UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4108
OPPENHEIMER VARIABLE ACCOUNT FUNDS
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
ROBERT G. ZACK, ESQ.
OPPENHEIMERFUNDS, INC.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: DECEMBER
Date of reporting period: 06/30/2006
ITEM 1. REPORTS TO STOCKHOLDERS.
OPPENHEIMER MIDCAP FUND/VA
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, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
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Non-Service shares Actual $1,000.00 $1,021.10 $3.46
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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 1,019.80 4.82
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Service shares Hypothetical 1,000.00 1,020.03 4.82
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------------
Non-Service shares 0.69%
- ------------------------------------------
Service shares 0.96
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5 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--97.3%
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CONSUMER DISCRETIONARY--15.9%
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HOTELS, RESTAURANTS & LEISURE--2.5%
Life Time Fitness, Inc. 1 25,600 $ 1,184,512
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Panera Bread Co., Cl. A 1 336,300 22,612,812
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Starbucks Corp. 1 129,800 4,901,248
--------------
28,698,572
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HOUSEHOLD DURABLES--1.4%
Harman International Industries, Inc. 197,000 16,817,890
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INTERNET & CATALOG RETAIL--0.6%
Coldwater Creek, Inc. 1 287,100 7,682,796
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MEDIA--1.0%
Getty Images, Inc. 1 181,200 11,508,012
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SPECIALTY RETAIL--6.8%
Chico's FAS, Inc. 1 603,300 16,277,034
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O'Reilly Automotive, Inc. 1 1,014,024 31,627,409
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Tractor Supply Co. 1 319,600 17,664,292
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Williams-Sonoma, Inc. 399,800 13,613,190
--------------
79,181,925
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TEXTILES, APPAREL & LUXURY GOODS--3.6%
Coach, Inc. 1 375,000 11,212,500
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Polo Ralph Lauren Corp. 551,000 30,249,900
--------------
41,462,400
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CONSUMER STAPLES--1.5%
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FOOD & STAPLES RETAILING--1.5%
Whole Foods Market, Inc. 269,200 17,401,088
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ENERGY--7.2%
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ENERGY EQUIPMENT & SERVICES--3.8%
BJ Services Co. 391,700 14,594,742
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National Oilwell Varco, Inc. 1 185,900 11,771,188
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Smith International, Inc. 419,000 18,632,930
--------------
44,998,860
--------------
OIL & GAS--3.4%
Apache Corp. 140,800 9,609,600
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Murphy Oil Corp. 343,900 19,210,254
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XTO Energy, Inc. 235,099 10,407,833
--------------
39,227,687
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FINANCIALS--14.4%
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CAPITAL MARKETS--4.7%
Affiliated Managers Group, Inc. 1 205,000 17,812,450
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Greenhill & Co., Inc. 124,800 7,582,848
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Legg Mason, Inc. 294,200 29,278,784
--------------
54,674,082
VALUE
SHARES SEE NOTE 1
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COMMERCIAL BANKS--2.5%
Commerce Bancorp, Inc. 825,300 $ 29,438,451
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DIVERSIFIED FINANCIAL SERVICES--2.7%
Chicago Mercantile Exchange (The) 63,100 30,991,565
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INSURANCE--2.7%
Brown & Brown, Inc. 658,200 19,232,604
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Philadelphia Consolidated
Holding Co. 1 381,200 11,573,232
--------------
30,805,836
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REAL ESTATE--1.8%
CB Richard Ellis Group, Inc., Cl. A 1 858,720 21,382,128
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HEALTH CARE--16.4%
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BIOTECHNOLOGY--0.4%
Gilead Sciences, Inc. 1 80,700 4,774,212
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HEALTH CARE EQUIPMENT & SUPPLIES--9.4%
Bard (C.R.), Inc. 488,800 35,809,488
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Gen-Probe, Inc. 1 390,600 21,084,588
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IDEXX Laboratories, Inc. 1 60,500 4,545,365
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ResMed, Inc. 1 461,300 21,658,035
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Varian Medical Systems, Inc. 1 537,400 25,445,890
--------------
108,543,366
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HEALTH CARE PROVIDERS & SERVICES--6.6%
Cerner Corp. 1 388,900 14,432,079
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Covance, Inc. 1 385,000 23,569,700
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Coventry Health Care, Inc. 1 619,675 34,044,945
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Healthways, Inc. 1 93,200 4,906,048
--------------
76,952,772
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INDUSTRIALS--17.2%
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AEROSPACE & DEFENSE--2.7%
Rockwell Collins, Inc. 559,600 31,264,852
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AIR FREIGHT & LOGISTICS--4.0%
C.H. Robinson Worldwide, Inc. 381,800 20,349,940
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Expeditors International
of Washington, Inc. 460,600 25,798,206
--------------
46,148,146
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COMMERCIAL SERVICES & SUPPLIES--4.7%
ChoicePoint, Inc. 1 228,300 9,536,091
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Corporate Executive Board Co. 225,400 22,585,080
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Stericycle, Inc. 1 350,500 22,817,550
--------------
54,938,721
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MACHINERY--3.7%
Donaldson Co., Inc. 510,700 17,297,409
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Oshkosh Truck Corp. 551,900 26,226,288
--------------
43,523,697
6 | OPPENHEIMER MIDCAP FUND/VA
VALUE
SHARES SEE NOTE 1
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TRADING COMPANIES & DISTRIBUTORS--2.1%
Fastenal Co. 605,200 $ 24,383,508
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INFORMATION TECHNOLOGY--20.8%
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IT SERVICES--8.9%
Alliance Data Systems Corp. 1 654,600 38,503,572
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Cognizant Technology
Solutions Corp. 1 496,600 33,455,942
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Global Payments, Inc. 506,000 24,566,300
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SRA International, Inc., Cl. A 1 268,800 7,158,144
--------------
103,683,958
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.5%
FormFactor, Inc. 1 205,700 9,180,391
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Linear Technology Corp. 117,000 3,918,330
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Microchip Technology, Inc. 830,200 27,853,210
--------------
40,951,931
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SOFTWARE--8.4%
Adobe Systems, Inc. 1 626,800 19,029,648
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Amdocs Ltd. 1 490,300 17,944,980
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Citrix Systems, Inc. 1 125,800 5,049,612
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FactSet Research Systems, Inc. 372,550 17,621,615
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Intuit, Inc. 1 365,700 22,084,623
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NAVTEQ Corp. 1 343,900 15,365,452
--------------
97,095,930
VALUE
SHARES SEE NOTE 1
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MATERIALS--2.0%
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CHEMICALS--2.0%
Ecolab, Inc. 562,800 $ 22,838,424
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TELECOMMUNICATION SERVICES--1.9%
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DIVERSIFIED TELECOMMUNICATION SERVICES--1.5%
NeuStar, Inc., Cl. A 1 527,000 17,786,250
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WIRELESS TELECOMMUNICATION SERVICES--0.4%
NII Holdings, Inc. 1 85,000 4,792,298
--------------
Total Common Stocks (Cost $847,129,918) 1,131,949,357
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PREFERRED STOCKS--0.0%
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Blaze Network Products,
Inc., 8% Cv., Series D(1,2,3)
(Cost $7,346,317) 1,147,862 2,586
PRINCIPAL
AMOUNT
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JOINT REPURCHASE AGREEMENTS--2.3%
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Undivided interest of 1.11% in joint repurchase agreement
(Principal Amount/Value $2,439,041,000, with a maturity
value of $2,440,006,454) with UBS Warburg LLC,
4.75%, dated 6/30/06, to be repurchased at
$27,184,756 on 7/3/06, collateralized by
Federal National Mortgage Assn.,
5%-6%, 10/1/35-3/1/36,
with a value of
$2,494,907,407 (Cost $27,174,000) $27,174,000 27,174,000
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TOTAL INVESTMENTS, AT VALUE
(COST $881,650,235) 99.6% 1,159,125,943
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OTHER ASSETS NET OF LIABILITIES 0.4 5,020,613
-------------------------------
NET ASSETS 100.0% $1,164,146,556
===============================
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, 2006 was $2,586, which represents less than
0.005% of the Fund's net assets, all of which is considered restricted. See Note
5 of accompanying Notes.
3. 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, 2006. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2005 ADDITIONS REDUCTIONS JUNE 30, 2006
- -------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D 1,147,862 -- -- 1,147,862
VALUE DIVIDEND
SEE NOTE 1 INCOME
- -------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., $2,586 $--
Series D
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
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June 30, 2006
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ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $874,303,918) $1,159,123,357
Affiliated companies (cost $7,346,317) 2,586
---------------
1,159,125,943
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Cash 5,931
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 4,615,934
Shares of beneficial interest sold 2,902,623
Interest and dividends 372,889
Other 25,909
---------------
Total assets 1,167,049,229
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LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,222,864
Shares of beneficial interest redeemed 595,079
Distribution and service plan fees 27,874
Trustees' compensation 21,299
Transfer and shareholder servicing agent fees 1,972
Shareholder communications 920
Other 32,665
---------------
Total liabilities 2,902,673
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NET ASSETS $1,164,146,556
===============
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 23,096
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Additional paid-in capital 1,562,062,532
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Accumulated net investment income 150,315
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Accumulated net realized loss on investments (675,565,095)
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Net unrealized appreciation on investments 277,475,708
---------------
NET ASSETS $1,164,146,556
===============
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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 $1,117,743,410
and 22,164,996 shares of beneficial interest outstanding) $ 50.43
- ----------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of $46,403,146
and 931,081 shares of beneficial interest outstanding) $ 49.84
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF OPERATIONS Unaudited
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For the Six Months Ended June 30, 2006
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends $ 4,234,388
- --------------------------------------------------------------------------------
Interest 259,483
-------------
Total investment income 4,493,871
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EXPENSES
- --------------------------------------------------------------------------------
Management fees 4,150,840
- --------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 52,568
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,162
Service shares 5,008
- --------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 57,219
Service shares 2,087
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Trustees' compensation 8,195
- --------------------------------------------------------------------------------
Custodian fees and expenses 6,311
- --------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------
Other 35,911
-------------
Total expenses 4,324,051
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NET INVESTMENT INCOME 169,820
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REALIZED AND UNREALIZED GAIN
Net realized gain on investments 96,674,922
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Net change in unrealized appreciation on investments (66,666,387)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 30,178,355
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER MIDCAP FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
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SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 169,820 $ (3,256,397)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain 96,674,922 16,088,109
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (66,666,387) 126,872,800
--------------
Net increase in net assets resulting from operations 30,178,355 139,704,512
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (139,802,121) (117,803,338)
Service shares 9,338,299 8,921,013
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Total increase (decrease) (100,285,467) 30,822,187
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,264,432,023 1,233,609,836
----------------------------------
End of period (including accumulated net investment income (loss) of $150,315
and $(19,505), respectively) $1,164,146,556 $1,264,432,023
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER MIDCAP FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 49.39 $ 43.97 $ 36.71 $ 29.23 $ 40.72 $ 70.77
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) .01 1 (.12) 1 (.15) 1 (.15) (.10) .23
Net realized and unrealized gain
(loss) 1.03 5.54 7.41 7.63 (11.16) (21.38)
------------------------------------------------------------------------------------------
Total from investment operations 1.04 5.42 7.26 7.48 (11.26) (21.15)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income -- -- -- -- (.23) (.54)
Distributions from net realized gain -- -- -- -- -- (8.36)
------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- -- -- (.23) (8.90)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 50.43 $ 49.39 $ 43.97 $ 36.71 $ 29.23 $ 40.72
==========================================================================================
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TOTAL RETURN, AT NET ASSET VALUE 2 2.11% 12.33% 19.78% 25.59% (27.79)% (31.27)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $1,117,744 $1,227,881 $1,209,459 $1,113,743 $ 979,919 $1,621,550
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,212,052 $1,177,979 $1,124,874 $1,041,584 $1,240,435 $1,898,088
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.04% (0.26)% (0.39)% (0.43)% (0.29)% 0.47%
Total expenses 0.69% 0.69% 4 0.69% 4 0.70% 4 0.68% 4 0.68% 4
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 32% 53% 154% 54% 134%
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.
11 | OPPENHEIMER MIDCAP FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 48.87 $ 43.64 $ 36.54 $ 29.13 $ 40.70 $ 70.77
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.06) 1 (.25) 1 (.27) 1 -- 2 .16 .19
Net realized and unrealized gain (loss) 1.03 5.48 7.37 7.41 (11.53) (21.36)
-----------------------------------------------------------------------------
Total from investment operations .97 5.23 7.10 7.41 (11.37) (21.17)
- ------------------------------------------------------------------------------------------------------------------------------------
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 $ 49.84 $ 48.87 $ 43.64 $ 36.54 $ 29.13 $ 40.70
=============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.98% 11.99% 19.43% 25.44% (28.05)% (31.31)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $46,403 $36,551 $24,151 $11,698 $ 144 $ 54
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $42,457 $28,798 $17,579 $ 3,858 $ 72 $ 31
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.24)% (0.54)% (0.68)% (0.72)% (0.56)% 0.09%
Total expenses 0.96% 0.97% 0.99% 0.95% 1.55% 0.83%
Expenses after payments and waivers and reduction
to custodian expenses 0.96% 0.97% 0.99% 0.95% 0.98% 0.83%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 32% 53% 154% 54% 134%
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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER MIDCAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer MidCap Fund/VA (the Fund), formerly Oppenheimer Aggressive Growth
Fund/VA, is a separate series of Oppenheimer Variable Account Funds, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic 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 NAS-DAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (including restricted securities)
for which market quotations are not readily available are valued at their fair
value. Foreign and domestic securities whose values have been materially
affected by what the Manager identifies as a significant event occurring before
the Fund's assets are valued but after the close of their respective exchanges
will be fair valued. Fair value is determined in good faith using consistently
applied procedures under the supervision of the Board of Trustees. Short-term
"money market type" debt securities with remaining maturities of sixty days or
less are valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
13 | OPPENHEIMER MIDCAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $675,503,169 expiring by
2014. 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, 2006, it is estimated that the Fund will utilize
$96,674,922 of capital loss carryforward to offset realized capital gains.
During the year ended December 31, 2005, the Fund utilized $24,465,493 of
capital loss carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
post-October losses of $19,139,346 and unused capital loss carryforwards as
follows:
EXPIRING
------------------------------
2009 $522,813,923
2010 230,224,822
------------
Total $753,038,745
============
- --------------------------------------------------------------------------------
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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.
14 | OPPENHEIMER MIDCAP FUND/VA
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 990,462 $ 50,838,451 2,464,320 $ 113,044,647
Redeemed (3,688,882) (190,640,572) (5,107,185) (230,847,985)
----------------------------------------------------------------
Net decrease (2,698,420) $(139,802,121) (2,642,865) $(117,803,338)
================================================================
- ---------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 231,576 $ 11,775,631 298,427 $ 13,509,067
Redeemed (48,366) (2,437,332) (103,986) (4,588,054)
----------------------------------------------------------------
Net increase 183,210 $ 9,338,299 194,441 $ 8,921,013
================================================================
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $373,082,744 $535,933,385
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $700 million of net assets 0.60
Over $1.5 billion of net assets 0.58
15 | OPPENHEIMER MIDCAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$9,983 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2006, 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, 2006 DEPRECIATION
- --------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D 10/17/00 $7,346,317 $2,586 $7,343,731
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
16 | OPPENHEIMER MIDCAP FUND/VA
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 MIDCAP 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
18 | OPPENHEIMER MIDCAP FUND/VA
OPPENHEIMER CAPITAL APPRECIATION FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- -----------------------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 998.70 $3.28
- -----------------------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.52 3.31
- -----------------------------------------------------------------------------------------------
Service shares Actual 1,000.00 997.40 4.52
- -----------------------------------------------------------------------------------------------
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, 2006 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, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.2%
- --------------------------------------------------------------------------------
AUTOMOBILES--0.5%
Toyota Motor Corp. 184,800 $ 9,672,772
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.3%
Apollo Group, Inc., Cl. A 1 114,000 5,890,380
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.2%
Carnival Corp. 201,500 8,410,610
- --------------------------------------------------------------------------------
Las Vegas Sands Corp. 1 161,800 12,597,748
- --------------------------------------------------------------------------------
Scientific Games Corp., Cl. A 1 206,900 7,369,778
- --------------------------------------------------------------------------------
Starbucks Corp. 1 396,200 14,960,512
--------------
43,338,648
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.3%
Harman International Industries, Inc. 82,700 7,060,099
- --------------------------------------------------------------------------------
MEDIA--1.6%
Comcast Corp., Cl. A
Special, Non-Vtg. 1 521,500 17,094,770
- --------------------------------------------------------------------------------
XM Satellite Radio
Holdings, Inc., Cl. A 1 969,300 14,200,245
--------------
31,295,015
- --------------------------------------------------------------------------------
MULTILINE RETAIL--2.3%
J.C. Penney Co., Inc. (Holding Co.) 268,600 18,133,186
- --------------------------------------------------------------------------------
Kohl's Corp. 1 272,200 16,092,464
- --------------------------------------------------------------------------------
Target Corp. 261,900 12,799,053
--------------
47,024,703
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--4.5%
Best Buy Co., Inc. 329,950 18,094,458
- --------------------------------------------------------------------------------
Lowe's Cos., Inc. 399,600 24,243,732
- --------------------------------------------------------------------------------
Michaels Stores, Inc. 340,500 14,042,220
- --------------------------------------------------------------------------------
Staples, Inc. 1,007,300 24,497,536
- --------------------------------------------------------------------------------
Urban Outfitters, Inc. 1 551,200 9,640,488
--------------
90,518,434
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.5%
Polo Ralph Lauren Corp. 183,800 10,090,620
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.3%
- --------------------------------------------------------------------------------
BEVERAGES--1.0%
PepsiCo, Inc. 342,900 20,587,716
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.6%
CVS Corp. 659,800 20,255,860
- --------------------------------------------------------------------------------
Sysco Corp. 396,000 12,101,760
--------------
32,357,620
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.9%
Cadbury Schweppes plc 1,228,110 11,843,471
- --------------------------------------------------------------------------------
Nestle SA 84,757 26,621,969
--------------
38,465,440
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.8%
Procter & Gamble Co. (The) 604,900 $ 33,632,440
- --------------------------------------------------------------------------------
Reckitt Benckiser plc 568,470 21,234,710
--------------
54,867,150
- --------------------------------------------------------------------------------
ENERGY--7.2%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--5.4%
Halliburton Co. 342,200 25,394,662
- --------------------------------------------------------------------------------
Schlumberger Ltd. 482,700 31,428,597
- --------------------------------------------------------------------------------
Smith International, Inc. 538,800 23,960,436
- --------------------------------------------------------------------------------
Transocean, Inc. 1 328,900 26,417,248
--------------
107,200,943
- --------------------------------------------------------------------------------
OIL & GAS--1.8%
EOG Resources, Inc. 134,800 9,347,032
- --------------------------------------------------------------------------------
Kinder Morgan Management LLC 247,256 10,636,953
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 157,000 16,100,350
--------------
36,084,335
- --------------------------------------------------------------------------------
FINANCIALS--9.8%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--4.1%
Franklin Resources, Inc. 127,700 11,085,637
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 144,100 21,676,963
- --------------------------------------------------------------------------------
Legg Mason, Inc. 198,800 19,784,576
- --------------------------------------------------------------------------------
Nomura Securities Co. Ltd. 472,000 8,877,632
- --------------------------------------------------------------------------------
Northern Trust Corp. 256,000 14,156,800
- --------------------------------------------------------------------------------
T. Rowe Price Group, Inc. 167,100 6,318,051
--------------
81,899,659
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.6%
Bank of America Corp. 145,000 6,974,500
- --------------------------------------------------------------------------------
Chicago Mercantile Exchange (The) 64,200 31,531,830
- --------------------------------------------------------------------------------
Citigroup, Inc. 278,400 13,430,016
--------------
51,936,346
- --------------------------------------------------------------------------------
INSURANCE--3.1%
American International Group, Inc. 461,150 27,230,908
- --------------------------------------------------------------------------------
Hartford Financial
Services Group, Inc. (The) 164,300 13,899,780
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 276,100 21,452,970
--------------
62,583,658
- --------------------------------------------------------------------------------
HEALTH CARE--17.1%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--4.2%
Amgen, Inc. 1 189,400 12,354,562
