
and reduction to custodian expenses N/A 5 N/A 5 N/A 5 N/A 5 N/A 5 1.35%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 147% 130% 121% 213% 162%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 1
- ------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.97 $ 13.40 $ 9.29 $ 11.05 $ 10.61
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) -- 2,3 (.02) 2 (.02) (.01) -- 3
Net realized and unrealized gain (loss) .06 2.59 4.13 (1.75) .44
-----------------------------------------------------------------------
Total from investment operations .06 2.57 4.11 (1.76) .44
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Distributions from net realized gain (.42) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.61 $ 15.97 $ 13.40 $ 9.29 $ 11.05
=======================================================================
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 0.39% 19.18% 44.24% (15.93)% 4.15%
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 210,052 $ 173,612 $ 62,660 $ 6,111 $ 108
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 182,051 $ 112,279 $ 25,018 $ 2,228 $ 26
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment loss (0.01)% (0.14)% (0.43)% (0.26)% (0.34)%
Total expenses 1.03% 1.06% 1.23% 1.21% 1.19%
Expenses after payments and waivers and
reduction to custodian expenses N/A 6 N/A 6 N/A 6 1.19% N/A 6
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 147% 130% 121% 213%
1. For the period from July 16, 2001 (inception of offering) to December 31,
2001.
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.
27 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Main Street Small Cap 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. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
28 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
During the year ended December 31, 2004, the Fund utilized $3,233,886 of
capital loss carryforward to offset capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
29 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 550,714 $ 8,510,815 989,664 $ 13,869,116
Dividends and/or distributions reinvested 65,758 1,015,976 -- --
Redeemed (503,660) (7,611,324) (632,898) (8,771,478)
---------------------------------------------------------------
Net increase 112,812 $ 1,915,467 356,766 $ 5,097,638
===============================================================
- -----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 3,405,611 $ 51,957,095 7,817,367 $110,026,860
Dividends and/or distributions reinvested 313,963 4,826,305 -- --
Redeemed (1,129,762) (17,150,061) (1,624,349) (22,637,466)
---------------------------------------------------------------
Net increase 2,589,812 $ 39,633,339 6,193,018 $ 87,389,394
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$162,149,677 and $125,079,410, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Trust which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the six months ended June 30, 2005, the Fund paid
$10,321 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 per annum 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.
30 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
- --------------------------------------------------------------------------------
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, 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2005, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2005, 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 10% 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.
Securities that are illiquid or restricted are marked with the applicable
footnote on the Statement of Investments. Information concerning restricted
securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED
SECURITY DATES COST JUNE 30, 2005 APPRECIATION
- ----------------------------------------------------------------------------------------
Mission Oil & Gas, Inc. 1/19/05 $ 34,507 $ 41,789 $ 7,282
Tusk Energy Corp. 11/15/04 38,148 92,662 54,514
------------------------------------------
$ 72,655 $134,451 $ 61,796
==========================================
31 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of June 30, 2005, the
Fund had on loan securities valued at $51,724,323. Collateral of $52,922,275 was
received for the loans, all of which was received in cash and subsequently
invested in approved instruments.
- --------------------------------------------------------------------------------
8. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005 and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
32 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
33 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of Nikolaos D. Monoyios and Mark Zavanelli and the
Manager's Equity Growth investment team and analysts. The Fund's portfolio is
managed by Mr. Monoyios and Mr. Zavanelli who are primarily responsible for the
day-to-day management of the Fund's investments. Mr. Monoyios and Zavanelli have
been managers of the Fund's portfolio since October 2003 and May 2001,
respectively. Mr. Monoyios is a Certified Financial Analyst and has been a
Senior Vice President of the Manager since October 2003 and is an officer of
other portfolios in the OppenheimerFunds complex. Mr. Zavanelli has been a Vice
President of the Fund and a Vice President of the Manager since November 2000
and is an officer and portfolio manager of other Oppenheimer funds. Mr. Monoyios
has had over 27 years of experience and Mr. Zavanelli has had over 13 years of
experience managing equity investments.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other small-cap core funds advised by
other investment advisers. The Board also receives and reviews comparative
performance information regarding the Fund and other funds at each Board
meeting. The Board noted that the Fund's one-year and five-year performance was
below its peer group average. However, its three-year performance was slightly
better than its peer group average. The Board noted that the three-year
performance of the Fund has been good and that market factors late in the
one-year period had adversely impacted the Fund's performance.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
34 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
consultant provided comparative data in regard to the fees and expenses of the
Fund, other small-cap core funds and other funds with comparable assets levels
and distribution features. The Board noted that the Fund's management fees and
it total expenses are both lower than its peer group average. In addition, the
Board evaluated the comparability of the fees charged and the services provided
to the Fund to the fees charged and services provided to other types of entities
advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates and research
provided to the Manager in connection with permissible brokerage arrangements
(soft dollar arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has recently experienced
significant asset growth but that, based on current asset levels, the Fund is
not yet approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
35 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STRATEGIC BOND FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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FUND EXPENSES
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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 June 30, 2005.
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, 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 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.
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BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/05) (6/30/05) JUNE 30, 2005
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Non-Service shares Actual $1,000.00 $1,016.60 $3.71
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Non-Service shares Hypothetical 1,000.00 1,021.12 3.72
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Service shares Actual 1,000.00 1,014.90 4.96
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Service shares Hypothetical 1,000.00 1,019.89 4.97
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 181/365
(to reflect the one-half year period). Those annualized expense ratios based on
the 6-month period ended June 30, 2005 are as follows:
CLASS EXPENSE RATIOS
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Non-Service shares 0.74%
- ----------------------------------------
Service shares 0.99
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5 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES--2.4%
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Aesop Funding II LLC,
Automobile
Asset-Backed Certificates,
Series 2005-1A, Cl. A2, 3.32%,
4/20/08 1,2 $ 200,000 $ 199,700
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BMW Vehicle Owner Trust,
Automobile Loan Certificates:
Series 2004-A, Cl. A2,
1.88%, 10/25/06 205,075 204,724
Series 2005-A, Cl. A2,
3.65%, 12/26/07 810,000 809,747
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Capital Auto Receivables Asset
Trust, Automobile
Mtg.-Backed Nts.:
Series 2004-2, Cl. A3,
3.58%, 1/15/09 740,000 733,132
Series 2005-1, Cl. A2B,
3.73%, 7/16/07 370,000 370,114
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Centex Home Equity Co.
LLC, Home Equity Loan
Asset-Backed Certificates:
Series 2004-D, Cl. AF1,
2.98%, 4/25/20 1 233,245 231,898
Series 2005-B, Cl. AF1,
4.02%, 3/26/35 1 224,127 223,710
Series 2005-C, Cl. AF1,
4.196%, 6/25/35 1 560,000 559,650
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Chase Funding Mortgage Loan
Asset-Backed Certificates, Home
Equity Mtg. Obligations:
Series 2003-1, Cl. 1A3,
3.14%, 7/25/23 41,247 41,176
Series 2003-5, Cl. 1A2,
2.451%, 11/25/18 128,602 128,115
Series 2004-1, Cl. 1A2,
2.427%, 6/25/19 390,000 388,101
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Chase Manhattan Auto Owner
Trust, Automobile Loan
Pass-Through Certificates:
Series 2002-A, Cl. A4, 4.24%,
9/15/08 99,692 99,946
Series 2005-A, Cl. A2, 3.72%,
12/15/07 650,000 648,895
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CIT Equipment Collateral,
Equipment Receivable-Backed
Nts., Series 2004-DFS, Cl. A2,
2.66%, 11/20/06 1 550,000 547,173
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CIT Group Home Equity Loan
Trust, Home Equity Loan
Asset-Backed Certificates,
Series 2003-1, Cl. A2,
2.35%, 4/20/27 32,489 32,446
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
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Citibank Credit Card Issuance
Trust, Credit Card Receivable
Nts., Series 2001-A6, Cl. A6,
5.65%, 6/16/08 $ 690,000 $ 701,445
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CitiFinancial Mortgage
Securities, Inc., Home Equity
Collateralized Mtg. Obligations,
Series 2003-3, Cl. AF1,
3.434%, 8/25/33 2 26,039 26,055
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Consumer Credit Reference
Index Securities Program,
Credit Card Asset-Backed
Certificates,Series 2002-B,
Cl. FX, 10.421%, 3/22/07 1 500,000 516,195
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Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates,
Series 2005-7, Cl. AF1B,
4.317%, 6/1/35 590,000 589,941
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DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates:
Series 2001-D, Cl. A4,
3.78%, 2/6/07 99,932 99,999
Series 2002-A, Cl. A4,
4.49%, 10/6/08 207,731 208,316
Series 2004-B, Cl. A2,
2.48%, 2/8/07 1 374,245 373,529
Series 2004-C, Cl. A2,
2.62%, 6/8/07 849,746 846,842
Series 2005-A, Cl. A2,
3.17%, 9/8/07 1 920,000 917,662
Series 2005-B, Cl. A2,
3.75%, 12/8/07 640,000 639,996
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Embarcadero Aircraft
Securitization Trust, Airplane
Receivable Nts., Series 2000-A,
Cl. B, 8/15/25 1,3,4 1,820,063 13,650
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Equity One ABS, Inc., Home
Equity Mtg. Pass-Through
Certificates, Series 2004-3,
Cl. AF2, 3.80%, 7/25/34 130,000 129,054
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Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates:
Series 2004-A,
Cl. A2, 2.13%, 10/15/06 566,994 565,426
Series 2005-A, Cl. A3,
3.48%, 11/17/08 550,000 546,758
Series 2005-B, Cl. A2,
3.77%, 9/15/07 730,000 729,860
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Harley-Davidson Motorcycle
Trust, Motorcycle Receivable Nts.,
Series 2003-3, Cl. A1, 1.50%,
1/15/08 175,130 174,655
6 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
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Honda Auto Receivables Owner
Trust, Automobile Receivable
Obligations:
Series 2003-4, Cl. A2,
1.58%, 7/17/06 $ 70,868 $ 70,854
Series 2005-1, Cl. A2,
3.21%, 5/21/07 1 360,000 359,125
Series 2005-3, Cl. A2,
3.73%, 10/18/07 610,000 610,000
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M&I Auto Loan Trust,
Automobile Loan Certificates,
Series 2002-1, Cl. A3,
2.49%, 10/22/07 49,817 49,803
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National City Auto Receivables
Trust, Automobile Receivable
Obligations, Series 2004-A,
Cl. A2, 1.50%, 2/15/07 124,039 123,864
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NC Finance Trust, Collateralized
Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 1/25/29 1 66,744 18,021
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Nissan Auto Lease Trust,
Automobile Lease Obligations,
Series 2004-A, Cl. A2,
2.55%, 1/15/07 436,440 435,144
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Nissan Auto Receivables Owner
Trust, Automobile Receivable Nts.:
Series 2002-A, Cl. A4,
4.28%, 10/16/06 45,447 45,489
Series 2003-B, Cl. A3,
1.51%, 8/15/07 69,695 69,242
Series 2004-A, Cl. A2,
1.40%, 7/17/06 152,732 152,450
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Onyx Acceptance Owner Trust,
Automobile Receivable
Obligations, Series 2002-B,
Cl. A4, 4.71%, 3/15/09 463,650 464,987
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Option One Mortgage Loan
Trust, Home Equity Mtg.
Obligations, Series 2004-3,
Cl. A2, 3.464%, 11/25/34 1,2 95,432 95,500
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Popular ABS Mortgage
Pass-Through Trust, Home
Equity Pass-Through Certificates:
Series 2004-5, Cl. AF2,
3.735%, 11/10/34 1 200,000 198,240
Series 2005-1, Cl. AF2,
3.914%, 5/25/35 150,000 148,879
Series 2005-2, Cl. AF2,
4.415%, 4/25/35 1 240,000 240,237
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Residential Asset Mortgage
Products, Inc., Home Equity
Asset-Backed Pass-Through
Certificates, Series 2004-RS7,
Cl. AI3, 4.45%, 7/25/28 480,000 481,277
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
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Structured Asset Securities Corp.,
Collateralized Mtg. Obligations,
Pass-Through Certificates,
Series 2005-4XS, Cl. 3A1,
5.18%, 3/26/35 $ 1,004,425 $ 1,009,735
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Toyota Auto Receivables Owner
Trust, Automobile Mtg.-Backed
Obligations, Series 2002-B,
Cl. A4, 4.39%, 5/15/09 793,739 795,436
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USAA Auto Owner Trust,
Automobile Loan Asset-Backed Nts.:
Series 2004-1, Cl. A2,
1.43%, 9/15/06 199,069 198,946
Series 2004-2, Cl. A2,
2.41%, 2/15/07 400,734 399,747
Series 2004-3, Cl. A2,
2.79%, 6/15/07 490,000 488,555
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Volkswagen Auto Lease Trust,
Automobile Lease Asset-Backed
Securities:
Series 2004-A, Cl. A2,
2.47%, 1/22/07 581,918 580,016
Series 2005-A, Cl. A2,
3.52%, 4/20/07 580,000 579,221
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Wachovia Auto Owner Trust,
Automobile Receivable Nts.,
Series 2004-B, Cl. A2,
2.40%, 5/21/07 364,222 363,032
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Wells Fargo Home Equity Trust,
Collateralized Mtg. Obligations,
Series 2004-2, Cl. AI1B,
2.94%, 9/25/18 669,422 664,351
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WFS Financial Owner Trust,
Automobile Receivable
Obligations, Series 2002-2,
Cl. A4, 4.50%, 2/20/10 238,989 239,992
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Whole Auto Loan Trust,
Automobile Loan Receivable
Certificates:
Series 2003-1, Cl. A3B,
1.99%, 5/15/07 194,559 193,266
Series 2004-1, Cl. A2A,
2.59%, 5/15/07 570,218 567,821
------------
Total Asset-Backed Securities
(Cost $23,837,027) 21,941,140
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MORTGAGE-BACKED OBLIGATIONS--12.8%
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Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1997-D4,
Cl. B1, 7.525%, 4/14/29 375,000 428,588
7 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS Continued
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Banc of America Commercial
Mortgage, Inc., Commercial
Mtg. Pass-Through Certificates:
Series 2004-6, Cl. A3,
4.512%, 12/10/42 $ 560,000 $ 562,183
Series 2005-2, Cl. A4,
4.783%, 7/10/42 820,000 834,094
Series 2005-3, Cl. A2,
4.501%, 7/10/43 5 690,000 694,313
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Bank of America Mortgage
Securities, Inc., Collateralized Mtg.
Obligations Pass-Through
Certificates:
Series 2004-2, Cl. 2A1,
6.50%, 7/20/32 759,069 769,677
Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 604,612 619,916
Series 2004-E, Cl. 2A9,
3.712%, 6/25/34 280,208 280,206
Series 2004-G, Cl. 2A1,
2.469%, 8/25/34 2 40,917 40,901
Series 2005-E, Cl. 2A2,
4.994%, 6/25/35 210,784 210,906
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Bear Stearns Commercial
Mortgage Securities, Inc.,
Commercial Mtg. Obligations,
Series 2005-PWR7, Cl. A2,
4.945%, 2/11/41 280,000 287,835
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Countrywide Alternative Loan
Trust, Collateralized Mtg.
Obligations:
Series 2004-J9, Cl. 1A1,
3.494%, 10/25/34 2 442,550 443,009
Series 2005-J1, Cl. 3A1,
6.50%, 8/25/32 1,328,021 1,357,072
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Federal Home Loan Mortgage
Corp.:
6%, 9/1/24-10/1/34 5,695,971 5,859,579
6.50%, 4/1/18-8/1/32 1,201,492 1,247,904
6.50%, 6/1/35 5 2,793,873 2,893,715
7%, 3/1/31-10/1/31 941,692 991,828
11%, 11/1/14 56,388 60,907
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Federal Home Loan Mortgage
Corp., Collateralized Mtg.
Obligations, Pass-Through
Participation Certificates,
Series 151, Cl. F, 9%, 5/15/21 94,569 94,543
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS Continued
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Federal Home Loan Mortgage
Corp., Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 1669, Cl. G,
6.50%, 2/15/23 $ 69,561 $ 69,740
Series 2055, Cl. ZM,
6.50%, 5/15/28 299,131 310,642
Series 2080, Cl. Z,
6.50%, 8/15/28 189,492 196,268
Series 2387, Cl. PD,
6%, 4/15/30 343,466 346,874
Series 2456, Cl. BD,
6%, 3/15/30 235,989 237,522
Series 2498, Cl. PC,
5.50%, 10/15/14 28,624 28,724
Series 2500, Cl. FD,
3.72%, 3/15/32 2 110,281 110,661
Series 2526, Cl. FE,
3.62%, 6/15/29 2 139,644 140,101
Series 2550, Cl. QK,
4.50%, 4/15/22 63,459 63,454
Series 2551, Cl. FD,
3.62%, 1/15/33 2 111,258 112,118
Series 2583, Cl. KA,
5.50%, 3/15/22 799,199 804,534
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Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 177, Cl. B, 2.40%, 7/1/26 6 363,061 65,111
Series 192, Cl. IO, 4.038%, 2/1/28 6 93,234 15,833
Series 200, Cl. IO, 2.912%, 1/1/29 6 111,947 19,335
Series 205, Cl. IO, 1.874%, 9/1/29 6 516,303 90,194
Series 208, Cl. IO, (26.14)%,
6/1/30 6 588,252 102,488
Series 2074, Cl. S, 1.497%, 7/17/28 6 120,994 14,798
Series 2079, Cl. S, (1.047)%,
7/17/28 6 191,454 24,008
Series 2526, Cl. SE, 9.297%,
6/15/29 6 261,074 19,580
Series 2920, Cl. S, 15.485%,
1/15/35 6 2,371,161 141,939
Series 3000, Cl. SE, .00%,
7/15/25 5,6 2,240,000 102,900
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Federal National Mortgage Assn.:
4.50%, 7/17/20 5 7,009,000 6,978,336
5%, 2/1/18-6/1/18 1,788,079 1,810,375
5%, 7/1/20-8/11/35 5 11,720,000 11,740,414
5.50%, 3/1/33-1/1/34 8,512,303 8,639,218
5.50%, 7/17/20-7/1/35 5 8,807,000 8,992,131
6%, 7/1/16-7/1/35 5 8,474,975 8,740,068
6.50%, 5/1/29-10/1/30 295,513 306,981
6.50%, 7/1/35 5 23,136,000 23,945,760
7%, 11/1/17 865,283 907,087
7.50%, 8/1/25-2/1/27 250,898 268,873
8.50%, 7/1/32 23,179 25,198
8 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS Continued
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Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1998-63, Cl. PG,
6%, 3/25/27 $ 75,216 $ 75,281
Trust 2001-50, Cl. NE,
6%, 8/25/30 179,919 181,422
Trust 2001-51, Cl. OD,
6.50%, 10/25/31 907,851 943,210
Trust 2001-70, Cl. LR,
6%, 9/25/30 188,578 191,314
Trust 2001-72, Cl. NH,
6%, 4/25/30 136,296 137,341
Trust 2001-74, Cl. PD,
6%, 5/25/30 57,840 58,307
Trust 2002-77, Cl. WF,
3.66%, 12/18/32 2 172,916 174,073
Trust 2002-94, Cl. MA,
4.50%, 8/25/09 172,583 172,471
Trust 2003-10, Cl. HP,
5%, 2/25/18 910,000 930,265
Trust 2003-17, Cl. EQ,
5.50%, 3/25/23 1,265,000 1,321,465
Trust 2003-23, Cl. EQ,
5.50%, 4/25/23 890,000 928,714
Trust 2003-81, Cl. PA,
5%, 2/25/12 18,145 18,116
Trust 2004-101, Cl. BG,
5%, 1/25/20 630,000 644,689
Trust 2005-71, Cl. DB,
4.50%, 7/25/05 5 480,000 465,600
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Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through
Certificates, Interest-Only
Stripped Mtg.-Backed Security:
Trust 2002-28, Cl. SA,
3.979%, 4/25/32 6 138,258 13,110
Trust 2002-38, Cl. SO,
5.026%, 4/25/32 6 741,575 53,116
Trust 2002-48, Cl. S,
3.265%, 7/25/32 6 223,143 21,958
Trust 2002-52, Cl. SL,
3.218%, 9/25/32 6 138,927 13,857
Trust 2002-56, Cl. SN,
5.22%, 7/25/32 6 306,627 30,444
Trust 2002-77, Cl. IS,
4.035%, 12/18/32 6 1,263,425 140,883
Trust 2005-71, Cl. SA, 7/25/25 5,6 1,440,000 87,750
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 214, Cl. 2,
3.28%, 3/1/23 6 $ 1,478,139 $ 270,324
Trust 221, Cl. 2,
0.39%, 5/1/23 6 166,074 30,811
Trust 240, Cl. 2,
7.147%, 9/1/23 6 289,104 52,165
Trust 301, Cl. 2,
(5.605)%, 4/1/29 6 687,860 117,637
Trust 313, Cl. 2,
(28.541)%, 7/1/31 6 753,679 134,124
Trust 319, Cl. 2,
(3.36)%, 2/1/32 6 226,015 40,401
Trust 321, Cl. 2,
(3.78)%, 3/1/32 6 999,850 181,760
Trust 324, Cl. 2,
(9.71)%, 6/1/32 6 1,753,686 310,078
Trust 329, Cl. 2,
(0.561)%, 1/1/33 6 1,418,770 250,864
Trust 333, Cl. 2,
(1.02)%, 3/1/33 6 727,419 130,630
Trust 346, Cl. 2,
9.24%, 12/1/33 6 959,038 168,254
Trust 2001-63, Cl. SD,
9.146%, 12/18/31 6 252,929 27,709
Trust 2001-68, Cl. SC,
5.63%, 11/25/31 6 183,087 19,300
Trust 2001-81, Cl. S,
5.117%, 1/25/32 6 240,680 24,698
Trust 2002-9, Cl. MS,
2.812%, 3/25/32 6 296,276 31,472
Trust 2002-77, Cl. SH,
9.708%, 12/18/32 6 303,614 32,434
Trust 2003-4, Cl. S,
18.483%, 2/25/33 6 575,101 56,572
Trust 2005-40, Cl. SA,
18.084%, 5/25/35 6 7,280,576 446,996
Trust 2005-40, Cl. SB,
27.134%, 5/25/35 6 1,523,269 102,022
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First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1,
Cl. D, 7.702%, 4/29/39 1,2 350,000 353,117
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First Union National Bank/
Lehman Brothers/Bank of
America Commercial Mtg. Trust,
Pass-Through Certificates,
Series 1998-C2, Cl. A2,
6.56%, 11/18/35 358,410 377,730
9 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
GE Capital Commercial
Mortgage Corp., Commercial
Mtg. Obligations:
Series 2004-C3, Cl. A2,
4.433%, 7/10/39 $ 390,000 $ 392,779
Series 2005-CA, Cl. A3,
4.578%, 6/10/48 220,000 221,819
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GMAC Commercial Mortgage
Securities, Inc., Commercial
Mtg. Obligations,
Series 2004-C3, Cl. A4,
4.547%, 12/10/41 360,000 362,725
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GMAC Commercial Mortgage
Securities, Inc., Commercial
Mtg. Pass-Through Certificates,
Series 1997-C1, Cl. A3,
6.869%, 7/15/29 257,474 269,020
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GMAC Commercial Mortgage
Securities, Inc., Mtg. Pass-Through
Certificates, Series 1998-C1,
Cl. F, 7.191%, 5/15/30 2 1,567,000 1,677,045
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Government National
Mortgage Assn.:
4.125%, 11/20/25 2 15,665 15,967
7%, 3/15/28-7/15/28 870,409 923,123
7.50%, 2/15/27 109,594 117,671
8%, 11/15/25-5/15/26 136,311 147,540
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Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 1998-6, Cl. SA,
1.679%, 3/16/28 6 233,567 26,528
Series 1998-19, Cl. SB,
0.286%, 7/16/28 6 383,871 47,513
Series 2001-21, Cl. SB,
2.354%, 1/16/27 6 1,901,459 178,287
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Greenwich Capital Commercial
Funding Corp., Commercial
Mtg. Pass-Through Certificates,
Series 2005-GG3, Cl. A2,
4.305%, 8/10/42 500,000 500,164
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GS Mortgage Securities Corp. II,
Commercial Mtg. Pass-Through
Certificates:
Series 2004-C1, Cl. A1,
3.659%, 10/10/28 404,959 399,665
Series 2004-GG2, Cl. A3,
4.602%, 8/10/38 250,000 253,143
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GSR Mortgage Loan Trust,
Collateralized Mtg. Obligations,
Series 04-12, Cl. 3A1,
4.495%, 12/25/34 1,2 615,349 613,881
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
J.P. Morgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 2005-LDP2,
Cl. A2, 4.575%, 7/15/42 $ 160,000 $ 161,459
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Mastr Alternative Loan Trust,
Pass-Through Collateralized
Mtg. Obligations, Series 2004-6,
Cl. 10A1, 6%, 7/25/34 881,739 900,297
- --------------------------------------------------------------------------------
Merrill Lynch Mortgage
Investors, Inc., Mtg. Pass-Through
Certificates, Series 1995-C2,
Cl. D, 7.72%, 6/15/21 2 144,435 144,815
- --------------------------------------------------------------------------------
Morgan Stanley Capital I Trust,
Commercial Mtg. Pass-Through
Certificates:
Series 1996-C1, Cl. F,
7.345%, 2/15/28 2,7 162,744 163,535
Series 1997-XL1, Cl. G,
7.695%, 10/3/30 390,000 275,805
- --------------------------------------------------------------------------------
Nomura Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-D6,
Cl. A1B, 6.59%, 3/15/30 420,000 446,042
- --------------------------------------------------------------------------------
Prudential Mortgage Capital Co.