- --------------------------------------------------------------------------------
Celgene Corp. 1 179,600 8,518,428
- --------------------------------------------------------------------------------
Cephalon, Inc. 1 80,400 4,832,040
- --------------------------------------------------------------------------------
Genentech, Inc. 1 196,900 16,106,420
- --------------------------------------------------------------------------------
Genzyme Corp. (General Division) 1 294,800 17,997,540
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 139,200 8,235,072
6 | OPPENHEIMER CAPITAL APPRECIATION FUND/ VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BIOTECHNOLOGY Continued
MedImmune, Inc. 1 306,400 $ 8,303,440
- --------------------------------------------------------------------------------
PDL BioPharma, Inc. 1 462,200 8,509,102
--------------
84,856,604
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--3.7%
Alcon, Inc. 63,800 6,287,490
- --------------------------------------------------------------------------------
Fisher Scientific International, Inc. 1 275,300 20,110,665
- --------------------------------------------------------------------------------
Medtronic, Inc. 433,400 20,335,128
- --------------------------------------------------------------------------------
St. Jude Medical, Inc. 1 466,700 15,130,414
- --------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1 237,600 11,250,360
--------------
73,114,057
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.7%
Caremark Rx, Inc. 370,700 18,486,809
- --------------------------------------------------------------------------------
Covance, Inc. 1 276,200 16,908,964
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 337,600 20,228,992
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 424,000 18,986,720
--------------
74,611,485
- --------------------------------------------------------------------------------
PHARMACEUTICALS--5.5%
Novartis AG 611,525 33,113,537
- --------------------------------------------------------------------------------
Roche Holdings AG 169,602 28,036,943
- --------------------------------------------------------------------------------
Sanofi-Aventis SA 111,900 10,920,494
- --------------------------------------------------------------------------------
Sepracor, Inc. 1 168,100 9,605,234
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 487,000 8,681,230
- --------------------------------------------------------------------------------
Teva Pharmaceutical
Industries Ltd., Sponsored ADR 627,346 19,817,860
--------------
110,175,298
- --------------------------------------------------------------------------------
INDUSTRIALS--8.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.0%
Empresa Brasileira de
Aeronautica SA, ADR 522,700 19,062,869
- --------------------------------------------------------------------------------
General Dynamics Corp. 266,800 17,464,728
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 275,100 19,735,674
- --------------------------------------------------------------------------------
United Technologies Corp. 359,800 22,818,516
--------------
79,081,787
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.4%
Expeditors International
of Washington, Inc. 158,600 8,883,186
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.3%
ChoicePoint, Inc. 1 195,400 8,161,858
- --------------------------------------------------------------------------------
Corporate Executive Board Co. 180,700 18,106,140
--------------
26,267,998
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.8%
General Electric Co. 860,400 28,358,784
- --------------------------------------------------------------------------------
Textron, Inc. 79,100 7,291,438
--------------
35,650,222
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY--0.9%
Danaher Corp. 274,200 $ 17,636,544
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.4%
Fastenal Co. 193,900 7,812,231
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--30.4%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--7.0%
Cisco Systems, Inc. 1 3,194,800 62,394,444
- --------------------------------------------------------------------------------
Corning, Inc. 1 740,000 17,900,600
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 189,600 10,139,808
- --------------------------------------------------------------------------------
Motorola, Inc. 458,900 9,246,835
- --------------------------------------------------------------------------------
Nokia Corp., Sponsored ADR 401,500 8,134,390
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 437,700 17,538,639
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson, Sponsored ADR 446,800 14,762,272
--------------
140,116,988
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.4%
Apple Computer, Inc. 1 333,300 19,038,096
- --------------------------------------------------------------------------------
EMC Corp. 1 1,813,800 19,897,386
- --------------------------------------------------------------------------------
Network Appliance, Inc. 1 247,500 8,736,750
--------------
47,672,232
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--6.1%
eBay, Inc. 1 1,155,900 33,856,311
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1 99,800 41,849,134
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 1,407,500 46,447,500
--------------
122,152,945
- --------------------------------------------------------------------------------
IT SERVICES--4.2%
Affiliated Computer
Services, Inc., Cl. A 1 589,400 30,418,934
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 767,300 34,797,055
- --------------------------------------------------------------------------------
Cognizant Technology
Solutions Corp. 1 278,800 18,782,756
--------------
83,998,745
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.7%
Advanced Micro Devices, Inc. 1 679,200 16,586,064
- --------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 754,200 22,663,710
- --------------------------------------------------------------------------------
Linear Technology Corp. 336,800 11,279,432
- --------------------------------------------------------------------------------
Marvell Technology Group Ltd. 1 238,700 10,581,571
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 410,400 13,768,920
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 652,700 19,770,283
--------------
94,649,980
- --------------------------------------------------------------------------------
SOFTWARE--6.0%
Adobe Systems, Inc. 1 750,400 22,782,144
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 458,900 16,795,740
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 288,600 9,945,156
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1 172,600 7,428,704
7 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
McAfee, Inc. 1 294,400 $ 7,145,088
- --------------------------------------------------------------------------------
Microsoft Corp. 1,001,600 23,337,280
- --------------------------------------------------------------------------------
NAVTEQ Corp. 1 204,900 9,154,932
- --------------------------------------------------------------------------------
Red Hat, Inc. 1 230,200 5,386,680
- --------------------------------------------------------------------------------
SAP AG, Sponsored ADR 344,100 18,072,132
--------------
120,047,856
- --------------------------------------------------------------------------------
MATERIALS--3.4%
- --------------------------------------------------------------------------------
CHEMICALS--3.4%
Monsanto Co. 471,300 39,678,747
- --------------------------------------------------------------------------------
Praxair, Inc. 524,300 28,312,200
--------------
67,990,947
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.2%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--2.2%
American Tower Corp. 1 581,300 18,090,056
- --------------------------------------------------------------------------------
Crown Castle International Corp. 1 305,400 10,548,516
- --------------------------------------------------------------------------------
Sprint Nextel Corp. 809,400 16,179,905
--------------
44,818,477
--------------
Total Common Stocks (Cost $1,696,887,613) 1,970,411,120
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.1%
- --------------------------------------------------------------------------------
Undivided interest of 0.89% in joint repurchase agreement
(Principal Amount/Value $2,439,041,000, with a maturity
value of $2,440,006,454) with UBS Warburg LLC,
4.75%, dated 6/30/06, to be repurchased at
$21,718,594 on 7/3/06, collateralized by
Federal National Mortgage Assn.,
5%-6%, 10/1/35-3/1/36,
with a value of
$2,494,907,407 (Cost $21,710,000) $21,710,000 $ 21,710,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,718,597,613) 99.5% 1,992,121,120
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 10,847,897
-------------------------------
NET ASSETS 100.0% $2,002,969,017
===============================
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, 2006
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $1,718,597,613)--see accompanying statement of investments $ 1,992,121,120
- ----------------------------------------------------------------------------------------------------------------------------------
Cash 11,548
- ----------------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 14,748,740
Shares of beneficial interest sold 5,945,890
Interest and dividends 1,407,710
Other 37,361
----------------
Total assets 2,014,272,369
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 49,909
- ----------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 10,023,022
Shares of beneficial interest redeemed 916,491
Distribution and service plan fees 260,733
Trustees' compensation 30,517
Transfer and shareholder servicing agent fees 2,163
Shareholder communications 1,646
Other 18,871
----------------
Total liabilities 11,303,352
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,002,969,017
================
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 52,338
- ----------------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,040,249,056
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 2,493,405
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (313,359,600)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 273,533,818
----------------
NET ASSETS $ 2,002,969,017
================
- ----------------------------------------------------------------------------------------------------------------------------------
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 $1,584,889,969
and 41,352,654 shares of beneficial interest outstanding) $ 38.33
- ----------------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of $418,079,048
and 10,985,805 shares of beneficial interest outstanding) $ 38.06
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $410,080) $ 9,179,230
- ------------------------------------------------------------------------------------------
Interest 640,541
-------------
Total investment income 9,819,771
- ------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------
Management fees 6,572,536
- ------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 511,431
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,275
Service shares 5,068
- ------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 101,979
Service shares 25,867
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 13,804
- ------------------------------------------------------------------------------------------
Trustees' compensation 12,249
- ------------------------------------------------------------------------------------------
Administration service fees 750
- ------------------------------------------------------------------------------------------
Other 42,717
-------------
Total expenses 7,291,676
Less reduction to custodian expenses (3,212)
-------------
Net expenses 7,288,464
- ------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,531,307
- ------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ------------------------------------------------------------------------------------------
Net realized gain on:
Investments 4,163,643
Foreign currency transactions 335,371
-------------
Net realized gain 4,499,014
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (17,641,467)
Translation of assets and liabilities denominated in foreign currencies 8,785,673
-------------
Net change in unrealized appreciation (8,855,794)
- ------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,825,473)
=============
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, 2006 DECEMBER 31,
(UNAUDITED) 2005
- -----------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,531,307 $ 8,432,318
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 4,499,014 (33,018,356)
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (8,855,794) 121,242,883
------------------------------------
Net increase (decrease) in net assets resulting from operations (1,825,473) 96,656,845
- -----------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (6,085,308) (15,541,862)
Service shares (772,510) (1,926,965)
- -----------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (60,941,005) (181,635,386)
Service shares 38,459,355 117,658,602
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (31,164,941) 15,211,234
- -----------------------------------------------------------------------------------------------------------------------
Beginning of period 2,034,133,958 2,018,922,724
------------------------------------
End of period (including accumulated net investment income of $2,493,405 and
$6,819,916, respectively) $ 2,002,969,017 $ 2,034,133,958
====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 38.52 $ 36.99 $ 34.70 $ 26.62 $ 36.58 $ 46.63
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 1 .18 1 .35 1,2 .12 .11 .18
Net realized and unrealized gain (loss) (.11) 1.68 2.05 8.07 (9.89) (5.86)
------------------------------------------------------------------------------------------
Total from investment operations (.05) 1.86 2.40 8.19 (9.78) (5.68)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.14) (.33) (.11) (.11) (.18) (.27)
Distributions from net realized gain -- -- -- -- -- (4.10)
------------------------------------------------------------------------------------------
Total dividends and/or distributions to (.14) (.33) (.11) (.11) (.18) (4.37)
shareholders
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 38.33 $ 38.52 $ 36.99 $ 34.70 $ 26.62 $ 36.58
==========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.13)% 5.10% 6.93% 30.94% (26.86)% (12.58)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,584,890 $1,652,282 $1,770,273 $1,715,240 $1,338,769 $1,975,345
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,655,864 $1,658,910 $1,708,511 $1,468,297 $1,630,430 $2,000,314
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.29% 0.47% 0.99% 2 0.39% 0.35% 0.51%
Total expenses 0.66% 5 0.66% 5 0.66% 5 0.67% 5 0.66% 5 0.68% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 70% 44% 48% 32% 45%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
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.
12 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 38.23 $ 36.73 $ 34.53 $ 26.53 $ 36.56 $ 31.66
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01 2 .08 2 .29 2,3 .08 .20 -- 4
Net realized and unrealized gain (loss) (.11) 1.69 1.99 8.02 (10.05) 4.90
---------------------------------------------------------------------------------------
Total from investment operations (.10) 1.77 2.28 8.10 (9.85) 4.90
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.07) (.27) (.08) (.10) (.18) --
Distributions from net realized gain -- -- -- -- -- --
---------------------------------------------------------------------------------------
Total dividends and/or distributions to (.07) (.27) (.08) (.10) (.18) --
shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 38.06 $ 38.23 $ 36.73 $ 34.53 $ 26.53 $ 36.56
=======================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 5 (0.26)% 4.87% 6.62% 30.69% (27.09)% 15.51%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $418,079 $381,852 $248,649 $119,699 $ 18,260 $ 90
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $412,942 $301,780 $184,273 $ 48,178 $ 6,263 $ 16
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 6
Net investment income 0.06% 0.20% 0.85% 3 0.14% 0.26% 0.11%
Total expenses 0.91% 7 0.91% 7 0.91% 7 0.94% 7 0.81% 7,8 0.81% 7
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 70% 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. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.
4. Less than $0.005 per share.
5. 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.
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%.
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, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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.
14 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $307,269,014 expiring by
2014. 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, 2006, it is estimated that the Fund will utilize
$4,499,014 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2005, the Fund did not utilized any capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
------------------------------
2010 $ 83,313,825
2011 193,776,365
2013 34,677,838
------------
Total $311,768,028
============
- --------------------------------------------------------------------------------
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.
15 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $606 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,166,570 $ 85,253,748 4,329,144 $ 158,705,810
Dividends and/or distributions
reinvested 154,136 6,085,308 429,927 15,541,862
Redeemed (3,858,760) (152,280,061) (9,732,224) (355,883,058)
---------------------------------------------------------------
Net decrease (1,538,054) $ (60,941,005) (4,973,153) $(181,635,386)
===============================================================
- ----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 2,065,385 $ 80,839,276 4,094,952 $ 149,465,324
Dividends and/or distributions
reinvested 19,641 770,516 53,616 1,926,965
Redeemed (1,087,304) (43,150,437) (929,573) (33,733,687)
---------------------------------------------------------------
Net increase 997,722 $ 38,459,355 3,218,995 $ 117,658,602
===============================================================
16 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $547,553,772 $562,481,432
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
- --------------------------------------------------------------------------------
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, 2006, the Fund paid
$10,009 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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.
17 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
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, 2006, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE (000S) JUNE 30, 2006 DEPRECIATION
- -------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
British Pound Sterling (GBP) 7/3/06 1,449GBP $2,679,853 $49,909
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
19 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
OPPENHEIMER STRATEGIC BOND FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 999.30 $ 3.23
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.57 3.26
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 998.00 4.47
- --------------------------------------------------------------------------------
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- --------------------------------------
Non-Service shares 0.65%
- --------------------------------------
Service shares 0.90
5 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--1.6%
- --------------------------------------------------------------------------------
Ace Securities Corp.,
Home Equity
Loan Pass-Through Certificates,
Series 2002-HE7, Cl. A2B, 5.503%,
11/25/35 1 $ 420,000 $ 420,479
- --------------------------------------------------------------------------------
Aesop Funding II LLC,
Automobile
Asset-Backed Certificates,
Series 2005-1A, Cl. A2,
5.327%, 4/20/08 1 200,000 200,147
- --------------------------------------------------------------------------------
Argent Securities, Inc.,
Home Equity Asset-Backed
Securities:
Series 2004-W8, Cl. A2,
5.803%, 5/25/34 1 1,960,000 1,971,619
Series 2006-W5, Cl. A2B,
5.423%, 5/26/36 1 810,000 810,489
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Automobile
Loan Certificates, Series 2005-A,
Cl. A2, 3.66%, 12/26/07 489,379 488,506
- --------------------------------------------------------------------------------
Capital Auto Receivables
Asset Trust, Automobile
Asset-Backed Securities,
Series 2004-2, Cl. A3, 3.58%,
1/15/09 740,000 724,476
- --------------------------------------------------------------------------------
Capital One Prime Auto
Receivables Trust, Automobile
Loan Asset-Backed Securities,
Series 2005-1, Cl. A2, 4.24%,
11/15/07 641,878 641,051
- --------------------------------------------------------------------------------
Centex Home Equity Co. LLC,
Home Equity Loan
Asset-Backed Certificates:
Series 2005-B, Cl. AF1,
4.05%, 3/26/35 25,661 25,572
Series 2005-C, Cl. AF1,
4.196%, 6/25/35 158,743 157,971
Series 2005-D, Cl. AF1,
5.04%, 10/25/35 800,871 794,762
Series 2006-A, Cl. AV2,
5.423%, 5/16/36 1 1,000,000 1,000,604
- --------------------------------------------------------------------------------
Chase Manhattan Auto
Owner Trust, Automobile
Loan Pass-Through Certificates,
Series 2005-A, Cl. A2,
3.72%, 12/15/07 356,955 355,738
- --------------------------------------------------------------------------------
Consumer Credit Reference
Index Securities Program,
Credit Card Asset-Backed
Certificates, Series 2002-B,
Cl. FX, 10.421%, 3/22/07 2 500,000 508,908
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2005-7, Cl. AF1B,
4.317%, 11/25/35 1 $ 182,884 $ 182,026
Series 2005-16, Cl. 2AF2,
5.382%, 5/25/36 1 300,000 296,976
Series 2005-17, Cl. 1AF1,
5.523%, 5/25/36 1 552,374 553,094
Series 2005-17, Cl. 1AF2,
5.363%, 5/25/36 1 200,000 197,924
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates:
Series 2005-A, Cl. A2,
3.17%, 9/8/07 54,791 54,803
Series 2005-B, Cl. A2,
3.75%, 12/8/07 176,559 176,408
- --------------------------------------------------------------------------------
Embarcadero Aircraft
Securitization Trust, Airplane
Receivable Nts., Series 2000-A,
Cl. B, 8/15/25 3,4 1,820,063 18,201
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Asset-Backed Certificates,
Home Equity Receivables:
Series 2005-FF3, Cl. A1,
5.403%, 4/25/35 1 1,249,706 1,250,571
Series 2005-FF10, Cl. A3,
5.533%, 11/25/35 1 1,170,000 1,171,318
Series 2006-FF5, Cl. 2A1,
5.373%, 5/15/36 1 587,157 587,512
Series 2006-FF9, Cl. 2A2, 7/7/36 1,5 430,000 430,000
Series 2006-FF10, Cl. A3,
5.413%, 7/25/36 1 840,000 840,000
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates:
Series 2005-A, Cl. A3,
3.48%, 11/17/08 534,524 529,207
Series 2005-B, Cl. A2,
3.78%, 9/15/07 116,001 115,943
- --------------------------------------------------------------------------------
GS Auto Loan Trust,
Automobile Loan Asset-Backed
Securities, Series 2005-1, Cl. A2,
4.32%, 5/15/08 1,195,321 1,191,546
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner
Trust, Automobile Receivable
Obligations,
Series 2005-3, Cl. A2,
3.73%, 10/18/07 4 348,837 347,746
- --------------------------------------------------------------------------------
Household Home Equity Loan
Trust, Home Equity Loan
Pass-Through Certificates,
Series 2005-3, Cl. A1,
5.527%, 1/20/35 1 469,995 470,709
6 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Lehman XS Trust, Home Equity
Asset-Backed Pass-Through
Certificates:
Series 2005-2, Cl. 2A1B,
5.18%, 8/25/35 1 $ 564,660 $ 561,674
Series 2005-4, Cl. 2A1B,
5.17%, 10/25/35 469,543 466,014
- --------------------------------------------------------------------------------
Morgan Stanley ABS Capital I,
Home Equity Receivables,
Series 2005-WMC6, Cl. A2B,
5.583%, 7/25/35 1 480,000 481,291
- --------------------------------------------------------------------------------
NC Finance Trust, CMO Home
Equity Pass-Through Certificates,
Series 1999-I, Cl. ECFD,
1.079%, 1/25/29 4 66,744 14,016
- --------------------------------------------------------------------------------
Nissan Auto Receivables Owner
Trust, Automobile Receivable Nts.,
Series 2005-C, Cl. A2,
3.99%, 1/15/08 1,075,566 1,071,812
- --------------------------------------------------------------------------------
Onyx Acceptance Owner Trust,
Automobile Receivable Obligations,
Series 2005-B, Cl. A2,
4.03%, 4/15/08 284,620 284,190
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2006-2, Cl. 2A2,
5.435%, 7/1/36 1 1,420,000 1,420,000
- --------------------------------------------------------------------------------
Popular ABS Mortgage
Pass-Through Trust, Home Equity
Pass-Through Certificates:
Series 2004-5, Cl. A F2,
3.735%, 11/10/34 1 200,000 198,465
Series 2005-1, Cl. A F2,
3.914%, 5/25/35 1 150,000 148,149
Series 2005-2, Cl. A F2,
4.415%, 4/25/35 1 240,000 236,877
Series 2005-6, Cl. A3,
5.68%, 1/25/36 1 320,000 315,769
- --------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc., Home Equity
Asset-Backed Pass-Through
Certificates:
Series 2004-RS7, Cl. AI3,
4.45%, 7/25/28 670,000 663,868
Series 2006-RS4, Cl. A1,
5.163%, 7/25/36 1 570,000 570,000
- --------------------------------------------------------------------------------
Structured Asset Investment Loan
Trust, Home Equity Asset-Backed
Securities, Series 2006-2, Cl. A1,
5.383%, 4/25/36 1 677,439 677,897
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Home Equity Asset-Backed
Securities:
Series 2003-25XS, Cl. A4,
4.51%, 8/25/33 $ 49,916 $ 49,687
Series 2005-4XS, Cl. 3A1,
5.18%, 3/26/35 522,318 520,260
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust,
Automobile Lease Asset-Backed
Securities, Series 2005-A, Cl. A2,
3.52%, 4/20/07 200,929 200,796
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Home Equity Asset-Backed
Certificates:
Series 2004-2, Cl. AI1B,
2.94%, 9/25/18 1 76,242 76,021
Series 2006-2, Cl. A2, 5.45%, 7/7/36 1 840,000 840,000
---------------
Total Asset-Backed Securities
(Cost $27,260,034) 25,311,092
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--11.9%
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Inc., Commercial Mtg
Pass-Through Certificates,
Series 2005-3, Cl. A2,
4.501%, 7/10/43 690,000 661,058
- --------------------------------------------------------------------------------
Banc of America Funding Corp.,
CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1,
6.50%, 7/20/32 516,282 509,123
- --------------------------------------------------------------------------------
Banc of America Mortgage
Securities, Inc., CMO Pass-Through
Certificates:
Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 417,166 415,341
Series 2005-E, Cl. 2A2,
4.977%, 6/25/35 1 76,228 76,062
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust,
Inc., CMO, Series 2006-WF1,
Cl. A2B, 5.536%, 3/1/36 260,000 257,883
- --------------------------------------------------------------------------------
Countrywide Alternative Loan
Trust, CMO, Series 2005-J1,
Cl. 3A1, 6.50%, 8/25/32 1,289,110 1,286,291
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates,
Series 2005-10, Cl. AF1,
5.483%, 2/25/36 1 874,111 874,832
- --------------------------------------------------------------------------------
Deutsche Alt-A Securities, Inc.
Mortgage Loan Trust, CMO,
Series 2006-AB2, Cl. A7,
5.961%, 5/1/36 1,907,685 1,901,365
7 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Deutsche Alt-B Securities, Inc.