II LLC, Commercial Mtg.
Pass-Through Certificates, Series
PRU-HTG 2000-C1, Cl. A2,
7.306%, 10/6/15 556,000 632,988
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Inc., Commercial
Mtg. Pass-Through Certificates,
Series 1996-C1, Cl. F,
8.42%, 1/20/28 1,2 1,000,000 820,000
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust, Commercial
Mtg. Obligations:
Series 2005-C16, Cl. A2,
4.38%, 10/15/41 750,000 752,508
Series 2005-C17, Cl. A2,
4.782%, 3/15/42 820,000 835,375
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., Collateralized
Mtg. Pass-Through Certificates,
Series 2005-AR5, Cl. A1,
4.69%, 5/25/35 2 869,676 872,167
10 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed
Securities Trust, Collateralized
Mtg. Obligations:
Series 2004-DD, Cl. 2A1,
4.54%, 1/25/35 2 $ 806,422 $ 806,646
Series 2004-N, Cl. A10,
3.803%, 8/25/34 1 549,937 550,577
Series 2004-W, Cl. A2,
4.611%, 11/25/34 2 277,763 277,276
------------
Total Mortgage-Backed
Obligations (Cost $117,135,431) 116,597,285
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--8.6%
- --------------------------------------------------------------------------------
Fannie Mae Unsec. Nts.,
3.58%, 1/31/07 8 3,482,000 3,278,247
- --------------------------------------------------------------------------------
Federal Home Loan Bank
Unsec. Bonds, Series S906,
3.50%, 8/15/06 1,715,000 1,709,999
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Nts., 3.75%, 7/15/09 [EUR] 949,000 1,205,171
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
2.75%, 8/15/06 9 280,000 276,914
3.625%, 9/15/06 10 4,459,000 4,451,594
4.125%, 7/12/10 4,376,000 4,395,268
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn. Unsec. Nts.:
3.01%, 6/2/06 1,219,000 1,209,960
3.25%, 7/31/06 1,335,000 1,327,826
3.75%, 5/17/07 1,382,000 1,378,419
4.25%, 7/15/07 9 2,198,000 2,218,567
6.625%, 9/15/09 10 6,965,000 7,682,221
7.25%, 5/15/30 710,000 988,985
7.25%, 1/15/10 9 4,352,000 4,939,742
- --------------------------------------------------------------------------------
Resolution Funding Corp.
STRIPS, 5.16%, 1/15/21 8 5,667,000 2,833,863
- --------------------------------------------------------------------------------
Tennessee Valley Authority Bonds:
4.65%, 6/15/35 455,000 457,632
Series A, 6.79%, 5/23/12 8,412,000 9,752,376
- --------------------------------------------------------------------------------
U.S. Treasury Bills, 2.80%, 8/4/05 9 12,975,000 12,940,976
- --------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.50%, 8/15/28 9 900,000 1,060,137
7.25%, 5/15/16 1,454,000 1,862,314
8.875%, 8/15/17 10 1,419,000 2,062,816
9.25%, 2/15/16 9 208,000 301,421
STRIPS, 4.20%, 2/15/11 8,9 900,000 729,940
STRIPS, 4.60%, 2/15/16 8,9 491,000 318,052
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
2.50%, 9/30/06 9 4,727,000 4,665,700
2.50%, 10/31/06 9,11 5,367,000 5,292,367
2.75%, 8/15/07 9 525,000 515,485
------------
Total U.S. Government
Obligations (Cost $77,134,269) 77,855,992
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--26.5%
- --------------------------------------------------------------------------------
ARGENTINA--1.1%
Argentina (Republic of) Bonds:
3.01%, 8/3/12 2 $ 6,733,000 $ 6,005,015
Series PRE8, 2%, 1/3/10 1,3,4 [ARP] 1,980,000 1,143,495
Series PR12, 2%, 1/3/16 1,3,4 [ARP] 1,335,300 701,365
- --------------------------------------------------------------------------------
Argentina (Republic of) Unsec.
Unsub. Bonds,
5.83%, 12/31/33 1 [ARP] 2,352,363 837,845
- --------------------------------------------------------------------------------
Buenos Aires (Province of)
Bonds, Bonos de Consolidacion
de Deudas, Series PBA1,
4/1/07 1,3,4 [ARP] 46,523 19,716
- --------------------------------------------------------------------------------
Central Bank of Argentina
Bonds, 2%, 2/4/18 1 [ARP] 2,440,320 1,091,116
------------
9,798,552
- --------------------------------------------------------------------------------
AUSTRALIA--0.9%
Queensland Treasury Corp.
Unsec. Nts., Series 09G,
6%, 7/14/09 [AUD] 10,801,000 8,457,069
- --------------------------------------------------------------------------------
AUSTRIA--0.6%
Austria (Republic of) Bonds,
6.25%, 7/15/27 [EUR] 3,030,000 5,113,771
- --------------------------------------------------------------------------------
BELGIUM--0.1%
Belgium (Kingdom of) Bonds,
Series 28, 5.75%, 3/28/08 [EUR] 701,000 928,570
- --------------------------------------------------------------------------------
BRAZIL--1.0%
Brazil (Federal Republic of) Bonds:
8.75%, 2/4/25 2,490,000 2,577,150
Series 15 yr., 4.313%, 4/15/09 2 11,766 11,707
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Debt
Capitalization Bonds, Series
20 yr., 8%, 4/15/14 6,043,745 6,191,061
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Unsec.
Unsub. Bonds, 11%, 8/17/40 138,000 166,187
------------
8,946,105
- --------------------------------------------------------------------------------
BULGARIA--0.2%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 743,000 937,109
8.25%, 1/15/15 7 743,000 937,109
------------
1,874,218
- --------------------------------------------------------------------------------
CANADA--0.2%
Canada (Government of)
Bonds, 5%, 6/1/14 [CAD] 2,298,000 2,046,434
- --------------------------------------------------------------------------------
COLOMBIA--0.5%
Colombia (Republic of) Bonds,
12%, 10/22/15 [COP] 3,643,000,000 1,641,858
- --------------------------------------------------------------------------------
Colombia (Republic of) Nts.,
11.75%, 3/1/10 [COP] 2,617,240,000 1,193,708
- --------------------------------------------------------------------------------
Colombia (Republic of) Unsec
Unsub. Bonds, 8.375%, 2/15/27 615,000 625,763
11 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COLOMBIA Continued
Colombia (Republic of) Unsec.
Unsub. Nts.,
11.375%, 1/31/08 [EUR] 979,000 $ 1,405,104
------------
4,866,433
- --------------------------------------------------------------------------------
DOMINICAN REPUBLIC--0.0%
Dominican Republic Unsec.
Unsub. Bonds, Series REGS,
9.04%, 1/23/18 407,000 426,841
- --------------------------------------------------------------------------------
ECUADOR--0.0%
Ecuador (Republic of) Unsec.
Bonds, 8%, 8/15/30 2 371,000 313,263
- --------------------------------------------------------------------------------
EL SALVADOR--0.1%
El Salvador (Republic of) Bonds,
7.625%, 9/21/34 7 590,000 640,150
- --------------------------------------------------------------------------------
FINLAND--0.0%
Finland (Republic of) Sr. Unsec.
Unsub. Bonds,
2.75%, 7/4/06 [EUR] 220,000 268,257
- --------------------------------------------------------------------------------
FRANCE--1.4%
France (Government of)
Obligations Assimilables du
Tresor Bonds:
5.50%, 10/25/07 [EUR] 940,000 1,225,046
5.50%, 10/25/10 [EUR] 3,731,000 5,163,458
5.75%, 10/25/32 [EUR] 2,873,000 4,717,187
- --------------------------------------------------------------------------------
France (Government of)
Treasury Nts.:
5 yr., 5%, 1/12/06 [EUR] 1,236,000 1,519,138
5 yr., 4.75%, 7/12/07 [EUR] 120,000 153,053
------------
12,777,882
- --------------------------------------------------------------------------------
GERMANY--3.8%
Germany (Republic of) Bonds:
5.25%, 1/4/11 [EUR] 8,671,000 11,908,118
5.375%, 1/4/10 [EUR] 1,119,000 1,520,320
Series 03, 3.75% 7/4/13 [EUR] 9,040,000 11,553,530
Series 140, 4.50%, 8/17/07 [EUR] 1,214,000 1,543,320
Series 143, 3.50%, 10/10/08 [EUR] 6,502,000 8,184,231
------------
34,709,519
- --------------------------------------------------------------------------------
GREECE--0.6%
Greece (Republic of) Bonds:
3.50%, 4/18/08 [EUR] 1,055,000 1,320,263
4.60%, 5/20/13 [EUR] 1,545,000 2,062,699
- --------------------------------------------------------------------------------
Greece (Republic of) Sr. Unsub.
Bonds, 4.65%, 4/19/07 [EUR] 1,610,000 2,035,919
------------
5,418,881
- --------------------------------------------------------------------------------
GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 7 250,000 302,500
10.25%, 11/8/11 95,000 114,950
------------
417,450
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ISRAEL--0.5%
Israel (State of) Aid Bonds,
United States Gtd.,
5.50%, 12/4/23 $ 891,000 $ 1,001,217
- --------------------------------------------------------------------------------
Israel (State of) Bonds,
Series 2682, 7.50%, 3/31/14 [ILS] 13,610,000 3,259,235
------------
4,260,452
- --------------------------------------------------------------------------------
ITALY--0.5%
Italy (Republic of) Treasury
Bonds, Buoni del Tesoro
Poliennali, 5%, 10/15/07 [EUR] 3,760,000 4,836,847
- --------------------------------------------------------------------------------
IVORY COAST--0.0%
Ivory Coast (Government of)
Past Due Interest Bonds,
3/29/18 1,3,4 [FRF] 2,194,500 71,862
- --------------------------------------------------------------------------------
JAPAN--2.6%
Japan (Government of) Bonds:
5 yr., Series 14, 0.40%,
6/20/06 [JPY] 1,641,750,000 14,858,348
10 yr., Series 239,
1.40%, 6/20/12 [JPY] 877,000,000 8,282,672
------------
23,141,020
- --------------------------------------------------------------------------------
MALAYSIA--0.4%
Johor Corp. Malaysia (State of)
Bonds, Series P3,
1%, 7/31/12 2 [MYR] 7,980,000 2,220,750
- --------------------------------------------------------------------------------
Malaysia (Government of)
Bonds, Series 2/05,
4.72%, 9/30/15 [MYR] 3,490,000 955,433
------------
3,176,183
- --------------------------------------------------------------------------------
MEXICO--1.2%
United Mexican States Bonds:
7.50%, 4/8/33 863,000 992,450
8.30%, 8/15/31 400,000 499,000
Series M10, 10.50%,
7/14/11 [MXN] 17,900,000 1,796,279
Series M20, 8%, 12/7/23 2 [MXN] 20,056,000 1,589,101
Series MI10, 8%, 12/19/13 [MXN] 16,100,000 1,378,816
Series MI10, 9.50%,
12/18/14 2 [MXN] 10,960,800 1,025,559
- --------------------------------------------------------------------------------
United Mexican States Nts.,
7.50%, 1/14/12 1,132,000 1,286,518
- --------------------------------------------------------------------------------
United Mexican States Treasury
Bills, Series BI,
10.32%, 10/13/05 8 [MXN] 8,340,000 755,587
- --------------------------------------------------------------------------------
United Mexican States Unsec.
Unsub. Nts., Series 6BR,
6.75%, 6/6/06 [JPY] 135,000,000 1,288,044
------------
10,611,354
12 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NEW ZEALAND--0.3%
New Zealand (Government of)
Bonds, 7%, 7/15/09 [NZD] 4,075,000 $ 2,955,174
- --------------------------------------------------------------------------------
NIGERIA--0.1%
Central Bank of Nigeria Gtd. Bonds,
Series WW, 6.25%, 11/15/20 275,000 272,938
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of)
Promissory Nts., Series RC,
5.092%, 1/5/10 214,821 180,352
------------
453,290
- --------------------------------------------------------------------------------
PANAMA--0.5%
Panama (Republic of) Bonds:
8.125%, 4/28/34 805,000 899,588
9.375%, 1/16/23 1,928,000 2,390,720
9.375%, 4/1/29 655,000 813,838
------------
4,104,146
- --------------------------------------------------------------------------------
PERU--0.7%
Peru (Republic of) Bonds:
8.375%, 5/3/16 290,000 326,975
9.91%, 5/5/15 [PEN] 6,840,000 2,320,470
Series 2, 9%, 1/31/12 [PEN] 1,340,000 442,754
Series 8-1, 12.25%, 8/10/11 [PEN] 1,427,000 542,028
- --------------------------------------------------------------------------------
Peru (Republic of) Past Due
Interest Bonds, Series 20 yr.,
5%, 3/7/17 2 1,479,850 1,413,257
- --------------------------------------------------------------------------------
Peru (Republic of) Sr. Nts.,
4.53%, 2/28/16 8 1,376,525 885,367
- --------------------------------------------------------------------------------
Peru (Republic of) Unsec. Unsub.
Bonds, 8.75%, 11/21/33 690,000 781,425
------------
6,712,276
- --------------------------------------------------------------------------------
PHILIPPINES--0.6%
Philippines (Republic of) Bonds:
8.375%, 2/15/11 438,000 455,246
9.50%, 2/2/30 3,520,000 3,600,960
10.625%, 3/16/25 710,000 797,863
Series 5-56, 12.375%,
10/28/09 [PHP] 11,560,000 216,430
Series 5-57, 11.50%, 1/27/10 [PHP] 39,310,000 723,745
------------
5,794,244
- --------------------------------------------------------------------------------
POLAND--0.5%
Poland (Republic of) Bonds:
Series DS0509,
6%, 5/24/09 [PLZ] 9,830,000 3,083,142
Series DS1013,
5%, 10/24/13 [PLZ] 4,640,000 1,395,050
Series WS0922,
5.75%, 9/23/22 [PLZ] 1,000,000 333,800
------------
4,811,992
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PORTUGAL--0.5%
Portugal (Republic of) Obrig
Do Tes Medio Prazo Nts.:
3.25%, 7/15/08 [EUR] 1,480,000 $ 1,840,105
4.875%, 8/17/07 [EUR] 1,410,000 1,803,904
- --------------------------------------------------------------------------------
Portugal (Republic of) Obrig
Do Tes Medio Prazo Unsec.
Unsub. Nts.,
5.85%, 5/20/10 [EUR] 450,000 625,842
------------
4,269,851
- --------------------------------------------------------------------------------
RUSSIA--0.9%
Aries Vermoegensverwaltungs
GmbH Unsub. Nts.:
Series B, 7.75%, 10/25/09 7 [EUR] 700,000 986,204
Series C, 9.60%, 10/25/14 1,450,000 1,881,042
- --------------------------------------------------------------------------------
Ministry Finance of Russia Debs.,
Series VII, 3%, 5/14/11 1,950,000 1,714,469
- --------------------------------------------------------------------------------
Russian Federation Debs.,
Series V, 3%, 5/14/08 1,717,000 1,621,349
- --------------------------------------------------------------------------------
Russian Federation Unsec.
Unsub. Bonds, 5%, 3/31/30 2,7 1,578,875 1,776,234
------------
7,979,298
- --------------------------------------------------------------------------------
SOUTH AFRICA--0.8%
South Africa (Republic of)
Bonds:
Series 153,
13%, 8/31/10 [ZAR] 7,700,000 1,423,055
Series R157,
13.50%, 9/15/15 [ZAR] 6,355,000 1,319,202
Series R186,
10.50%, 12/21/26 [ZAR] 17,528,000 3,444,533
Series R203,
8.25%, 9/15/17 [ZAR] 3,000,000 459,049
Series R204,
8%, 12/21/18 [ZAR] 3,175,000 477,152
------------
7,122,991
- --------------------------------------------------------------------------------
SPAIN--0.9%
Spain (Kingdom of) Bonds:
Bonos y Obligacion del Estado,
5.35%, 10/31/11 [EUR] 3,216,000 4,479,356
Bonos y Obligacion del Estado,
5.75%, 7/30/32 [EUR] 2,203,000 3,612,073
------------
8,091,429
- --------------------------------------------------------------------------------
SWEDEN--1.3%
Sweden (Kingdom of) Bonds,
Series 1045, 5.25%, 3/15/11 [SEK] 79,410,000 11,614,088
- --------------------------------------------------------------------------------
THE NETHERLANDS--0.1%
Netherlands (Kingdom of the)
Bonds, 5.50%, 1/15/28 [EUR] 740,000 1,148,498
13 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
TURKEY--0.8%
Turkey (Republic of) Nts.:
7%, 6/5/20 $ 2,290,000 $ 2,249,925
7.25%, 3/15/15 2,701,000 2,795,535
- --------------------------------------------------------------------------------
Turkey (Republic of) Sr. Unsec.
Unsub. Nts., 11.875%, 1/15/30 1,358,000 1,970,798
------------
7,016,258
- --------------------------------------------------------------------------------
UNITED KINGDOM--2.3%
United Kingdom Treasury Nts.,
4%, 3/7/09 [GBP] 11,568,000 20,718,478
- --------------------------------------------------------------------------------
VENEZUELA--0.5%
Venezuela (Republic of) Bonds:
7%, 12/1/18 750,000 670,406
9.25%, 9/15/27 2,590,000 2,722,090
- --------------------------------------------------------------------------------
Venezuela (Republic of) Nts.,
7%, 3/16/15 [EUR] 1,097,000 1,318,148
------------
4,710,644
------------
Total Foreign Government
Obligations (Cost $234,348,088) 240,603,770
- --------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.4%
- --------------------------------------------------------------------------------
Algeria (Republic of) Loan
Participation Nts., 4.003%, 3/4/10 1,2 388,333 383,479
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Indonesia (Republic of) Rupiah
Loan Participation Nts.,
3.813%, 1/25/06 2 1,490,000 1,496,556
OAO Gazprom Loan
Participation Nts.,
8.27%, 8/4/05 1,2 1,520,000 1,576,696
------------
Total Loan Participations
(Cost $3,365,939) 3,456,731
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--26.7%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--7.3%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.6%
Accuride Corp., 8.50% Sr. Unsec.
Sub. Nts., 2/1/15 225,000 221,063
- --------------------------------------------------------------------------------
Collins & Aikman
Floorcoverings, Inc.,
9.75% Sr. Sub. Nts.,
Series B, 2/15/10 200,000 208,000
- --------------------------------------------------------------------------------
Cooper Standard Automotive, Inc.,
8.375% Sr. Unsec. Sub. Nts.,
12/15/14 695,000 552,525
- --------------------------------------------------------------------------------
Dana Corp.,
10.125% Nts., 3/15/10 200,000 209,452
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
AUTO COMPONENTS Continued
Dura Operating Corp.:
8.625% Sr. Nts., Series B,
4/15/12 $ 100,000 $ 90,500
9% Sr. Sub. Nts., Series B,
5/1/09 [EUR] 100,000 81,383
9% Sr. Unsec. Sub. Nts., Series D,
5/1/09 500,000 350,000
- --------------------------------------------------------------------------------
Eagle-Picher, Inc.,
9.75% Sr. Nts., 9/1/13 3,4 300,000 208,500
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 825,000 806,438
9% Sr. Nts., 7/1/15 7 645,000 636,938
- --------------------------------------------------------------------------------
Metaldyne Corp.:
10% Sr. Nts., 11/1/13 7 200,000 165,000
11% Sr. Sub. Nts., 6/15/12 217,000 141,593
- --------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts.,
5/1/12 500,000 512,500
- --------------------------------------------------------------------------------
Tenneco Automotive, Inc.:
8.625% Sr. Unsec. Sub. Nts.,
11/15/14 700,000 707,000
10.25% Sr. Sec. Nts., Series B,
7/15/13 150,000 170,250
- --------------------------------------------------------------------------------
United Components, Inc.,
9.375% Sr. Sub. Nts., 6/15/13 200,000 202,500
- --------------------------------------------------------------------------------
Visteon Corp., 7% Sr. Unsec. Nts.,
3/10/14 425,000 352,750
------------
5,616,392
- --------------------------------------------------------------------------------
AUTOMOBILES--0.1%
General Motors Acceptance
Corp., 6.875% Nts., 9/15/11 300,000 277,265
- --------------------------------------------------------------------------------
Navistar International Corp.,
6.25% Sr. Nts., 3/1/12 7 230,000 223,100
------------
500,365
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.1%
Apcoa, Inc., 9.25% Sr. Unsec.
Sub. Nts., 3/15/08 100,000 98,500
- --------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec. Sub.
Nts., 8/15/11 850,000 927,563
- --------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr.
Sub. Nts., 4/15/12 300,000 327,375
- --------------------------------------------------------------------------------
Carrols Corp., 9% Sr. Sub. Nts.,
1/15/13 7 130,000 132,275
- --------------------------------------------------------------------------------
Domino's, Inc., 8.25% Sr. Unsec.