Mortgage Loan Trust, CMO,
Series 2006-AB3, Cl. A7,
6.36%, 4/25/08 $ 620,000 $ 620,000
- --------------------------------------------------------------------------------
Federal Home Loan
Mortgage Corp.:
4.50%, 12/1/18-7/1/19 4,905,699 4,640,910
5%, 9/1/33 3,961,828 3,719,024
6%, 5/1/18-10/1/29 4,134,814 4,114,329
6.50%, 3/1/18-6/1/35 8,089,484 8,179,622
7%, 3/1/31-10/1/31 688,587 706,007
7.50%, 4/1/36 2,143,421 2,225,073
11%, 11/1/14 27,793 29,153
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Multiclass
Mtg. Participation Certificates:
Series 2106, Cl. FG,
5.649%, 5/15/28 1 3,199,604 3,215,325
Series 2191, Cl. MF,
5.852%, 12/17/27 1 189,745 190,123
Series 2453, Cl. BD,
6%, 5/15/17 414,934 417,589
Series 3105, Cl. BD,
5.50%, 1/15/26 1,500,000 1,448,720
Series 3138, Cl. PA,
5.50%, 2/15/27 4,284,485 4,258,636
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Real Estate Mtg
Investment Conduit Multiclass
Pass-Through Certificates:
Series 1674, Cl. Z,
6.75%, 2/15/24 1,774,313 1,818,655
Series 2055, Cl. ZM,
6.50%, 5/15/28 224,953 227,141
Series 2080, Cl. Z,
6.50%, 8/15/28 142,781 143,807
Series 2116, Cl. ZA,
6%, 1/15/29 1,205,798 1,206,428
Series 2135, Cl. OH,
6.50%, 3/15/29 1,927,703 1,956,888
Series 2173, Cl. Z,
6.50%, 7/15/29 1,032,251 1,048,308
Series 2195, Cl. LH,
6.50%, 10/15/29 1,391,679 1,403,036
Series 2326, Cl. ZP,
6.50%, 6/15/31 239,173 242,276
Series 2368, Cl. PR,
6.50%, 10/15/31 908,725 921,740
Series 2387, Cl. PD,
6%, 4/15/30 120,992 121,040
Series 2500, Cl. FD,
5.699%, 3/15/32 1 73,675 74,340
Series 2526, Cl. FE,
5.599%, 6/15/29 1 102,721 103,284
Series 2551, Cl. FD,
5.481%, 1/15/33 1 79,725 80,676
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Real Estate Mtg
Investment Conduit Multiclass
Pass-Through Certificates: Continued
Series 2583, Cl. KA,
5.50%, 3/15/22 $ 282,032 $ 281,452
Series 2939, Cl. PE,
5%, 2/15/35 1,585,000 1,419,904
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Pass-Through
Participation Certificates,
Series 151, Cl. F, 9%, 5/15/21 65,743 65,604
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 177, Cl. B,
13.878%, 7/1/26 6 268,493 64,679
Series 192, Cl. IO,
15.946%, 2/1/28 6 69,487 16,495
Series 200, Cl. IO,
14.841%, 1/1/29 6 83,437 20,605
Series 205, Cl. IO,
11.856%, 9/1/29 6 366,631 91,977
Series 208, Cl. IO,
(15.57)%, 6/1/30 6 411,359 96,909
Series 2003-118, Cl. S,
11.815%, 12/25/33 6 1,656,190 160,116
Series 2074, Cl. S,
2.584%, 7/17/28 6 92,083 7,328
Series 2079, Cl. S,
2.267%, 7/17/28 6 144,858 12,515
Series 2177, Cl. S,
7.568%, 8/15/29 6 4,410,247 299,979
Series 2526, Cl. SE,
4.254%, 6/15/29 6 192,044 10,406
Series 2920, Cl. S,
(0.707)%, 1/15/35 6 1,655,134 55,112
Series 3000, Cl. SE,
(1.42)%, 7/15/25 6 1,789,531 36,833
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 2/1/18-11/1/33 5,696,255 5,413,290
5%, 7/1/36 5 19,890,000 18,597,150
5.50%, 3/1/33-1/1/34 10,603,933 10,232,930
5.50%, 7/1/21-7/1/36 5 25,497,000 24,558,358
6%, 9/1/26-1/1/33 6,042,255 5,973,771
6%, 7/1/21-7/1/36 5 12,395,000 12,379,810
6.50%, 5/1/29-10/1/30 4,059,759 4,103,644
6.50%, 7/1/36 5 5,216,000 5,243,707
7%, 11/1/17-3/1/36 6,855,864 7,028,058
7.50%, 2/1/27-3/1/33 4,487,815 4,663,479
7.50%, 1/1/33 4 1,651,749 1,714,532
8.50%, 7/1/32 12,645 13,612
8 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn., CMO Gtd. Real Estate
Mtg. Investment Conduit
Pass-Through Certificates:
Trust 2001-50, Cl. NE,
6%, 8/25/30 $ 69,920 $ 70,129
Trust 2001-51, Cl. OD,
6.50%, 10/25/31 680,118 686,239
Trust 2001-70, Cl. LR,
6%, 9/25/30 95,963 95,930
Trust 2001-72, Cl. NH,
6%, 4/25/30 45,779 45,709
Trust 2001-74, Cl. PD,
6%, 5/25/30 19,125 19,068
Trust 2002-9, Cl. PR,
6%, 3/25/17 1,655,628 1,664,377
Trust 2002-12, Cl. PG,
6%, 3/25/17 1,259,125 1,265,775
Trust 2002-77, Cl. WF,
5.652%, 12/18/32 1 119,940 121,047
Trust 2003-17, Cl. EQ,
5.50%, 3/25/23 1,265,000 1,198,238
Trust 2003-23, Cl. EQ,
5.50%, 4/25/23 890,000 842,518
Trust 2003-116, Cl. FA,
5.723%, 11/25/33 1 214,565 215,731
Trust 2004-101, Cl. BG,
5%, 1/25/20 630,000 599,613
Trust 2005-31, Cl. PB,
5.50%, 4/25/35 560,000 524,913
Trust 2005-71, Cl. DB,
4.50%, 8/25/25 480,000 428,623
Trust 2005-100, Cl. BQ,
5.50%, 11/25/25 520,000 485,515
Trust 2005-109, Cl. AH,
5.50%, 12/25/25 2,160,000 2,036,808
Trust 2006-50, Cl. KS,
4.684%, 6/25/36 1 718,956 608,650
Trust 2006-50, Cl. SK,
4.684%, 6/25/36 1 1,372,115 1,214,564
Trust 2006-57, Cl. PA,
5.50%, 8/25/27 2,987,973 2,965,948
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg
Investment Conduit
Pass-Through Certificates,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 2002-28, Cl. SA,
2.50%, 4/25/32 6 98,725 7,132
Trust 2002-38, Cl. SO,
(1.977)%, 4/25/32 6 514,378 22,580
Trust 2002-48, Cl. S,
2.912%, 7/25/32 6 159,877 12,458
Trust 2002-52, Cl. SL,
2.799%, 9/25/32 6 99,203 7,946
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg
Investment Conduit
Pass-Through Certificates,
Interest-Only Stripped
Mtg.-Backed Security: Continued
Trust 2002-56, Cl. SN,
3.982%, 7/25/32 6 $ 219,691 $ 17,457
Trust 2002-77, Cl. IS,
2.787%, 12/18/32 6 876,348 65,636
Trust 2006-34, Cl. SK,
15.769%, 5/25/36 6 6,719,758 436,784
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 214, Cl. 2,
15.687%, 3/1/23 6 1,120,277 266,236
Trust 221, Cl. 2,
11.281%, 5/1/23 6 122,067 29,275
Trust 240, Cl. 2,
22.285%, 9/1/23 6 223,733 56,343
Trust 254, Cl. 2,
4.488%, 1/1/24 6 1,846,591 450,035
Trust 301, Cl. 2,
8.349%, 4/1/29 6 491,909 120,232
Trust 313, Cl. 2,
(10.546)%, 6/1/31 6 536,584 140,678
Trust 319, Cl. 2,
12.178%, 2/1/32 6 160,728 42,844
Trust 321, Cl. 2,
11.921%, 4/1/32 6 713,960 190,870
Trust 324, Cl. 2,
6.349%, 7/1/32 6 1,256,475 319,811
Trust 329, Cl. 2,
10.133%, 1/1/33 6 3,745,036 996,502
Trust 334, Cl. 12,
5.449%, 2/1/33 6 2,283,132 580,748
Trust 344, Cl. 2,
9.593%, 12/1/33 6 4,668,961 1,238,579
Trust 2001-61, Cl. SH,
11.696%, 11/18/31 6 879,892 76,554
Trust 2001-63, Cl. SD,
4.371%, 12/18/31 6 197,122 16,861
Trust 2001-68, Cl. SC,
4.463%, 11/25/31 6 139,223 11,774
Trust 2001-81, Cl. S,
5.531%, 1/25/32 6 171,353 12,437
Trust 2002-9, Cl. MS,
2.772%, 3/25/32 6 210,694 16,719
Trust 2002-77, Cl. SH,
5.839%, 12/18/32 6 217,123 18,627
Trust 2003-4, Cl. S,
12.602%, 2/25/33 6 432,286 41,937
Trust 2003-33, Cl. SP,
14.996%, 5/25/33 6 1,394,328 143,453
Trust 2005-40, Cl. SA,
(0.408)%, 5/25/35 6 4,748,075 156,383
9 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security: Continued
Trust 2005-40, Cl. SB,
3.899%, 5/25/35 6 $ 1,095,116 $ 36,650
Trust 2005-71, Cl. SA,
5.83%, 8/25/25 6 1,140,104 43,631
Trust 2006-33, CL. SP,
16.252%, 5/25/36 6 3,705,140 248,939
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates, Series 2005-C,
Cl. A2, 4.24%, 3/15/08 644,107 641,520
- --------------------------------------------------------------------------------
GE Capital Commercial
Mortgage Corp., Commercial
Mtg. Obligations:
Series 2004-C3, Cl. A2,
4.433%, 7/10/39 390,000 377,607
Series 2005-C3, Cl. A2,
4.853%, 7/10/45 430,000 417,861
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg
Pass-Through Certificates:
Series 1997-C1, Cl. A3,
6.869%, 7/15/29 161,440 162,828
Series 1998-C1, Cl. F,
7.186%, 5/15/30 1 1,567,000 1,596,381
- --------------------------------------------------------------------------------
Government National
Mortgage Assn.:
5.125%, 11/20/25 1 12,192 12,259
7%, 3/15/28-7/15/28 609,952 629,486
7.50%, 2/15/27 77,648 81,375
8%, 11/15/25-5/15/26 124,715 132,441
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., CMO Gtd. Real Estate
Mtg. Investment Conduit
Pass-Through Certificates,
Series 1999-32, Cl. ZB,
8%, 9/16/29 1,730,064 1,821,876
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 1998-6, Cl. SA,
0.033%, 3/16/28 6 177,709 12,394
Series 1998-19, Cl. SB,
1.348%, 7/16/28 6 288,330 23,054
Series 2001-21, Cl. SB,
(4.709)%, 1/16/27 6 1,384,458 67,535
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial
Mtg. Pass-Through Certificates:
Series 2005-GG3, Cl. A2,
4.305%, 8/10/42 500,000 479,297
Series 2005-GG5, Cl. A2,
5.117%, 4/10/37 550,000 537,610
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial
Mtg. Pass-Through
Certificates: Continued
JP Morgan Mortgage Trust,
CMO Pass-Through Certificates,
Series 2005-S2, Cl. 3A1,
6.746%, 2/25/32 1 $ 2,467,885 $ 2,460,029
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates:
Series 2005-LDP2, Cl. A2,
4.575%, 7/15/42 160,000 153,534
Series 2005-LDP4, Cl. A2,
4.79%, 10/15/42 670,000 646,316
- --------------------------------------------------------------------------------
LB-UBS Commercial Mortgage
Trust, Commercial Mtg
Pass-Through Certificates,
Series 2005-C5, Cl. A2,
4.885%, 9/15/30 520,000 505,519
- --------------------------------------------------------------------------------
Lehman XS Trust, Home Equity
Mtg. Pass-Through Certificates,
Series 2005-10, Cl. 2-A3B,
5.55%, 1/25/36 504,771 498,108
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust,
CMO Pass-Through Certificates:
Series 2004-6, Cl. 10A1,
6%, 7/25/34 653,237 647,341
Series 2004-9, Cl. A3,
4.70%, 8/25/34 1 627,681 621,714
- --------------------------------------------------------------------------------
Morgan Stanley Capital I Trust,
Commercial Mtg. Pass-Through
Certificates:
Series 1996-C1, Cl. F,
7.059%, 2/15/28 1,2 12,697 12,674
Series 1997-XL1, Cl. G,
7.695%, 10/3/30 390,000 326,518
- --------------------------------------------------------------------------------
Prudential Mortgage Capital
Co. II LLC, Commercial Mtg
Pass-Through Certificates,
Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 556,000 587,137
- --------------------------------------------------------------------------------
Residential Accredit Loans, Inc.,
CMO Asset-Backed Pass-Through
Certificates, Series 2006-QS5,
Cl. A2, 6%, 4/25/08 2,211,644 2,204,065
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust, Commercial
Mtg. Obligations, Series 2005-C17, Cl. A2,
4.782%, 3/15/42 820,000 795,075
10 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., CMO
Pass-Through Certificates:
Series 2005-AR5, Cl. A1,
4.675%, 5/25/35 1 $ 366,804 $ 366,000
Series 2005-AR8, Cl. 2AB1,
5.573%, 7/25/45 1 568,306 569,131
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed
Securities Trust, CMO,
Series 2004-DD, Cl. 2A1,
4.513%, 1/25/35 1 169,237 168,502
---------------
Total Mortgage-Backed Obligations
(Cost $193,323,679) 190,127,033
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--20.2%
- --------------------------------------------------------------------------------
Fannie Mae Unsec. Nts.,
3.58%, 1/31/07 7 3,482,000 3,374,507
- --------------------------------------------------------------------------------
Federal Home Loan Bank
Unsec. Bonds:
3.50%, 11/15/07 425,000 414,031
Series S906, 3.50%, 8/15/06 1,715,000 1,711,068
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
2.75%, 8/15/06 280,000 279,120
3.625%, 9/15/06 2,059,000 2,051,509
4.125%, 7/12/10 2,066,000 1,967,125
4.875%, 2/17/09 1,000,000 987,444
5.125%, 4/18/11 8 6,140,000 6,050,485
5.50%, 9/15/11 3,350,000 3,353,447
6%, 6/15/11 4,100,000 4,192,164
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn. Unsec. Nts.:
3.25%, 7/31/06 8 1,335,000 1,332,777
4%, 2/28/07 965,000 955,494
4.25%, 7/15/07 8 2,198,000 2,170,668
4.75%, 12/15/10 2,245,000 2,183,211
6%, 5/15/11 9 12,860,000 13,150,932
6.625%, 9/15/09 9 2,625,000 2,715,796
7.25%, 1/15/10 2,552,000 2,698,947
- --------------------------------------------------------------------------------
Resolution Funding Corp.
Bonds, STRIPS, 5.16%, 1/15/21 7,8 5,667,000 2,575,697
- --------------------------------------------------------------------------------
Tennessee Valley Authority
Bonds, Series A, 6.79%, 5/23/12 3,696,000 3,931,546
- --------------------------------------------------------------------------------
U.S. Treasury Bills:
4.74%, 8/10/06 8 55,870,000 55,575,737
4.795%, 9/14/06 8 190,000,000 188,177,900
- --------------------------------------------------------------------------------
U.S. Treasury Bonds:
4.50%, 2/15/36 8 50,000 44,848
5.50%, 8/15/28 8,10 900,000 924,962
6.875%, 8/15/25 8 2,000,000 2,372,188
7.25%, 5/15/16 8,11,12 4,454,000 5,158,641
8.875%, 8/15/17 8,9 1,419,000 1,852,128
9.25%, 2/15/16 8 208,000 271,562
STRIPS, 4.20%, 2/15/11 7,8 900,000 714,903
STRIPS, 4.81%, 2/15/16 7,8 4,491,000 2,730,950
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
4.875%, 2/15/12 8 $ 2,000,000 $ 1,978,752
6.50%, 2/15/10 8 3,900,000 4,075,960
---------------
Total U.S. Government Obligations
(Cost $322,103,183) 319,974,499
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--20.0%
- --------------------------------------------------------------------------------
ARGENTINA--0.9%
Argentina (Republic of) Bonds:
2%, 9/30/14 4 [ARP] 1,802,000 553,675
4.889%, 8/3/12 1 11,769,625 10,881,040
Series V, 7%, 3/28/11 765,000 708,029
- --------------------------------------------------------------------------------
Argentina (Republic of) Discount
Bonds, 8.28%, 12/31/33 1,155,803 1,032,710
- --------------------------------------------------------------------------------
Buenos Aires (Province of)
Bonds, Bonos de Consolidacion
de Deudas, Series PBA1,
4/1/07 3,4 [ARP] 19,999 8,576
- --------------------------------------------------------------------------------
Central Bank of Argentina
Bonds, 2%, 2/4/18 4 [ARP] 2,321,280 1,051,962
---------------
14,235,992
- --------------------------------------------------------------------------------
AUSTRALIA--0.8%
Queensland Treasury Corp.
Unsec. Nts., Series 09G,
6%, 7/14/09 [AUD] 18,200,000 13,551,711
- --------------------------------------------------------------------------------
BELGIUM--0.6%
Belgium (Kingdom of) Bonds,
Series 44, 5%, 3/28/35 [EUR] 2,030,000 2,860,014
- --------------------------------------------------------------------------------
Belgium (Kingdom of) Treasury
Bills, 2.81%, 9/14/06 7 [EUR] 4,890,000 6,218,280
---------------
9,078,294
- --------------------------------------------------------------------------------
BRAZIL--0.9%
Brazil (Federal Republic of) Bonds:
7.125%, 1/20/37 1,050,000 997,500
8%, 1/15/18 4,670,000 4,938,525
8.25%, 1/20/34 2,450,000 2,578,625
8.75%, 2/4/25 2,340,000 2,574,000
- --------------------------------------------------------------------------------
Brazil (Federal Republic of) Nts.,
7.875%, 3/7/15 130,000 136,435
- --------------------------------------------------------------------------------
Brazil (Federal Republic of)
Unsec. Bonds, 10.125%, 5/15/27 2,745,000 3,417,525
---------------
14,642,610
- --------------------------------------------------------------------------------
BULGARIA--0.1%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 740,000 837,680
8.25%, 1/15/15 2 710,000 803,720
---------------
1,641,400
11 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CANADA--0.8%
Canadian Nts., 4%,
9/1/10 [CAD] 14,280,000 $ 12,566,477
- --------------------------------------------------------------------------------
COLOMBIA--1.1%
Colombia (Republic of) Bonds:
10.375%, 1/28/33 660,000 816,750
10.75%, 1/15/13 1,390,000 1,643,675
12%, 10/22/15 [COP] 18,130,000,000 7,720,749
- --------------------------------------------------------------------------------
Colombia (Republic of) Nts.:
8.25%, 12/22/14 933,000 984,315
11.75%, 3/1/10 [COP] 2,617,240,000 1,069,568
- --------------------------------------------------------------------------------
Colombia (Republic of)
Unsec. Bonds, 8.125%, 5/21/24 4,720,000 4,802,600
---------------
17,037,657
- --------------------------------------------------------------------------------
DENMARK--0.2%
Denmark (Kingdom of) Bonds:
4%, 11/15/10 [DKK] 4,685,000 808,248
4%, 11/15/15 [DKK] 3,485,000 591,366
7%, 11/10/24 [DKK] 1,270,000 289,459
- --------------------------------------------------------------------------------
Denmark (Kingdom of) Nts.,
4%, 8/15/08 [DKK] 5,030,000 868,801
---------------
2,557,874
- --------------------------------------------------------------------------------
DOMINICAN REPUBLIC--0.0%
Dominican Republic Unsec.
Unsub. Nts., 9.50%, 9/27/11 2 428,951 454,688
- --------------------------------------------------------------------------------
EL SALVADOR--0.1%
El Salvador (Republic of) Bonds:
7.625%, 9/21/34 2 590,000 613,600
7.65%, 6/15/35 2 1,265,000 1,220,725
---------------
1,834,325
- --------------------------------------------------------------------------------
FRANCE--1.7%
France (Government of) Bonds,
3.25%, 4/25/16 [EUR] 12,960,000 15,488,081
- --------------------------------------------------------------------------------
France (Government of)
Obligations Assimilables du
Tresor Bonds, 4%, 4/25/55 [EUR] 5,575,000 6,662,932
- --------------------------------------------------------------------------------
France (Government of)
Treasury Bills, 2.90%,
9/21/06 7 [EUR] 3,930,000 4,995,277
---------------
27,146,290
- --------------------------------------------------------------------------------
GERMANY--1.6%
Germany (Republic of) Bonds,
Series 05, 4%, 1/4/37 [EUR] 7,830,000 9,451,122
- --------------------------------------------------------------------------------
Germany (Republic of)
Treasury Bills,
Series 0306, 2.78%,
9/13/06 7 [EUR] 13,240,000 16,841,199
---------------
26,292,321
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
GREECE--0.4%
Greece (Republic of) Bonds,
4.60%, 5/20/13 [EUR] 4,710,000 $ 6,185,960
- --------------------------------------------------------------------------------
GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 2 250,000 288,375
10.25%, 11/8/11 95,000 109,583
---------------
397,958
- --------------------------------------------------------------------------------
INDONESIA--0.2%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14 2 120,000 117,900
7.25%, 4/20/15 2 200,000 201,500
- --------------------------------------------------------------------------------
Indonesia (Republic of)
Unsec. Nts., 8.50%, 10/12/35 2 2,070,000 2,186,489
---------------
2,505,889
- --------------------------------------------------------------------------------
ISRAEL--0.3%
Israel (State of) Bonds,
Series 2682, 7.50%, 3/31/14 [ILS] 21,493,000 5,114,372
- --------------------------------------------------------------------------------
ITALY--1.8%
Italy (Republic of) Nts.,
Certificate Di Credito del
Tesoro, 2.80%, 7/1/09 1 [EUR] 13,215,000 16,973,643
- --------------------------------------------------------------------------------
Italy (Republic of) Treasury
Bonds, Buoni del Tesoro
Poliennali, 4.25%, 2/1/19 [EUR] 9,100,000 11,457,785
---------------
28,431,428
- --------------------------------------------------------------------------------
JAPAN--1.9%
Japan (Government of) Bonds:
2 yr., Series 237, 0.20%,
10/15/07 [JPY] 3,341,000,000 29,022,383
20 yr., Series 81, 2%,
9/20/25 [JPY] 239,000,000 1,999,631
---------------
31,022,014
- --------------------------------------------------------------------------------
MALAYSIA--0.3%
Johor Corp. Malaysia
(Government of) Bonds,
Series P3, 1%, 7/31/12 4 [MYR] 7,980,000 2,356,321
- --------------------------------------------------------------------------------
Malaysia (Government of)
Bonds, Series 2/05, 4.72%,
9/30/15 [MYR] 8,950,000 2,380,415
---------------
4,736,736
- --------------------------------------------------------------------------------
MEXICO--0.5%
United Mexican States Bonds:
7.50%, 4/8/33 1,368,000 1,456,920
8.30%, 8/15/31 555,000 642,413
Series MI10, 8%, 12/19/13 [MXN] 16,100,000 1,348,262
- --------------------------------------------------------------------------------
United Mexican States Nts.:
7.50%, 1/14/12 2,335,000 2,480,938
8.375%, 1/14/11 2,145,000 2,343,413
---------------
8,271,946
12 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NIGERIA--0.1%
Central Bank of Nigeria Gtd
Bonds, Series WW,
6.25%, 11/15/20 $ 960,000 $ 953,400
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of)
Promissory Nts., Series RC,
5.092%, 1/5/10 173,784 154,098
---------------
1,107,498
- --------------------------------------------------------------------------------
PANAMA--0.5%
Panama (Republic of) Bonds:
6.70%, 1/26/36 7,400,000 6,808,000
9.375%, 4/1/29 655,000 776,175
---------------
7,584,175
- --------------------------------------------------------------------------------
PERU--1.4%
Peru (Republic of) Bonds:
7.35%, 7/21/25 2,910,000 2,808,150
7.84%, 8/12/20 [PEN] 28,720,000 8,540,690
8.20%, 8/12/26 [PEN] 5,945,000 1,812,382
8.375%, 5/3/16 290,000 314,650
9.91%, 5/5/15 [PEN] 8,101,000 2,772,007
Series 7, 8.60%, 8/12/17 [PEN] 3,450,000 1,096,709
Series 8-1, 12.25%, 8/10/11 [PEN] 1,427,000 528,305
- --------------------------------------------------------------------------------
Peru (Republic of) Past Due
Interest Bonds, Series 20 yr.,
5%, 3/7/17 1 1,375,390 1,341,005
- --------------------------------------------------------------------------------
Peru (Republic of) Sr. Nts.,
4.53%, 2/28/16 7 645,329 344,502
- --------------------------------------------------------------------------------
Peru (Republic of) Unsec.
Unsub. Bonds,
8.75%, 11/21/33 1,850,000 2,067,375
---------------
21,625,775
- --------------------------------------------------------------------------------
POLAND--0.6%
Poland (Republic of) Bonds:
Series 0K0807,
4.24%, 81/2/07 7 [PLZ] 1,200,000 360,077
Series DS1013,
5%, 10/24/13 [PLZ] 11,340,000 3,507,115
Series WS0922,
5.75%, 9/23/22 [PLZ] 1,000,000 309,301
Series 0511,
4.25%, 5/24/11 [PLZ] 16,820,000 5,008,445
---------------
9,184,938
- --------------------------------------------------------------------------------
RUSSIA--0.6%
Aries Vermoegensverwaltungs
GmbH Unsub. Nts.:
Series B, 7.75%, 10/25/09 2 [EUR] 700,000 996,598
Series C, 9.60%, 10/25/14 6,310,000 7,863,964
- --------------------------------------------------------------------------------
Russian Federation Unsec.
Unsub. Nts.,
12.75%, 6/24/28 100,000 169,750
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
RUSSIA Continued
Russian Federation Unsub. Nts.,
5%, 3/31/30 1 $ 435,000 $ 463,819
---------------
9,494,131
- --------------------------------------------------------------------------------
TURKEY--0.3%
Turkey (Republic of) Nts.:
7.25%, 3/15/15 2,215,000 2,090,406
11%, 1/14/13 1,730,000 1,980,850
---------------
4,071,256
- --------------------------------------------------------------------------------
GREAT BRITAIN--1.0%
United Kingdom Treasury
Bond, 6%, 12/7/28 [GBP] 7,375,000 16,559,689
- --------------------------------------------------------------------------------
URUGUAY--0.2%
Uruguay (Oriental Republic of)
Bonds, 7.625%, 3/21/36 1,120,000 1,013,600
- --------------------------------------------------------------------------------
Uruguay (Oriental Republic of)
Unsec. Bonds, 8%, 11/18/22 3,060,000 2,945,250
---------------
3,958,850
- --------------------------------------------------------------------------------
VENEZUELA--1.1%
Venezuela (Republic of) Bonds:
9.25%, 9/15/27 10,115,000 11,960,988
13.625%, 8/15/18 500,000 716,875
- --------------------------------------------------------------------------------
Venezuela (Republic of) Nts.,
7%, 3/16/15 [EUR] 1,097,000 1,438,196
- --------------------------------------------------------------------------------
Venezuela (Republic of) Unsec.
Bonds, 9.375%, 1/13/34 2,360,000 2,773,000
---------------
16,889,059
---------------
Total Foreign Government
Obligations
(Cost $321,179,059) 318,181,313
- --------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.0%
- --------------------------------------------------------------------------------
Algeria (Republic of) Loan
Participation Nts., 5.813%,
3/4/10 1,4 (Cost $290,293) 310,667 310,667
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--26.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.8%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.5%
Collins & Aikman Floorcoverings,
Inc., 9.75% Sr. Sub. Nts.,
Series B, 2/15/10 700,000 691,250
- --------------------------------------------------------------------------------
Eagle-Picher, Inc., 9.75% Sr. Nts.,
9/1/13 3 60,000 40,500
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 1,125,000 1,049,063
9% Sr. Unsec. Nts., 7/1/15 1,045,000 1,003,200
- --------------------------------------------------------------------------------
Stoneridge, Inc.,
11.50% Sr. Nts., 5/1/12 1,200,000 1,158,000
13 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
AUTO COMPONENTS Continued
Tenneco Automotive, Inc.:
8.625% Sr. Unsec. Sub. Nts.,
11/15/14 $ 900,000 $ 902,250
10.25% Sr. Sec. Nts.,
Series B, 7/15/13 650,000 715,813
- --------------------------------------------------------------------------------
United Components, Inc.,
9.375% Sr. Sub. Nts., 6/15/13 200,000 198,000
- --------------------------------------------------------------------------------
Visteon Corp.:
7% Sr. Unsec. Nts., 3/10/14 1,125,000 923,906
8.25% Sr. Unsec. Nts., 8/1/10 1,700,000 1,598,000
---------------
8,279,982
- --------------------------------------------------------------------------------
AUTOMOBILES--1.0%
Ford Motor Co.,
7.45% Bonds, 7/16/31 800,000 582,000
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.625% Nts., 10/1/08 1,700,000 1,573,408
5.80% Sr. Unsec. Nts., 1/12/09 300,000 274,225
7.375% Nts., 10/28/09 4,400,000 4,070,858
9.473% Nts., 4/15/12 1 1,990,000 2,023,137
- --------------------------------------------------------------------------------
General Motors
Acceptance Corp.:
6.875% Nts., 9/15/11 2,270,000 2,168,254
7.25% Nts., 3/2/11 400,000 388,178
8% Bonds, 11/1/31 2,880,000 2,775,416
- --------------------------------------------------------------------------------
General Motors Corp.,
8.375% Sr. Unsec. Debs., 7/15/33 400,000 324,000
- --------------------------------------------------------------------------------
Hertz Corp.:
8.875% Sr. Nts., 1/1/14 2 1,160,000 1,194,800
10.50% Sr. Sub. Nts., 1/1/16 2 1,135,000 1,208,775
---------------
16,583,051
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
SGS International, Inc.,
12% Sr. Sub. Nts., 12/15/13 2 580,000 582,900
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.1%
Education Management
LLC/Education Management
Corp., 10.25% Sr. Sub. Nts., 6/1/16 2 1,140,000 1,140,000
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.2%
American Casino &
Entertainment Properties LLC,
7.85% Sr. Sec. Nts., 2/1/12 500,000 503,750
- --------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec.
Sub. Nts., 3/15/08 500,000 492,500
- --------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec.
Sub. Nts., 8/15/11 850,000 894,625
- --------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr.
Sub. Nts., 4/15/12 500,000 526,250
- --------------------------------------------------------------------------------
CCM Merger, Inc., 8% Unsec.
Nts., 8/1/13 2 1,040,000 988,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Domino's, Inc., 8.25% Sr. Unsec.
Sub. Nts., 7/1/11 $ 1,047,000 $ 1,091,498
- --------------------------------------------------------------------------------
French Lick Resorts & Casino
LLC, 10.75% First Mtg. Nts.,
4/15/14 2 1,460,000 1,405,250
- --------------------------------------------------------------------------------
Gaylord Entertainment Co.,
8% Sr. Nts., 11/15/13 900,000 903,375
- --------------------------------------------------------------------------------
Greektown Holdings, Inc.,
10.75% Sr. Nts., 12/1/13 2 1,335,000 1,415,100
- --------------------------------------------------------------------------------
Intrawest Corp., 7.50% Sr. Unsec.
Nts., 10/15/13 625,000 625,000
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 2,100,000 1,992,375
9% Sr. Sub. Nts., 3/15/12 500,000 524,375
- --------------------------------------------------------------------------------
Kerzner International Ltd.,
6.75% Sr. Unsec. Sub. Nts., 10/1/15 340,000 356,575
- --------------------------------------------------------------------------------
Mandalay Resort Group,
10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 650,000 676,813
- --------------------------------------------------------------------------------
MGM Mirage, Inc.:
6.75% Sr. Nts., 4/1/13 2 650,000 623,188
8.375% Sr. Unsec. Sub. Nts., 2/1/11 2,300,000 2,369,000
9.75% Sr. Unsec. Sub. Nts., 6/1/07 350,000 361,375
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 225,000 212,906
6.375% Sr. Sub. Nts., 7/15/09 250,000 244,688
6.875% Sr. Unsec. Sub. Nts., 2/15/15 515,000 487,963
7.125% Sr. Unsec. Sub. Nts., 8/15/14 500,000 486,250
8% Sr. Sub. Nts., 4/1/12 1,000,000 1,021,250
- --------------------------------------------------------------------------------
NCL Corp., 10.625% Sr. Unsub
Nts., 7/15/14 800,000 790,000
- --------------------------------------------------------------------------------
Park Place Entertainment Corp.:
7.875% Sr. Sub. Nts., 3/15/10 800,000 834,000
9.375% Sr. Unsec. Sub. Nts., 2/15/07 800,000 816,000
- --------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts., 3/1/15 230,000 215,625
6.875% Sr. Sub. Nts., 12/1/11 500,000 491,250
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc.,
8.25% Sr. Unsec. Sub. Nts., 3/15/12 1,800,000 1,813,500
- --------------------------------------------------------------------------------
Pokagon Gaming Authority,
10.375% Sr. Nts., 6/15/14 2 525,000 545,344
- --------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts.,
3/15/08 3,4 250,000 --
- --------------------------------------------------------------------------------
Six Flags, Inc.:
8.875% Sr. Unsec. Nts., 2/1/10 874,000 834,670
9.625% Sr. Nts., 6/1/14 669,000 612,135
9.75% Sr. Nts., 4/15/13 600,000 554,250
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc., 7.875% Sr. Nts.,
5/1/12 835,000 875,706
14 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts.,
2/1/14 $ 2,203,000 $ 2,059,805
6.875% Sr. Unsec. Sub. Nts.,
3/1/16 235,000 220,313
- --------------------------------------------------------------------------------
Trump Entertainment Resorts, Inc.,
8.50% Sec. Nts., 6/1/15 3,100,000 2,995,375
- --------------------------------------------------------------------------------
Universal City Development
Partners Ltd., 11.75% Sr. Nts.,
4/1/10 500,000 546,875
- --------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub. Nts.,
2/15/14 1,100,000 1,050,500
- --------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn
Las Vegas Capital Corp.,
6.625% Nts., 12/1/14 2,274,000 2,154,615
---------------
35,612,069
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.3%
Beazer Homes USA, Inc.,
8.375% Sr. Nts., 4/15/12 400,000 402,000
- --------------------------------------------------------------------------------
D.R. Horton, Inc., 9.75% Sr. Sub.
Nts., 9/15/10 400,000 441,194
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.,
7.75% Sr. Unsec. Sub. Nts., 5/15/13 300,000 275,250
- --------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 250,000 260,313
9.50% Sr. Unsec. Sub. Nts., 2/15/11 400,000 418,500
- --------------------------------------------------------------------------------
Sealy Mattress Co., 8.25% Sr. Sub.
Nts., 6/15/14 450,000 452,250
- --------------------------------------------------------------------------------
Standard Pacific Corp., 9.25% Sr.
Sub. Nts., 4/15/12 200,000 199,750
- --------------------------------------------------------------------------------
WCI Communities, Inc., 9.125% Sr.
Sub. Nts., 5/1/12 800,000 754,000
- --------------------------------------------------------------------------------
William Lyon Homes, Inc., 10.75%
Sr. Nts., 4/1/13 900,000 868,500
---------------
4,071,757
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Leslie's Poolmart, Inc., 7.75% Sr.
Unsec. Nts., 2/1/13 525,000 511,875
- --------------------------------------------------------------------------------
Rexnord Corp., 10.125% Sr. Unsec.
Sub. Nts., 12/15/12 350,000 387,569
- --------------------------------------------------------------------------------
Steinway Musical Instruments, Inc.,
7% Sr. Nts., 3/1/14 2 785,000 763,413
---------------
1,662,857
- --------------------------------------------------------------------------------
MEDIA--3.7%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 3 350,000 189,000
10.25% Sr. Unsec. Sub. Nts.,
6/15/11 3 200,000 116,000
10.875% Sr. Unsec. Nts., 10/1/10 3 400,000 220,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Allbritton Communications Co.,
7.75% Sr. Unsec. Sub. Nts.,
12/15/12 $ 1,100,000 $ 1,094,500
- --------------------------------------------------------------------------------
AMC Entertainment, Inc.:
8% Sr. Unsec. Sub. Nts., 3/1/14 650,000 598,813
9.50% Sr. Unsec. Sub. Nts., 2/1/11 360,000 355,500
- --------------------------------------------------------------------------------
American Media
Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts.,
1/15/11 150,000 133,500
10.25% Sr. Unsec. Sub. Nts.,
Series B, 5/1/09 700,000 656,250
- --------------------------------------------------------------------------------
Block Communications, Inc.,
8.25% Sr. Nts., 12/15/15 2 405,000 390,825
- --------------------------------------------------------------------------------
Charter Communications
Holdings II LLC/Charter
Communications Holdings II
Capital Corp.:
10.25% Sr. Nts., 9/15/10 2 885,000 889,425
10.25% Sr. Unsec. Nts., 9/15/10 700,000 705,250
- --------------------------------------------------------------------------------
Charter Communications
Holdings LLC/Charter
Communications Holdings
Capital Corp.: 8.375% Sr. Nts.,
Second Lien, 4/30/14 2 4,503,000 4,531,144
- --------------------------------------------------------------------------------
Cinemark USA, Inc., 9% Sr.
Unsec. Sub. Nts., 2/1/13 900,000 949,500
- --------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr.
Unsec. Disc. Nts., 3/15/14 13 1,500,000 1,170,000
- --------------------------------------------------------------------------------
CSC Holdings, Inc.:
7.625% Sr. Unsec. Debs., 7/15/18 1,000,000 995,000
7.625% Sr. Unsec. Unsub. Nts.,
Series B, 4/1/11 1,106,000 1,111,530
- --------------------------------------------------------------------------------
Dex Media East LLC/Dex
Media East Finance Co.,
9.875% Sr. Unsec. Nts., 11/15/09 200,000 212,500
- --------------------------------------------------------------------------------
Dex Media West LLC/Dex
Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 300,000 312,750
9.875% Sr. Sub. Nts., 8/15/13 586,000 638,005
- --------------------------------------------------------------------------------
Dex Media, Inc.:
0%/9% Unsec. Disc. Nts.,
11/15/13 13 300,000 254,250
0%/9% Unsec. Disc. Nts.,
11/15/13 13 400,000 339,000
8% Unsec. Nts., 11/15/13 3,575,000 3,610,750
- --------------------------------------------------------------------------------
Dow Jones CDX High Yield
Index, 8.625% Pass-Through
Certificates, Series 6-T1, 6/29/11 2 10,350,000 10,168,875
- --------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 927,000 873,698
7.125% Sr. Nts., 2/1/16 2 1,400,000 1,354,500
15 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Emmis Operating Co.,
6.875% Sr. Unsec. Sub. Nts.,
5/15/12 $ 1,000,000 $ 985,000
- --------------------------------------------------------------------------------
Granite Broadcasting Corp.,
9.75% Sr. Sec. Nts., 12/1/10 359,000 330,280
- --------------------------------------------------------------------------------
Lamar Media Corp.,
6.625% Sr. Unsec. Sub. Nts.,
8/15/15 1,760,000 1,636,800
- --------------------------------------------------------------------------------
Lin Television Corp.,
6.50% Sr. Sub. Nts., 5/15/13 550,000 504,625
- --------------------------------------------------------------------------------
Marquee Holdings, Inc.,
0%/12% Sr. Disc. Nts., 8/15/14 13 1,600,000 1,150,000
- --------------------------------------------------------------------------------
Mediacom Broadband LLC/
Mediacom Broadband Corp.,
8.50% Sr. Nts., 10/15/15 280,000 270,200
- --------------------------------------------------------------------------------
Mediacom LLC/Mediacom
Capital Corp.,
9.50% Sr. Unsec. Nts., 1/15/13 969,000 969,000
- --------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 1,300,000 1,144,000
6.875% Sr. Unsec. Sub. Nts., 10/1/13 700,000 640,500
- --------------------------------------------------------------------------------
Paxson Communications Corp.,
11.318% Sr. Sec. Nts., 1/15/13 1,2 760,000 765,700
- --------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 900,000 810,000
8.875% Sr. Unsec. Nts., 5/15/11 319,000 307,835
- --------------------------------------------------------------------------------
Quebecor World Capital Corp.,
8.75% Sr. Nts., 3/15/16 2 315,000 289,013
- --------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts., 1/15/13 2 2,230,000 2,062,750
6.875% Sr. Disc. Nts.,
Series A-2, 1/15/13 2 1,865,000 1,725,125
6.875% Sr. Nts., 1/15/13 1,300,000 1,202,500
8.875% Sr. Nts., Series A-3, 1/15/16 2 3,140,000 3,183,175
- --------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I,
10.875% Sr. Sub. Nts., 12/15/12 2 400,000 441,000
- --------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec.