Sub. Nts., 7/1/11 547,000 585,290
- --------------------------------------------------------------------------------
Gaylord Entertainment Co.,
8% Sr. Nts., 11/15/13 300,000 316,875
- --------------------------------------------------------------------------------
Intrawest Corp.,
7.50% Sr. Unsec. Nts., 10/15/13 625,000 644,531
14 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 $ 400,000 $ 404,000
9% Sr. Sub. Nts., 3/15/12 500,000 546,250
- --------------------------------------------------------------------------------
John Q. Hammons Hotels, Inc.,
8.875% Sr. Nts., Series B, 5/15/12 300,000 328,500
- --------------------------------------------------------------------------------
La Quinta Properties, Inc.,
7% Sr. Sec. Nts., 8/15/12 250,000 259,688
- --------------------------------------------------------------------------------
Mandalay Resort Group,
10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 650,000 718,250
- --------------------------------------------------------------------------------
MGM Mirage, Inc.:
8.375% Sr. Unsec. Sub. Nts.,
2/1/11 900,000 985,500
9.75% Sr. Unsec. Sub. Nts.,
6/1/07 350,000 381,063
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Nts., 2/15/13 7 225,000 228,375
6.375% Sr. Sub. Nts., 7/15/09 250,000 256,250
6.875% Sr. Sub. Nts., 2/15/15 7 315,000 323,663
8% Sr. Sub. Nts., 4/1/12 600,000 645,000
- --------------------------------------------------------------------------------
NCL Corp.,
11.625% Sr. Nts., 7/15/14 7 300,000 317,250
- --------------------------------------------------------------------------------
Park Place Entertainment Corp.:
7.875% Sr. Sub. Nts., 3/15/10 200,000 225,000
9.375% Sr. Unsec. Sub. Nts., 2/15/07 800,000 862,000
- --------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Sub. Nts., 3/1/15 7 230,000 229,425
6.875% Sr. Sub. Nts., 12/1/11 500,000 515,000
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc.,
8.25% Sr. Unsec. Sub. Nts., 3/15/12 700,000 731,500
- --------------------------------------------------------------------------------
Premier Cruise Ltd.,
11% Sr. Nts., 3/15/08 3,4,7 250,000 --
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd.,
8.75% Sr. Unsub. Nts., 2/2/11 300,000 347,250
- --------------------------------------------------------------------------------
Six Flags, Inc.:
8.875% Sr. Unsec. Nts., 2/1/10 1,074,000 1,052,520
9.625% Sr. Nts., 6/1/14 19,000 17,860
9.75% Sr. Nts., 4/15/13 300,000 284,625
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc.,
7.875% Sr. Nts., 5/1/12 835,000 945,638
- --------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 928,000 951,200
9.875% Sr. Unsec. Sub. Nts., 7/1/10 928,000 962,364
- --------------------------------------------------------------------------------
Sun International Hotels Ltd.,
8.875% Sr. Unsec. Sub. Nts., 8/15/11 700,000 752,500
- --------------------------------------------------------------------------------
Universal City Development
Partners Ltd., 11.75% Sr. Nts., 4/1/10 500,000 576,250
- --------------------------------------------------------------------------------
Vail Resorts, Inc.,
6.75% Sr. Sub. Nts., 2/15/14 500,000 510,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Wynn Las Vegas LLC/Wynn
Las Vegas Capital Corp.,
6.625% Nts., 12/1/14 7 $ 1,474,000 $ 1,440,835
------------
18,830,165
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.6%
Beazer Homes USA, Inc.,
8.375% Sr. Nts., 4/15/12 400,000 431,000
- --------------------------------------------------------------------------------
Blount, Inc.,
8.875% Sr. Sub. Nts., 8/1/12 350,000 376,250
- --------------------------------------------------------------------------------
D.R. Horton, Inc.:
9.375% Sr. Unsec. Sub. Nts., 3/15/11 400,000 431,625
9.75% Sr. Sub. Nts., 9/15/10 400,000 470,297
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.,
7.75% Sr. Unsec. Sub. Nts., 5/15/13 300,000 313,500
- --------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 250,000 272,281
9.50% Sr. Unsec. Sub. Nts., 2/15/11 400,000 429,800
- --------------------------------------------------------------------------------
Meritage Homes Corp.,
6.25% Sr. Unsec. Nts., 3/15/15 480,000 448,800
- --------------------------------------------------------------------------------
Sealy Mattress Co.,
8.25% Sr. Sub. Nts., 6/15/14 450,000 456,750
- --------------------------------------------------------------------------------
Standard Pacific Corp.,
9.25% Sr. Sub. Nts., 4/15/12 200,000 221,000
- --------------------------------------------------------------------------------
WCI Communities, Inc.,
9.125% Sr. Sub. Nts., 5/1/12 300,000 316,500
- --------------------------------------------------------------------------------
William Lyon Homes, Inc.,
10.75% Sr. Nts., 4/1/13 400,000 436,000
- --------------------------------------------------------------------------------
Williams Scotsman, Inc.,
9.875% Sr. Unsec. Nts., 6/1/07 800,000 804,000
------------
5,407,803
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.0%
Leslie's Poolmart, Inc.,
7.75% Sr. Unsec. Nts., 2/1/13 225,000 228,375
- --------------------------------------------------------------------------------
MEDIA--3.3%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 3,4 350,000 297,500
10.25% Sr. Unsec. Nts., 11/1/06 3,4 400,000 342,000
10.25% Sr. Unsec. Sub. Nts., 6/5/11 3,4 200,000 180,500
10.875% Sr. Unsec. Nts., 10/1/10 3,4 400,000 350,000
- --------------------------------------------------------------------------------
Allbritton Communications Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/12 600,000 594,000
- --------------------------------------------------------------------------------
AMC Entertainment, Inc.:
8% Sr. Unsec. Sub. Nts., 3/1/14 650,000 580,125
9.50% Sr. Unsec. Sub. Nts., 2/1/11 360,000 355,050
- --------------------------------------------------------------------------------
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 150,000 142,875
10.25% Sr. Unsec. Sub. Nts.,
Series B, 5/1/09 400,000 402,000
- --------------------------------------------------------------------------------
Block Communications, Inc.,
9.25% Sr. Sub. Nts., 4/15/09 400,000 428,000
15 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Cablevision Systems Corp.,
8% Sr. Unsec. Nts., Series B, 4/15/12 $ 250,000 $ 246,250
- --------------------------------------------------------------------------------
Carmike Cinemas, Inc.,
7.50% Sr. Sub. Nts., 2/15/14 500,000 455,625
- --------------------------------------------------------------------------------
Charter Communications
Holdings LLC/Charter
Communications Holdings
Capital Corp.:
0%/11.75% Sr. Unsec. Sub. Disc.
Nts., 5/15/11 12 1,275,000 851,063
8.375% Sr. Nts., Second Lien,
4/30/14 7 3,003,000 3,003,000
- --------------------------------------------------------------------------------
Cinemark USA, Inc.,
9% Sr. Unsec. Sub. Nts., 2/1/13 300,000 309,750
- --------------------------------------------------------------------------------
Cinemark, Inc.,
0%/9.75% Sr. Unsec. Disc. Nts.,
3/15/14 12 500,000 335,000
- --------------------------------------------------------------------------------
Corus Entertainment, Inc.,
8.75% Sr. Sub. Nts., 3/1/12 300,000 323,250
- --------------------------------------------------------------------------------
CSC Holdings, Inc.,
7.625% Sr. Unsec. Unsub. Nts.,
Series B, 4/1/11 1,021,000 1,013,343
- --------------------------------------------------------------------------------
Dex Media East LLC/Dex Media
East Finance Co., 9.875% Sr.
Unsec. Nts., 11/15/09 200,000 221,500
- --------------------------------------------------------------------------------
Dex Media West LLC/
Dex Media
West Finance Co.:
5.875% Sr. Nts., 11/15/11 900,000 893,250
8.50% Sr. Nts., 8/15/10 300,000 328,500
9.875% Sr. Sub. Nts., 8/15/13 586,000 670,970
- --------------------------------------------------------------------------------
Dex Media, Inc.,
8% Unsec. Nts., 11/15/13 1,175,000 1,254,313
- --------------------------------------------------------------------------------
DirecTV Holdings LLC/DirecTV
Financing Co., Inc.,
8.375% Sr. Unsec. Nts., 3/15/13 776,000 863,300
- --------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 1,327,000 1,317,048
9.125% Sr. Nts., 1/15/09 936,000 999,180
- --------------------------------------------------------------------------------
Emmis Operating Co.,
6.875% Sr. Unsec. Sub. Nts., 5/15/12 600,000 597,000
- --------------------------------------------------------------------------------
Entravision Communications Corp.,
8.125% Sr. Sub. Nts., 3/15/09 400,000 418,500
- --------------------------------------------------------------------------------
Granite Broadcasting Corp.,
9.75% Sr. Sec. Nts., 12/1/10 619,000 578,765
- --------------------------------------------------------------------------------
Lin Television Corp.,
6.50% Sr. Sub. Nts., 5/15/13 400,000 382,000
- --------------------------------------------------------------------------------
LodgeNet Entertainment Corp.,
9.50% Sr. Sub. Debs., 6/15/13 200,000 219,000
- --------------------------------------------------------------------------------
Mediacom LLC/Mediacom
Capital Corp.,
9.50% Sr. Unsec. Nts., 1/15/13 969,000 971,423
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 $ 800,000 $ 771,000
6.875% Sr. Unsec. Sub. Nts.,
10/1/13 200,000 199,250
- --------------------------------------------------------------------------------
News America Holdings, Inc.,
8.875% Sr. Debs., 4/26/23 625,000 818,709
- --------------------------------------------------------------------------------
PanAmSat Corp.,
9% Sr. Unsec. Nts., 8/15/14 650,000 712,563
- --------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 900,000 906,750
8.875% Sr. Unsec. Nts., 5/15/11 19,000 19,998
- --------------------------------------------------------------------------------
R.H. Donnelley Corp.,
6.875% Sr. Nts., 1/15/13 7 500,000 512,500
- --------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I,
10.875% Sr. Sub. Nts., 12/15/12 7 400,000 467,000
- --------------------------------------------------------------------------------
Radio One, Inc.,
8.875% Sr. Unsec. Sub. Nts.,
Series B, 7/1/11 600,000 647,250
- --------------------------------------------------------------------------------
Rainbow National Services LLC,
8.75% Sr. Nts., 9/1/12 7 800,000 878,000
- --------------------------------------------------------------------------------
Shaw Communications, Inc.,
8.54% Debs., 9/30/27 [CAD] 340,000 288,606
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
8% Sr. Unsec. Sub. Nts., 3/15/12 975,000 1,004,250
8.75% Sr. Sub. Nts., 12/15/11 300,000 316,500
- --------------------------------------------------------------------------------
Spanish Broadcasting System, Inc.,
9.625% Sr. Unsec. Sub. Nts., 11/1/09 800,000 841,000
- --------------------------------------------------------------------------------
Vertis, Inc.,
9.75% Sr. Sec. Nts., 4/1/09 200,000 209,000
- --------------------------------------------------------------------------------
Weekly Reader Corp./
CompassLearning, Inc./ WRC
Media, Inc.,
12.75% Sr. Sub. Nts., 11/15/09 500,000 531,875
- --------------------------------------------------------------------------------
WMG Holdings Corp.,
0%/9.50% Sr. Disc. Nts., 12/15/14 7,12 857,000 595,615
------------
29,643,946
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.1%
Saks, Inc.:
8.25% Sr. Unsec. Nts., 11/15/08 700,000 739,375
9.875% Nts., 10/1/11 200,000 217,500
------------
956,875
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.2%
Asbury Automotive Group, Inc.,
9% Sr. Sub. Nts., 6/15/12 300,000 308,250
- --------------------------------------------------------------------------------
Atlantic Broadband Finance LLC,
9.375% Sr. Sub. Nts., 1/15/14 7 250,000 236,250
- --------------------------------------------------------------------------------
AutoNation, Inc.,
9% Sr. Unsec. Nts., 8/1/08 500,000 548,750
- --------------------------------------------------------------------------------
Boise Cascade LLC,
7.125% Sr. Sub. Nts., 10/15/14 7 450,000 444,375
16 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
SPECIALITY RETAIL Continued
Finlay Fine Jewelry Corp.,
8.375% Sr. Unsec. Nts., 6/1/12 $ 300,000 $ 271,875
- --------------------------------------------------------------------------------
Petco Animal Supplies, Inc.,
10.75% Sr. Sub. Nts., 11/1/11 200,000 224,000
- --------------------------------------------------------------------------------
Rent-A-Center, Inc.,
7.50% Sr. Unsec. Sub. Nts.,
Series B, 5/1/10 150,000 150,750
------------
2,184,250
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 7 867,000 951,533
- --------------------------------------------------------------------------------
Levi Strauss & Co.:
7.73% Sr. Unsec. Unsub. Nts., 4/1/12 2 440,000 418,000
12.25% Sr. Nts., 12/15/12 800,000 878,000
- --------------------------------------------------------------------------------
Oxford Industries, Inc.,
8.875% Sr. Nts., 6/1/11 250,000 268,750
- --------------------------------------------------------------------------------
Russell Corp., 9.25% Sr. Nts., 5/1/10 200,000 212,000
------------
2,728,283
- --------------------------------------------------------------------------------
CONSUMER STAPLES--0.9%
- --------------------------------------------------------------------------------
BEVERAGES--0.1%
Constellation Brands, Inc.,
8.125% Sr. Sub. Nts., 1/15/12 300,000 322,500
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.2%
Great Atlantic & Pacific Tea Co.,
Inc. (The),
9.125% Sr. Nts., 12/15/11 419,000 443,093
- --------------------------------------------------------------------------------
Jean Coutu Group (PJC), Inc. (The):
7.625% Sr. Unsec. Nts., 8/1/12 250,000 259,375
8.50% Sr. Sub. Nts., 8/1/14 600,000 595,500
- --------------------------------------------------------------------------------
Real Time Data Co.,
11% Disc. Nts., 5/31/09 1,3,4 142,981 --
- --------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 450,000 465,750
9.50% Sr. Sec. Nts., 2/15/11 200,000 214,000
------------
1,977,718
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.5%
American Seafoods Group LLC,
10.125% Sr. Sub. Nts., 4/15/10 200,000 214,500
- --------------------------------------------------------------------------------
Burns Philp Capital
Property Ltd.,
9.75% Sr. Unsec. Sub. Nts.,
7/15/12 450,000 486,000
- --------------------------------------------------------------------------------
Chiquita Brands
International, Inc.,
7.50% Sr. Unsec. Nts., 11/1/14 150,000 140,250
- --------------------------------------------------------------------------------
Del Monte Corp.:
6.75% Sr. Sub. Nts., 2/15/15 7 180,000 184,500
8.625% Sr. Sub. Nts., 12/15/12 400,000 442,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD PRODUCTS Continued
Doane Pet Care Co.:
9.75% Sr. Unsec. Sub. Nts., 5/15/07 $ 400,000 $ 391,000
10.75% Sr. Nts., 3/1/10 460,000 488,750
- --------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09 306,000 327,420
8.875% Sr. Unsec. Nts., 3/15/11 71,000 76,148
- --------------------------------------------------------------------------------
Hines Nurseries, Inc.,
10.25% Sr. Unsec. Sub. Nts., 10/1/11 200,000 207,000
- --------------------------------------------------------------------------------
Pinnacle Foods Holding Corp.,
8.25% Sr. Sub. Nts., 12/1/13 100,000 90,000
- --------------------------------------------------------------------------------
Smithfield Foods, Inc.,
7.625% Sr. Unsec. Sub. Nts.,
2/15/08 400,000 418,000
- --------------------------------------------------------------------------------
United Biscuits Finance plc,
10.75% Sr. Sub. Nts.,
4/15/11 1 [GBP] 400,000 725,637
------------
4,191,205
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.1%
Church & Dwight Co., Inc.,
6% Sr. Unsec. Sub. Nts., 12/15/12 350,000 355,250
- --------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 500,000 536,875
9.375% Sr. Unsec. Sub. Nts., 6/1/11 200,000 211,500
------------
1,103,625
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.0%
Elizabeth Arden, Inc.,
7.75% Sr. Unsec. Sub. Nts., 1/15/14 175,000 183,313
- --------------------------------------------------------------------------------
TOBACCO--0.0%
R.J. Reynolds Tobacco Holdings,
Inc., 6.50% Nts., 7/15/10 7 220,000 220,550
- --------------------------------------------------------------------------------
ENERGY--2.8%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.2%
Dresser, Inc.,
9.375% Sr. Sub. Nts., 4/15/11 300,000 317,250
- --------------------------------------------------------------------------------
Hanover Compressor Co.,
8.625% Sr. Nts., 12/15/10 300,000 318,750
- --------------------------------------------------------------------------------
Hanover Equipment Trust 2001A,
8.50% Sr. Sec. Nts., Series A, 9/1/08 500,000 522,500
- --------------------------------------------------------------------------------
Petroleum Helicopters, Inc.,
9.375% Sr. Nts., 5/1/09 200,000 211,500
- --------------------------------------------------------------------------------
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts., 5/15/10 400,000 420,000
------------
1,790,000
- --------------------------------------------------------------------------------
OIL & GAS--2.6%
Chesapeake Energy Corp.:
6.375% Sr. Nts., 6/15/15 7 250,000 257,500
6.875% Sr. Unsec. Nts., 1/15/16 822,000 861,045
17 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Delta Petroleum Corp.,
7% Sr. Nts., 4/1/15 7 $ 140,000 $ 132,300
- --------------------------------------------------------------------------------
El Paso Corp.,
7.875% Sr. Unsec. Nts., 6/15/12 1,584,000 1,639,440
- --------------------------------------------------------------------------------
El Paso Energy Corp.,
7.625% Nts., 7/15/11 200,000 202,500
- --------------------------------------------------------------------------------
El Paso Production Holding Co.,
7.75% Sr. Unsec. Nts., 6/1/13 1,219,000 1,307,378
- --------------------------------------------------------------------------------
Forest Oil Corp.,
7.75% Sr. Nts., 5/1/14 300,000 324,000
- --------------------------------------------------------------------------------
Frontier Oil Corp.,
6.625% Sr. Unsec. Nts., 10/1/11 200,000 207,000
- --------------------------------------------------------------------------------
Gazprom International SA,
7.201% Sr. Unsec. Bonds, 2/1/20 3,574,000 3,863,744
- --------------------------------------------------------------------------------
Newfield Exploration Co.:
6.625% Sr. Unsec. Sub. Nts., 9/1/14 600,000 631,500
8.375% Sr. Sub. Nts., 8/15/12 500,000 548,750
- --------------------------------------------------------------------------------
Pemex Project Funding Master
Trust:
7.375% Unsec. Unsub. Nts.,
12/15/14 740,000 831,760
8.50% Unsub. Nts., 2/15/08 420,000 460,950
9.125% Unsec. Unsub. Nts.,
10/13/10 610,000 715,835
- --------------------------------------------------------------------------------
Plains Exploration & Production
Co., 7.125% Sr. Nts., 6/15/14 300,000 322,500
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc.:
6.75% Sr. Nts., 5/1/14 350,000 378,875
9.50% Sr. Nts., 2/1/13 835,000 964,425
- --------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 230,000 230,000
7.375% Sr. Sub. Nts., 7/15/13 200,000 214,000
- --------------------------------------------------------------------------------
Southern Natural Gas Co.,
8% Sr. Unsub. Nts., 3/1/32 300,000 342,688
- --------------------------------------------------------------------------------
Stone Energy Corp.,
6.75% Sr. Unsec. Sub. Nts., 12/15/14 520,000 508,300
- --------------------------------------------------------------------------------
Tengizchevroil LLP,
6.124% Nts., 11/15/14 7 2,123,000 2,181,383
- --------------------------------------------------------------------------------
Tennessee Gas Pipeline Co.,
7.50% Bonds, 4/1/17 1,567,000 1,743,529
- --------------------------------------------------------------------------------
Tesoro Petroleum Corp.:
8% Sr. Sec. Nts., 4/15/08 928,000 983,680
9.625% Sr. Sub. Nts., 4/1/12 19,000 21,114
- --------------------------------------------------------------------------------
Whiting Petroleum Corp.,
7.25% Sr. Sub. Nts., 5/1/12 400,000 412,000
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 500,000 542,500
7.625% Nts., 7/15/19 928,000 1,048,640
8.75% Unsec. Nts., 3/15/32 1,219,000 1,470,419
- --------------------------------------------------------------------------------
XTO Energy, Inc.,
7.50% Sr. Nts., 4/15/12 500,000 575,851
------------
23,923,606
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FINANCIALS--2.0%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.1%
American Color Graphics, Inc.,
10% Sr. Sec. Nts., 6/15/10 $ 200,000 $ 145,000
- --------------------------------------------------------------------------------
Berry Plastics Corp.,
10.75% Sr. Sub. Nts., 7/15/12 750,000 822,188
------------
967,188
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.2%
Bank Plus Corp.,
12% Sr. Nts., 7/18/07 1 7,000 7,525
- --------------------------------------------------------------------------------
BankUnited Capital Trust,
10.25% Capital Securities,
12/31/26 1 100,000 109,250
- --------------------------------------------------------------------------------
Dresdner Bank AG (Ukreximbank),
8.75% Bonds, 2/10/10 760,000 799,900
- --------------------------------------------------------------------------------
HSBC Bank plc:
9.75% Sr. Unsec. Nts., 7/8/09 8 1,960,000 1,264,200
11.60% Sr. Unsec. Nts., 1/12/10 8 2,510,000 1,409,365
12.28% Sr. Unsec. Nts., 3/9/09 8 1,960,000 1,190,700
- --------------------------------------------------------------------------------
Inter-American Development
Bank:
3.95% Nts., 1/25/12 1 [COP] 1,237,000,000 542,341
6.26% Nts., 12/8/09 1,2 [BRR] 920,000 376,914
- --------------------------------------------------------------------------------
Ongko International Finance
Co. BV,
10.50% Sec. Nts., 3/29/10 1,3,4 90,000 --
- --------------------------------------------------------------------------------
UBS Luxembourg SA,
6.23% Sub. Nts., 2/11/15 2 2,500,000 2,540,738
- --------------------------------------------------------------------------------
VTB Capital SA,
6.25% Bonds, 7/2/35 1 1,870,000 1,888,700
- --------------------------------------------------------------------------------
Western Financial Bank,
9.625% Unsec. Sub. Debs., 5/15/12 500,000 547,500
------------
10,677,133
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.3%
Affinia Group, Inc.,
9% Sr. Sub. Nts., 11/30/14 7 200,000 169,000
- --------------------------------------------------------------------------------
American Commercial Lines LLC/
American Commercial Lines
Finance Corp.,
9.50% Sr. Nts., 2/15/15 7 135,000 143,100
- --------------------------------------------------------------------------------
Argentine Beverages
Financial Trust,
7.375% Bonds, 3/22/12 7 490,000 501,025
- --------------------------------------------------------------------------------
Crystal US Holdings 3 LLC/
Crystal US Sub 3 Corp.:
0%/10.50% Sr. Unsec. Disc. Nts.,
Series B, 10/1/14 12 570,000 399,000
9.625% Sr. Sub. Nts., 6/15/14 813,000 914,625
- --------------------------------------------------------------------------------
Global Cash Access LLC/Global
Cash Finance Corp.,
8.75% Sr. Sub. Nts., 3/15/12 275,000 300,438
18 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
JSG Funding plc,
7.75% Sr. Sub. Nts., 4/1/15 7 $ 330,000 $ 272,250
- --------------------------------------------------------------------------------
SBS Agro Finance BV,
10.25% Bonds, 7/21/00 1,3,4 339,000 --
- --------------------------------------------------------------------------------
Universal City Florida:
7.96% Sr. Unsec. Nts., 5/1/10 2 130,000 135,525
8.375% Sr. Unsec. Nts., 5/1/10 130,000 136,175
------------
2,971,138
- --------------------------------------------------------------------------------
REAL ESTATE--0.4%
American Casino & Entertainment
Properties LLC,
7.85% Sr. Sec. Nts., 2/1/12 500,000 532,500
- --------------------------------------------------------------------------------
Felcor Lodging LP,
9% Sr. Nts., 6/1/11 425,000 466,438
- --------------------------------------------------------------------------------
HMH Properties, Inc.,
7.875% Sr. Nts., Series B, 8/1/08 89,000 90,780
- --------------------------------------------------------------------------------
Host Marriott LP:
6.375% Sr. Nts., 3/15/15 7 530,000 527,350
9.50% Sr. Nts., 1/15/07 400,000 426,000
- --------------------------------------------------------------------------------
MeriStar Hospitality Corp.,
9.125% Sr. Unsec. Nts., 1/15/11 946,000 998,030
- --------------------------------------------------------------------------------
Trustreet Properties, Inc.,
7.50% Sr. Nts., 4/1/15 7 400,000 411,000
------------
3,452,098
- --------------------------------------------------------------------------------
HEALTH CARE--2.0%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Titan Petrochemicals Group Ltd.,
8.50% Sr. Unsec. Nts., 3/18/12 7 846,000 774,090
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.1%
Inverness Medical Innovations, Inc.,
8.75% Sr. Sub. Nts., 2/15/12 350,000 349,125
- --------------------------------------------------------------------------------
Sybron Dental Specialties, Inc.,
8.125% Sr. Sub. Nts., 6/15/12 300,000 322,500
- --------------------------------------------------------------------------------
Universal Hospital Services, Inc.,
10.125% Sr. Unsec. Nts., 11/1/11 300,000 304,500
------------
976,125
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.7%
Alderwoods Group, Inc.,
7.75% Sr. Nts., 9/15/12 7 450,000 479,813
- --------------------------------------------------------------------------------
AmeriPath, Inc.,
10.50% Sr. Unsec. Sub. Nts., 4/1/13 300,000 305,250
- --------------------------------------------------------------------------------
Beverly Enterprises, Inc.,
7.875% Sr. Sub. Nts., 6/15/14 300,000 328,500
- --------------------------------------------------------------------------------
Community Health Systems, Inc.,
6.50% Sr. Unsec. Sub. Nts., 12/15/12 400,000 409,000
- --------------------------------------------------------------------------------
Coventry Health Care, Inc.,
6.125% Sr. Unsec. Nts., 1/15/15 1 225,000 230,063
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
DaVita, Inc.:
6.625% Sr. Nts., 3/15/13 7 $ 465,000 $ 482,438
7.25% Sr. Sub. Nts., 3/15/15 7 375,000 387,188
- --------------------------------------------------------------------------------
Extendicare Health Services, Inc.:
6.875% Sr. Sub. Nts., 5/1/14 300,000 299,250