Sub. Nts., Series B, 7/1/11 600,000 624,750
- --------------------------------------------------------------------------------
Rainbow National Services LLC,
8.75% Sr. Nts., 9/1/12 2 900,000 949,500
- --------------------------------------------------------------------------------
Shaw Communications, Inc.,
8.54% Debs., 9/30/27 [CAD] 340,000 308,842
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
8% Sr. Unsec. Sub. Nts., 3/15/12 2,775,000 2,830,500
8.75% Sr. Sub. Nts., 12/15/11 300,000 315,000
- --------------------------------------------------------------------------------
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 700,000 715,750
10.875% Sr. Unsec. Nts.,
Series B, 6/15/09 1,100,000 1,089,000
- --------------------------------------------------------------------------------
WMG Holdings Corp.,
0%/9.50% Sr. Disc. Nts., 12/15/14 13 2,057,000 1,491,325
---------------
58,612,735
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.3%
Bon-Ton Stores, Inc. (The),
10.25% Sr. Nts., 3/15/14 2 $ 1,980,000 $ 1,846,350
- --------------------------------------------------------------------------------
Neiman Marcus Group, Inc.:
9% Sr. Nts., 10/15/15 2 2,220,000 2,331,000
10.375% Sr. Sub. Nts., 10/15/15 2 660,000 704,550
---------------
4,881,900
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.3%
Asbury Automotive Group, Inc.,
9% Sr. Sub. Nts., 6/15/12 300,000 298,500
- --------------------------------------------------------------------------------
Atlantic Broadband Finance LLC,
9.375% Sr. Unsec. Sub. Nts., 1/15/14 250,000 236,250
- --------------------------------------------------------------------------------
Boise Cascade LLC,
7.125% Sr. Unsec. Sub. Nts.,
10/15/14 1,308,000 1,164,120
- --------------------------------------------------------------------------------
Linens `N Things, Inc.,
10.702% Sr. Sec. Nts., 1/15/14 1,2 1,480,000 1,409,700
- --------------------------------------------------------------------------------
Petco Animal Supplies, Inc.,
10.75% Sr. Sub. Nts., 11/1/11 200,000 212,000
- --------------------------------------------------------------------------------
Rent-A-Center, Inc.,
7.50% Sr. Unsec. Sub. Nts.,
Series B, 5/1/10 550,000 550,000
---------------
3,870,570
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 2 1,067,000 1,125,685
- --------------------------------------------------------------------------------
Levi Strauss & Co.:
9.74% Sr. Unsec. Unsub. Nts.,
4/1/12 1 1,540,000 1,574,650
9.75% Sr. Unsec. Unsub. Nts.,
1/15/15 859,000 863,295
- --------------------------------------------------------------------------------
Oxford Industries, Inc.,
8.875% Sr. Nts., 6/1/11 250,000 251,250
- --------------------------------------------------------------------------------
Quiksilver, Inc.,
6.875% Sr. Unsec. Nts., 4/15/15 610,000 570,350
- --------------------------------------------------------------------------------
Russell Corp., 9.25% Sr. Nts.,
5/1/10 700,000 735,875
---------------
5,121,105
- --------------------------------------------------------------------------------
CONSUMER STAPLES--0.8%
- --------------------------------------------------------------------------------
BEVERAGES--0.0%
Constellation Brands, Inc.,
8.125% Sr. Sub. Nts., 1/15/12 300,000 309,750
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.2%
Jean Coutu Group (PJC), Inc. (The),
8.50% Sr. Sub. Nts., 8/1/14 1,600,000 1,480,000
- --------------------------------------------------------------------------------
Real Time Data Co.,
11% Disc. Nts., 5/31/09 3,4 142,981 --
- --------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 450,000 454,500
9.50% Sr. Sec. Nts., 2/15/11 700,000 729,750
---------------
2,664,250
16 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.2%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts.,
2/15/15 $ 180,000 $ 167,850
8.625% Sr. Sub. Nts., 12/15/12 400,000 414,000
- --------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09 306,000 293,760
8.875% Sr. Unsec. Nts., 3/15/11 71,000 66,918
- --------------------------------------------------------------------------------
Hines Nurseries, Inc.,
10.25% Sr. Unsec. Sub. Nts., 10/1/11 1,300,000 1,254,500
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical
Corp., Escrow Shares, 3/15/10 4 500,000 23,020
- --------------------------------------------------------------------------------
Smithfield Foods, Inc.,
7.625% Sr. Unsec. Sub. Nts., 2/15/08 400,000 404,000
- --------------------------------------------------------------------------------
United Biscuits Finance plc,
10.75% Sr. Sub. Nts., 4/15/11 [GBP] 400,000 780,369
---------------
3,404,417
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.1%
Church & Dwight Co., Inc.,
6% Sr. Unsec. Sub. Nts., 12/15/12 350,000 325,500
- --------------------------------------------------------------------------------
Nutro Products, Inc.,
10.75% Sr. Sub. Nts., 4/15/14 2 735,000 759,806
---------------
1,085,306
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.2%
Elizabeth Arden, Inc.,
7.75% Sr. Unsec. Sub. Nts., 1/15/14 1,175,000 1,160,313
- --------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 500,000 520,000
9.375% Sr. Unsec. Sub. Nts., 6/1/11 740,000 774,225
---------------
2,454,538
- --------------------------------------------------------------------------------
TOBACCO--0.1%
Reynolds American, Inc.,
7.25% Sr. Sec. Nts., 6/1/13 2 1,805,000 1,773,413
- --------------------------------------------------------------------------------
ENERGY--2.6%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.2%
Basic Energy Services, Inc.,
7.125% Sr. Nts., 4/15/16 2 335,000 313,225
- --------------------------------------------------------------------------------
Dresser, Inc.,
9.875% Sr. Unsec. Sub. Nts.,
4/15/11 1 300,000 305,250
- --------------------------------------------------------------------------------
Hanover Compressor Co.,
8.625% Sr. Unsec. Sub. Nts.,
12/15/10 800,000 832,000
- --------------------------------------------------------------------------------
Hanover Equipment Trust,
8.50% Sr. Sec. Nts., Series A, 9/1/08 221,000 227,630
- --------------------------------------------------------------------------------
PHI, Inc., 7.125% Sr. Nts., 4/15/13 2 400,000 379,000
- --------------------------------------------------------------------------------
RathGibson, Inc.,
11.25% Sr. Nts., 2/15/14 2 300,000 310,500
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts.,
5/15/10 $ 400,000 $ 401,000
---------------
2,768,605
- --------------------------------------------------------------------------------
OIL & GAS--2.4%
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 700,000 673,750
- --------------------------------------------------------------------------------
Atlas Pipeline Partners LP,
8.125% Sr. Nts., 12/15/15 2 290,000 290,363
- --------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Unsec. Nts., 6/15/15 250,000 233,125
6.875% Sr. Unsec. Nts., 1/15/16 1,822,000 1,730,900
- --------------------------------------------------------------------------------
Clayton Williams Energy, Inc.,
7.75% Sr. Unsec. Nts., 8/1/13 85,000 78,625
- --------------------------------------------------------------------------------
Compton Petroleum Finance
Corp., 7.625% Sr. Nts., 12/1/13 1,310,000 1,257,600
- --------------------------------------------------------------------------------
Copano Energy LLC,
8.125% Sr. Nts., 3/1/16 2 180,000 180,000
- --------------------------------------------------------------------------------
El Paso Corp.,
7.875% Sr. Unsec. Nts., 6/15/12 2,784,000 2,846,640
- --------------------------------------------------------------------------------
El Paso Energy Corp.,
7.625% Nts., 7/15/11 200,000 203,000
- --------------------------------------------------------------------------------
El Paso Production Holding Co.,
7.75% Sr. Unsec. Nts., 6/1/13 1,319,000 1,335,488
- --------------------------------------------------------------------------------
Forest Oil Corp.,
7.75% Sr. Nts., 5/1/14 300,000 302,250
- --------------------------------------------------------------------------------
Foundation PA Coal Co.,
7.25% Sr. Unsec. Nts., 8/1/14 550,000 539,000
- --------------------------------------------------------------------------------
Frontier Oil Corp.,
6.625% Sr. Unsec. Nts., 10/1/11 700,000 673,750
- --------------------------------------------------------------------------------
Inergy LP/Inergy Finance Corp.,
8.25% Sr. Unsec. Nts., 3/1/16 880,000 893,200
- --------------------------------------------------------------------------------
Massey Energy Co.:
6.625% Sr. Nts., 11/15/10 200,000 198,000
6.875% Sr. Nts., 12/15/13 2 285,000 266,475
- --------------------------------------------------------------------------------
National Gas Co.,
6.05% Nts., 1/15/36 2 1,510,000 1,394,564
- --------------------------------------------------------------------------------
Newfield Exploration Co.,
6.625% Sr. Unsec. Sub. Nts., 9/1/14 1,900,000 1,819,250
- --------------------------------------------------------------------------------
Pacific Energy Partners LP/
Pacific Energy Finance Corp.,
6.25% Sr. Unsec. Nts., 9/15/15 100,000 97,500
- --------------------------------------------------------------------------------
Peabody Energy Corp.,
6.875% Sr. Unsec. Nts.,
Series B, 3/15/13 700,000 691,250
- --------------------------------------------------------------------------------
Pemex Project Funding Master
Trust:
7.375% Unsec. Unsub. Nts.,
12/15/14 740,000 765,530
8.50% Unsub. Nts., 2/15/08 420,000 437,325
9.125% Unsec. Unsub. Nts.,
10/13/10 610,000 669,475
17 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Petroleum Export Ltd.
Cayman SPV, 5.265% Sr. Nts.,
Cl. A3, 6/15/11 2 $ 3,786,952 $ 3,674,536
- --------------------------------------------------------------------------------
Plains Exploration &
Production Co.,
7.125% Sr. Nts., 6/15/14 300,000 297,000
- --------------------------------------------------------------------------------
Pogo Producing Co.,
7.875% Sr. Sub. Nts., 5/1/13 2 365,000 367,738
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc.,
9.50% Sr. Nts., 2/1/13 835,000 913,263
- --------------------------------------------------------------------------------
Quicksilver Resources, Inc.,
7.125% Sr. Sub. Nts., 4/1/16 1,340,000 1,262,950
- --------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 230,000 213,325
7.375% Sr. Sub. Nts., 7/15/13 200,000 199,500
7.50% Sr. Sub. Nts., 5/15/16 355,000 352,338
- --------------------------------------------------------------------------------
Southern Natural Gas Co.:
7.35% Nts., 2/15/31 500,000 482,246
8% Sr. Unsub. Nts., 3/1/32 300,000 311,492
- --------------------------------------------------------------------------------
Stone Energy Corp.,
6.75% Sr. Unsec. Sub. Nts.,
12/15/14 1,020,000 1,028,925
- --------------------------------------------------------------------------------
Targa Resources, Inc.,
8.50% Sr. Nts., 11/1/13 2 525,000 509,250
- --------------------------------------------------------------------------------
Tengizchevroil LLP,
6.124% Nts., 11/15/14 2 2,123,000 2,061,964
- --------------------------------------------------------------------------------
Tennessee Gas Pipeline Co.,
7.50% Bonds, 4/1/17 1,567,000 1,575,822
- --------------------------------------------------------------------------------
Tesoro Corp.:
6.25% Sr. Nts., 11/1/12 2 405,000 386,775
6.625% Sr. Nts., 11/1/15 2 905,000 862,013
- --------------------------------------------------------------------------------
Titan Petrochemicals Group Ltd.,
8.50% Sr. Unsec. Nts., 3/18/12 2 846,000 725,445
- --------------------------------------------------------------------------------
Transcontinental Gas Pipe
Line Corp.,
6.40% Sr. Nts., 4/15/16 2 470,000 452,375
- --------------------------------------------------------------------------------
Whiting Petroleum Corp.,
7.25% Sr. Sub. Nts., 5/1/12 1,500,000 1,447,500
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 1,100,000 1,105,500
7.625% Nts., 7/15/19 928,000 946,560
8.75% Unsec. Nts., 3/15/32 1,619,000 1,768,758
---------------
38,522,335
- --------------------------------------------------------------------------------
FINANCIALS--2.9%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.2%
Berry Plastics Corp.,
10.75% Sr. Sub. Nts., 7/15/12 1,250,000 1,359,375
- --------------------------------------------------------------------------------
E*TRADE Financial Corp.:
7.375% Sr. Unsec. Nts., 9/15/13 1,146,000 1,151,730
8% Sr. Nts., 6/15/11 410,000 420,250
---------------
2,931,355
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.9%
Banco BMG SA,
9.15% Nts., 1/15/16 2 $ 2,980,000 $ 2,927,850
- --------------------------------------------------------------------------------
Bank Plus Corp.,
12% Sr. Nts., 7/18/07 4 7,000 7,525
- --------------------------------------------------------------------------------
HSBC Bank plc:
9.75% Sr. Unsec. Nts., 7/8/09 7 1,960,000 989,996
11.60% Sr. Unsec. Nts., 1/12/10 7 2,510,000 1,142,552
12.28% Sr. Unsec. Nts., 3/9/09 7 1,960,000 1,048,404
- --------------------------------------------------------------------------------
Inter-American
Development Bank:
6.26% Nts., 12/8/09 1 [BRR] 920,000 382,408
8.81% Nts., 1/25/12 1 [COP] 1,060,285,718 453,636
- --------------------------------------------------------------------------------
Ongko International
Finance Co. BV,
10.50% Sec. Nts., 3/29/10 3,4 90,000 --
- --------------------------------------------------------------------------------
RSHB Capital SA/OJSC Russian
Agricultural Bank
7.175% Nts., 5/16/13 2 3,110,000 3,090,563
- --------------------------------------------------------------------------------
UBS Luxembourg SA,
6.23% Sub. Nts., 2/11/15 1 2,500,000 2,456,263
- --------------------------------------------------------------------------------
VTB Capital SA,
6.25% Sr. Nts., 6/30/35 2 1,870,000 1,772,760
---------------
14,271,957
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.6%
Affinia Group, Inc.,
9% Sr. Unsec. Sub. Nts., 11/30/14 120,000 109,500
- --------------------------------------------------------------------------------
Argentine Beverages Financial Trust,
7.375% Bonds, 3/22/12 4 490,000 472,850
- --------------------------------------------------------------------------------
Autopistas del Nordeste
Cayman Ltd.,
9.39% Nts., 1/15/26 2 1,477,137 1,469,751
- --------------------------------------------------------------------------------
BCP Crystal US Holdings Corp.,
9.625% Sr. Sub. Nts., 6/15/14 813,000 886,170
- --------------------------------------------------------------------------------
Cloverie plc, 9.664% Sec. Nts.,
Series 2005-93, 12/20/10 1,4 1,100,000 1,100,880
- --------------------------------------------------------------------------------
Crystal US Holdings 3 LLC/
Crystal US Sub 3 Corp.,
0%/10.50% Sr. Unsec. Disc. Nts.,
Series B, 10/1/14 13 570,000 448,875
- --------------------------------------------------------------------------------
Dow Jones CDX High Yield Index,
8.25% Pass-Through Certificates,
Series 4-T1, 6/29/10 2 15,548,160 15,684,206
- --------------------------------------------------------------------------------
Halyk Savings Bank Kazakhstan
Europe BV, 7.75% Nts., 5/13/13 2 1,625,000 1,635,156
- --------------------------------------------------------------------------------
JSG Funding plc,
7.75% Sr. Unsec. Sub. Nts., 4/1/15 330,000 300,300
- --------------------------------------------------------------------------------
Nell AF Sarl,
8.375% Sr. Nts., 8/15/15 2 1,510,000 1,459,038
- --------------------------------------------------------------------------------
Tiers-BSP,
0%/8.60% Collateralized Trust,
Cl. A, 6/15/97 4,13 2,695,000 889,350
18 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Universal City Florida:
8.375% Sr. Unsec. Nts., 5/1/10 $ 130,000 $ 131,300
9.899% Sr. Unsec. Nts., 5/1/10 1 130,000 134,875
---------------
24,722,251
- --------------------------------------------------------------------------------
REAL ESTATE--0.1%
Felcor Lodging LP,
8.50% Sr. Nts., 6/1/11 1 925,000 985,125
- --------------------------------------------------------------------------------
Host Marriott LP,
6.375% Sr. Nts., Series O, 3/15/15 530,000 500,850
---------------
1,485,975
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.1%
Banco Hipotecario SA,
9.75% Sr. Unsec. Nts., 4/27/16 4 2,340,000 2,258,100
- --------------------------------------------------------------------------------
Bankunited Capital Trust,
10.25% Capital Securities, 12/31/26 4 100,000 108,250
---------------
2,366,350
- --------------------------------------------------------------------------------
HEALTH CARE--1.4%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.0%
Angiotech Pharmaceuticals, Inc.,
7.75% Sr. Sub. Nts., 4/1/14 2 325,000 312,000
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.1%
Inverness Medical Innovations, Inc.,
8.75% Sr. Sub. Nts., 2/15/12 650,000 633,750
- --------------------------------------------------------------------------------
Universal Hospital Services, Inc.,
10.125% Sr. Unsec. Nts., 11/1/11 300,000 313,500
---------------
947,250
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.3%
AmeriPath, Inc.,
10.50% Sr. Unsec. Sub. Nts., 4/1/13 300,000 316,125
- --------------------------------------------------------------------------------
Community Health Systems, Inc.,
6.50% Sr. Unsec. Sub. Nts., 12/15/12 400,000 381,500
- --------------------------------------------------------------------------------
DaVita, Inc.:
6.625% Sr. Unsec. Nts., 3/15/13 465,000 444,075
7.25% Sr. Unsec. Sub. Nts., 3/15/15 2,375,000 2,291,875
- --------------------------------------------------------------------------------
Extendicare Health Services, Inc.:
6.875% Sr. Sub. Nts., 5/1/14 300,000 315,000
9.50% Sr. Unsec. Sub. Nts., 7/1/10 300,000 314,625
- --------------------------------------------------------------------------------
Fresenius Medical Care
Capital Trust II,
7.875% Nts., 2/1/08 900,000 915,750
- --------------------------------------------------------------------------------
Fresenius Medical Care
Capital Trust III,
7.375% Nts., 2/1/08 [DEM] 25,000 16,921
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust IV, 7.875% Trust Preferred
Securities, 6/15/11 4 600,000 609,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Genesis HealthCare Corp.,
8% Sr. Sub. Nts., 10/15/13 $ 200,000 $ 210,250
- --------------------------------------------------------------------------------
HCA, Inc.:
6.30% Sr. Unsec. Nts., 10/1/12 2,919,000 2,759,976
6.375% Nts., 1/15/15 1,871,000 1,742,928
8.75% Sr. Nts., 9/1/10 200,000 211,853
- --------------------------------------------------------------------------------
HEALTHSOUTH Corp.,
10.75% Sr. Nts., 6/15/16 2 1,475,000 1,452,875
- --------------------------------------------------------------------------------
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 230,000 220,225
6.875% Sr. Sub. Nts., 12/15/15 285,000 272,175
- --------------------------------------------------------------------------------
Psychiatric Solutions, Inc.,
7.75% Sr. Unsec. Sub. Nts., 7/15/15 220,000 216,425
- --------------------------------------------------------------------------------
Select Medical Corp.,
7.625% Sr. Unsec. Sub. Nts., 2/1/15 2,250,000 1,968,750
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 1,282,000 1,150,595
7.375% Nts., 2/1/13 19,000 17,433
9.875% Sr. Nts., 7/1/14 2,382,000 2,393,910
- --------------------------------------------------------------------------------
Triad Hospitals, Inc.,
7% Sr. Sub. Nts., 11/15/13 465,000 454,538
- --------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 300,000 313,500
10.75% Sr. Unsec. Sub. Nts., 8/15/14 300,000 327,000
- --------------------------------------------------------------------------------
Vanguard Health Holding Co. I LLC,
0%/11.25% Sr. Disc. Nts., 10/1/15 13 2,000,000 1,420,000
---------------
20,737,304
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.0%
Valeant Pharmaceuticals
International, Inc.,
7% Sr. Nts., 12/15/11 350,000 334,250
- --------------------------------------------------------------------------------
INDUSTRIALS--1.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.3%
Alliant Techsystems, Inc.,
6.75% Sr. Sub. Nts., 4/1/16 1,335,000 1,288,275
- --------------------------------------------------------------------------------
BE Aerospace, Inc.:
8.50% Sr. Unsec. Nts., 10/1/10 200,000 212,000
8.875% Sr. Unsec. Sub. Nts., 5/1/11 219,000 227,760
- --------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 970,000 943,325
7.625% Sr. Sub. Nts., 2/1/18 205,000 205,000
- --------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 583,000 546,563
6.125% Sr. Unsec. Sub. Nts., 1/15/14 400,000 382,000
6.375% Sr. Unsec. Sub. Nts.,
Series B, 10/15/15 515,000 494,400
7.625% Sr. Sub. Nts., 6/15/12 500,000 510,000
- --------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 223,000 238,053
11% Sr. Sub. Nts., 2/15/13 194,000 212,915
---------------
5,260,291
19 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp.,
13% Sr. Unsec. Nts., 2/1/09 3,4 $ 735,000 $ 33,075
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.2%
Associated Materials, Inc.,
9.75% Sr. Sub. Nts., 4/15/12 200,000 200,000
- --------------------------------------------------------------------------------
Goodman Global
Holding Co., Inc.,
7.875% Sr. Unsec. Sub. Nts.,
12/15/12 770,000 739,200
- --------------------------------------------------------------------------------
Jacuzzi Brands, Inc.,
9.625% Sr. Sec. Nts., 7/1/10 1,011,000 1,072,924
- --------------------------------------------------------------------------------
Nortek, Inc.,
8.50% Sr. Unsec. Unsub. Nts., 9/1/14 1,250,000 1,215,625
---------------
3,227,749
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.3%
Allied Waste North America, Inc.:
7.25% Sr. Nts., 3/15/15 180,000 172,800
7.375% Sr. Sec. Nts.,
Series B, 4/15/14 1,000,000 955,000
9.25% Sr. Sec. Debs.,
Series B, 9/1/12 434,000 462,210
- --------------------------------------------------------------------------------
Avis Budget Car Rental LLC/
Avis Budget Finance, Inc.:
7.576% Sr. Nts., 5/15/14 1,2 135,000 135,338
7.75% Sr. Nts., 5/15/16 2 335,000 323,275
- --------------------------------------------------------------------------------
Cenveo Corp.,
7.875% Sr. Sub. Nts., 12/1/13 1,500,000 1,470,000
- --------------------------------------------------------------------------------
Comforce Operating, Inc.,
12% Sr. Nts., Series B, 12/1/07 350,000 352,188
- --------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts.,
3/15/13 460,000 434,700
7.50% Sr. Nts., 5/1/11 200,000 202,500
---------------
4,508,011
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.1%
Belden & Blake Corp.,
8.75% Sec. Nts., 7/15/12 325,000 331,500
- --------------------------------------------------------------------------------
Dayton Superior Corp.,
13% Sr. Unsec. Sub. Nts., 6/15/09 200,000 175,500
- --------------------------------------------------------------------------------
Eletropaulo Metropolitana SA,
19.125% Nts., 6/28/10 4 [BRR] 1,115,000 558,555
- --------------------------------------------------------------------------------
General Cable Corp.,
9.50% Sr. Nts., 11/15/10 200,000 213,000
- --------------------------------------------------------------------------------
UCAR Finance, Inc.,
10.25% Sr. Nts., 2/15/12 300,000 318,000
---------------
1,596,555
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.1%
Covalence Specialty Materials Corp.,
10.25% Sr. Sub. Nts., 3/1/16 2 1,280,000 1,235,200
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES Continued
Great Lakes Dredge & Dock Co.,
7.75% Sr. Unsec. Sub. Nts.,
12/15/13 $ 120,000 $ 111,150
---------------
1,346,350
- --------------------------------------------------------------------------------
MACHINERY--0.2%
Case New Holland, Inc.,
7.125% Sr. Nts., 3/1/14 2 500,000 480,000
- --------------------------------------------------------------------------------
Douglas Dynamics LLC,
7.75% Sr. Nts., 1/15/12 2 700,000 668,500
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc.,
8.375% Sr. Unsec. Nts., 5/15/15 380,000 389,975
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The),
10.50% Sr. Sub. Nts., 8/1/12 325,000 354,250
- --------------------------------------------------------------------------------
Milacron Escrow Corp.,
11.50% Sr. Sec. Nts., 5/15/11 700,000 652,750
- --------------------------------------------------------------------------------
Trinity Industries, Inc.,
6.50% Sr. Nts., 3/15/14 300,000 294,000
- --------------------------------------------------------------------------------
Wolverine Tube, Inc.,
7.375% Sr. Nts., 8/1/08 2 950,000 774,250
---------------
3,613,725
- --------------------------------------------------------------------------------
ROAD & RAIL--0.4%
Grupo TMM SA,
10.50% Sr. Sec. Nts., 8/1/07 14 4,505,911 4,394,620
- --------------------------------------------------------------------------------
Kansas City Southern
Railway Co. (The),
7.50% Sr. Nts., 6/15/09 400,000 402,000
- --------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 150,000 138,750
7.50% Sr. Unsec. Nts., 11/1/13 387,000 377,325
9.625% Sr. Nts., 12/1/12 750,000 800,625
---------------
6,113,320
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.3%
Interline Brands, Inc.,
8.125% Sr. Sub. Nts., 6/15/14 145,000 145,363
- --------------------------------------------------------------------------------
United Rentals, Inc.,
7% Sr. Sub. Nts., 2/15/14 4,000,000 3,675,000
---------------
3,820,363
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.0%
Horizon Lines LLC,
9% Nts., 11/1/12 236,000 240,720
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.2%
Loral Skynet Corp.,
14% Sr. Sec. Nts., 11/21/15 14 116,000 133,980
- --------------------------------------------------------------------------------
Lucent Technologies, Inc.,
6.45% Unsec. Debs., 3/15/29 3,160,000 2,701,800
20 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Nortel Networks Ltd.,
9.73% Sr. Nts., 7/15/11 1,2 $ 383,000 $ 391,618
- --------------------------------------------------------------------------------
Orion Network Systems, Inc.,
12.50% Sr. Unsub. Disc. Nts.,
1/15/07 3 675,000 7
---------------
3,227,405
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.0%
Seagate Technology Hdd Holdings,
8% Sr. Nts., 5/15/09 200,000 206,000
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.2%
Flextronics International Ltd.,
6.25% Sr. Sub. Nts., 11/15/14 2,021,000 1,902,266
- --------------------------------------------------------------------------------
Sanmina-SCI Corp.:
6.75% Unsec. Sub. Nts., 3/1/13 380,000 356,250
8.125% Sr. Sub. Nts., 3/1/16 745,000 730,100
- --------------------------------------------------------------------------------
Solectron Corp.,
8% Sr. Sub. Nts., 3/15/16 2 425,000 420,750
---------------
3,409,366
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 3,4 [EUR] 338,620 --
- --------------------------------------------------------------------------------
NorthPoint Communications
Group, Inc.,
12.875% Nts., 2/15/10 3,4 200,173 --
- --------------------------------------------------------------------------------
PSINet, Inc.,
10.50% Sr. Unsec. Nts., 12/1/06 3,4 [EUR] 100,000 --
---------------
--
- --------------------------------------------------------------------------------
IT SERVICES--0.4%
DI Finance/DynCorp
International LLC,
9.50% Sr. Unsec. Sub. Nts.,
Series B, 2/15/13 607,000 634,315
- --------------------------------------------------------------------------------
iPayment Holdings, Inc.,
9.75% Sr. Sub. Nts., 5/15/14 2 415,000 415,000
- --------------------------------------------------------------------------------
Iron Mountain, Inc.,
7.75% Sr. Sub. Nts., 1/15/15 400,000 384,000
- --------------------------------------------------------------------------------
SunGard Data Systems, Inc.:
9.125% Sr. Unsec. Nts., 8/15/13 2 1,935,000 2,017,238
10.25% Sr. Sub. Nts., 8/15/15 2 2,035,000 2,113,856
---------------
5,564,409
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.2%
Advanced Micro Devices, Inc.,
7.75% Sr. Unsec. Nts., 11/1/12 1,458,000 1,490,805
- --------------------------------------------------------------------------------
Amkor Technology, Inc.,
7.75% Sr. Nts., 5/15/13 2,250,000 2,044,688
---------------
3,535,493
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MATERIALS--2.9%
- --------------------------------------------------------------------------------
CHEMICALS--0.5%
Chemtura Corp.,
6.875% Sr. Nts., 6/1/16 $ 327,000 $ 317,599
- --------------------------------------------------------------------------------
Crompton Corp.,
9.875% Sr. Nts., 8/1/12 350,000 395,500
- --------------------------------------------------------------------------------
Equistar Chemicals LP/
Equistar Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 550,000 570,625
10.125% Sr. Unsec. Nts., 9/1/08 19,000 20,093
10.625% Sr. Unsec. Nts., 5/1/11 600,000 647,250
- --------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical
Co. plc,
10.125% Sr. Unsec. Sub. Nts., 7/1/09 433,000 441,660
- --------------------------------------------------------------------------------
Huntsman International LLC,
7.875% Sr. Sub. Nts., 1/1/15 1,2 790,000 744,575
- --------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 1 198,000 222,255
11.625% Sr. Unsec. Nts., 10/15/10 13,000 14,430
- --------------------------------------------------------------------------------
IMC Global, Inc.,
10.875% Sr. Unsec. Nts., 8/1/13 19,000 21,233
- --------------------------------------------------------------------------------
Ineos Group Holdings plc,
8.50% Nts., 2/15/16 2 2,510,000 2,362,538
- --------------------------------------------------------------------------------
Innophos, Inc.,
8.875% Sr. Unsec. Sub. Nts., 8/15/14 550,000 544,500
- --------------------------------------------------------------------------------
KI Holdings, Inc.,
0%/9.875% Sr. Unsec. Sub. Disc. Nts.,
11/15/14 13 350,000 252,000
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 11,000 11,358
9.625% Sr. Sec. Nts.,
Series A, 5/1/07 200,000 204,000
10.50% Sr. Sec. Nts., 6/1/13 600,000 663,000
- --------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.,
7.50% Sr. Sub. Nts., 11/15/14 200,000 197,000
- --------------------------------------------------------------------------------
Tronox Worldwide LLC/Tronox
Finance Corp.,
9.50% Sr. Nts., 12/1/12 2 555,000 574,425
---------------
8,204,041
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.1%
NTK Holdings, Inc.,
0%/10.75% Sr. Disc. Nts., 3/1/14 13 1,225,000 892,719
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--1.0%
Ball Corp.,
6.625% Sr. Nts., 3/15/18 1,035,000 967,725
- --------------------------------------------------------------------------------
Crown Americas, Inc.,
7.75% Sr. Nts., 11/15/15 2 1,435,000 1,420,650
- --------------------------------------------------------------------------------
Graham Packaging Co., Inc.:
8.50% Sr. Unsec. Nts., 10/15/12 200,000 197,000
9.875% Sr. Unsec. Sub. Nts., 10/15/14 1,800,000 1,791,000
21 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING Continued
Graphic Packaging
International Corp.:
8.50% Sr. Nts., 8/15/11 $ 800,000 $ 802,000
9.50% Sr. Sub. Nts., 8/15/13 1,050,000 1,044,750
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
7.50% Sr. Unsec. Unsub. Nts., 6/1/13 300,000 270,000
8.25% Sr. Unsec. Nts., 10/1/12 1,450,000 1,366,625
- --------------------------------------------------------------------------------
MDP Acquisitions plc,
9.625% Sr. Nts., 10/1/12 400,000 414,000
- --------------------------------------------------------------------------------
Owens-Brockway Glass
Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 450,000 455,625
8.25% Sr. Unsec. Nts., 5/15/13 1,719,000 1,731,893
8.75% Sr. Sec. Nts., 11/15/12 928,000 970,920
8.875% Sr. Sec. Nts., 2/15/09 200,000 207,000
- --------------------------------------------------------------------------------
Pliant Corp.,
11.625% Sr. Sec. Nts., 6/15/09 3,14 360,178 391,694
- --------------------------------------------------------------------------------
Solo Cup Co.,
8.50% Sr. Sub. Nts., 2/15/14 1,975,000 1,718,250
- --------------------------------------------------------------------------------
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12 650,000 617,500
9.75% Sr. Unsec. Nts., 2/1/11 516,000 532,770
- --------------------------------------------------------------------------------
Stone Container
Finance Co. of Canada II,
7.375% Sr. Unsec. Nts., 7/15/14 300,000 267,000
- --------------------------------------------------------------------------------
Tekni-Plex, Inc.,
10.875% Sr. Sec. Nts., 8/15/12 2 125,000 138,750
- --------------------------------------------------------------------------------
TriMas Corp.,
9.875% Sr. Unsec. Sub. Nts., 6/15/12 1,300,000 1,196,000
---------------
16,501,152
- --------------------------------------------------------------------------------
METALS & MINING--1.0%
AK Steel Corp.:
7.75% Sr. Unsec. Nts., 6/15/12 1,019,000 1,003,715
7.875% Sr. Unsec. Nts., 2/15/09 100,000 100,000
- --------------------------------------------------------------------------------
Alrosa Finance SA:
8.875% Nts., 11/17/14 2 6,880,000 7,490,600
8.875% Nts., 11/17/14 915,000 996,206
- --------------------------------------------------------------------------------
Century Aluminum Co.,
7.50% Sr. Unsec. Nts., 8/15/14 600,000 603,000
- --------------------------------------------------------------------------------
Gibraltar Industries, Inc.,
8% Sr. Sub. Nts., 12/1/15 2 635,000 635,000
- --------------------------------------------------------------------------------
IMCO Recycling, Inc.,
10.375% Sr. Sec. Nts., 10/15/10 300,000 325,500
- --------------------------------------------------------------------------------
International Utility
Structures, Inc.,
13% Unsec. Sub. Nts., 2/1/08 3,4 71,000 --
- --------------------------------------------------------------------------------
Ispat Inland ULC,
9.75% Sr. Sec. Nts., 4/1/14 585,000 645,851
- --------------------------------------------------------------------------------
Jorgensen (Earle M.) Co.,
9.75% Sr. Sec. Nts., 6/1/12 500,000 535,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING Continued
Koppers Industry, Inc.,
9.875% Sr. Sec. Nts., 10/15/13 $ 204,000 $ 219,810
- --------------------------------------------------------------------------------
Novelis, Inc.,
7.75% Sr. Nts., 2/15/15 1,2 1,575,000 1,519,875
- --------------------------------------------------------------------------------
Oregon Steel Mills, Inc.,
10% Sr. Nts., 7/15/09 400,000 420,000
- --------------------------------------------------------------------------------
Steel Dynamics, Inc.,
9.50% Sr. Nts., 3/15/09 200,000 206,250
- --------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts., 5/15/10 336,000 359,520
10.75% Sr. Nts., 8/1/08 519,000 560,520
---------------
15,620,847
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Abitibi-Consolidated
Co. of Canada,
8.375% Sr. Unsec. Sub. Nts., 4/1/15 1,000,000 917,500
- --------------------------------------------------------------------------------
Abitibi-Consolidated, Inc.:
8.55% Nts., 8/1/10 600,000 571,500
8.85% Unsec. Bonds, 8/1/30 400,000 340,000
- --------------------------------------------------------------------------------
Appleton Papers, Inc.,
8.125% Sr. Nts., 6/15/11 190,000 192,850
- --------------------------------------------------------------------------------
Buckeye Technologies, Inc.,
8.50% Sr. Nts., 10/1/13 100,000 95,500
- --------------------------------------------------------------------------------
Catalyst Paper Corp.,
8.625% Sr. Unsec. Nts.,
Series D, 6/15/11 500,000 490,000
- --------------------------------------------------------------------------------
Domtar, Inc., 7.125% Nts., 8/15/15 500,000 437,500
- --------------------------------------------------------------------------------
Inland Fiber Group LLC,
9.625% Sr. Unsec. Nts., 11/15/07 3,4 600,000 390,000
- --------------------------------------------------------------------------------
JSG Holding plc,
11.50% Sr. Nts., 10/1/15 2,14 [EUR] 159,612 209,511
- --------------------------------------------------------------------------------
Mercer International, Inc.,
9.25% Sr. Nts., 2/15/13 315,000 281,925
- --------------------------------------------------------------------------------
Norske Skog Canada Ltd.,
7.375% Sr. Unsec. Nts., 3/1/14 4 700,000 630,000
---------------
4,556,286
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.3%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.3%
AT&T Corp.:
9.05% Sr. Unsec. Nts., 11/15/11 1 592,000 629,124
9.75% Sr. Nts., 11/15/31 1 700,000 806,024
- --------------------------------------------------------------------------------
Citizens Communications Co.,
6.25% Sr. Nts., 1/15/13 2 2,900,000 2,755,000
- --------------------------------------------------------------------------------
Intelsat Bermuda Ltd.,
11.25% Sr. Nts., 6/15/16 2,5 1,280,000 1,318,400
- --------------------------------------------------------------------------------
Intelsat Subsidiary
Holding Co. Ltd.:
8.25% Sr. Nts., 1/15/13 1 1,000,000 997,500
8.625% Sr. Nts., 1/15/15 1 815,000 821,113
22 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Nordic Telephone Co.
Holdings ApS,
8.875% Sr. Nts., 5/1/16 2 $ 345,000 $ 356,213
- --------------------------------------------------------------------------------
PanAmSat Corp.:
9% Sr. Nts., 6/15/16 2,5 1,200,000 1,224,000
9% Sr. Unsec. Nts., 8/15/14 1,350,000 1,377,000
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc.:
7.25% Unsec. Unsub. Nts., 2/15/11 2,100,000 2,052,750
7.90% Unsec. Nts., 8/15/10 1,719,000 1,719,000
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc.,
7.25% Sr. Unsec. Sub. Nts., 2/15/11 1 300,000 292,500
- --------------------------------------------------------------------------------
Qwest Corp.,
8.875% Unsec. Unsub. Nts.,
3/15/12 1 2,000,000 2,120,000
- --------------------------------------------------------------------------------
Telefonica del Peru SA,
8% Sr. Unsec. Bonds,
4/11/16 4 [PEN] 3,290,100 1,002,147
- --------------------------------------------------------------------------------
Teligent, Inc.,
11.50% Sr. Nts., 12/1/07 3,4 500,000 --
- --------------------------------------------------------------------------------
Time Warner Telecom
Holdings, Inc.,
9.25% Sr. Unsec. Unsub. Nts.,
2/15/14 1,400,000 1,442,000
- --------------------------------------------------------------------------------
Valor Telecommunications
Enterprises LLC,
7.75% Sr. Unsec. Sub. Nts.,
2/15/15 225,000 233,438
- --------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Nts., 8/1/13 2,5 575,000 589,375
8.625% Sr. Nts., 8/1/16 2,5 575,000 590,813
- --------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 3,4 250,000 --
---------------
20,326,397
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Alamosa Delaware, Inc.:
8.50% Sr. Nts., 1/31/12 700,000 745,500
11% Sr. Unsec. Nts., 7/31/10 19,000 20,900
- --------------------------------------------------------------------------------
American Cellular Corp.,
10% Sr. Nts., Series B, 8/1/11 1,120,000 1,184,400
- --------------------------------------------------------------------------------
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 250,000 250,625
7.50% Sr. Nts., 5/1/12 400,000 406,000
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc., Sr
Unsec. Disc. Nts., 10/1/07 3,4 400,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating
Co. LLC/Centennial
Communications Corp.,
10.125% Sr. Nts., 6/15/13 2,014,000 2,129,805
- --------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 280,000 289,100
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13 $ 859,000 $ 848,263
9.318% Sr. Unsec. Nts., 10/15/12 1 145,000 146,813
- --------------------------------------------------------------------------------
IWO Holdings, Inc.,
8.818% Sr. Sec. Nts., 1/15/12 1 110,000 114,400
- --------------------------------------------------------------------------------
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 3,378,000 3,440,719
- --------------------------------------------------------------------------------
Nextel Partners, Inc.,
8.125% Sr. Nts., 7/1/11 4 500,000 525,625
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.:
7.50% Sec. Nts., 3/15/15 882,000 895,230
8% Sr. Sub. Nts., 12/15/12 800,000 822,000
- --------------------------------------------------------------------------------
Rural Cellular Corp.:
9.75% Sr. Sub. Nts., 1/15/10 2,419,000 2,422,024
9.875% Sr. Nts., 2/1/10 1,400,000 1,447,250
- --------------------------------------------------------------------------------
UbiquiTel Operating Co.,
9.875% Sr. Nts., 3/1/11 600,000 655,500
- --------------------------------------------------------------------------------
US Unwired, Inc.,
10% Sr. Sec. Nts., 6/15/12 250,000 278,750
---------------
16,622,904
- --------------------------------------------------------------------------------
UTILITIES--1.4%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
Edison Mission Energy:
7.50% Sr. Nts., 6/15/13 2 360,000 354,600
7.75% Sr. Nts., 6/15/16 2 500,000 493,750
- --------------------------------------------------------------------------------
Midwest Generation LLC,
8.75% Sr. Sec. Nts., 5/1/34 1,910,000 2,034,150
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC,
Escrow Shares, 5/1/06 4 200,000 --
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/
MSW Energy Finance Co. II, Inc.,
7.375% Sr. Sec. Nts., Series B, 9/1/10 350,000 351,750
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/
MSW Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10 200,000 207,000
- --------------------------------------------------------------------------------
National Power Corp.,
9.625% Unsec. Bonds, 5/15/28 2,270,000 2,413,419
- --------------------------------------------------------------------------------
Reliant Energy, Inc.,
6.75% Sr. Sec. Nts., 12/15/14 200,000 185,000
- --------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 469,000 471,345
9.50% Sr. Sec. Nts., 7/15/13 690,000 696,900
- --------------------------------------------------------------------------------
Sierra Pacific Resources,
6.75% Sr. Unsec. Nts., 8/15/17 1,777,000 1,687,832
---------------
8,895,746
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.8%
AES Corp. (The),
8.75% Sr. Sec. Nts., 5/15/13 2 2,000,000 2,150,000
23 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY TRADERS Continued
AES Red Oak LLC,
8.54% Sr. Sec. Bonds,
Series A, 11/30/19 $ 418,920 $ 444,056
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts.,
4/1/11 621,000 589,950
8.375% Sr. Unsec. Nts., 5/1/16 2 1,360,000 1,346,400
8.75% Sr. Nts., 2/15/12 292,000 297,840
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC:
8.30% Sr. Unsec. Nts., 5/1/11 3,000,000 2,977,500
8.50% Sr. Unsec. Nts., 10/1/21 500,000 471,250
9.125% Sr. Unsec. Nts., 5/1/31 500,000 487,500
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC,
8.625% Sec. Pass-Through
Certificates, Series A, 6/30/12 771,107 817,856
- --------------------------------------------------------------------------------
NRG Energy, Inc.,
7.375% Sr. Nts., 2/1/16 3,315,000 3,240,413
---------------
12,822,765
- --------------------------------------------------------------------------------
GAS UTILITIES--0.0%
SEMCO Energy, Inc.,
7.125% Sr. Nts., 5/15/08 150,000 149,679
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.0%
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 19,000 19,333
7.75% Sr. Nts., 8/1/10 200,000 204,000
8.50% Sr. Nts., 4/15/11 250,000 261,875
- --------------------------------------------------------------------------------
NorthWestern Corp.,
5.875% Sr. Sec. Nts., 11/1/14 90,000 88,625
---------------
573,833
---------------
Total Corporate Bonds and Notes
(Cost $421,985,370) 412,379,433
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.2%
- --------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr
Exchangeable, Non-Vtg. 4,14 4,253 --
- --------------------------------------------------------------------------------
Dobson Communications Corp.,
6% Cv., Series F (converts into
Dobson Communications Corp.,
Cl. A common stock), Non-Vtg. 2 608 106,552
- --------------------------------------------------------------------------------
e.spire Communications, Inc.,
12.75% Jr. Redeemable, Non-Vtg. 4,14 216 22
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc.,
11.75% Cum. Exchangeable,
Series B, Non-Vtg. 4,15 5,000 --
- --------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25%
Exchangeable, Non-Vtg. 4,15 151 --
- --------------------------------------------------------------------------------
ION Media Networks, Inc.,
14.25% Cum., Non-Vtg. 15 124 1,063,220
- --------------------------------------------------------------------------------
Loral Skynet Corp., 12% Cum.,
Series A, Non-Vtg. 4,15 959 190,841
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS Continued
- --------------------------------------------------------------------------------
Pennsylvania Real Estate
Investment Trust, 11% 2,000 $ 109,200
- --------------------------------------------------------------------------------
PTV, Inc., 10% Cum., Series A,
Non-Vtg. 15 7 21
- --------------------------------------------------------------------------------
Rural Cellular Corp.,
11.375% Cum., Series B, Non-Vtg. 15 228 276,450
- --------------------------------------------------------------------------------
Sovereign Real Estate
Investment Trust,
12% Non-Cum., Series A 2 4,600 633,650
---------------
Total Preferred Stocks (Cost $2,690,827) 2,379,956
- --------------------------------------------------------------------------------
COMMON STOCKS--2.3%
- --------------------------------------------------------------------------------
3i Group plc 18,560 309,408
- --------------------------------------------------------------------------------
Advanced Micro Devices, Inc. 15 10,200 249,084
- --------------------------------------------------------------------------------
Allegheny Technologies, Inc. 4,600 318,504
- --------------------------------------------------------------------------------
Allied Waste Industries, Inc. 15 24,900 282,864
- --------------------------------------------------------------------------------
American Stock Exchange Basic
Industries SPDR 39,100 1,255,110
- --------------------------------------------------------------------------------
American Tower Corp. 15 11,276 350,909
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 6,100 290,909
- --------------------------------------------------------------------------------
Apache Corp. 4,700 320,775
- --------------------------------------------------------------------------------
Arcelor 7,220 348,519
- --------------------------------------------------------------------------------
Archer-Daniels-Midland Co. 7,300 301,344
- --------------------------------------------------------------------------------
Ashland, Inc. 4,900 326,830
- --------------------------------------------------------------------------------
Associated British Ports
Holdings plc 21,280 355,342
- --------------------------------------------------------------------------------
ATA Holdings Corp. 4,15 1,721 25,815
- --------------------------------------------------------------------------------
Avaya, Inc. 15 25,500 291,210
- --------------------------------------------------------------------------------
Axa SA 8,870 291,117
- --------------------------------------------------------------------------------
BAA plc 18,730 323,152
- --------------------------------------------------------------------------------
Baker Hughes, Inc. 3,500 286,475
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 2,200 308,176
- --------------------------------------------------------------------------------
Beverly Hills Bancorp, Inc. 6,273 60,346
- --------------------------------------------------------------------------------