9.50% Sr. Unsec. Sub. Nts., 7/1/10 300,000 325,500
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust II, 7.875% Nts., 2/1/08 900,000 942,750
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust III, 7.375% Nts., 2/1/08 1 [DEM] 25,000 16,397
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust IV, 7.875% Trust Preferred
Nts., 6/15/11 600,000 648,000
- --------------------------------------------------------------------------------
Genesis HealthCare Corp.,
8% Sr. Sub. Nts., 10/15/13 200,000 217,500
- --------------------------------------------------------------------------------
HCA, Inc.:
6.30% Sr. Unsec. Nts., 10/1/12 1,219,000 1,254,332
6.375% Nts., 1/15/15 1,871,000 1,946,042
- --------------------------------------------------------------------------------
HealthSouth Corp.:
7.625% Nts., 6/1/12 1,067,000 1,040,325
10.75% Sr. Unsec. Sub. Nts., 10/1/08 19,000 19,855
- --------------------------------------------------------------------------------
Magellan Health Services, Inc.,
9.375% Sr. Unsec. Nts.,
Series A, 11/15/08 653,675 699,432
- --------------------------------------------------------------------------------
Medquest, Inc.,
11.875% Sr. Unsec. Sub. Nts.,
Series B, 8/15/12 600,000 570,000
- --------------------------------------------------------------------------------
NDCHealth Corp.,
10.50% Sr. Unsec. Sub. Nts., 12/1/12 250,000 266,875
- --------------------------------------------------------------------------------
PacifiCare Health Systems, Inc.,
10.75% Sr. Unsec. Unsub. Nts.,
6/1/09 585,000 646,425
- --------------------------------------------------------------------------------
Psychiatric Solutions, Inc.,
7.75% Sr. Sub. Nts., 7/15/15 7 220,000 220,825
- --------------------------------------------------------------------------------
Quintiles Transnational Corp.,
10% Sr. Sub. Nts., 10/1/13 300,000 330,000
- --------------------------------------------------------------------------------
Select Medical Corp.,
7.625% Sr. Sub. Nts., 2/1/15 7 450,000 447,750
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 482,000 461,515
7.375% Nts., 2/1/13 19,000 18,858
9.875% Sr. Nts., 7/1/14 882,000 950,355
- --------------------------------------------------------------------------------
Triad Hospitals, Inc.:
7% Sr. Nts., 5/15/12 200,000 209,500
7% Sr. Sub. Nts., 11/15/13 925,000 955,063
- --------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 300,000 322,500
10.75% Sr. Unsec. Sub. Nts., 8/15/14 300,000 328,500
------------
15,759,801
19 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.1%
Valeant Pharmaceuticals
International, Inc.,
7% Sr. Nts., 12/15/11 $ 350,000 $ 344,750
- --------------------------------------------------------------------------------
INDUSTRIALS--2.0%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.4%
Alliant Techsystems, Inc.,
8.50% Sr. Unsec. Sub. Nts., 5/15/11 300,000 321,750
- --------------------------------------------------------------------------------
BE Aerospace, Inc.:
8.50% Sr. Unsec. Nts., 10/1/10 200,000 222,000
8.875% Sr. Unsec. Sub. Nts., 5/1/11 219,000 229,950
- --------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 583,000 568,425
6.125% Sr. Unsec. Sub. Nts.,
1/15/14 400,000 402,000
- --------------------------------------------------------------------------------
Rexnord Corp.,
10.125% Sr. Unsec. Sub. Nts.,
12/15/12 350,000 385,000
- --------------------------------------------------------------------------------
TD Funding Corp.,
8.375% Sr. Sub. Nts., 7/15/11 400,000 426,000
- --------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 223,000 248,088
11% Sr. Sub. Nts., 2/15/13 194,000 224,070
- --------------------------------------------------------------------------------
Vought Aircraft Industries, Inc.,
8% Sr. Nts., 7/15/11 200,000 199,000
------------
3,226,283
- --------------------------------------------------------------------------------
AIRLINES--0.0%
AMR Corp., 9% Debs., 8/1/12 50,000 39,500
- --------------------------------------------------------------------------------
ATA Holdings Corp.,
13% Sr. Unsec. Nts., 2/1/09 3,4 735,000 143,325
------------
182,825
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.1%
Associated Materials, Inc.,
9.75% Sr. Sub. Nts., 4/15/12 200,000 208,000
- --------------------------------------------------------------------------------
Goodman Global Holding Co., Inc.,
7.875% Sr. Sub. Nts., 12/15/12 7 170,000 158,100
- --------------------------------------------------------------------------------
Jacuzzi Brands, Inc.,
9.625% Sr. Sec. Nts., 7/1/10 311,000 342,100
- --------------------------------------------------------------------------------
Nortek, Inc.,
8.50% Sr. Unsec. Unsub. Nts., 9/1/14 250,000 233,750
- --------------------------------------------------------------------------------
North America Energy
Partners, Inc.,
8.75% Sr. Unsec. Nts., 12/1/11 150,000 129,750
------------
1,071,700
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.5%
Allied Waste North America, Inc.:
7.25% Sr. Nts., 3/15/15 7 $ 180,000 $ 175,050
7.375% Sr. Sec. Nts., Series B, 4/15/14 500,000 465,000
8.875% Sr. Nts., Series B, 4/1/08 800,000 844,000
9.25% Sr. Sec. Debs., Series B, 9/1/12 434,000 470,890
- --------------------------------------------------------------------------------
Cenveo Corp.,
7.875% Sr. Sub. Nts., 12/1/13 1,000,000 955,000
- --------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 460,000 458,850
7.50% Sr. Nts., 5/1/11 200,000 209,250
- --------------------------------------------------------------------------------
Mail-Well I Corp.,
9.625% Sr. Nts., 3/15/12 400,000 434,000
------------
4,012,040
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.2%
Belden & Blake Corp.,
8.75% Sec. Nts., 7/15/12 325,000 320,125
- --------------------------------------------------------------------------------
Dayton Superior Corp.,
13% Sr. Unsec. Sub. Nts., 6/15/09 200,000 177,000
- --------------------------------------------------------------------------------
Eletropaulo Metropolitana SA,
19.125% Nts., 6/28/10 1 [BRR] 2,204,000 951,588
- --------------------------------------------------------------------------------
General Cable Corp.,
9.50% Sr. Nts., 11/15/10 200,000 215,000
- --------------------------------------------------------------------------------
Tennessee Gas Pipeline Co.,
7% Sr. Unsec. Debs., 10/15/28 500,000 512,912
------------
2,176,625
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.0%
Great Lakes Dredge & Dock Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/13 120,000 91,500
- --------------------------------------------------------------------------------
MACHINERY--0.4%
Case New Holland, Inc.,
9.25% Sr. Nts., 8/1/11 7 225,000 237,375
- --------------------------------------------------------------------------------
Douglas Dynamics LLC,
7.75% Sr. Nts., 1/15/12 7 300,000 295,500
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc. (The),
8.375% Sr. Nts., 5/15/15 7 380,000 388,550
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The),
10.50% Sr. Sub. Nts., 8/1/12 325,000 368,875
- --------------------------------------------------------------------------------
Milacron Escrow Corp.,
11.50% Sr. Sec. Nts., 5/15/11 700,000 738,500
- --------------------------------------------------------------------------------
Navistar International Corp.,
7.50% Sr. Nts., 6/15/11 400,000 410,000
- --------------------------------------------------------------------------------
NMHG Holding Co.,
10% Sr. Nts., 5/15/09 300,000 316,500
- --------------------------------------------------------------------------------
Terex Corp.,
9.25% Sr. Unsec. Sub. Nts., 7/15/11 400,000 436,000
- --------------------------------------------------------------------------------
Trinity Industries, Inc.,
6.50% Sr. Nts., 3/15/14 300,000 300,000
------------
3,491,300
20 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MARINE--0.1%
CP Ships Ltd.,
10.375% Sr. Nts., 7/15/12 $ 600,000 $ 675,000
- --------------------------------------------------------------------------------
Navigator Gas Transport plc,
10.50% First Priority Ship Mtg.
Nts., 6/30/07 1,3,4 128,000 112,000
- --------------------------------------------------------------------------------
WPO Shipholding Co. LLC,
12% Sr. Sec. Nts., 7/15/05 1,3,4 250,000 1,400
------------
788,400
- --------------------------------------------------------------------------------
ROAD & RAIL--0.2%
Kansas City Southern Railway
Co. (The),
7.50% Sr. Nts., 6/15/09 400,000 415,000
- --------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 450,000 419,625
7.50% Sr. Unsec. Nts., 11/1/13 387,000 383,130
9.625% Sr. Nts., 12/1/12 250,000 273,750
------------
1,491,505
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.1%
United Rentals, Inc.,
7% Sr. Sub. Nts., 2/15/14 1,200,000 1,149,000
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.0%
Horizon Lines LLC,
9% Nts., 11/1/12 7 300,000 315,750
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.1%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.2%
Lucent Technologies, Inc.,
6.45% Unsec. Debs., 3/15/29 1,160,000 1,044,000
- --------------------------------------------------------------------------------
Orion Network Systems, Inc.,
12.50% Sr. Unsub. Disc. Nts.,
1/15/07 1,3,4 675,000 371,250
------------
1,415,250
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.0%
Seagate Technology Hdd Holdings,
8% Sr. Nts., 5/15/09 200,000 213,750
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Flextronics International Ltd.,
6.25% Sr. Sub. Nts., 11/15/14 1,021,000 1,018,448
- --------------------------------------------------------------------------------
Ingram Micro, Inc.,
9.875% Sr. Unsec. Sub. Nts., 8/15/08 700,000 740,250
- --------------------------------------------------------------------------------
LCE Acquisition Corp.,
9% Sr. Sub. Nts., 8/1/14 7 425,000 413,313
- --------------------------------------------------------------------------------
Sanmina-SCI Corp.,
6.75% Sub. Nts., 3/1/13 7 520,000 499,200
- --------------------------------------------------------------------------------
Sensus Metering System, Inc.,
8.625% Sr. Unsec. Sub. Nts., 12/15/13 450,000 420,750
------------
3,091,961
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 1,3,4 [EUR] 338,620 $ 4,098
- --------------------------------------------------------------------------------
NorthPoint Communications
Group, Inc.,
12.875% Nts., 2/15/10 1,3,4 200,173 --
- --------------------------------------------------------------------------------
PSINet, Inc.,
10.50% Sr. Unsec. Nts.,
12/1/06 1,3,4 [EUR] 100,000 --
------------
4,098
- --------------------------------------------------------------------------------
IT SERVICES--0.1%
DynCorp International LLC,
9.50% Sr. Sub. Nts., 2/15/13 7 665,000 621,775
- --------------------------------------------------------------------------------
Iron Mountain, Inc.,
7.75% Sr. Sub. Nts., 1/15/15 400,000 404,000
- --------------------------------------------------------------------------------
Titan Corp. (The),
8% Sr. Sub. Nts., 5/15/11 100,000 107,750
------------
1,133,525
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.4%
Advanced Micro Devices, Inc.,
7.75% Sr. Unsec. Nts., 11/1/12 975,000 965,250
- --------------------------------------------------------------------------------
Amkor Technology, Inc.,
9.25% Sr. Unsec. Sub. Nts., 2/15/08 250,000 241,250
- --------------------------------------------------------------------------------
Freescale Semiconductor, Inc.,
7.125% Sr. Unsec. Nts., 7/15/14 450,000 486,000
- --------------------------------------------------------------------------------
Huntsman International LLC,
7.375% Sr. Sub. Nts., 1/1/15 7 1,510,000 1,498,675
- --------------------------------------------------------------------------------
MagnaChip Semiconductor Ltd.,
8% Sr. Sub. Nts., 12/15/14 7 87,000 83,955
- --------------------------------------------------------------------------------
Micron Technology, Inc.,
6.50% Sub. Nts., 9/30/05 476,190 473,810
------------
3,748,940
- --------------------------------------------------------------------------------
MATERIALS--3.6%
- --------------------------------------------------------------------------------
CHEMICALS--1.0%
AEP Industries, Inc.,
7.875% Sr. Nts., 3/15/13 7 140,000 141,010
- --------------------------------------------------------------------------------
Compass Minerals Group, Inc.,
10% Sr. Sub. Nts., 8/15/11 200,000 219,000
- --------------------------------------------------------------------------------
Crompton Corp.,
9.875% Sr. Nts., 8/1/12 350,000 407,750
- --------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar
Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 550,000 581,625
10.125% Sr. Unsec. Nts., 9/1/08 19,000 20,663
10.625% Sr. Unsec. Nts., 5/1/11 600,000 665,250
21 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CHEMICALS Continued
Huntsman Corp./ICI
Chemical Co. plc:
10.125% Sr. Unsec. Sub. Nts.,
7/1/09 1 [EUR] 123,000 $ 151,640
10.125% Sr. Unsec. Sub. Nts.,
7/1/09 853,000 881,789
- --------------------------------------------------------------------------------
Huntsman International LLC,
9.875% Sr. Nts., 3/1/09 850,000 913,750
- --------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 2 198,000 233,145
11.625% Sr. Unsec. Nts., 10/15/10 13,000 15,291
- --------------------------------------------------------------------------------
IMC Global, Inc.,
10.875% Sr. Unsec. Nts., 8/1/13 19,000 22,373
- --------------------------------------------------------------------------------
Innophos, Inc.,
8.875% Sr. Sub. Nts., 8/15/14 7 550,000 563,750
- --------------------------------------------------------------------------------
ISP Holdings, Inc.,
10.625% Sr. Sec. Nts., 12/15/09 200,000 216,000
- --------------------------------------------------------------------------------
KI Holdings, Inc.,
0%/9.875% Sr. Unsec. Sub. Disc. Nts.,
11/15/14 12 350,000 204,750
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 19,000 20,306
9.625% Sr. Sec. Nts., Series A, 5/1/07 200,000 214,500
9.875% Sec. Nts., Series B, 5/1/07 278,000 286,340
10.50% Sr. Sec. Nts., 6/1/13 600,000 689,250
- --------------------------------------------------------------------------------
Millennium America, Inc.,
9.25% Sr. Unsec. Sub. Nts., 6/15/08 100,000 108,750
- --------------------------------------------------------------------------------
PCI Chemicals Canada,
10% Sr. Sec. Nts., 12/31/08 113,061 120,410
- --------------------------------------------------------------------------------
Pioneer Cos., Inc.,
6.99% Sr. Sec. Nts., 12/31/06 2 4,940 4,965
- --------------------------------------------------------------------------------
PolyOne Corp.:
8.875% Sr. Unsec. Nts., 5/1/12 761,000 755,293
10.625% Sr. Unsec. Nts., 5/15/10 19,000 20,188
- --------------------------------------------------------------------------------
Resolution Performance
Products LLC:
8% Sr. Sec. Nts., 12/15/09 250,000 261,250
13.50% Sr. Unsec. Sub. Nts.,
11/15/10 100,000 108,000
- --------------------------------------------------------------------------------
Rhodia SA,
10.25% Sr. Unsec. Nts., 6/1/10 430,000 463,325
- --------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.,
7.50% Sr. Sub. Nts., 11/15/14 7 200,000 199,500
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc.,
10% Sr. Sec. Nts., 12/19/07 1,13 170,473 169,621
- --------------------------------------------------------------------------------
Westlake Chemical Corp.,
8.75% Sr. Nts., 7/15/11 260,000 284,050
------------
8,943,534
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.1%
NTK Holdings, Inc.,
0%/10.75% Sr. Disc. Nts., 3/1/14 7,12 $ 725,000 $ 344,375
- --------------------------------------------------------------------------------
Texas Industries, Inc.,
10.25% Sr. Unsec. Nts., 6/15/11 400,000 465,500
------------
809,875
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.9%
Crown Euro Holdings SA:
9.50% Sr. Sec. Nts., 3/1/11 500,000 555,000
10.875% Sr. Sec. Nts., 3/1/13 200,000 236,000
- --------------------------------------------------------------------------------
Graham Packaging Co., Inc.:
8.50% Sr. Nts., 10/15/12 7 200,000 203,000
9.875% Sub. Nts., 10/15/14 7 300,000 302,250
- --------------------------------------------------------------------------------
Graphic Packaging
International Corp.:
8.50% Sr. Nts., 8/15/11 500,000 517,500
9.50% Sr. Sub. Nts., 8/15/13 350,000 354,375
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
7.50% Sr. Unsec. Unsub. Nts., 6/1/13 300,000 288,000
8.25% Sr. Unsec. Nts., 10/1/12 250,000 252,500
- --------------------------------------------------------------------------------
MDP Acquisitions plc,
9.625% Sr. Nts., 10/1/12 400,000 402,000
- --------------------------------------------------------------------------------
Owens-Brockway Glass
Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 450,000 480,375
8.25% Sr. Unsec. Nts., 5/15/13 419,000 457,234
8.75% Sr. Sec. Nts., 11/15/12 928,000 1,027,760
8.875% Sr. Sec. Nts., 2/15/09 200,000 213,500
- --------------------------------------------------------------------------------
Pliant Corp.,
11.625% Sr. Sec. Nts., 6/15/09 7,13 340,393 365,922
- --------------------------------------------------------------------------------
Solo Cup Co.,
8.50% Sr. Sub. Nts., 2/15/14 500,000 470,000
- --------------------------------------------------------------------------------
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12 850,000 862,750
9.25% Sr. Unsec. Nts., 2/1/08 200,000 210,000
9.75% Sr. Unsec. Nts., 2/1/11 600,000 637,500
- --------------------------------------------------------------------------------
Stone Container Finance Co. of
Canada II,
7.375% Sr. Unsec. Nts., 7/15/14 300,000 283,500
- --------------------------------------------------------------------------------
Tekni-Plex, Inc.,
10.875% Sr. Sec. Nts., 8/15/12 7 125,000 135,625
- --------------------------------------------------------------------------------
TriMas Corp.,
9.875% Sr. Unsec. Sub. Nts.,
6/15/12 700,000 591,500
------------
8,846,291
22 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING--1.0%
AK Steel Corp.:
7.75% Sr. Unsec. Nts., 6/15/12 $ 519,000 $ 441,150
7.875% Sr. Unsec. Nts., 2/15/09 500,000 457,500
- --------------------------------------------------------------------------------
Alrosa Finance SA,
8.875% Nts., 11/17/14 7 880,000 998,800
- --------------------------------------------------------------------------------
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 400,000 415,000
- --------------------------------------------------------------------------------
California Steel Industries, Inc.,
6.125% Sr. Nts., 3/15/14 300,000 280,500
- --------------------------------------------------------------------------------
Century Aluminum Co.,
7.50% Sr. Unsec. Nts., 8/15/14 600,000 595,500
- --------------------------------------------------------------------------------
Foundation PA Coal Co.,
7.25% Sr. Unsec. Nts., 8/1/14 250,000 263,750
- --------------------------------------------------------------------------------
IMCO Recycling, Inc.,
10.375% Sr. Sec. Nts., 10/15/10 300,000 330,750
- --------------------------------------------------------------------------------
International Utility Structures, Inc.,
13% Unsec. Sub. Nts., 2/1/08 1,3,4 71,000 --
- --------------------------------------------------------------------------------
Ispat Inland ULC,
9.75% Sr. Sec. Nts., 4/1/14 585,000 684,450
- --------------------------------------------------------------------------------
Jorgensen (Earle M.) Co.,
9.75% Sr. Sec. Nts., 6/1/12 500,000 542,500
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical
Corp., 10.875% Sr. Nts., Series B,
10/15/06 3,4 500,000 457,500
- --------------------------------------------------------------------------------
Koppers Industry, Inc.,
9.875% Sr. Sec. Nts., 10/15/13 300,000 325,500
- --------------------------------------------------------------------------------
Massey Energy Co.,
6.625% Sr. Nts., 11/15/10 200,000 207,000
- --------------------------------------------------------------------------------
Novelis, Inc.,
7.25% Sr. Nts., 2/15/15 7 675,000 680,906
- --------------------------------------------------------------------------------
Oregon Steel Mills, Inc.,
10% Sr. Nts., 7/15/09 400,000 433,000
- --------------------------------------------------------------------------------
Peabody Energy Corp.,
6.875% Sr. Unsec. Nts.,
Series B, 3/15/13 400,000 426,000
- --------------------------------------------------------------------------------
Steel Dynamics, Inc.,
9.50% Sr. Nts., 3/15/09 200,000 213,500
- --------------------------------------------------------------------------------
UCAR Finance, Inc.,
10.25% Sr. Nts., 2/15/12 300,000 317,250
- --------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts., 5/15/10 336,000 364,560
10.75% Sr. Nts., 8/1/08 519,000 578,685
------------
9,013,801
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.6%
Abitibi-Consolidated, Inc.,
8.55% Nts., 8/1/10 200,000 209,500
- --------------------------------------------------------------------------------
Appleton Papers, Inc.,
8.125% Sr. Nts., 6/15/11 300,000 294,000
- --------------------------------------------------------------------------------
Buckeye Technologies, Inc.,
8.50% Sr. Nts., 10/1/13 100,000 102,500
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS Continued
Fort James Corp.,
6.875% Sr. Nts., 9/15/07 $ 500,000 $ 522,500
- --------------------------------------------------------------------------------
Georgia-Pacific Corp.:
8.125% Sr. Unsec. Nts., 5/15/11 914,000 1,035,105
9.375% Sr. Unsec. Nts., 2/1/13 1,088,000 1,236,240
- --------------------------------------------------------------------------------
Inland Fiber Group LLC,
9.625% Sr. Unsec. Nts., 11/15/07 1,3,4 600,000 267,000
- --------------------------------------------------------------------------------
JSG Holding plc,
11.50% Sr. Nts., 10/1/15 7,13 [EUR] 142,728 139,042
- --------------------------------------------------------------------------------
Mercer International, Inc.,
9.25% Sr. Nts., 2/15/13 315,000 253,575
- --------------------------------------------------------------------------------
Norske Skog Canada Ltd.,
7.375% Sr. Unsec. Nts., 3/1/14 300,000 295,500
- --------------------------------------------------------------------------------
Tekni-Plex, Inc.:
8.75% Sr. Sec. Nts., 11/15/13 7 669,000 597,083
12.75% Sr. Unsec. Sub. Nts.,
Series B, 6/15/10 200,000 138,000
- --------------------------------------------------------------------------------
Tembec Industries, Inc.,
8.50% Sr. Unsec. Nts., 2/1/11 19,000 14,773
- --------------------------------------------------------------------------------
Western Forest Products, Inc.,
15% Sec. Nts., 7/28/09 1,13 187,000 194,480
------------
5,299,298
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.2%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.5%
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 250,000 265,625
9.375% Sr. Nts., 2/1/09 133,000 140,149
- --------------------------------------------------------------------------------
Cincinnati Bell, Inc.:
7% Sr. Nts., 2/15/15 7 450,000 442,125
8.375% Sr. Sub. Nts., 1/15/14 7 160,000 164,800
- --------------------------------------------------------------------------------
Citizens Communications Co.,
6.25% Sr. Nts., 1/15/13 7 530,000 515,425
- --------------------------------------------------------------------------------
Intelsat Bermuda Ltd.,
8.625% Sr. Nts., 1/15/15 7 800,000 848,000
- --------------------------------------------------------------------------------
Level 3 Communications, Inc.,
9.125% Sr. Unsec. Nts., 5/1/08 700,000 584,500
- --------------------------------------------------------------------------------
MCI, Inc.:
6.908% Sr. Unsec. Nts., 5/1/07 2 468,000 475,605
7.688% Sr. Unsec. Nts., 5/1/09 2 1,350,000 1,409,063
- --------------------------------------------------------------------------------
PanAmSat Holding Corp.,
0%/10.375% Sr. Unsec. Disc. Nts.,
11/1/14 12 225,000 155,813
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc.,
7.90% Unsec. Nts., 8/15/10 1,019,000 1,019,000
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc.,
7.25% Sr. Unsec. Sub. Nts., 2/15/11 2 300,000 291,750
- --------------------------------------------------------------------------------
Qwest Corp.,
8.875% Nts., 3/15/12 2,7 800,000 874,000
23 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Qwest Services Corp.:
13.50% Sr. Sec. Sub. Nts., 12/15/10 $ 2,350,000 $ 2,726,000
14% Sr. Sec. Sub. Nts., 12/15/14 1,175,000 1,430,563
- --------------------------------------------------------------------------------
Teligent, Inc.,
11.50% Sr. Nts., 12/1/07 1,3,4 500,000 --
- --------------------------------------------------------------------------------
Telus Corp.,
7.50% Nts., 6/1/07 790,000 836,113
- --------------------------------------------------------------------------------
Time Warner Telecom
Holdings, Inc.,
9.25% Sr. Nts., 2/15/14 7 450,000 436,500
- --------------------------------------------------------------------------------
Time Warner Telecom LLC/
Time Warner Telecom, Inc.,
9.75% Sr. Nts., 7/15/08 150,000 151,500
- --------------------------------------------------------------------------------
Time Warner Telecom, Inc.,
10.125% Sr. Unsec. Sub. Nts., 2/1/11 450,000 452,250
- --------------------------------------------------------------------------------
Valor Telecommunications
Enterprises LLC,
7.75% Sr. Nts., 2/15/15 7 225,000 222,188
- --------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 1,3,4 250,000 --
------------
13,440,969
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.7%
Alamosa Delaware, Inc.:
8.50% Sr. Nts., 1/31/12 700,000 737,625
11% Sr. Unsec. Nts., 7/31/10 19,000 21,399
12.50% Sr. Unsec. Nts., 2/1/11 50,000 56,750
- --------------------------------------------------------------------------------
American Cellular Corp.,
10% Sr. Nts., Series B, 8/1/11 320,000 326,400
- --------------------------------------------------------------------------------
American Tower Corp.,
7.50% Sr. Nts., 5/1/12 400,000 429,000
- --------------------------------------------------------------------------------
American Tower Escrow Corp.,
12.25% Sr. Sub. Disc. Nts., 8/1/08 8 800,000 618,000
- --------------------------------------------------------------------------------
AT&T Corp.:
9.05% Sr. Unsec. Nts., 11/15/11 2 592,000 685,240
9.75% Sr. Nts., 11/15/31 2 500,000 653,125
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc.,
Sr. Unsec. Disc. Nts., 10/1/07 1,3,4 400,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating Co.
LLC/Centennial Communications
Corp.,
10.125% Sr. Nts., 6/15/13 914,000 1,037,390
- --------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 7 280,000 295,400
- --------------------------------------------------------------------------------
Dobson Communications Corp.,
8.875% Sr. Nts., 10/1/13 159,000 146,280
- --------------------------------------------------------------------------------
IWO Escrow Co.,
6.891% Sr. Sec. Nts., 1/15/12 2,7 110,000 109,725
- --------------------------------------------------------------------------------
Nextel Communications, Inc.,
7.375% Sr. Nts., 8/1/15 3,378,000 3,665,085
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Nextel Partners, Inc.:
8.125% Sr. Nts., 7/1/11 $ 500,000 $ 545,000
12.50% Sr. Nts., 11/15/09 342,000 373,208
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.:
7.50% Sec. Nts., 3/15/15 882,000 963,585
8% Sr. Sub. Nts., 12/15/12 400,000 433,000
- --------------------------------------------------------------------------------
Rural Cellular Corp.:
8.25% Sr. Sec. Nts., 3/15/12 275,000 288,750
9.625% Sr. Sub. Nts.,
Series B, 5/15/08 500,000 485,000
9.75% Sr. Sub. Nts., 1/15/10 319,000 298,265
9.875% Sr. Nts., 2/1/10 300,000 311,250
- --------------------------------------------------------------------------------
SBA Communications Corp.,
8.50% Sr. Unsec. Nts., Cl. A, 12/1/12 550,000 595,375
- --------------------------------------------------------------------------------
SBA Telecommunications, Inc./
SBA Communications Corp.,
0%/9.75% Sr. Disc. Nts., 12/15/11 12 851,000 787,175
- --------------------------------------------------------------------------------
Triton PCS, Inc.,
8.50% Sr. Unsec. Nts., 6/1/13 750,000 695,625
- --------------------------------------------------------------------------------
UbiquiTel Operating Co.,
9.875% Sr. Nts., 3/1/11 600,000 661,500
- --------------------------------------------------------------------------------
US Unwired, Inc.,
10% Sr. Sec. Nts., 6/15/12 250,000 279,375
- --------------------------------------------------------------------------------
Western Wireless Corp.,
9.25% Sr. Unsec. Nts., 7/15/13 235,000 268,781
------------
15,767,308
- --------------------------------------------------------------------------------
UTILITIES--1.8%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.4%
AES Corp. (The),
8.75% Sr. Sec. Nts., 5/15/13 7 700,000 785,750
- --------------------------------------------------------------------------------
Caithness Coso Funding Corp.,
9.05% Sr. Sec. Nts., Series B, 12/15/09 274,704 295,994
- --------------------------------------------------------------------------------
Calpine Corp.:
7.625% Sr. Nts., 4/15/06 232,000 218,660
8.891% Sr. Sec. Nts., 7/15/07 2,7 728,033 626,108
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc.,
7.25% Sr. Nts., Series B, 9/1/10 200,000 222,146
- --------------------------------------------------------------------------------
CITGO Trustees Cayman Ltd.,
8.50% Nts., 12/21/14 1 610,000 611,525
- --------------------------------------------------------------------------------
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 19,000 20,093
7.75% Sr. Nts., 8/1/10 200,000 216,000
8.50% Sr. Nts., 4/15/11 250,000 280,000
9.875% Sr. Unsec. Nts., 10/15/07 835,000 914,325
- --------------------------------------------------------------------------------
FPL Energy National Wind Power:
5.608% Nts., 3/10/24 7 270,000 276,306
6.125% Nts., 3/25/19 7 160,000 155,637
- --------------------------------------------------------------------------------
Funding Corp./Beaver Valley
Funding Corp.,
9% Second Lease Obligation
Bonds, 6/1/17 199,000 236,583
24 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES Continued
Midwest Generation LLC,
8.75% Sr. Sec. Nts., 5/1/34 $ 1,610,000 $ 1,811,250
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC,
7.625% Sr. Unsec. Nts., 5/1/06 3,4 200,000 232,500
- --------------------------------------------------------------------------------
MSW Energy Holdings II LLC/
MSW Energy Finance Co. II, Inc.,
7.375% Sr. Sec. Nts., Series B, 9/1/10 350,000 360,500
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/
MSW Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10 200,000 212,500
- --------------------------------------------------------------------------------
NRG Energy, Inc.,
8% Sr. Sec. Nts., 12/15/13 7 1,060,000 1,123,600
- --------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 669,000 732,555
9.50% Sr. Sec. Nts., 7/15/13 900,000 1,003,500
- --------------------------------------------------------------------------------
Teco Energy, Inc.,
7.20% Unsec. Unsub. Nts., 5/1/11 958,000 1,044,220
- --------------------------------------------------------------------------------
Texas Genco LLC,
6.875% Sr. Nts., 12/15/14 7 1,291,000 1,365,233
- --------------------------------------------------------------------------------
TXU Corp.,
5.55% Nts., 11/15/14 7 400,000 389,942
------------
13,134,927
- --------------------------------------------------------------------------------
GAS UTILITIES--0.0%
SEMCO Energy, Inc.,
7.125% Sr. Nts., 5/15/08 150,000 153,463
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.4%
AES Red Oak LLC,
8.54% Sr. Sec. Bonds,
Series A, 11/30/19 1 560,818 628,116
- --------------------------------------------------------------------------------
Calpine Canada Energy Finance
ULC, 8.50% Sr. Unsec. Nts., 5/1/08 1,150,000 833,750
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 121,000 120,093
8.75% Sr. Nts., 2/15/12 292,000 319,740
10.125% Sr. Sec. Nts., 7/15/13 7 800,000 908,000
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC,
8.625% Sec. Pass-Through
Certificates, Series A, 6/30/12 461,023 479,752
- --------------------------------------------------------------------------------
NorthWestern Corp.,
5.875% Sr. Sec. Nts., 11/1/14 7 90,000 92,700
------------
3,382,151
------------
Total Corporate Bonds and
Notes (Cost $238,256,978) 242,127,363
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.2%
- --------------------------------------------------------------------------------
AmeriKing, Inc.,
13% Cum. Sr. Exchangeable,
Non-Vtg. 1,4 4,253 $ --
- --------------------------------------------------------------------------------
Doane Pet Care Co.,
14.25% Jr. Sub. Exchange Debs.,
Non-Vtg. 1,4 5,000 401,250
- --------------------------------------------------------------------------------
Dobson Communications Corp.,
6% Cv., Series F (converts into
Dobson Communications Corp.,
Cl. A common stock), Non-Vtg. 7 550 69,025
- --------------------------------------------------------------------------------
e.spire Communications, Inc.,
12.75% Jr. Redeemable, Non-Vtg. 1,4 216 22
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc.,
11.75% Cum. Exchangeable,
Series B, Non-Vtg. 1,4 5,000 6,250
- --------------------------------------------------------------------------------
ICG Holdings, Inc.,
14.25% Exchangeable, Non-Vtg. 1,4 151 --
- --------------------------------------------------------------------------------
Paxson Communications Corp.,
14.25% Cum. Jr. Exchangeable,
Non-Vtg. 1,13 47 303,268
- --------------------------------------------------------------------------------
Pennsylvania Real Estate
Investment Trust, 11% 2,000 118,000
- --------------------------------------------------------------------------------
PTV, Inc.,
10% Cum., Series A, Non-Vtg. 7 14
- --------------------------------------------------------------------------------
Rural Cellular Corp.,
11.375% Cum., Series B, Non-Vtg. 1,4 273 251,843
- --------------------------------------------------------------------------------
Sovereign Real Estate Investment
Trust, 12% Non-Cum., Series A 1 4,600 668,150
------------
Total Preferred Stocks (Cost $2,137,651) 1,817,822
- --------------------------------------------------------------------------------
COMMON STOCKS--2.7%
- --------------------------------------------------------------------------------
ACE Ltd. 4,000 179,400
- --------------------------------------------------------------------------------
Aetna, Inc. 2,200 182,204
- --------------------------------------------------------------------------------
Allstate Corp. 3,000 179,250
- --------------------------------------------------------------------------------
Amerada Hess Corp. 1,800 191,718
- --------------------------------------------------------------------------------
American Electric Power Co., Inc. 4,900 180,663
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 2,310 189,767
- --------------------------------------------------------------------------------
Apache Corp. 2,900 187,340
- --------------------------------------------------------------------------------
Apple Computer, Inc. 4 4,500 165,645
- --------------------------------------------------------------------------------
Arcelor 8,630 168,427
- --------------------------------------------------------------------------------
Arriva plc 17,790 173,715
- --------------------------------------------------------------------------------
Asahi Glass Co. Ltd. 16,000 167,629
- --------------------------------------------------------------------------------
Ashland, Inc. 2,500 179,675
- --------------------------------------------------------------------------------
Axa SA 7,060 175,579
- --------------------------------------------------------------------------------
BASF AG 2,588 171,533
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 1,800 187,092
- --------------------------------------------------------------------------------
Beverly Hills Bancorp, Inc. 6,273 68,689
- --------------------------------------------------------------------------------
BNP Paribas SA 2,560 175,026
25 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
British American Tobacco plc 9,070 $ 174,857
- --------------------------------------------------------------------------------
Broadwing Corp. 738 3,410
- --------------------------------------------------------------------------------
Capcom Co. Ltd. 18,200 172,135
- --------------------------------------------------------------------------------
Cebridge Connections
Holding LLC 1,4 529 --
- --------------------------------------------------------------------------------
Centex Corp. 2,600 183,742
- --------------------------------------------------------------------------------
Charles River Laboratories
International, Inc. 4 2,660 128,345
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 91 2,075
- --------------------------------------------------------------------------------
Chevron Corp. 3,200 178,944
- --------------------------------------------------------------------------------
Chubb Corp. 2,100 179,781
- --------------------------------------------------------------------------------
CIGNA Corp. 1,800 192,654
- --------------------------------------------------------------------------------
Citigroup, Inc. 55 2,543
- --------------------------------------------------------------------------------
CMS Energy Corp. 4 12,700 191,262
- --------------------------------------------------------------------------------
ConocoPhillips 3,200 183,968
- --------------------------------------------------------------------------------
Conseco, Inc. 4 13,986 305,175
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc. 3,300 190,377
- --------------------------------------------------------------------------------
Continental AG 2,425 174,360
- --------------------------------------------------------------------------------
Countrywide Financial Corp. 4,600 177,606
- --------------------------------------------------------------------------------
Covad Communications
Group, Inc. 4 16,528 23,139
- --------------------------------------------------------------------------------
Criimi MAE, Inc. 4 62,047 1,355,727
- --------------------------------------------------------------------------------
CSX Corp. 4,100 174,906
- --------------------------------------------------------------------------------
Cummins, Inc. 2,400 179,064
- --------------------------------------------------------------------------------
DaimlerChrysler AG 4,204 170,378
- --------------------------------------------------------------------------------
Deutsche Telekom AG 9,257 171,397
- --------------------------------------------------------------------------------
Devon Energy Corp. 3,700 187,516
- --------------------------------------------------------------------------------
Dobson Communications Corp.,
Cl. A 4 24,300 103,518
- --------------------------------------------------------------------------------
Douglas Holding AG 5,068 183,685
- --------------------------------------------------------------------------------
E.ON AG 1,980 175,785
- --------------------------------------------------------------------------------
Energy Select Sector SPDR Fund 16,700 742,649
- --------------------------------------------------------------------------------
EOG Resources, Inc. 3,400 193,120
- --------------------------------------------------------------------------------
Equinix, Inc. 4 1,887 81,783
- --------------------------------------------------------------------------------
Federated Department Stores, Inc. 2,600 190,528
- --------------------------------------------------------------------------------
Financial Select Sector SPDR Fund 24,200 713,174
- --------------------------------------------------------------------------------
Ford Motor Co. 17,600 180,224
- --------------------------------------------------------------------------------
Friends Provident plc 54,250 176,903
- --------------------------------------------------------------------------------
Geotek Communications, Inc.,
Series B, Escrow Shares 1,4,14 210 --
- --------------------------------------------------------------------------------
Globix Corp. 4 6,880 16,994
- --------------------------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 2,300 171,994
- --------------------------------------------------------------------------------
Horizon Natural Resources Co. 1,4 6,667 --
- --------------------------------------------------------------------------------
Humana, Inc. 4 4,600 182,804
- --------------------------------------------------------------------------------
Huntsman Corp. 4 5,871 113,055
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. 4 6,016 $ 25,267
- --------------------------------------------------------------------------------
iPCS, Inc. 4 8,548 277,810
- --------------------------------------------------------------------------------
Ishikawajima-Harima Heavy
Industries Co. Ltd. 4 121,000 174,793
- --------------------------------------------------------------------------------
Japan Real Estate Investment Corp. 21 178,361
- --------------------------------------------------------------------------------
Japan Retail Fund Investment Corp. 21 180,065
- --------------------------------------------------------------------------------
Joyo Bank Ltd. (The) 34,000 166,153
- --------------------------------------------------------------------------------
KB Home 2,600 198,198
- --------------------------------------------------------------------------------
Kelda Group plc 14,700 183,971
- --------------------------------------------------------------------------------
Klepierre 1,830 174,620
- --------------------------------------------------------------------------------
Komori Corp. 11,000 166,324
- --------------------------------------------------------------------------------
Kubota Corp. 30,000 163,750
- --------------------------------------------------------------------------------
Kyushu Electric Power Co. 8,200 178,181
- --------------------------------------------------------------------------------
Leap Wireless International, Inc. 4 1,714 47,564
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 1,900 188,632
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series A 4 3,368 157,185
- --------------------------------------------------------------------------------
Lloyds TSB Group plc 20,900 177,122
- --------------------------------------------------------------------------------
Loews Corp. 2,300 178,250
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 7,000 172,060
- --------------------------------------------------------------------------------
MAN AG 3,819 158,321
- --------------------------------------------------------------------------------
Marathon Oil Corp. 3,500 186,795
- --------------------------------------------------------------------------------
MBIA, Inc. 3,100 183,861
- --------------------------------------------------------------------------------
MCI, Inc. 1,629 41,882
- --------------------------------------------------------------------------------
MetLife, Inc. 4,000 179,760
- --------------------------------------------------------------------------------
Novell, Inc. 4 27,500 170,500
- --------------------------------------------------------------------------------
NSK Ltd. 36,000 184,690
- --------------------------------------------------------------------------------
NTL, Inc. 4 7,842 536,550
- --------------------------------------------------------------------------------
Nucor Corp. 3,200 145,984
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 2,300 176,939
- --------------------------------------------------------------------------------
OKI Electric Industry Co. 4 50,000 175,246
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 4 745 7,376
- --------------------------------------------------------------------------------
Peninsular & Oriental Steam
Navigation Co. 30,510 173,424
- --------------------------------------------------------------------------------
Persimmon plc 12,660 177,153
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 1,900 175,750
- --------------------------------------------------------------------------------
Pilkington plc 81,780 174,860
- --------------------------------------------------------------------------------
Pioneer Cos., Inc. 4 7,312 160,791
- --------------------------------------------------------------------------------
Prandium, Inc. 1,4 24,165 145
- --------------------------------------------------------------------------------
Premier Holdings Ltd. 1,4 18,514 --
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 2,800 183,848
- --------------------------------------------------------------------------------
Pulte Homes, Inc. 2,310 194,618
- --------------------------------------------------------------------------------
Rowan Cos., Inc. 6,170 183,311
- --------------------------------------------------------------------------------
RWE AG 2,812 180,802
- --------------------------------------------------------------------------------
Safeco Corp. 3,200 173,888
26 | OPPENHEIMER STRATEGIC BOND FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
Schroders plc 12,210 $ 165,606
- --------------------------------------------------------------------------------
Scottish & Southern Energy plc 9,640 174,304
- --------------------------------------------------------------------------------
ScottishPower plc 20,420 180,906
- --------------------------------------------------------------------------------
Sears Holdings Corp. 4 1,100 164,857
- --------------------------------------------------------------------------------
Sempra Energy 4,400 181,764
- --------------------------------------------------------------------------------
Severn Trent plc 9,360 170,554
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 1,750 177,264
- --------------------------------------------------------------------------------
Star Gas Partners LP 187 533
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. 1,4 716 26,492
- --------------------------------------------------------------------------------
Suez SA 6,400 173,098
- --------------------------------------------------------------------------------
Sumitomo Metal Industries 4 102,000 172,773
- --------------------------------------------------------------------------------
Sunoco, Inc. 1,600 181,888
- --------------------------------------------------------------------------------
T&D Holdings, Inc. 3,550 166,056
- --------------------------------------------------------------------------------
Tate & Lyle plc 19,990 170,842
- --------------------------------------------------------------------------------
Taylor Woodrow plc 30,630 184,741
- --------------------------------------------------------------------------------
Telewest Global, Inc. 4 31,828 725,042
- --------------------------------------------------------------------------------
Telus Corp. 269 9,149
- --------------------------------------------------------------------------------
ThyssenKrupp AG 9,349 162,045
- --------------------------------------------------------------------------------
Tokyo Electric Power Corp. 4 7,300 174,092
- --------------------------------------------------------------------------------
TonenGeneral Sekiyu K.K. 16,000 173,113
- --------------------------------------------------------------------------------
Toys R Us, Inc. 4 6,600 174,768
- --------------------------------------------------------------------------------
TUI AG 6,926 171,016
- --------------------------------------------------------------------------------
TVMAX Holdings, Inc. 1,4 1,000 5,500
- --------------------------------------------------------------------------------
Unibail 1,350 173,337
- --------------------------------------------------------------------------------
United States Steel Corp. 4,400 151,228
- --------------------------------------------------------------------------------
United Utilities plc 13,960 165,080
- --------------------------------------------------------------------------------
Unocal Corp. 3,000 195,150
- --------------------------------------------------------------------------------
UnumProvident Corp. 9,700 177,704
- --------------------------------------------------------------------------------
Utilities Select Sector SPDR Fund 23,300 735,581
- --------------------------------------------------------------------------------
Valeo SA 4,010 179,478
- --------------------------------------------------------------------------------
Valero Energy Corp. 2,400 189,864
- --------------------------------------------------------------------------------
Veolia Environnement SA 4,560 170,710
- --------------------------------------------------------------------------------
Viatel Holding (Bermuda) Ltd. 1,4 2,251 642
- --------------------------------------------------------------------------------
Vinci SA 2,300 191,495
- --------------------------------------------------------------------------------
Western Forest Products, Inc. 4 38,252 128,787
- --------------------------------------------------------------------------------
WRC Media Corp. 1,4 1,082 22
- --------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 2,300 171,177
- --------------------------------------------------------------------------------
XO Communications, Inc. 4 1,100 2,926
------------
Total Common Stocks (Cost $21,570,158) 24,287,313
VALUE
UNITS SEE NOTE 1
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
American Tower Corp. Wts.,
Exp. 8/1/08 4,7 800 $ 237,088
- --------------------------------------------------------------------------------
ASAT Finance LLC Wts.,
Exp. 11/1/06 1,4 250 --
- --------------------------------------------------------------------------------
COLO.com, Inc. Wts.,
Exp. 3/15/10 1,4 400 --
- --------------------------------------------------------------------------------
Concentric Network Corp.