BNP Paribas SA 3,300 315,932
- --------------------------------------------------------------------------------
BOC Group plc 10,530 307,856
- --------------------------------------------------------------------------------
Caterpillar, Inc. 4,200 312,816
- --------------------------------------------------------------------------------
Cebridge Connections
Holding LLC 4,15 529 --
- --------------------------------------------------------------------------------
Centex Corp. 6,500 326,950
- --------------------------------------------------------------------------------
Charles River Laboratories
International, Inc. 15 2,660 97,888
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 10,091 305,253
- --------------------------------------------------------------------------------
Chevron Corp. 5,100 316,506
- --------------------------------------------------------------------------------
Chubb Corp. 6,100 304,390
- --------------------------------------------------------------------------------
Cincinnati Financial Corp. 6,600 310,266
- --------------------------------------------------------------------------------
Circuit City Stores, Inc./
Circuit City Group 10,100 274,922
24 | OPPENHEIMER STRATEGIC BOND FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
Citigroup, Inc. 55 $ 2,653
- --------------------------------------------------------------------------------
ConocoPhillips 4,764 312,185
- --------------------------------------------------------------------------------
Countrywide Financial Corp. 7,900 300,832
- --------------------------------------------------------------------------------
Covad Communications
Group, Inc. 15 16,528 33,221
- --------------------------------------------------------------------------------
Credit Agricole SA 8,260 314,307
- --------------------------------------------------------------------------------
CSX Corp. 4,500 316,980
- --------------------------------------------------------------------------------
Cummins, Inc. 2,700 330,075
- --------------------------------------------------------------------------------
D.R. Horton, Inc. 11,800 281,076
- --------------------------------------------------------------------------------
DaimlerChrysler AG 5,877 289,855
- --------------------------------------------------------------------------------
Daiwa Securities Group, Inc. 25,000 299,953
- --------------------------------------------------------------------------------
Deutsche Bank AG 2,688 302,414
- --------------------------------------------------------------------------------
Deutsche Boerse AG 2,260 308,375
- --------------------------------------------------------------------------------
Deutsche Post AG 11,354 305,114
- --------------------------------------------------------------------------------
Deutsche Telekom AG 19,001 305,492
- --------------------------------------------------------------------------------
Dillard's, Inc., Cl. A 10,800 343,980
- --------------------------------------------------------------------------------
Dobson Communications
Corp., Cl. A 15 24,300 187,839
- --------------------------------------------------------------------------------
DSG International plc 86,774 306,486
- --------------------------------------------------------------------------------
E*TRADE Financial Corp. 15 12,600 287,532
- --------------------------------------------------------------------------------
El Paso Corp. 25,800 387,000
- --------------------------------------------------------------------------------
Electrocomponents plc 65,030 278,690
- --------------------------------------------------------------------------------
Energy Select Sector SPDR Fund 22,700 1,287,544
- --------------------------------------------------------------------------------
Euronext NV 3,560 333,766
- --------------------------------------------------------------------------------
Freeport-McMoRan Copper &
Gold, Inc., Cl. B 5,400 299,214
- --------------------------------------------------------------------------------
Fujikura Ltd. 27,000 299,732
- --------------------------------------------------------------------------------
Gecina SA 2,560 335,295
- --------------------------------------------------------------------------------
Globix Corp. 15 6,880 34,194
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 2,000 300,860
- --------------------------------------------------------------------------------
Great Portland Estates plc 35,420 327,496
- --------------------------------------------------------------------------------
Halliburton Co. 4,000 296,840
- --------------------------------------------------------------------------------
Hess Corp. 6,100 322,385
- --------------------------------------------------------------------------------
Horizon Natural Resources Co. 4,15 6,667 --
- --------------------------------------------------------------------------------
Huntsman Corp. 4,15 5,871 96,601
- --------------------------------------------------------------------------------
ICAP plc 33,410 307,676
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. 15 6,016 28,275
- --------------------------------------------------------------------------------
iPCS, Inc. 15 8,733 421,804
- --------------------------------------------------------------------------------
JFE Holdings, Inc. 7,100 300,900
- --------------------------------------------------------------------------------
Kawasaki Kisen Kaisha Ltd. 49,000 283,450
- --------------------------------------------------------------------------------
KB Home 6,000 275,100
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 5,600 388,360
- --------------------------------------------------------------------------------
Kobe Steel Ltd. 93,000 292,340
- --------------------------------------------------------------------------------
Komatsu Ltd. 15,000 300,504
- --------------------------------------------------------------------------------
Land Securities Group plc 9,050 300,233
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
Leap Wireless International, Inc. 15 1,714 $ 81,329
- --------------------------------------------------------------------------------
Lennar Corp., Cl. A 6,400 283,968
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series A 3,059 65,769
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 15 3,102 63,808
- --------------------------------------------------------------------------------
Lincoln National Corp. 5,400 304,776
- --------------------------------------------------------------------------------
Lloyds TSB Group plc 32,610 320,510
- --------------------------------------------------------------------------------
Loral Space &
Communications Ltd. 15 7,273 206,262
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 12,400 271,560
- --------------------------------------------------------------------------------
MAN AG 4,286 309,787
- --------------------------------------------------------------------------------
Marathon Oil Corp. 3,891 324,120
- --------------------------------------------------------------------------------
Mirant Corp. 15 1,134 30,391
- --------------------------------------------------------------------------------
Mitchells & Butlers plc 33,010 314,675
- --------------------------------------------------------------------------------
Mitsubishi Materials Corp. 68,000 291,594
- --------------------------------------------------------------------------------
Mitsui Chemicals, Inc. 44,000 288,311
- --------------------------------------------------------------------------------
National City Corp. 8,200 296,758
- --------------------------------------------------------------------------------
Navistar International Corp. 15 11,300 278,093
- --------------------------------------------------------------------------------
Nikko Cordial Corp. 21,000 270,254
- --------------------------------------------------------------------------------
Nippon Mining Holdings, Inc. 37,000 312,970
- --------------------------------------------------------------------------------
Nippon Steel Corp. 81,305 307,629
- --------------------------------------------------------------------------------
Nippon Yusen Kabushiki Kaisha 47,000 305,558
- --------------------------------------------------------------------------------
Norfolk Southern Corp. 5,700 303,354
- --------------------------------------------------------------------------------
NTL, Inc. 28,755 716,000
- --------------------------------------------------------------------------------
Nucor Corp. 5,700 309,225
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 3,100 317,905
- --------------------------------------------------------------------------------
Office Depot, Inc. 15 7,200 273,600
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 15 745 12,024
- --------------------------------------------------------------------------------
PagesJaunes Groupe SA 11,090 348,234
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 3,500 287,560
- --------------------------------------------------------------------------------
Prandium, Inc. 4,15 24,165 242
- --------------------------------------------------------------------------------
Premier Holdings Ltd. 4,15 18,514 --
- --------------------------------------------------------------------------------
Pulte Homes, Inc. 9,800 282,142
- --------------------------------------------------------------------------------
Resolution plc 24,380 302,062
- --------------------------------------------------------------------------------
Reynolds American, Inc. 2,800 322,840
- --------------------------------------------------------------------------------
Rio Tinto plc 5,560 291,694
- --------------------------------------------------------------------------------
RWE AG, Non-Vtg., Preference 3,993 300,562
- --------------------------------------------------------------------------------
Ryder Systems, Inc. 5,600 327,208
- --------------------------------------------------------------------------------
Sanyo Electric Co. Ltd. 15 127,000 268,337
- --------------------------------------------------------------------------------
Schlumberger Ltd. 8 4,700 306,017
- --------------------------------------------------------------------------------
Showa Shell Sekiyu K.K 26,100 306,294
- --------------------------------------------------------------------------------
Star Gas Partners LP 15 187 501
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. 15 720 10,728
- --------------------------------------------------------------------------------
Suez SA 8,010 332,969
- --------------------------------------------------------------------------------
Sumitomo Metal Industries 68,000 281,601
- --------------------------------------------------------------------------------
Technip SA 5,150 285,222
25 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
ThyssenKrupp AG 8,989 $ 306,980
- --------------------------------------------------------------------------------
TUI AG 15,174 301,023
- --------------------------------------------------------------------------------
TVMAX Holdings, Inc. 4,15 1,000 1,000
- --------------------------------------------------------------------------------
TXU Corp. 5,200 310,908
- --------------------------------------------------------------------------------
Unibail 1,870 326,006
- --------------------------------------------------------------------------------
United States Steel Corp. 4,400 308,528
- --------------------------------------------------------------------------------
United Utilities plc 24,940 295,856
- --------------------------------------------------------------------------------
Utilities Select Sector SPDR Fund 39,500 1,275,455
- --------------------------------------------------------------------------------
Valero Energy Corp. 4,900 325,948
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 935 31,313
- --------------------------------------------------------------------------------
Viatel Holding (Bermuda) Ltd. 4,15 2,251 23
- --------------------------------------------------------------------------------
Volkswagen AG, Preference 6,140 307,852
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 6,700 305,361
- --------------------------------------------------------------------------------
Weatherford International Ltd. 15 5,700 282,834
- --------------------------------------------------------------------------------
Western Forest Products, Inc. 15 38,252 66,820
- --------------------------------------------------------------------------------
WRC Media Corp. 4,15 1,082 11
- --------------------------------------------------------------------------------
XO Holdings, Inc. 15 1,469 6,464
---------------
Total Common Stocks (Cost $35,676,713) 37,062,121
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
ASAT Finance LLC Wts.,
Exp. 11/1/06 4,15 250 --
- --------------------------------------------------------------------------------
Axa SA Rts., Exp. 6/30/06 15 8,870 7,488
- --------------------------------------------------------------------------------
COLO.com, Inc. Wts.,
Exp. 3/15/10 4,15 400 --
- --------------------------------------------------------------------------------
Concentric Network Corp. Wts.,
Exp. 12/15/07 4,15 100 --
- --------------------------------------------------------------------------------
HF Holdings, Inc. Wts.,
Exp. 9/27/09 4,15 530 --
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. Wts.,
Exp. 8/1/06 4,15 2 --
- --------------------------------------------------------------------------------
Imperial Credit Industries, Inc. Wts.,
Exp. 1/31/08 4,15 2,135 --
- --------------------------------------------------------------------------------
iPCS, Inc. Wts., Exp. 6/15/10 4,15 300 --
- --------------------------------------------------------------------------------
Long Distance
International, Inc. Wts.,
Exp. 4/13/08 4,15 200 --
- --------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10 4,15 450 --
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts.,
Exp. 9/19/10 15 5,710 1,941
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 15 1,174 7
- --------------------------------------------------------------------------------
Venezuela (Republic of) Oil
Linked Payment Obligation Wts.,
Exp. 4/15/20 4,15 2,300 81,650
VALUE
UNITS SEE NOTE 1
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES Continued
- --------------------------------------------------------------------------------
Verado Holdings, Inc., Cl. B Wts.,
Exp. 4/15/08 15 175 $ 124
- --------------------------------------------------------------------------------
XO Communications, Inc.:
Series A Wts., Exp. 1/16/10 15 2,946 2,534
Series B Wts., Exp. 1/16/10 15 2,209 1,060
Series C Wts., Exp. 1/16/10 15 2,209 773
---------------
Total Rights, Warrants and Certificates
(Cost $33,481) 95,577
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
STRUCTURED NOTES--12.5%
- --------------------------------------------------------------------------------
Aiolos Ltd. Catastrophe
Linked Nts.,
7.581%, 4/8/09 1,2 [EUR] 800,000 1,021,552
- --------------------------------------------------------------------------------
Atlantic & Western Re
Ltd. Catastrophe
Linked Nts., Series B,
15.166%, 11/15/10 1 1,550,000 1,410,733
- --------------------------------------------------------------------------------
Barclays Capital, Russia
(Government of) Credit
Linked Nts.,
5.16%, 8/18/08 7 [RUR] 270,000,000 8,882,042
- --------------------------------------------------------------------------------
Calabash Re Ltd. Catastrophe
Linked Nts., Cl. A-1,
13.708%, 5/26/09 1,4 1,750,000 1,742,650
- --------------------------------------------------------------------------------
Cascadia Ltd. Catastrophe Nts.,
8.395%, 6/13/08 1,2 500,000 502,110
- --------------------------------------------------------------------------------
Cat-Mex Ltd.
Catastrophe Linked Nts.,
Cl. A, 7.512%, 5/18/09 1,4 1,250,000 1,250,875
- --------------------------------------------------------------------------------
Champlain Ltd.
Catastrophe Linked Nts.,
Series A, 17.764%, 1/7/09 1 940,000 938,731
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Argentina (Republic of)
Credit Linked Nts.,
4%, 5/22/08 16 [ARP] 840,000 711,634
Argentina (Republic of)
Unsec. Credit Linked Nts.,
4%, 4/16/10 16 [ARP] 2,987,157 1,802,029
Brazil (Federal Republic of)
Credit Linked Nts.,
10%, 1/5/10 [BRR] 10,670,000 4,461,015
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
10%, 1/5/10 [BRR] 2,927,000 1,223,748
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
10%, 1/5/10 [BRR] 4,619,000 1,931,155
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
14.81%, 1/5/10 7 [BRR] 2,480,096 684,898
26 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.: Continued
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
15.43%, 1/2/09 7 [BRR] 2,231,957 $ 718,082
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
15.73%, 1/3/08 7 [BRR] 1,948,615 727,984
Colombia (Republic of)
Credit Linked Bonds,
11%, 7/24/20 [COP] 1,060,000,000 430,507
Colombia (Republic of)
Credit Linked Nts., Series II,
15%, 4/27/12 [COP] 552,359,546 251,548
Colombia (Republic of)
Unsec. Credit Linked Nts.,
15%, 4/27/12 [COP] 1,200,000,000 546,487
Colombia (Republic of)
Unsec. Credit Linked Nts.,
15%, 4/27/12 [COP] 1,034,000,000 470,889
Colombia (Republic of)
Unsec. Credit Linked Nts.,
15%, 4/27/12 [COP] 927,000,000 422,161
Dominican Republic Credit
Linked Bonds,
14.40%, 9/5/06 (linked to
Dominican Republic Treasury
Bills) 7 [DOP] 79,000,000 2,357,701
Dominican Republic Credit
Linked Nts., 14.11%, 7/10/06
(linked to Dominican Republic
Treasury Bills) 7 [DOP] 23,200,000 706,601
Dominican Republic Credit
Linked Nts., 15.123%, 5/14/07
(linked to Dominican Republic
Treasury Bills) [DOP] 18,300,000 491,988
Dominican Republic Credit
Linked Nts., 16.78%, 3/12/07
(linked to Dominican Republic
Treasury Bills) [DOP] 26,500,000 731,994
Dominican Republic Credit
Linked Nts., 17%, 3/12/07 [DOP] 21,900,000 676,574
Dominican Republic Credit
Linked Nts., 17.06%, 11/6/06
(linked to Dominican Republic
Treasury Bills) 7 [DOP] 59,600,000 1,735,623
Dominican Republic Credit
Linked Nts., Series II, 15.56%,
4/23/07 (linked to Dominican
Republic Treasury Bills) 7 [DOP] 7,591,000 205,886
Dominican Republic Unsec
Credit Linked Nts., 15.64%,
4/30/07 (linked to Dominican
Republic Treasury Bills) 7 [DOP] 6,910,000 186,867
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.: Continued
Dominican Republic Unsec
Credit Linked Nts., Series II,
15.74%, 4/30/07 (linked to
Dominican Republic Treasury
Bills) 7 [DOP] 15,150,000 $ 409,702
Egypt (The Arab Republic of)
Credit Linked Nts., 7.91%,
8/3/06 (linked to Egyptian
Treasury Bills) 7 [EGP] 5,990,000 1,032,778
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
7.97%, 8/17/06 (linked to
Egyptian Treasury Bills) [EGP] 6,000,000 1,031,010
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.21%, 9/19/06 (linked to Egypt
an Treasury Bills) 7 [EGP] 5,000,000 851,894
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.50%, 2/16/08 (linked to
Egyptian Treasury Bills) [EGP] 4,450,000 791,668
Nigeria (Federal Republic of)
Credit Linked Nts.,
14.50%, 3/1/11 [NGN] 347,000,000 2,753,515
Nigeria (Federal Republic of)
Credit Linked Nts., Series II,
14.50%, 4/4/11 [NGN] 265,000,000 2,073,873
Russia (Government of) Credit
Linked Nts., 5.315%, 1/20/11 10,000,000 10,228,200
Ukraine Hryvnia Unsec. Credit
Linked Nts., 11.94%, 1/4/10 [UAH] 880,000 191,997
Zambia (Republic of) Credit
Linked Nts., 10.969%, 2/21/07
(linked to Zambian Treasury
Bills) [ZMK] 3,160,000,000 831,319
Zambia (Republic of) Credit
Linked Nts., Series II, 11.03%,
2/21/07 (linked to Zambian
Treasury Bills) [ZMK] 1,290,000,000 339,368
- --------------------------------------------------------------------------------
Credit Suisse First Boston
International:
EESRRU Total Return
Linked Nts.,
8.25%, 6/22/10 [RUR] 93,500,000 3,540,585
Indonesia (Republic of) Total
Return Linked Nts.,
12%, 9/16/11 [IDR] 14,800,000,000 1,561,805
OAO Gazprom Credit Linked
Nts., 8.11%, 1/21/07 [RUR] 28,065,000 1,094,208
South African Rand Interest
Bearing Linked Nts., Series FBi
43, 5.175%, 5/23/22 1 825,000 822,525
Ukraine (Republic of) Credit
Linked Nts., Series EMG 13,
11.94%, 12/30/09 [UAH] 2,195,000 493,970
27 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
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 $ 287,993
Turkey (Republic of) Credit
Linked Nts., Series EM 880,
20%, 10/18/07 1,190,000 1,077,429
Turkey (Republic of) Credit
Linked Nts., Series EMG 19,
16.90%, 7/5/06 7 [TRY] 1,440,000 909,052
Turkey (Republic of) Credit
Linked Nts., Series EMG 4,
17.20%, 7/6/06 7 [TRY] 1,909,191 1,205,245
Ukraine (Republic of) Credit
Linked Nts., 11.94%, 12/30/09 [UAH] 5,650,000 1,271,494
Ukraine (Republic of) Credit
Linked Nts., Series EMG 11,
11.94%, 12/30/09 [UAH] 661,000 148,754
Ukraine (Republic of) Credit
Linked Nts., Series NPC 12,
11.94%, 12/30/09 [UAH] 4,170,000 938,430
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Argentina (Republic of) Credit
Linked Nts., 4%, 12/21/11 [ARP] 2,990,000 2,336,733
Arrendadora Capita Corp. SA
de CV/Capita Corp. (The) de
Mexico SA de CV Credit Linked
Nts., 9.09%, 1/5/11 [MXN] 17,711,475 1,546,069
Arrendadora Capita Corp. SA de
CV/Capita Corp. (The) de Mexico
SA de CV Credit Linked Nts.,
9.65%, 1/5/11 4 [MXN] 11,700,000 1,031,632
Brazil Real Credit Linked Nts.,
13.88%, 3/3/10 7 [BRR] 4,580,760 1,480,885
Brazil Real Credit Linked Nts., 6%,
8/18/10 [BRR] 2,065,000 1,332,543
Campania Total Return Linked Nts.,
3.469%, 7/30/10 1,4 [EUR] 5,200,000 6,582,556
Campania Total Return Linked Nts.,
3.524%, 7/30/10 1,4 [EUR] 5,050,000 6,336,480
Colombia (Republic of) Credit
Linked Nts., 13.50%,
9/15/14 5 [COP] 2,002,000,000 943,069
Egypt (The Arab Republic of)
Total Return Linked Nts., 8.38%,
9/29/06 (linked to Egyptian
Treasury Bills) 4,7 [EGP] 4,990,000 848,690
Egypt (The Arab Republic of)
Total Return Linked Nts.,
8.78%, 12/12/06 (linked to Egyptian
Treasury Bills) 7 [EGP] 8,170,000 1,364,127
European Investment Bank,
Russian Federation Credit
Linked Nts., 5.50%, 1/19/10 7 705,000 597,347
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Halyk Bank of Kazakhstan Total
Return Linked Nts., Series I,
7.25%, 3/24/09 [KZT] 258,990,000 $ 2,234,329
Indonesia (Republic of) Credit
Linked Nts., 9.50%, 6/22/15 820,000 705,200
Indonesia (Republic of) Credit
Linked Nts., Series III,
14.25%, 6/15/13 873,600 963,144
Nigeria (Federal Republic of)
Credit Linked Nts.,
12.50%, 2/27/09 [NGN] 67,900,000 534,475
Nigeria (Federal Republic of)
Credit Linked Nts.,
15%, 1/30/09 [NGN] 91,000,000 768,539
OAO Gazprom I Credit Nts.,
8.36%, 10/20/07 790,000 836,920
OAO Gazprom II Credit Nts.,
8.11%, 4/20/07 790,000 823,175
Peru (Republic of) Credit
Linked Nts.,
6.211%, 2/20/11 1 875,000 880,983
Romania (The State of)
Credit Linked Nts.,
11.49%, 12/7/06 [RON] 788,640 302,486
Russian Federation
Credit Linked Nts.,
0%, 12/2/09 7 [RUR] 19,221,000 749,137
Russian Federation Total Return
Linked Nts., Series II,
9%, 4/22/11 [RUR] 21,590,000 869,621
Turkish Lira Credit Linked Nts.,
20%, 10/19/07 [TRY] 1,240,000 795,708
Ukraine (Republic of) 5 yr
Credit Linked Nts.,
4.05%, 8/25/10 885,000 904,266
Ukraine (Republic of) 5.5 yr
Credit Linked Nts.,
4.05%, 2/25/11 885,000 898,027
Ukraine (Republic of) 6 yr
Credit Linked Nts.,
4.05%, 8/25/11 885,000 894,443
Ukraine (Republic of) 6.5 yr
Credit Linked Nts.,
4.05%, 2/27/12 885,000 892,797
Ukraine (Republic of) 7 yr
Credit Linked Nts.,
4.05%, 8/28/12 885,000 891,337
Ukraine (Republic of)
Credit Linked Nts.,
11.94%, 12/30/09 [UAH] 269,000 60,211
Ukraine (Republic of)
Credit Linked Nts.,
11.94%, 12/30/09 [UAH] 955,000 213,760
Ukraine (Republic of)
Credit Linked Nts.,
5.592%, 5/16/07 [UAH] 2,390,000 474,254
28 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Ukraine (Republic of)
Credit Linked Nts., Series A,
5.592%, 5/16/07 [UAH] 2,390,000 $ 474,254
United Mexican States
Credit Linked Nts.,
9.52%, 1/5/11 [MXN] 11,560,000 1,019,288
Videocon International Ltd.