Wts., Exp. 12/15/07 1,4 100 --
- --------------------------------------------------------------------------------
HF Holdings, Inc. Wts.,
Exp. 9/27/09 1,4 530 5
- --------------------------------------------------------------------------------
ICG Communications, Inc.
Wts., Exp. 9/15/05 1,4 825 --
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. Wts.:
Exp. 5/16/06 1,4 1,509 60
Exp. 5/16/06 1,4 2 --
- --------------------------------------------------------------------------------
Imperial Credit Industries, Inc. Wts.,
Exp. 1/31/08 1,4 2,135 --
- --------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/15/07 4,7 270 --
- --------------------------------------------------------------------------------
iPCS, Inc. Wts., Exp. 6/15/10 1,4 300 --
- --------------------------------------------------------------------------------
Long Distance International,
Inc. Wts.,
Exp. 4/13/08 4,7 200 --
- --------------------------------------------------------------------------------
Loral Space & Communications
Ltd. Wts.,
Exp. 1/15/07 1,4 150 --
- --------------------------------------------------------------------------------
Ntelos, Inc. Wts.,
Exp. 8/15/10 1,4 450 --
- --------------------------------------------------------------------------------
Orion Network Systems, Inc. Rts.,
Exp. 7/8/05 4 116 --
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts.,
Exp. 9/19/10 4 5,710 2,113
- --------------------------------------------------------------------------------
PLD Telekom, Inc. Wts.,
Exp. 6/1/06 1,4 300 3
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 1,4 1,165 2,447
- --------------------------------------------------------------------------------
Venezuela (Republic of) Oil
Linked Payment Obligation Wts.,
Exp. 4/15/20 1,4 2,300 55,200
- --------------------------------------------------------------------------------
Verado Holdings, Inc., Cl. B Wts.,
Exp. 4/15/08 4 175 126
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. A
Wts., Exp. 1/16/10 4 2,204 771
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. B
Wts., Exp. 1/16/10 4 1,653 430
- --------------------------------------------------------------------------------
XO Communications, Inc., Cl. C
Wts., Exp. 1/16/10 4 1,653 347
------------
Total Rights, Warrants and
Certificates (Cost $36,086) 298,590
27 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES--11.0%
- --------------------------------------------------------------------------------
Aon Capital Markets/Helix 04
Ltd. Catastrophe Linked Nts.,
8.89%, 6/30/09 2 $ 600,000 $ 602,508
- --------------------------------------------------------------------------------
Arbor I Ltd. Catastrophe
Linked Nts.:
18.91%, 6/15/06 2,7 100,000 102,634
Series IV, 17.41%, 3/16/06 2 250,000 251,451
- --------------------------------------------------------------------------------
Cascadia Ltd.,
6.485% Nts., 6/13/08 1,2 500,000 500,000
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Brazil (Federal Republic of)
Credit Linked Nts.,
17.37%, 7/3/07 [BRR] 4,660,000 1,450,681
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
10%, 1/5/10 [BRR] 2,927,000 1,082,871
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
10%, 1/5/10 [BRR] 4,619,000 1,708,842
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
18.41%, 10/4/05 [BRR] 2,230,000 912,479
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
18.80%, 1/3/08 [BRR] 1,948,615 564,468
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
19.85%, 1/2/09 [BRR] 2,231,957 560,576
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
20.40%, 1/5/10 [BRR] 2,480,096 543,751
Colombia (Republic of) Credit
Linked Nts., Series II,
15%, 4/27/12 [COP] 552,359,546 291,678
Colombia (Republic of) Unsec.
Credit Linked Nts.,
15%, 3/15/07 [COP] 3,860,150,000 1,922,056
Colombia (Republic of) Unsec.
Credit Linked Nts.,
15%, 4/27/12 [COP] 1,800,000,000 950,503
Colombia (Republic of) Unsec.
Credit Linked Nts.,
15%, 4/27/12 [COP] 1,200,000,000 633,669
Colombia (Republic of) Unsec.
Credit Linked Nts.,
15%, 4/27/12 [COP] 1,034,000,000 546,011
Colombia (Republic of) Unsec.
Credit Linked Nts.,
15%, 4/27/12 [COP] 927,000,000 489,509
Dominican Republic Credit
Linked Nts.,
15.93%, 5/2/06 [DOP] 19,490,000 608,968
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc: Continued
Dominican Republic Credit
Linked Nts.,
19.69%, 3/31/06 8 [DOP] 17,740,000 $ 561,397
Dominican Republic Credit
Linked Nts.,
22.97%, 3/10/06 [DOP] 22,703,730 725,414
Dominican Republic Treasury
Bills Unsec. Credit Linked Nts.,
16.50%, 4/24/06 8 [DOP] 6,560,000 205,630
Dominican Republic Unsec.
Credit Linked Nts.,
14.86%, 5/15/06 [DOP] 16,070,000 498,867
Dominican Republic Unsec.
Credit Linked Nts.,
23.60%, 3/3/06 [DOP] 42,662,900 1,367,440
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8%, 10/28/05 [EGP] 3,970,000 667,536
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.407%, 2/9/06 [EGP] 5,773,000 947,081
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.75%, 8/25/05 [EGP] 2,960,000 505,097
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.90%, 1/12/06 [EGP] 4,530,000 748,185
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.90%, 12/29/05 [EGP] 1,380,000 228,644
Ukraine Hryvnia Unsec. Credit
Linked Nts.,
11.94%, 1/4/10 [UAH] 880,000 208,333
- --------------------------------------------------------------------------------
Credit Suisse First Boston
Corp. (Cayman):
Russia (Government of)
Credit Linked Bonds, Series 24,
15%, 9/2/05 [RUR] 22,279,000 805,024
Turkey (Republic of) Credit
Linked Nts., Series EMG
7, 15%, 2/10/10 [TRY] 3,014,000 2,430,682
- --------------------------------------------------------------------------------
Credit Suisse First
Boston International:
OAO Gazprom Credit Linked Nts.,
8.11%, 1/21/07 [RUR] 28,065,000 1,033,200
South African Rand Interest
Bearing Linked Nts.,
Series FBi 43,
2.425%, 5/23/22 825,000 803,468
Ukraine (Republic of)
Credit Linked Nts.,
Series EMG
13, 11.94%, 12/30/09 [UAH] 2,195,000 519,483
28 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.:
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
20%, 10/18/07 $ 352,000 $ 391,639
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series EM 868,
27.50%, 8/25/05 2,125,000 2,082,033
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series EM 872,
22.88%, 10/20/05 2 396,000 426,067
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series EM 880,
20%, 10/18/07 1,190,000 1,465,699
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series EMG 19,
18%, 7/5/06 [TRY] 1,440,000 929,187
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series EMG 4,
18.70%, 7/6/06 [TRY] 1,909,191 1,231,941
(Nassau Branch),
Turkey (Republic of)
Credit Linked Nts.,
Series NAS 316,
18.641%, 2/23/06 607,000 563,527
(Nassau Branch),
Ukraine (Republic of)
Credit Linked Nts.,
Series EMG 11,
11.94%, 12/30/09 [UAH] 661,000 156,436
(Nassau Branch),
Ukraine (Republic of)
Credit Linked Nts.,
Series NPC
12, 11.94%, 12/30/09 [UAH] 4,170,000 986,899
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Brazil Real Credit Linked Nts.,
9.638%, 3/3/10 [BRR] 4,580,760 1,133,657
Egypt (The Arab Republic of)
Unsec. Treasury Bills Total
Return Linked Nts.,
9.85%, 3/9/06 [EGP] 2,120,000 342,678
European Investment Bank,
Russian Federation Credit
Linked Nts.,
6.232%, 1/19/10 705,000 552,368
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Indonesia (Republic of)
Credit Linked Nts.,
14.25%, 6/22/13 1 $ 942,000 $ 1,088,858
Indonesia (Republic of)
Credit Linked Nts.,
9.50%, 6/22/15 820,000 730,538
Indonesia (Republic of)
Credit Linked Nts., Series II,
14.25%, 6/22/13 1 938,000 1,084,234
Indonesia (Republic of)
Credit Linked Nts., Series III,
14.25%, 6/15/13 873,600 1,009,794
Moscow (City of)
Credit Linked Nts.,
10%, 3/30/10 [RUR] 22,742,000 846,848
Moscow (City of)
Credit Linked Nts.,
15%, 9/2/05 [RUR] 30,255,000 1,086,348
Nigeria (Federal Republic of)
Treasury Bills Total Return
Linked Nts.,
13%, 8/17/05 1 [NGN] 64,290,000 455,870
OAO Gazprom I Credit Nts.,
7.339%, 10/20/07 790,000 853,216
OAO Gazprom II Credit Nts.,
7..089%, 4/20/07 790,000 840,364
Philippines (Republic of)
Credit Linked Nts.,
12%, 1/20/09 1 [PHP] 23,740,000 443,755
Philippines (Republic of)
Credit Linked Nts.,
12.375%, 11/1/09 1 [PHP] 46,230,000 869,760
Philippines (Republic of)
Credit Linked Nts.,
12.375%, 3/1/15 1 [PHP] 8,110,000 150,261
Romania (The State of)
Credit Linked Nts.,
11.49%, 12/7/06 [ROL] 7,886,400,000 290,232
Russian Federation Credit
Linked Nts.,
8.33%, 12/2/09 [RUR] 19,221,000 682,973
Ukraine (Republic of) Credit
Linked Nts.,
11.70%, 5/31/06 [UAH] 1,727,000 365,073
Ukraine (Republic of)
Credit Linked Nts.,
11.94%, 12/30/09 [UAH] 269,000 61,769
Ukraine (Republic of)
Credit Linked Nts.,
11.94%, 12/30/09 [UAH] 955,000 219,293
Ukraine (Republic of)
Credit Linked Nts., 7.69%, 8/5/11 4,070,000 4,508,746
Videocon International Ltd.
Credit Linked Nts.,
5.34%, 12/29/09 1 1,630,000 1,628,370
29 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Dow Jones CDX High Yield Index
Pass-Through Certificates,
Series 4-T1,
8.25%, 6/29/10 7,15 $ 22,546,000 $ 22,658,730
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The)/
Residential Reinsurance Ltd.
Catastrophe Linked Nts.,
Series B, 11.77%, 6/6/08 1,2 800,000 800,000
- --------------------------------------------------------------------------------
ING Bank NV, Ukraine (Republic
of) Credit Linked Nts., Series 725,
11.89%, 12/30/09 1 [UAH] 4,689,000 1,105,617
- --------------------------------------------------------------------------------
JPMorgan Chase Bank:
Brazil (Federal Republic of)
Credit Linked Nts.,
12.08%, 1/2/15 8 [BRR] 3,693,700 472,919
Brazil (Federal Republic of)
Credit Linked Nts.,
12.68%, 6/1/13 8 [BRR] 5,490,000 830,512
Brazil (Federal Republic of)
Credit Linked Nts.,
15.33%, 1/2/15 8 [BRR] 10,948,600 1,401,794
Brazil (Federal Republic of)
Credit Linked Nts., Series II,
13.55%, 1/2/15 8 [BRR] 8,035,000 1,028,754
Swaziland (Kingdom of)
Credit Linked Nts.,
7.25%, 6/20/10 1 1,120,000 1,128,193
- --------------------------------------------------------------------------------
Lehman Brothers International:
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.90%, 2/8/10 [ROL] 8,214,000,000 291,067
Turkey (Republic of) Treasury
Bills Total Return Linked Nts.,
20%, 10/17/07 1,260,000 1,535,310
Turkey (Republic of) Treasury
Bills Total Return Linked Nts.,
24.204%, 8/25/05 1,165,000 1,125,041
- --------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
6.50%, 3/8/10 [ROL] 22,283,000,000 741,733
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
6.75%, 3/10/08 [ROL] 26,000,000,000 869,725
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.25%, 4/18/10 [ROL] 2,130,000,000 72,549
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.50%, 3/5/07 [ROL] 3,540,000,000 120,733
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.: Continued
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.75%, 4/18/08 [ROL] 1,990,000,000 $ 67,844
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.75%, 4/18/08 [ROL] 5,120,000,000 174,553
Romania (The State of)
Treasury Bills Total Return
Linked Nts.,
7.90%, 2/11/08 [ROL] 18,851,000,000 654,357
- --------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Brazil Sr. Sub. Linked Nts.,
15.45%, 1/2/14 [BRR] 3,400,000 1,466,510
Venezuela (Republic of)
Credit Linked Nts.,
7.382%, 5/20/10 1,900,000 1,952,250
- --------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./
Foundation RE Ltd. Catastrophe
Linked Nts.,
7.37%, 11/24/08 2,7 500,000 500,213
- --------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./
Oak Capital Ltd. Catastrophe
Linked Nts., 8.16%, 6/15/07 2,7 250,000 256,037
- --------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./
Pioneer 2002 Ltd. Sec.
Catastrophe Linked Nts.:
Series 2002, Cl. A-A,
9.41%, 6/15/06 2,7 250,000 251,693
Series 2002-1, Cl. E-A,
7.66%, 6/15/06 2 500,000 503,956
Series 2003-I, Cl. C-A,
9.41%, 6/15/06 2 500,000 507,725
Series 2003-II, Cl. A-A,
9.41%, 6/15/06 2,7 500,000 503,123
Series 2003-II, Cl. B-A,
8.41%, 6/15/06 2,7 500,000 507,068
Series 2003-II, Cl. C-A,
9.16%, 6/15/06 2,7 500,000 506,494
- --------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./
Redwood Capital V Catastrophe
Linked Nts.,
7.28%, 1/9/07 1,2 750,000 751,575
- --------------------------------------------------------------------------------
UBS AG:
Israel (State of) Credit Linked Nts.,
7.50%, 4/5/14 [ILS] 4,792,700 1,158,156
OAO Gazprom III Credit Nts.,
5.928%, 7/5/06 1,980,000 2,086,349
------------
Total Structured Notes (Cost $95,542,611) 99,487,149
30 | OPPENHEIMER STRATEGIC BOND FUND/VA
VALUE
DATE STRIKE CONTRACTS SEE NOTE 1
- --------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------
Israeli Shekel
Call 4 9/27/05 4.46ILS 14,050,000 $ 6,913
- --------------------------------------------------------------------------------
Mexican Neuvo
Peso Call 4 9/26/05 10.70MXN 23,400,000 9,641
-------------
Total Options Purchased (Cost $24,089) 16,554
- --------------------------------------------------------------------------------
SWAPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------
Brazilian Real
Call 1,4 10/3/05 16.50BRR 4,670,000 18,012
- --------------------------------------------------------------------------------
Mexican Neuvo
Peso Call: 4 8/19/05 10.07MXN 22,855,000 32,600
9/1/05 10.35MXN 4,640,000 10,362
-------------
Total Swaptions Purchased (Cost $51,281) 60,974
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.8%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $7,169,842) $ 7,169,842 7,169,842
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--12.9% 16
- --------------------------------------------------------------------------------
Undivided interest of 9.48% in joint repurchase
agreement (Principal Amount/Value
$1,234,399,000, with a maturity value of
$1,234,508,724) with UBS Warburg LLC, 3.20%,
dated 6/30/05, to be repurchased at
$116,985,398 on 7/1/05, collateralized by
Federal Home Loan Mortgage Corp., 5.50%,
2/1/35, with a value of $1,260,871,334
(Cost $116,975,000) 116,975,000 116,975,000
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments Purchased
with Cash Collateral from Securities
Loaned) (Cost $937,584,450) 952,695,525
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED--0.2%
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.2%
Undivided interest of 0.05% in joint repurchase
agreement (Principal Amount/Value
$4,000,000,000, with a maturity value of
$4,000,386,667) with Nomura Securities, 3.48%,
dated 6/30/05, to be repurchased at $2,056,225
on 7/1/05, collateralized by U.S. Agency
Mortgages, 0.00%--5.959%, 1/15/18--4/1/42,
with a value of $4,160,000,001 17
(Cost $2,056,026) $ 2,056,026 $ 2,056,026
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $939,640,476) 105.2% 954,751,551
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (5.2) (47,240,483)
------------------------------
NET ASSETS 100.0% $907,511,068
==============================
31 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
PRINCIPAL AMOUNT IS REPORTED IN U.S. DOLLARS, EXCEPT FOR THOSE DENOTED IN THE
FOLLOWING CURRENCIES:
ARP Argentine Peso MXN Mexican Nuevo Peso
AUD Australian Dollar MYR Malaysian Ringgit
BRR Brazilian Real NGN Nigeria Naira
CAD Canadian Dollar NZD New Zealand Dollar
COP Colombian Peso PEN Peruvian New Sol
DEM German Mark PHP Philippines Peso
DOP Dominican Republic Peso PLZ Polish Zloty
EGP Egyptian Pounds ROL Romanian Leu
EUR Euro RUR Russian Ruble
FRF French Franc SEK Swedish Krona
GBP British Pound Sterling TRY New Turkish Lira
ILS Israeli Shekel UAH Ukraine Hryvnia
JPY Japanese Yen ZAR South African Rand
1. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2005 was $31,764,336, which represents
3.50% of the Fund's net assets, of which $145 is considered restricted. In
addition, the Fund held restricted currency with a value of $82,056, which
represents 0.01% of the Fund's net assets. See Note 13 of Notes to Financial
Statements.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Issue is in default. See Note 1 of Notes to Financial Statements.
4. Non-income producing security.
5. When-issued security or forward commitment to be delivered and settled after
June 30, 2005. See Note 1 of Notes to Financial Statements.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $3,637,883 or 0.40% of the Fund's net assets
as of June 30, 2005.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $67,964,978 or 7.49% of the Fund's net
assets as of June 30, 2005.
8. Zero coupon bond reflects effective yield on the date of purchase.
9. Partial or fully-loaned security--See Note 14 of Notes to Financial
Statements.
10. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts. The aggregate
market value of such securities is $2,541,173. See Note 6 of Notes to Financial
Statements.
11. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
13. Interest or dividend is paid-in-kind.
14. Received as the result of issuer reorganization.
15. Interest rate represents a weighted average rate comprised of the interest
rates of the underlying securities.
16. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks. See Note 1 of Notes to
Financial Statements.
17. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 14 of Notes to Financial
Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- --------------------------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
Investments, at value (including cost and market value of $116,975,000 in repurchase agreements)
(including securities loaned of $31,782,663) (cost $939,640,476)--see accompanying statement of investments $ 954,751,551
- --------------------------------------------------------------------------------------------------------------------------------
Collateral for securities loaned 30,363,500
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 6,533,170
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 4,211,972
- --------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $22,211,267 sold on a when-issued basis or forward commitment) 27,054,507
Interest, dividends and principal paydowns 10,842,588
Shares of beneficial interest sold 8,152,397
Futures margins 170,520
Other 15,199
----------------
Total assets 1,042,095,404
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $39,924) 80,373
- --------------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 32,419,526
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 2,185,102
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 1,964,845
- --------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $84,785,181 purchased on a when-issued basis or forward commitment) 96,491,615
Closed foreign currency contracts 767,924
Shares of beneficial interest redeemed 378,464
Distribution and service plan fees 209,371
Shareholder communications 35,638
Trustees' compensation 17,066
Transfer and shareholder servicing agent fees 1,761
Other 32,651
----------------
Total liabilities 134,584,336
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 907,511,068
================
- --------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 178,222
- --------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 874,247,997
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 18,871,875
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (7,469,319)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 21,682,293
----------------
NET ASSETS $ 907,511,068
================
- --------------------------------------------------------------------------------------------------------------------------------
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 $512,718,706 and 101,417,554 shares of beneficial interest outstanding) $5.06
- --------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $394,792,362 and 76,804,500 shares of beneficial interest outstanding) $5.14
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- -----------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------
Interest $ 22,570,014
- -----------------------------------------------------------------------------------------
Fee income 636,932
- -----------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $21,836) 319,875
- -----------------------------------------------------------------------------------------
Portfolio lending fees 14,464
-------------
Total investment income 23,541,285
- -----------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------
Management fees 3,031,287
- -----------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 373,418
- -----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,194
Service shares 5,113
- -----------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 26,155
Service shares 13,575
- -----------------------------------------------------------------------------------------
Custodian fees and expenses 86,402
- -----------------------------------------------------------------------------------------
Trustees' compensation 9,891
- -----------------------------------------------------------------------------------------
Other 32,789
-------------
Total expenses 3,583,824
Less reduction to custodian expenses (53,006)
-------------
Net expenses 3,530,818
- -----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 20,010,467
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 7,738,553
Closing and expiration of option contracts written 8,952
Closing and expiration of swaption contracts (274,157)
Closing of futures contracts 1,056,963
Foreign currency transactions 10,354,199
Swap contracts (1,854,408)
-------------
Net realized gain 17,030,102
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (6,340,317)
Translation of assets and liabilities denominated in foreign currencies (21,496,422)
Futures contracts 411,039
Option contracts 12,121
Swaption contracts (64,042)
Swap contracts 3,705,630
-------------
Net change in unrealized appreciation (23,771,991)
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,268,578
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 20,010,467 $ 32,017,472
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain 17,030,102 7,611,909
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (23,771,991) 25,007,424
---------------------------------
Net increase in net assets resulting from operations 13,268,578 64,636,805
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (28,059,108) (29,467,620)
Service shares (12,131,395) (5,049,740)
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (81,519,196) 23,501,705
Service shares 158,331,883 152,771,336
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Total increase 49,890,762 206,392,486
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period 857,620,306 651,227,820
---------------------------------
End of period (including accumulated net investment
income of $18,871,875 and $39,051,911, respectively) $ 907,511,068 $ 857,620,306
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER STRATEGIC BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.21 $ 5.05 $ 4.57 $ 4.62 $ 4.69 $ 4.97
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .22 1 .22 .29 .41 .41
Net realized and unrealized gain (loss) (.05) .20 .56 .03 (.19) (.28)
-----------------------------------------------------------------------------
Total from investment operations .08 .42 .78 .32 .22 .13
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) (.26) (.30) (.37) (.29) (.41)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.06 $ 5.21 $ 5.05 $ 4.57 $ 4.62 $ 4.69
=============================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 1.66% 8.67% 18.07% 7.44% 4.85% 2.63%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $512,719 $614,915 $571,445 $406,126 $351,686 $304,562
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $577,032 $584,878 $472,213 $374,519 $330,711 $289,923
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 5.04% 4.50% 5.61% 6.89% 8.78% 9.23%
Total expenses 0.74% 0.74% 0.75% 0.79% 0.79% 0.79%
Expenses after payments and waivers and
reduction to custodian expenses N/A 4 N/A 4 N/A 4 0.78% N/A 4 N/A 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 47% 5 88% 5 117% 65% 104% 104%
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%.
5. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2005 $481,080,968 $473,429,566
Year Ended December 31, 2004 959,649,113 973,488,511
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER STRATEGIC BOND FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2004 2003 2002 2001 1
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.29 $ 5.13 $ 4.67 $ 4.73 $ 4.64
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 2 .19 2 .27 .03 .15
Net realized and unrealized gain (loss) (.01) .22 .49 .28 (.06)
------------------------------------------------------------------------
Total from investment operations .08 .41 .76 .31 .09
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.23) (.25) (.30) (.37) --
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.14 $ 5.29 $ 5.13 $ 4.67 $ 4.73
========================================================================
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.49% 8.43% 17.16% 7.03% 1.94%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $394,792 $242,705 $ 79,782 $ 8,138 $ 4
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $302,024 $150,040 $ 34,744 $ 2,307 $ 2
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 3.73% 3.82% 4.57% 5.40% 8.17%
Total expenses 0.99% 0.99% 1.02% 1.06% 0.92%
Expenses after payments and waivers and
reduction to custodian expenses N/A 5 N/A 5 N/A 5 1.03% N/A 5
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 47% 6 88% 6 117% 65% 104%
1. For the period from March 19, 2001 (inception of offering) to December 31,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
6. The portfolio turnover rate excludes purchases and sales of To Be Announced
(TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2005 $481,080,968 $473,429,566
Year Ended December 31, 2004 959,649,113 973,488,511
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Strategic Bond Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek a high level of current
income principally derived from interest on debt securities. 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. 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).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures. As of June 30, 2005, the market value
of these securities comprised 11.0% of the Fund's net assets and resulted in
unrealized cumulative gains of $3,944,538.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in
38 | OPPENHEIMER STRATEGIC BOND FUND/VA
value prior to their delivery. The Fund maintains internally designated assets
with a market value equal to or greater than the amount of its purchase
commitments. The purchase of securities on a when-issued basis or forward
commitment may increase the volatility of the Fund's net asset value to the
extent the Fund executes such transactions while remaining substantially fully
invested. The Fund may also sell securities that it purchased on a when-issued
basis or forward commitment prior to settlement of the original purchase. As of
June 30, 2005 the Fund had purchased $84,785,181 of securities issued on a
when-issued basis or forward commitment and sold $22,211,267 of securities
issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such transactions that have an associated fee in lieu of a difference in the
forward purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of June 30, 2005, securities with an aggregate
market value of $4,917,661, representing 0.54% of the Fund's net assets, were in
default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
39 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2005, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $5,015,692. This estimated
capital loss carryforward represents carryforward as of the end of the last
fiscal year, increased for losses deferred under tax accounting rules to the
current fiscal year and is increased or decreased by capital losses or gains
realized in the first six months of the current fiscal year. During the six
months ended June 30, 2005, it is estimated that the Fund will utilize
$17,030,102 of capital loss carryforward to offset realized capital gains.
During the year ended December 31, 2004 the Fund utilized $1,200,449 of capital
loss carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2004, the Fund had available for federal income tax purposes
post-October losses of $478,895 and unused capital loss carryforwards as
follows:
EXPIRING
------------------------
2007 $ 4,546,599
2008 253,735
2009 9,904,928
2010 6,861,637
-----------
Total $21,566,899
===========
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
40 | OPPENHEIMER STRATEGIC BOND FUND/VA
- --------------------------------------------------------------------------------
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:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 12,142,242 $ 61,680,465 24,003,073 $ 119,433,508
Dividends and/or distributions reinvested 5,623,067 28,059,108 6,088,351 29,467,620
Redeemed (34,481,519) (171,258,769) (25,208,632) (125,399,423)
---------------------------------------------------------------------
Net increase (decrease) (16,716,210) $ (81,519,196) 4,882,792 $ 23,501,705
=====================================================================
- ---------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 29,870,082 $ 153,162,048 31,450,838 $ 158,302,695
Dividends and/or distributions reinvested 2,388,069 12,131,395 1,026,369 5,049,740
Redeemed (1,352,052) (6,961,560) (2,125,979) (10,581,099)
---------------------------------------------------------------------
Net increase 30,906,099 $ 158,331,883 30,351,228 $ 152,771,336
=====================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the six months
ended June 30, 2005, were $330,681,931 and $307,091,707, respectively. There
were purchases of $30,779,782 and sales of $27,481,975 of U.S. government and
government agency obligations for the six months ended June 30, 2005. In
addition, there were purchases of $481,080,968 and sales of $473,429,566 of To
Be Announced (TBA) mortgage-related securities for the six months ended June 30,
2005.
41 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / 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% on the next $200 million and 0.50% of average annual
net assets over $1 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 six months ended June 30, 2005, the Fund paid
$10,251 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 per annum 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, 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.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
42 | OPPENHEIMER STRATEGIC BOND FUND/VA
As of June 30, 2005, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) JUNE 30, 2005 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso [ARP} 2/2/06 3,375ARP $ 1,144,034 $ 22,771 $ --
Brazilian Real [BRR] 7/5/05-1/5/10 39,371BRR 18,112,684 2,480,904 --
British Pound Sterling [GBP] 9/9/05 400GBP 714,952 912 --
Canadian Dollar [CAD] 9/27/05 3,790CAD 3,100,247 14,506 --
Chilean Peso [CLP] 7/25/05 665,000CLP 1,150,685 1,557 --
Czech Koruna [CZK] 8/23/05 28,800CZK 1,159,934 -- 45,793
Euro [EUR] 7/15/05 1,080EUR 1,307,712 5,524 --
Hungary Forints [HUF] 7/25/05 706,000HUF 3,450,831 12,128 --
Indian Rupee [INR] 11/9/05-12/20/05 43,280INR 986,292 25,968 --
Japanese Yen [JPY] 11/17/05-11/22/05 2,742,000JPY 25,081,979 -- 944,908
Mexican Nuevo Peso [MXN] 7/25/05 37,300MXN 3,454,369 30,466 --
Polish Zloty [PLZ] 9/21/05 8,030PLZ 2,397,199 -- 191,454
Russian Ruble [RUR] 10/27/05 28,475RUR 990,403 14,898 --
Slovakia Koruna [SKK] 8/12/05-12/5/05 126,390SKK 4,007,707 19,699 50,478
South African Rand [ZAR] 7/11/05-7/25/05 28,770ZAR 4,313,425 48,060 63,278
South Korean Won [KRW] 7/11/05-9/29/05 13,001,000KRW 12,562,505 -- 281,646
Thailand Baht [THB] 8/31/05 42,800THB 1,034,316 -- 80,848
Turkish Lira [TRY] 7/6/05-2/1/08 10,339TRY 9,074,769 341,235 --
-------------------------
3,018,628 1,658,405
-------------------------
CONTRACTS TO SELL
Australian Dollar [AUD] 12/5/05 11,080AUD 8,368,048 -- 146,688
British Pound Sterling [GBP] 11/9/05-3/8/06 10,000GBP 17,852,142 907,242 --
Canadian Dollar [CAD] 8/17/05 355CAD 290,068 -- 2,619
Colombian Peso [COP] 7/25/05-7/26/05 2,170,000COP 929,765 3,569 --
Czech Koruna [CZK] 7/25/05 84,600CZK 3,402,276 26,963 --
Euro [EUR] 7/11/05-3/8/06 51,895EUR 63,175,155 2,125,358 4,002
Japanese Yen [JPY] 7/25/06-3/8/06 11,106,000JPY 10,075,681 326,642 --
New Taiwan Dollar [TWD] 7/25/05 107,500TWD 3,397,241 32,224 --
New Zealand Dollar [NZD] 9/27/05 4,360NZD 3,007,660 50,706 --
Norwegian Krone [NOK] 7/25/05 22,100NOK 3,385,154 22,532 --
Polish Zloty [PLZ] 7/1/05 4,681PLZ 1,401,563 -- 10,310
Swiss Franc [CHF] 7/25/05 4,280CHF 3,345,712 19,306 --
Turkish Lira [TRY] 7/25/05-2/8/06 8,109TRY 5,895,624 -- 363,078
-------------------------
3,514,542 526,697
-------------------------
Total unrealized appreciation and depreciation $6,533,170 $2,185,102
=========================
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.
43 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.
Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations as the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of June 30, 2005, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2005 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Euro-Bundesobligation, 10 yr. 9/8/05 14 $2,092,359 $ 13,490
Hang Seng Stock Index (The) 7/28/05 16 1,462,669 (3,611)
Japan (Government of) Bonds, 10 yr. 9/7/05 13 1,655,856 3,266
NASDAQ 100 Index 9/16/05 92 2,765,520 (78,637)
Standard & Poor's ASX 200 Index 9/15/05 18 1,464,635 12,631
Standard & Poor's/MIB Index, 10 yr. 9/16/05 7 1,372,952 (1,514)
U.S. Long Bonds 9/21/05 295 35,031,250 410,098
U.S. Treasury Nts., 10 yr. 9/21/05 180 20,424,375 14,609
United Kingdom Long Gilt 9/28/05 2 409,116 2,717
-----------
373,049
-----------
CONTRACTS TO SELL
CAC-40 10 Index 9/16/05 26 1,337,065 (11,209)
FTSE 100 Index 9/16/05 18 1,651,712 (18,343)
Japan (Government of) Bonds, 10 yr. 9/8/05 4 5,092,417 (25,900)
Nikkei 225 Index 9/8/05 34 3,543,774 (111,263)
Standard & Poor's 500 Index 9/15/05 50 14,943,750 63,563
Standard & Poor's/Toronto
Stock Exchange 60 Index 9/15/05 17 1,543,209 (12,124)
U.S. Treasury Nts., 2 yr. 9/30/05 295 61,267,813 (1,349)
U.S. Treasury Nts., 5 yr. 9/21/05 158 17,204,719 (21,131)
U.S. Treasury Nts., 10 yr. 9/21/05 62 7,035,063 (34,043)
-----------
(171,799)
-----------
$ 201,250
===========
44 | OPPENHEIMER STRATEGIC BOND FUND/VA
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the six months ended June 30, 2005 was as follows:
CALL OPTIONS PUT OPTIONS
----------------------- -----------
PRINCIPAL/ PRINCIPAL/
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------------------------------
Options outstanding as of December 31, 2004 945 $ 2,661 2,325,000 $ 5,357
Options written 1,190 935 -- --
Options closed or expired (2,135) (3,596) (2,325,000) (5,357)
-----------------------------------------------------
Options outstanding as of June 30, 2005 -- $ -- -- $ --
=====================================================
- --------------------------------------------------------------------------------
8. CREDIT SWAP CONTRACTS
The Fund may enter into a credit default swap contract to seek to maintain a
total return on a particular investment or portion of its portfolio, or for
other non-speculative purposes. Credit default swap contracts are subject to
credit risks (for example if the counterparty fails to meet its obligations).
As a purchaser of a credit default swap contract, the Fund pays a periodic
interest fee on the notional amount to the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized loss upon payment. Upon occurrence of a specific credit
event with respect to the underlying referenced debt obligation, the Fund is
obligated to deliver that security to the counterparty in exchange for receipt
of the notional amount from the counterparty. The difference between the value
of the security delivered and the notional amount received is recorded as
realized gain. Information regarding such credit swaps as of June 30, 2005 is as
follows:
45 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT SWAP CONTRACTS Continued
NOTIONAL AMOUNT ANNUAL
RECEIVED BY THE INTEREST
REFERENCED FUND UPON RATE PAID UNREALIZED
COUNTERPARTY DEBT OBLIGATION CREDIT EVENT BY THE FUND DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Russian Federation 5%
Limited London, UK Step-up Bond $3,590,000 1.09% $ 11,475
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank:
Peru Government 8.75%
International Bond 820,000 2.95 34,533
United Mexican States
11.375% Bond 1,235,000 2.08 67,360
- ----------------------------------------------------------------------------------------------------------------------
JPMorgan Chase New York, NY:
Kingdom of Jordan 6%
Step-up Bond 250,000 2.00 1,282
Russian Federation 2.50%
Step-up Bond 730,000 2.40 55,320
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
General Motors 7.125% Bond 700,000 5.45 43,638
General Motors 7.125% Bond 1,300,000 4.40 26,339
Brazil 12.25% Global Bond 3,000,000 6.15 430,407
Republic of Turkey 11.875% Bond 580,000 3.15 20,790
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services Inc.:
Republic of Hungry 4.50% Bond 1,880,000 0.55 37,179
Turkey Government 11.875%
International Bond 1,560,000 3.22 8,157
- ----------------------------------------------------------------------------------------------------------------------
Federal Republic of Brazil
UBS AG, London Branch 12.25% Bond 900,000 4.50 59,427
--------
$795,906
========
As a seller of a credit default swap contract, the Fund receives a periodic
interest fee on the notional amount from the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized gain upon receipt. Upon occurrence of a specific credit
event with respect to the underlying referenced debt obligation, the Fund
receives that security from the counterparty in exchange for payment of the
notional amount to the counterparty. The difference between the value of the
security received and the notional amount paid is recorded as realized loss.
Information regarding such credit swaps as of June 30, 2005 is as follows:
NOTIONAL AMOUNT ANNUAL
PAID BY THE INTEREST UNREALIZED
REFERENCED FUND UPON RATE RECEIVED APPRECIATION
COUNTERPARTY DEBT OBLIGATION CREDIT EVENT BY THE FUND (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Russian Federation 5.00%
Limited London, UK Step-up Bond $6,280,000 0.70% $ 10,208
- ---------------------------------------------------------------------------------------------------------------------
Lehman Brothers.
Special Financing, Inc.:
Republic of Turkey
11.875% Bond 1,270,000 1.87 17,092
General Motors 7.125% Bond 700,000 9.80 136,128
General Motors 7.125% Bond 1,300,000 5.55 (49,733)
- ---------------------------------------------------------------------------------------------------------------------
Federal Republic of Brazil
UBS AG, London Branch 12.25% Bond 3,055,000 3.80 100,138
-----------
$ 213,833
===========
46 | OPPENHEIMER STRATEGIC BOND FUND/VA
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS
The Fund may enter into an interest rate swap transaction to maintain a total
return or yield spread on a particular investment, or portion of its portfolio,
or for other non-speculative purposes. Interest rate swaps involve the exchange
of commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The coupon payments are based on an agreed
upon principal amount and a specified index. Because the principal amount is not
exchanged, it represents neither an asset nor a liability to either
counterparty, and is referred to as notional. The Fund records an increase or
decrease to unrealized gain (loss), in the amount due to or owed by the Fund at
termination or settlement.
Interest rate swaps are subject to credit risk (if the counterparty fails
to meet its obligations) and interest rate risk. The Fund could be obligated to
pay more under its swap agreements than it receives under them, as a result of
interest rate changes.
As of June 30, 2005, the Fund had entered into the following interest rate swap
agreements:
RATE RATE
PAID BY RECEIVED BY UNREALIZED
NOTIONAL THE FUND AT THE FUND AT FLOATING TERMINATION APPRECIATION
SWAP COUNTERPARTY AMOUNT JUNE 30, 2005 JUNE 30, 2005 RATE INDEX DATES (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Three-Month
1,407,000,000KRW 3.51% 4.34% KWCDC 2/17/10 $ 18,434
Six-Month
1,260,000PLZ 5.90 5.52 WIBO 3/24/10 14,546
Six-Month
2,016,000PLZ 5.90 5.55 WIBO 3/24/10 24,091
- ------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston, Inc. Six-Month
(Nassau Branch) 3,640,000PLZ 4.91 4.48 WIBO 7/1/10 2,946
- ------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Three-Month
3,290,000CAD 3.0475 2.58714 CDOR 1/28/07 (9,767)
Three-Month
8,110,000EUR 2.134 3.83 EURIBOR 3/8/15 535,980
Six-Month
5,920,000EUR 2.16 2.47 EURIBOR 4/25/07 (1,168)
Six-Month
1,300,000EUR 3.604 2.16 EURIBOR 4/25/15 959
1,444,000,000KRW 3.50 4.24 KWCDC 3/4/10 12,021
1,444,000,000KRW 3.50 4.31 KWCDC 3/4/10 16,245
1,156,000,000KRW 3.50 4.27 KWCDC 3/4/10 11,073
1,156,000,000KRW 3.50 4.27 KWCDC 3/4/10 11,073
578,000,000KRW 3.50 4.28 KWCDC 3/4/10 5,778
1,195,000,000KRW 3.51 3.80 KWCDC 5/24/10 (5,437)
Six-Month
930,000 3.66 5.25 LIBOR 6/23/15 (26,382)
Three-Month
11,110,000 4.816 2.95875 LIBOR BBA 3/8/15 (518,824)
- ------------------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG, 5 yr.:
90-Day
55,240,000TWD 2.59 1.289 CPTW 8/19/09 (1,238)
74,350,000INR 4.88 5.465 IRS 1/15/09 61,625
47 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
RATE RATE
PAID BY RECEIVED BY UNREALIZED
NOTIONAL THE FUND AT THE FUND AT FLOATING TERMINATION APPRECIATION
SWAP COUNTERPARTY AMOUNT JUNE 30, 2005 JUNE 30, 2005 RATE INDEX DATES (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank Three-Month
AG, 10 yr. 10,000,000 3.26813% 5.32% LIBOR BBA 5/12/14 $ 733,537
- ------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
15,887,992BRR 19.73 17.18 BZDI 1/2/08 56,302
9,160,000MXN 9.98 10.22 MXN TIIE 1/30/15 16,448
7,875,000MXN 10.01 10.43 MXN TIIE 5/29/15 23,547
7,875,000MXN 10.015 10.30 MXN TIIE 6/1/15 17,288
12,500,000MXN 10.03 10.01 MXN TIIE 6/4/10 (21,382)
12,500,000MXN 9.86 10.015 MXN TIIE 6/7/10 (13,417)
12,850,000MXN 10.03 9.83 MXN TIIE 6/10/10 (12,340)
7,990,000MXN 10 10.70 MXN TIIE 6/14/15 17,004
- ------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
3,307,000BRR 18.63 18 BZDI 1/2/07 3,604
1,314,230BRR 18.25 17.17 BZDI 1/2/08 1,084
1,606,280BRR 18.25 17.17 BZDI 1/2/08 1,325
2,744,000BRR 19.20 18.16 BZDI 1/2/08 33,628
651,592BRR 18.69 16.8 BZDI 1/4/10 2,615
436,214BRR 18.70 16.15 BZDI 1/4/10 617
564,716BRR 18.70 16.25 BZDI 1/4/10 1,882
1,682,090BRR 18.25 17.72 BZDI 1/2/07 (1,996)
9,100,00013MXN 10 10.7 MXN TIIE 5/8/15 42,115
11,510,000MXN 9.98 9.74 MXN TIIE 1/5/10 7,398
23,010,000MXN 10.02 9.84 MXN TIIE 12/31/09 22,651
4,100,000MXN 10.015 10.85 MXN TIIE 3/5/15 22,807
- ------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
Six-Month
245,400,000HUF 8.88 7 LIBOR flat 7/14/08 43,121
28-Day
14,620,000MXN 10.035 10.88 MXN TIIE 11/16/14 83,192
Three-Month
1,820,000 3.19 4.94 LIBOR BBA 4/30/14 84,044
Three-Month
50,000,000 3.23 4.0725 LIBOR BBA 5/6/09 (12,248)
Three-Month
35,000,000 3.23 4.985 LIBOR BBA 5/6/14 1,713,856
Three-Month
25,000,000 4.24 3.16063 LIBOR 7/23/09 (420,815)
- ------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
1,760,273BRR 18.68 16.88 BZDI 1/2/08 (4,443)
Three-Month
22,000,000 2.32 2.77 LIBOR flat 11/10/05 133,545
Three-Month
4,940,000ZAR 6.936 8.14 JIBA 5/18/10 15,377
-----------
$2,742,301
===========
48 | OPPENHEIMER STRATEGIC BOND FUND/VA
Notional amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
BRR Brazilian Real
CAD Canadian Dollar
EUR Euro
HUF Hungary Forints
INR Indian Rupee
KRW South Korean Won
MXN Mexican Nuevo Peso
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
Index abbreviations are as follows:
BZDI Brazil Cetip Interbank Deposit Rate
CDOR Canada Bankers Acceptances Rate
CPTW Bloomberg Taiwan Secondary Commercial Papers
EURIBOR Euro Interbank Offered Rate
IRS India Swap Composites
JIBA South Africa Johannesburg Interbank Agreed Rate
KWCDC South Korean Won-3 Months
LIBOR London-Interbank Offered Rate
LIBOR BBA London-Interbank Offered Rate British Bankers Association
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
WIBO Poland Warsaw Interbank Offer Bid Rate
- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termination or
settlement. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
As of June 30, 2005, the Fund had entered into the following total return swap
agreements.
PAID BY RECEIVED BY UNREALIZED
NOTIONAL THE FUND AT THE FUND AT TERMINATION APPRECIATION
SWAP COUNTERPARTY AMOUNT JUNE 30, 2005 JUNE 30, 2005 DATES (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------
Six-Month
Deutsche Bank AG $1,620,000 LIBOR BBA 5.46% 5/13/15 $(60,502)
- -------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month
920,000 LIBOR BBA 5.10 1/14/15 62,365
Six-Month
920,000 LIBOR BBA 5.08 1/20/15 70,219
- -------------------------------------------------------------------------------------------------------------------
One-Month
LIBOR Minus
UBS AG 7,850,000 0.25% 1.51 12/1/05 24,064
---------
$ 96,146
=========
Index abbreviations are as follows:
LIBOR London-Interbank Offered Rate
LIBOR BBA London-Interbank Offered Rate British Bankers Association
49 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. FOREIGN EXCHANGE VOLATILITY SWAP CONTRACTS
The Fund may enter into a foreign exchange volatility swap transaction to hedge
the direction of volatility in a particular currency, or for other
non-speculative purposes. In foreign exchange volatility swaps, counterparties
agree to buy or sell volatility at a specific volatility level over a fixed
period. Payment is normally made on the basis of a currency amount per
percentage point above or below the volatility strike level at maturity. Because
the principal amount is not exchanged, it represents neither an asset nor a
liability to either counterparty, and is referred to as a notional principal
amount. The Fund records a daily increase or decrease to unrealized gain (loss)
based on changes in the amount due to or owed by the Fund at the expiration date
of the swap. Foreign exchange volatility swaps are subject to credit risks (if
the counterparty fails to meet its obligations).
As of June 30, 2005, the Fund had entered into the following foreign exchange
volatility swap agreements:
NOTIONAL
PRINCIPAL EXPIRATION UNREALIZED
SWAP COUNTERPARTY CURRENCY AMOUNT DATE PRICE DEPRECIATION
- ------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) Mexican Nuevo Peso $2,160,000 10/12/05 11.449MXN $9,247
- --------------------------------------------------------------------------------
12. SWAPTION TRANSACTIONS
The Fund may enter into a swaption transaction, whereby a contract that grants
the holder, in return for payment of the purchase price (the "premium") of the
option, the right, but not the obligation, to enter into an interest rate swap
at a preset rate within a specified period of time, with the writer of the
contract. The writer receives premiums and bears the risk of unfavorable changes
in the preset rate on the underlying interest rate swap. Swaption contracts
written by the Fund do not give rise to counterparty credit risk as they
obligate the Fund, not its counterparty, to perform. Swaptions written are
reported as a liability in the Statement of Assets and Liabilities.
Written swaption activity for the six months ended June 30, 2005 was as follows:
CALL SWAPTIONS PUT SWAPTIONS
------------------------------- -----------------------------
NOTIONAL AMOUNT OF NOTIONAL AMOUNT OF
AMOUNT PREMIUMS AMOUNT PREMIUMS
- -------------------------------------------------------------------------------------------------------------------------
Swaptions outstanding as of December 31, 2004 $ 6,670,000 $ 66,002 $ 8,240,000 $ 28,460
Swaptions written 30,525,000 247,145 -- --
Swaptions closed or expired (26,250,000) (273,223) (8,240,000) (28,460)
--------------------------------------------------------------------
Swaptions outstanding as of June 30, 2005 $ 10,945,000 $ 39,924 $ -- $ --
====================================================================
As of June 30, 2005, the Fund had entered into the following swaption contracts:
NOTIONAL EXPIRATION EXERCISE PREMIUM VALUE
SWAPTIONS AMOUNT DATE PRICE RECEIVED SEE NOTE 1
- -----------------------------------------------------------------------------------------------
Deutsche Bank AG $10,945,000 8/10/05 5.78AUD $39,924 $80,373
Exercise price is denoted in the following currency:
AUD Australian Dollar
- --------------------------------------------------------------------------------
13. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of June 30, 2005, 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.
Securities that are illiquid or restricted are marked with the
50 | OPPENHEIMER STRATEGIC BOND FUND/VA
applicable footnote on the Statement of Investments. Information concerning
restricted securities and currency is as follows:
UNREALIZED
ACQUISITION VALUATION AS OF APPRECIATION
SECURITY DATES COST JUNE 30, 2005 (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., Series B, Escrow Shares 1/4/01 $ 840 $ -- $ (840)
Prandium, Inc. 3/19/99-9/25/02 284,000 145 (283,855)
CURRENCY
Argentine Peso 6/28/05 81,843 82,056 213
----------------------------------------------
$366,683 $82,201 $(284,482)
==============================================
- --------------------------------------------------------------------------------
14. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of June 30, 2005, the
Fund had on loan securities valued at $31,782,663. Collateral of $32,419,526 was
received for the loans, of which $2,056,026 was received in cash and
subsequently invested in approved instruments.
- --------------------------------------------------------------------------------
15. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005, and amended on March 4, 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 defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
51 | OPPENHEIMER STRATEGIC BOND FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
52 | OPPENHEIMER STRATEGIC BOND FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's
advisory agreement for the current year, the Board evaluated the nature and
extent of the services provided by the Manager and its affiliates. The Manager
provides the Fund with office space, facilities and equipment; administrative,
accounting, clerical, legal and compliance personnel; securities trading
services and oversight of third party service providers and the services of the
portfolio managers and the Manager's investment team, who provide research,
analysis and other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the
quality of the portfolio management services to be provided, the Board
considered the experience of Arthur P. Steinmetz and the Manager's international
and quantitative fixed income investment teams and analysts. Mr. Steinmetz has
been portfolio manager and a Vice President of the Fund and a Senior Vice
President of the Manager since March 1993 and is an officer of other portfolios
and accounts in the OppenheimerFunds complex. Mr. Steinmetz has had over 22
years of experience managing fixed income investments.
The Board reviewed information, prepared by the Manager and by the
independent consultant, comparing the Fund's historical performance to relevant
market indices and to the performance of other general bond funds (including
both funds advised by the Manager and funds advised by other investment
advisers). The Board also receives and reviews comparative performance
information regarding the Fund and other funds at each Board meeting. The Board
noted that the Fund's ten-year performance was below its peer group average.
However, its one-year, three-year and five-year performance was better than its
peer group average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information,
including comparative information, regarding the fees paid to the Manager and
its affiliates and the other expenses borne by the Fund. The independent
consultant provided comparative data in regard to the fees and expenses of the
Fund, other flexible income, multisector income and general bond funds and other
funds with comparable assets levels and distribution features. The Board noted
that, although the Fund's management fees are higher than its peer group
average, its total expenses are lower than its peer group average. In addition,
the Board evaluated the comparability of the fees charged and the services
provided to the Fund to the fees charged and services provided to other types of
entities advised by the Manager.
53 | OPPENHEIMER STRATEGIC BOND FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed
information regarding the cost of services provided by the Manager and its
affiliates and the Manager's profitability. The Board considered that the
Manager must be able to pay and retain experienced professional personnel at
competitive rates to provide services to the Fund and that maintaining the
financial viability of the Manager is important in order for the Manager to
continue to provide significant services to the Fund and its shareholders. In
addition the Board considered information that was provided regarding the direct
and indirect benefits the Manager receives as a result of its relationship with
the Fund, including compensation paid to the Manager's affiliates.
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has recently experienced
moderate asset growth and that, based on current asset levels, the Fund is not
yet approaching its last management fee breakpoint.
CONCLUSIONS. These factors were also considered by the independent
Trustees meeting separately from the full Board, assisted by experienced counsel
to the Fund and to the independent Trustees. Fund counsel and the independent
Trustees' counsel are both independent of the Manager within the meaning and
intent of the Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations
described above, the Board, including a majority of the independent Trustees,
concluded that the nature, extent and quality of the services provided to the
Fund by the Manager are a benefit to the Fund and in the best interest of the
Fund's shareholders and that the amount and structure of the compensation
received by the Manager and its affiliates are reasonable in relation to the
services provided. Accordingly, the Board elected to continue the investment
advisory agreement for another year. In arriving at this decision, the Board did
not single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
54 | OPPENHEIMER STRATEGIC BOND FUND/VA
VALUE FUND/VA
SEMIANNUAL REPORT
JUNE 30, 2005
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; 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 June 30, 2005.
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, 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, 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 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
(1/1/05) (6/30/05) JUNE 30, 2005
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,018.80 $7.54
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,017.36 7.53
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio, multiplied by the
average account value over the period, multiplied by 181/365 (to reflect the
one-half year period). The annualized expense ratio based on the 6-month period
ended June 30, 2005 is as follows:
CLASS EXPENSE RATIO
- -------------------------------------
Non-Service shares 1.50%
- --------------------------------------------------------------------------------
5 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF INVESTMENTS June 30, 2005 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.5%
- --------------------------------------------------------------------------------
MEDIA--6.5%
Liberty Global, Inc., Series A 1 3,213 $ 149,951
- --------------------------------------------------------------------------------
News Corp., Cl. A 2,200 35,596
--------------
185,547
- --------------------------------------------------------------------------------
CONSUMER STAPLES--4.8%
- --------------------------------------------------------------------------------
TOBACCO--4.8%
Altria Group, Inc. 2,130 137,726
- --------------------------------------------------------------------------------
ENERGY--10.7%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.6%
Halliburton Co. 2,170 103,769
- --------------------------------------------------------------------------------
OIL & GAS--7.1%
BP plc, ADR 2,490 155,326
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, ADR 900 46,917
--------------
202,243
- --------------------------------------------------------------------------------
FINANCIALS--30.0%
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--7.1%
Bank of America Corp. 1,308 59,658
- --------------------------------------------------------------------------------
Wells Fargo & Co. 2,370 145,945
--------------
205,603
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--14.6%
Alliance Capital Management Holding LP 500 23,370
- --------------------------------------------------------------------------------
Capital One Financial Corp. 1,000 80,010
- --------------------------------------------------------------------------------
Citigroup, Inc. 3,000 138,690
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 390 30,022
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 2,400 84,768
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 630 62,546
--------------
419,406
- --------------------------------------------------------------------------------
INSURANCE--5.7%
Everest Re Group Ltd. 300 27,900
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 2,910 87,969
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 1,470 46,775
--------------
162,644
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.6%
Countrywide Financial Corp. 1,200 46,332
- --------------------------------------------------------------------------------
Freddie Mac 420 27,397
--------------
73,729
- --------------------------------------------------------------------------------
HEALTH CARE--4.2%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.6%
Wyeth 1,050 46,725
- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.6%
Sanofi-Aventis SA, ADR 1,800 73,782
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIALS--15.7%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--8.6%
Honeywell International, Inc. 4,030 $ 147,619
- --------------------------------------------------------------------------------
Raytheon Co. 2,550 99,756
--------------
247,375
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--4.8%
Cendant Corp. 6,090 136,233
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.3%
General Electric Co. 780 27,027
- --------------------------------------------------------------------------------
Tyco International Ltd. 1,380 40,296
--------------
67,323
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.9%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.9%
International Business Machines Corp. 750 55,650
- --------------------------------------------------------------------------------
SOFTWARE--11.0%
Compuware Corp. 1 2,060 14,811
- --------------------------------------------------------------------------------
Microsoft Corp. 4,900 121,716
- --------------------------------------------------------------------------------
Novell, Inc. 1 4,800 29,760
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 5,250 87,518
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 2,390 60,826
--------------
314,631
- --------------------------------------------------------------------------------
MATERIALS--3.2%
- --------------------------------------------------------------------------------
CHEMICALS--2.2%
Praxair, Inc. 1,390 64,774
- --------------------------------------------------------------------------------
METALS & MINING--1.0%
Phelps Dodge Corp. 300 27,750
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.6%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.6%
IDT Corp., Cl. B 1 3,740 49,218
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 1,550 53,553
--------------
102,771
- --------------------------------------------------------------------------------
UTILITIES--7.9%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--6.9%
AES Corp. (The) 1 5,680 93,038
- --------------------------------------------------------------------------------
CMS Energy Corp. 1 2,200 33,132
- --------------------------------------------------------------------------------
NRG Energy, Inc. 1 200 7,520
- --------------------------------------------------------------------------------
PG&E Corp. 740 27,780
- --------------------------------------------------------------------------------
Reliant Energy, Inc. 1 2,890 35,778
--------------
197,248
- --------------------------------------------------------------------------------
GAS UTILITIES--1.0%
Sempra Energy 720 29,743
--------------
Total Common Stocks (Cost $2,385,609) 2,854,672
6 | OPPENHEIMER VALUE FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MONEY MARKET DEPOSIT--0.2%
- --------------------------------------------------------------------------------
JPMorgan Chase, Nassau Branch, 2.716%,
7/1/05 (Cost $5,025) $ 5,025 $ 5,025
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.0%
- --------------------------------------------------------------------------------
Undivided interest of 0.002% in joint repurchase agreement
(Principal Amount/Value $1,234,399,000, with a maturity
value of $1,234,508,724) with UBS Warburg LLC, 3.20%,
dated 6/30/05, to be repurchased at $27,002 on 7/1/05,
collateralized by Federal Home Loan Mortgage Corp.,
5.50%, 2/1/35, with a value of $1,260,871,334
(Cost $27,000) 27,000 27,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,417,634) 100.7% 2,886,697
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (18,712)
-----------------------------
NET ASSETS 100.0% $ 2,867,985
=============================
FOOTNOTE TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2005
- -------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------
Investments, at value (cost $2,417,634)--see accompanying statement of investments $ 2,886,697
- -------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 2,967
Other 2,373
----------------
Total assets 2,892,037
- -------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 11,456
Legal, auditing and other professional fees 5,400
Trustees' compensation 3,093
Shareholder communications 2,737
Other 1,366
----------------
Total liabilities 24,052
- -------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,867,985
================
- -------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 230
- -------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,132,982
- -------------------------------------------------------------------------------------------------------------
Accumulated net investment income 4,643
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 261,067
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 469,063
----------------
NET ASSETS--applicable to 229,559 shares of beneficial
interest outstanding $ 2,867,985
================
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 12.49
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2005
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $269) $ 25,985
- -------------------------------------------------------------------------------------------------------------
Interest 936
----------------
Total investment income 26,921
- -------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------
Management fees 10,447
- -------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 7,152
- -------------------------------------------------------------------------------------------------------------
Trustees' compensation 2,221
- -------------------------------------------------------------------------------------------------------------
Shareholder communications 281
- -------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 31
- -------------------------------------------------------------------------------------------------------------
Other 707
----------------
Total expenses 20,839
Less reduction to custodian expenses (31)
----------------
Net expenses 20,808
- -------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,113
- -------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- -------------------------------------------------------------------------------------------------------------
Net realized gain on investments 261,067
- -------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (213,725)
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 53,455
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER VALUE FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
- ------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 6,113 $ (2,747)
- ------------------------------------------------------------------------------------------------------
Net realized gain 261,067 462,480
- ------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (213,725) (56,226)
---------------------------
Net increase in net assets resulting from operations 53,455 403,507
- ------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------
Dividends from net investment income--Non-Service shares -- (10,068)
- ------------------------------------------------------------------------------------------------------
Distributions from net realized gain--Non-Service shares -- (584,853)
- ------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from beneficial interest
transactions--Non-Service shares -- (864,862)
- ------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------
Total increase (decrease) 53,455 (1,056,276)
- ------------------------------------------------------------------------------------------------------
Beginning of period 2,814,530 3,870,806
---------------------------
End of period (including accumulated net investment income (loss) of
$4,643 and $(1,470), respectively) $ 2,867,985 $ 2,814,530
===========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER VALUE FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2005 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2004 2003 1
- --------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.26 $ 12.90 $ 10.00
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 2 (.01) 2 .03
Net realized and unrealized gain .20 1.82 2.87
-------------------------------------------------
Total from investment operations .23 1.81 2.90
- --------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.03) --
Distributions from net realized gain -- (2.42) --
-------------------------------------------------
Total dividends and/or distributions to shareholders -- (2.45) --
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.49 $ 12.26 $ 12.90
=================================================
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.88% 14.50% 29.00%
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,868 $ 2,815 $ 3,871
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,809 $ 3,370 $ 3,205
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.44% (0.08)% 0.27%
Total expenses 1.50% 5 1.82% 5 1.39% 5
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 100% 120%
1. For the period from January 2, 2003 (commencement of operations) to December
31, 2003.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
4. Annualized for periods of less than one full year.
5. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER VALUE FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Value Fund/VA (the Fund) is a separate series of Oppenheimer
Variable Account Funds (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek long-term growth of capital by investing
primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. Realization of current income is a secondary
consideration. The Trust's investment advisor is OppenheimerFunds, Inc. (the
Manager). As of June 30, 2005, all of the Non-Service shares were owned by the
Manager.
The Fund currently offers Non-Service shares only. The class is sold at
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 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 sixty days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Futures contracts traded on a
commodities or futures exchange will be valued at the final settlement price or
official closing price on the principal exchange as reported by such principal
exchange at its trading session ending at, or most recently prior to, the time
when the Fund's assets are valued. Securities may be valued primarily using
dealer-supplied valuations or a portfolio pricing service authorized by the
Board of Trustees. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of The New
York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day
the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
12 | OPPENHEIMER VALUE FUND/VA
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts at a rate equal to the Federal
Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if
applicable, represents earnings on cash balances maintained by the Fund during
the period. Such interest expense and other custodian fees may be paid with
these earnings.
- --------------------------------------------------------------------------------
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.
13 | OPPENHEIMER VALUE FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Trust has authorized an unlimited number of $0.001 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED JUNE 30, 2005 YEAR ENDED DECEMBER 31, 2004
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold -- $ -- -- $ --
Dividends and/or distributions reinvested -- -- 10,679 135,090
Redeemed -- -- (81,120) (999,952)
-------------------------------------------------------------------
Net decrease -- $ -- (70,441) $ (864,862)
===================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2005, were
$1,253,860 and $1,643,199, respectively.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.75% of the first $200 million of average annual net assets,
0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the
next $200 million and 0.60% of average annual net assets over $800 million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per annum for assets of $10 million or more.
The Fund is subject to the minimum fee in the event that the per account fee
does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees to 0.35% of average annual net
assets of the Fund. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. LITIGATION
A consolidated amended complaint has been filed as putative derivative and class
actions against the Manager, OFS and the Distributor, as well as 51 of the
Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 30 present and
former Directors or Trustees and 8 present and former officers of the funds.
This complaint, initially filed in the U.S. District Court for the Southern
District of New York on January 10, 2005, and amended on March 4, 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,
14 | OPPENHEIMER VALUE FUND/VA
rescission of the funds' investment advisory agreements, an accounting of all
fees paid, and an award of attorneys' fees and litigation expenses.
The defendants believe that the allegations contained in the Complaints
are without merit and that they have meritorious defenses against the claims
asserted. The defendants intend to defend these lawsuits vigorously and to
contest any claimed liability. The 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.
15 | OPPENHEIMER VALUE FUND/VA
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 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 voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those
forms may be reviewed and copied at the SEC's Public Reference Room in
Washington D.C. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
16 | OPPENHEIMER VALUE FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each year, the Board of Trustees (the "Board"), including a majority of the
independent Trustees, is required to determine whether to renew the Fund's
advisory agreement. The Investment Company Act of 1940, as amended, requires
that the Board request and evaluate, and that the Manager provide, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. The Board employs an independent consultant to prepare a report that
provides information, including comparative information, that the Board requests
for this purpose. In addition, the Board receives information throughout the
year regarding Fund services, fees, expenses and performance.
NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory
agreement for the current year, the Board evaluated the nature and extent of the
services provided by the Manager and its affiliates. The Manager provides the
Fund with office space, facilities and equipment; administrative, accounting,
clerical, legal and compliance personnel; securities trading services and
oversight of third party service providers and the services of the portfolio
manager and the Manager's investment team, who provide research, analysis and
other advisory services in regard to the Fund's investments.
QUALITY OF SERVICES. The Board also considered the quality of the services
provided and the quality of the Manager's resources that are available to the
Fund. The Board noted that the Manager has had over forty years of experience as
an investment adviser and that its assets under management rank it among the top
mutual fund managers in the United States. The Board evaluated the Manager's
administrative, accounting, legal and compliance services and information the
Board received regarding the experience and professional qualifications of the
Manager's personnel and the size and functions of its staff. The Board members
also considered their experiences as directors or trustees of the Fund and other
funds advised by the Manager. The Board received and reviewed information
regarding the quality of services provided by affiliates of the Manager, which
it also reviews at other times during the year in connection with the renewal of
the Fund's service agreements. The Board was aware that there are alternatives
to retaining the Manager.
PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality
of the portfolio management services to be provided, the Board considered the
experience of Christopher Leavy and the Manager's Equity Value investment team
and analysts. Mr. Leavy is a Vice President of the Fund and has been the person
primarily responsible for the day-to-day management of the Fund's portfolio
since December 2002. He has been a Senior Vice President of the Manager since
September 2002 and is an officer and portfolio manager of other funds in the
OppenheimerFunds complex. Mr. Leavy has had over 12 years of experience managing
equity investments.
The Board reviewed information, prepared by the Manager and by the independent
consultant, comparing the Fund's historical performance to relevant market
indices and to the performance of other large-cap value funds (including both
funds advised by the Manager and funds advised by other investment advisers).
The Board also receives and reviews comparative performance information
regarding the Fund and other funds at each Board meeting. The Board noted that
the Fund's performance since its inception in January 2003 was below its peer
group average. However, its one-year performance was better than its peer group
average.
MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including
comparative information, regarding the fees paid to the Manager and its
affiliates and the other expenses borne by the Fund. The independent consultant
provided comparative data in regard to the fees and expenses of the Fund, other
large-cap value and largecap core funds and other funds with comparable assets
levels and distribution features. The Board noted that the Fund's actual
management fees and total expenses are higher than its peer group average.
However, its contractual management fees are lower than its peer group average.
In addition, the Board evaluated the comparability of the
17 | OPPENHEIMER VALUE FUND/VA
BOARD APPROVAL OF THE FUND'S INVESTMENT
ADVISORY AGREEMENT Unaudited / Continued
- --------------------------------------------------------------------------------
fees charged and the services provided to the Fund to the fees charged and
services provided to other types of entities advised by the Manager.
PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information
regarding the cost of services provided by the Manager and its affiliates and
the Manager's profitability. The Board considered that the Manager must be able
to pay and retain experienced professional personnel at competitive rates to
provide services to the Fund and that maintaining the financial viability of the
Manager is important in order for the Manager to continue to provide significant
services to the Fund and its shareholders. In addition the Board considered
information that was provided regarding the direct and indirect benefits the
Manager receives as a result of its relationship with the Fund, including
compensation paid to the Manager's affiliates and research provided to the
Manager in connection with permissible brokerage arrangements (soft dollar
arrangements).
ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may
realize economies of scale in managing and supporting the Fund and the current
level of Fund assets in relation to the Fund's breakpoint schedule for its
management fees. The Board considered that the Fund has not experienced any
asset growth during the period ended September 30, 2004 and that, based on
current asset levels, the Fund is not yet approaching its last management fee
breakpoint.
CONCLUSIONS. These factors were also considered by the independent Trustees
meeting separately from the full Board, assisted by experienced counsel to the
Fund and to the independent Trustees. Fund counsel and the independent Trustees'
counsel are both independent of the Manager within the meaning and intent of the
Securities and Exchange Commission Rules.
Based on its review of the information it received and its evaluations described
above, the Board, including a majority of the independent Trustees, concluded
that the nature, extent and quality of the services provided to the Fund by the
Manager are a benefit to the Fund and in the best interest of the Fund's
shareholders and that the amount and structure of the compensation received by
the Manager and its affiliates are reasonable in relation to the services
provided. Accordingly, the Board elected to continue the investment advisory
agreement for another year. In arriving at this decision, the Board did not
single out any factor or factors as being more important than others, but
considered all of the factors together. The Board judged the terms and
conditions of the advisory agreement, including the management fee, in light of
all of the surrounding circumstances.
18 | OPPENHEIMER VALUE FUND/VA
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to semiannual reports.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUNDS' GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Funds' Governance Committee (the "Committee") will evaluate
potential Board candidates to assess their qualifications. The
Committee shall have the authority, upon approval of the Board, to
retain an executive search firm to assist in this effort. The
Committee may consider recommendations by business and personal
contacts of current Board members and by executive search firms
which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider
the advice and recommendation of the Funds' investment manager and
its affiliates in making the selection.
2. The Committee shall screen candidates for Board membership. The
Committee has not established specific qualifications that it
believes must be met by a trustee nominee. In evaluating trustee
nominees, the
Committee considers, among other things, an individual's
background, skills, and experience; whether the individual is an
"interested person" as defined in the Investment Company Act of
1940; and whether the individual would be deemed an "audit
committee financial expert" within the meaning of applicable SEC
rules. The Committee also considers whether the individual's
background, skills, and experience will complement the background,
skills, and experience of other nominees and will contribute to the
Board. There are no differences in the manner in which the
Committee evaluates nominees for trustees based on whether the
nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the
Board at such times as the Committee meets to consider new nominees
for the Board. The Committee shall have the sole discretion to
determine the candidates to present to the Board and, in such cases
where required, to shareholders. Recommendations for trustee
nominees should, at a minimum, be accompanied by the following:
o the name, address, and business, educational, and/or
other pertinent background of the person being
recommended;
o a statement concerning whether the person is an
"interested person" as defined in the Investment
Company Act of 1940;
o any other information that the Funds would be required
to include in a proxy statement concerning the person
if he or she was nominated; and
o the name and address of the person submitting the
recommendation and, if that person is a shareholder,
the period for which that person held Fund shares.
The recommendation also can include any additional information
which the person submitting it believes would assist the Committee
in evaluating the recommendation.
4. Shareholders should note that a person who owns securities issued
by Massachusetts Mutual Life Insurance Company (the parent company
of the Funds' investment adviser) would be deemed an "interested
person" under the Investment Company Act of 1940. In addition,
certain other relationships with Massachusetts Mutual Life
Insurance Company or its subsidiaries, with registered
broker-dealers, or with the Funds' outside legal counsel may cause
a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a
trustee, Committee members and other directors customarily
interview the
individual in person. In addition, the individual customarily is
asked to complete a detailed questionnaire which is designed to
elicit information which must be disclosed under SEC and stock
exchange rules and to determine whether the individual is subject
to any statutory disqualification from serving as a trustee of a
registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the 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 June 30, 2005 the registrant's principal
executive officer and principal financial officer found the registrant's
disclosure controls and procedures to provide reasonable assurances that
information required to be disclosed by the 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.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Variable Account Funds
By: /s/John V. Murphy
-----------------
John V. Murphy
Principal Executive Officer
Date: August 10, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/John V. Murphy
-----------------
John V. Murphy
Principal Executive Officer
Date: August 10, 2005
By: /s/Brian W. Wixted
-----------------
Brian W. Wixted
Principal Financial Officer
Date: August 10, 2005