Credit Linked Nts.,
7.21%, 12/29/09 1,630,000 1,625,436
Volga Investments Ltd.
Credit Linked Nts., Series III,
6.01%, 4/2/08 10,000,000 9,998,000
- --------------------------------------------------------------------------------
Drewcat Capital Ltd.
Catastrophe Linked Nts., Cl. A,
25.999%, 12/28/06 1,4 1,550,000 1,550,000
- --------------------------------------------------------------------------------
Foundation RE Ltd.
Catastrophe Linked Nts.,
9.271%, 11/24/08 1,2 1,000,000 939,860
- --------------------------------------------------------------------------------
ING Bank NV, Ukraine
(Republic of) Credit Linked Nts.,
Series 725, 11.89%, 12/30/09 4 [UAH] 4,689,000 1,013,146
- --------------------------------------------------------------------------------
JPMorgan Chase Bank:
Argentina (Republic of)
Credit Linked Nts.,
4%, 12/19/11 4 [ARP] 4,355,000 3,406,327
Brazil (Federal Republic of)
Credit Linked Nts.,
12.08%, 1/2/15 7 [BRR] 3,693,700 498,738
Brazil (Federal Republic of)
Credit Linked Nts.,
12.68%, 6/1/13 7 [BRR] 5,490,000 916,521
Brazil (Federal Republic of)
Credit Linked Nts.,
15.33%, 1/2/15 7 [BRR] 10,948,600 1,478,324
Brazil (Federal Republic of)
Credit Linked Nts.,
2.73%, 11/30/12 7 [ARP] 4,550,000 1,032,096
Brazil (Federal Republic of)
Credit Linked Nts.,
6%, 5/16/45 4 [BRR] 5,855,000 2,989,837
Brazil (Federal Republic of)
Credit Linked Nts., Series II,
13.55%, 1/2/15 7 [BRR] 8,035,000 1,084,918
Brazil (Federal Republic of)
Credit Linked Nts., Series III,
12.18%, 1/2/15 7 [BRR] 8,500,000 1,147,704
Colombia (Republic of)
Credit Linked Bonds,
10.19%, 1/5/16 7 [COP] 20,100,000,000 2,506,106
Colombia (Republic of)
Credit Linked Bonds,
27.486%, 8/3/20 [COP] 11,160,000,000 912,499
Peru (Republic of)
Credit Linked Nts.,
8.12%, 9/2/15 7 [PEN] 3,470,000 455,221
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
JPMorgan Chase Bank: Continued
Swaziland (Kingdom of)
Credit Linked Nts.,
7.25%, 6/20/10 $ 1,120,000 $ 1,113,728
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
High Yield Targeted Return
Index Securities, Series 2006-1,
7.548%, 5/1/16 4,17 10,000,000 9,976,400
- --------------------------------------------------------------------------------
Lehman Brothers International:
Romania (The State of)
Total Return Linked Nts.,
7.90%, 2/9/10 (linked to
Romanian Treasury Bills) [RON] 821,400 338,938
Turkey (Republic of) Total
Return Linked Nts.,
20%, 10/17/07 (linked to
Turkish Treasury Bills) 410,938 387,802
- --------------------------------------------------------------------------------
Lehman Brothers Special
Financing, Inc.:
Romania (The State of)
Total Return Linked Nts.,
6.50%, 3/10/10 (linked to
Romanian Treasury Bills) [RON] 2,228,300 865,152
Romania (The State of)
Total Return Linked Nts.,
6.75%, 3/11/08 (linked to
Romanian Treasury Bills) [RON] 2,600,000 1,011,295
Romania (The State of)
Total Return Linked Nts.,
7.25%, 4/18/10 (linked to
Romanian Treasury Bills) [RON] 213,000 84,692
Romania (The State of)
Total Return Linked Nts.,
7.50%, 3/6/07 (linked to
Romanian Treasury Bills) [RON] 354,000 139,437
Romania (The State of)
Total Return Linked Nts.,
7.75%, 4/18/08 (linked to
Romanian Treasury Bills) [RON] 199,000 78,971
Romania (The State of)
Total Return Linked Nts.,
7.75%, 4/18/08 (linked to
Romanian Treasury Bills) [RON] 512,000 203,183
Romania (The State of)
Total Return Linked Nts.,
7.90%, 2/12/08 (linked to
Romanian Treasury Bills) [RON] 1,885,100 758,807
- --------------------------------------------------------------------------------
Morgan Stanley & Co.
International Ltd./Red Arrow
International Leasing plc:
Total Return Linked Nts.,
Series A, 8.375%, 6/30/12 [RUR] 38,020,000 1,431,218
Total Return Linked Nts., Series B,
11%, 6/30/12 [RUR] 28,520,000 1,089,329
29 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Brazil (Federal Republic of) Sr
Sub. Linked Nts.,
15.45%, 1/2/14 [BRR] 3,400,000 $ 1,679,499
Philippines (Republic of)
Credit Linked Nts.,
8.619%, 9/20/15 2 1,230,000 1,303,185
Philippines (Republic of)
Credit Linked Nts.,
9.78%, 9/20/15 4 10,300,000 11,378,410
Philippines (Republic of)
Credit Linked Nts.,
8.38%, 6/20/16 1,4 1,360,000 1,306,688
United Mexican States
Credit Linked Nts.,
5.64%, 11/20/15 2,000,000 1,963,200
Venezuela (Republic of) 10 yr
Credit Linked Nts.,
7.85%, 11/20/15 1,885,000 1,977,554
Venezuela (Republic of)
Credit Linked Nts.,
6.49%, 5/20/10 1,480,000 1,507,232
Venezuela (Republic of)
Credit Linked Nts.,
7.382%, 5/20/10 1,900,000 2,068,720
- --------------------------------------------------------------------------------
Redwood Capital V
Catastrophe Linked Nts.,
9.173%, 1/9/07 1,2 1,250,000 1,234,263
- --------------------------------------------------------------------------------
Residential Reinsurance Ltd.
Catastrophe Linked Nts., Series B,
13.681%, 6/6/08 1 1,300,000 1,146,178
- --------------------------------------------------------------------------------
Successor Cal Quake
Parametric Ltd. Catastrophe
Linked Nts., Cl. A-1,
10.52%, 6/6/08 1,2 1,040,000 1,037,608
- --------------------------------------------------------------------------------
Successor Euro Wind Ltd.
Catastrophe Linked Nts.,
Series A-I, 22.77%, 6/6/08 1,2 1,450,000 1,444,925
- --------------------------------------------------------------------------------
Successor II Ltd. Catastrophe
Linked Nts., Series A-I,
9.52%, 6/6/08 1,2 2,450,000 2,456,125
- --------------------------------------------------------------------------------
UBS AG:
Israel (State of)
Credit Linked Nts., 7.50%,
4/5/14 [ILS] 4,792,700 1,182,128
OAO Gazprom III
Credit Nts., 7.81%, 7/5/06 1,980,000 2,056,021
Ukraine (Republic of)
Credit Linked Nts.,
8.40%, 2/10/16 4 1,740,000 1,718,178
- --------------------------------------------------------------------------------
VASCO Re 2006 Ltd.,
Catastrophe Linked Nts.,
13.924%, 6/5/09 1,2 1,550,000 1,548,721
---------------
Total Structured Notes (Cost $197,690,566) 198,739,683
VALUE
DATE STRIKE CONTRACTS SEE NOTE 1
- --------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------
Euro
Put 15 7/25/06 1.24USD 9,590,000 $ 3,052
- --------------------------------------------------------------------------------
Japanese Yen
Put 4,15 9/21/06 119.00USD 6,757,000,000 114,666
- --------------------------------------------------------------------------------
Mexican
Nuevo
Peso
Call 15 10/12/06 11.40USD 12,312,000 24,976
- --------------------------------------------------------------------------------
Mexican
Nuevo Peso
Put 15 10/12/06 11.40USD 12,312,000 25,543
---------------
Total Options Purchased (Cost $679,847) 168,237
NOTIONAL
AMOUNT
- --------------------------------------------------------------------------------
SWAPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------
Mexican
Nuevo
Peso (MXN)
Call 15 9/15/06 8.61MXN $ 39,600,000 13,080
- --------------------------------------------------------------------------------
Mexican
Nuevo
Peso (MXN)
Call 15 7/20/06 9.39MXN 71,470,000 9,291
- --------------------------------------------------------------------------------
South
African
Rand
(ZAR) Call 15 9/22/06 9.17ZAR 39,600,000 64,203
---------------
Total Swaptions Purchased (Cost $215,616) 86,574
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--8.0%
- --------------------------------------------------------------------------------
Undivided interest of 5.22% in joint repurchase agreement
(Principal Amount/Value $2,439,041,000, with a maturity
value of $2,440,006,454) with UBS Warburg LLC,
4.75%, dated 6/30/06, to be repurchased at
$127,474,439 on 7/3/06, collateralized by
Federal National Mortgage Assn.,
5%-6%, 10/1/35-3/1/36, with a
value of $2,494,907,407
(Cost $127,424,000) 127,424,000 127,424,000
- --------------------------------------------------------------------------------
Total Investments, At Value
(Excluding Investments
Purchased With Cash
Collateral From Securities
Loaned) (Cost $1,650,552,668) 1,632,240,185
30 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED--16.1%
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--16.1%
Undivided interest of 2.08% in joint repurchase agreement
(Principal Amount/Value $1,000,000,000, with a maturity
value of $1,000,444,375) with Bank of America NA,
5.3325%, dated 6/30/06, to be repurchased at
$20,801,234 on 7/3/06, collateralized by
U.S. Agency Mortgages, 5%,
6/1/35, with a value of
$1,020,000,000 19 $ 20,791,995 $ 20,791,995
- --------------------------------------------------------------------------------
Undivided interest of 5.21% in joint repurchase agreement
(Principal Amount/Value $4,500,000,000, with a maturity
value of $4,502,006,250) with Nomura Securities,
5.35%, dated 6/30/06, to be repurchased at
$234,563,952 on 7/3/06, collateralized by
U.S. Agency Mortgages, 0.00%--8.50%,
3/1/07--3/1/43, with a value
of $4,590,000,000 18,19 234,459,422 234,459,422
VALUE
SEE NOTE 1
- --------------------------------------------------------------------------------
Total Investments Purchased with
Cash Collateral from Securities
Loaned (Cost $255,251,417) $ 255,251,417
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,905,804,085) 118.8% 1,887,491,602
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (18.8) (298,131,525)
----------------------------------
NET ASSETS 100.0% $1,589,360,077
==================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
PRINCIPAL AMOUNT IS REPORTED IN U.S. DOLLARS, EXCEPT FOR THOSE DENOTED IN THE
FOLLOWING CURRENCIES:
ARP Argentine Peso
AUD Australian Dollar
BRR Brazilian Real
CAD Canadian Dollar
COP Colombian Peso
DEM German Mark
DKK Danish Krone
DOP Dominican Republic Peso
EGP Egyptian Pounds
EUR Euro
GBP British Pound Sterling
IDR Indonesian Rupiah
ILS Israeli Shekel
JPY Japanese Yen
KZT Kazakhstan Tenge
MXN Mexican Nuevo Peso
MYR Malaysian Ringgit
NGN Nigeria Naira
PEN Peruvian New Sol
PLZ Polish Zloty
RON New Romanian Leu
RUR Russian Ruble
TRY New Turkish Lira
UAH Ukraine Hryvnia
ZAR South African Rand
ZMK Zambian Kwacha
1. Represents the current interest rate for a variable or increasing rate
security.
2. 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 $143,429,956 or 9.02% of the Fund's net
assets as of June 30, 2006.
3. Issue is in default. Non-income producing. See Note 1 of accompanying Notes.
4. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2006 was $66,626,813, which represents
4.19% of the Fund's net assets, of which $96,843 is considered restricted. In
addition, the Fund has restricted currency of $229,203, which represents 0.01%
of the Fund's net assets. See Note 12 of accompanying Notes.
5. When-issued security or forward commitment to be delivered and settled after
June 30, 2006. See Note 1 of accompanying Notes.
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 $6,802,048 or 0.43% of the Fund's net assets
as of June 30, 2006.
7. Zero coupon bond reflects effective yield on the date of purchase.
8. Partial or fully-loaned security. See Note 13 of accompanying Notes.
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 $5,395,087. See Note 6 of accompanying Notes.
10. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of accompanying Notes.
11. A sufficient amount of securities has been designated to cover outstanding
written put options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO PUT DATE PRICE RECEIVED SEE NOTE 7
- -------------------------------------------------------------------------------------------------
Japanese Yen (JPY) 6,757,000,000 9/21/06 $124 $141,679 $9,798
31 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
12. A sufficient amount of liquid assets has been designated to cover
outstanding swaptions. See Note 11 of accompanying Notes.
13. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
14. Interest or dividend is paid-in-kind.
15. Non-income producing security.
16. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
17. Interest rate represents a weighted average rate comprised of the interest
rates of the underlying securities.
18. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
19. 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 13 of accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $1,905,804,085)--see accompanying statement of investments $ 1,887,491,602
- -----------------------------------------------------------------------------------------------------------------------
Cash 3,837,492
- -----------------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $5,452,229) 5,506,095
- -----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 4,105,703
- -----------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 1,555,663
- -----------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 16,059,882
Investments sold (including $8,873,380 sold on a when-issued basis or forward commitment) 8,652,810
Shares of beneficial interest sold 7,152,974
Futures margins 501,275
Other 21,200
----------------
Total assets 1,934,884,696
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $141,679)--see accompanying statement of investments 9,798
- -----------------------------------------------------------------------------------------------------------------------
Swaptions written, at value (premiums received $20,683) 14,854
- -----------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 255,251,417
- -----------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 2,860,683
- -----------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 3,048,207
- -----------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $76,433,222 purchased on a when-issued basis or forward commitment) 82,495,241
Closed foreign currency contracts 978,594
Distribution and service plan fees 589,998
Shares of beneficial interest redeemed 150,288
Shareholder communications 61,926
Trustees' compensation 16,829
Transfer and shareholder servicing agent fees 1,872
Other 44,912
----------------
Total liabilities 345,524,619
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,589,360,077
================
- -----------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 321,609
- -----------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,607,737,347
- -----------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 30,525,220
- -----------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (29,705,517)
- -----------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (19,518,582)
----------------
NET ASSETS $ 1,589,360,077
================
- -----------------------------------------------------------------------------------------------------------------------
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 $552,418,147 and 112,952,163 shares of beneficial interest outstanding) $ 4.89
- -----------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $1,036,941,930 and 208,656,886 shares of beneficial interest outstanding) $ 4.97
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------
Interest $ 37,949,389
- -----------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $30,863) 609,786
- -----------------------------------------------------------------------------------------------------------------------
Fee income 171,011
- -----------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 46,631
----------------
Total investment income 38,776,817
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------
Management fees 4,382,609
- -----------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 1,052,973
- -----------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,039
Service shares 5,052
- -----------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 18,096
Service shares 27,837
- -----------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 13,161
- -----------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,976
- -----------------------------------------------------------------------------------------------------------------------
Administration service fees 750
- -----------------------------------------------------------------------------------------------------------------------
Other 47,477
----------------
Total expenses 5,560,970
- -----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 33,215,847
- -----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 2,216,278
Closing and expiration of swaption contracts 36,900
Closing and expiration of futures contracts 48,830
Foreign currency transactions (8,067,275)
Swap contracts (3,909,512)
----------------
Net realized loss (9,674,779)
- -----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (34,507,011)
Translation of assets and liabilities denominated in foreign currencies 6,715,942
Futures contracts (1,574,993)
Option contracts 131,881
Swaption contracts (22,441)
Swap contracts (2,288,203)
----------------
Net change in unrealized depreciation (31,544,825)
- -----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (8,003,757)
================
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, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 33,215,847 $ 44,032,240
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (9,674,779) 14,763,560
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (31,544,825) (33,428,041)
-----------------------------------
Net increase (decrease) in net assets resulting from operations (8,003,757) 25,367,759
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (23,204,298) (28,059,108)
Service shares (32,674,854) (12,131,395)
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares 38,401,382 (62,203,962)
Service shares 418,593,345 415,654,659
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Total increase 393,111,818 338,627,953
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,196,248,259 857,620,306
-----------------------------------
End of period (including accumulated net investment
income of $30,525,220 and $53,188,525, respectively) $ 1,589,360,077 $ 1,196,248,259
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER STRATEGIC BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.11 $ 5.21 $ 5.05 $ 4.57 $ 4.62 $ 4.69
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 1 .25 1 .22 1 .22 .29 .41
Net realized and unrealized gain (loss) (.12) (.12) .20 .56 .03 (.19)
---------------------------------------------------------------------------------
Total from investment operations .00 .13 .42 .78 .32 .22
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) (.23) (.26) (.30) (.37) (.29)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.89 $ 5.11 $ 5.21 $ 5.05 $ 4.57 $ 4.62
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (0.07)% 2.67% 8.67% 18.07% 7.44% 4.85%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 552,418 $ 538,141 $ 614,915 $ 571,445 $ 406,126 $ 351,686
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 550,289 $ 550,201 $ 584,878 $ 472,213 $ 374,519 $ 330,711
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 4.92% 4.91% 4.50% 5.61% 6.89% 8.78%
Total expenses 0.65% 0.71% 0.74% 0.75% 0.79% 0.79%
Expenses after payments and waivers and
reduction to custodian expenses 0.65% 0.71% 0.74% 0.75% 0.78% 0.79%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 56% 4 98% 4 88% 4 117% 65% 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. 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, 2006 $349,624,128 $358,722,507
Year Ended December 31, 2005 890,029,144 873,786,459
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
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.19 $ 5.29 $ 5.13 $ 4.67 $ 4.73 $ 4.64
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 2 .21 2 .19 2 .27 .03 .15
Net realized and unrealized gain (loss) (.13) (.08) .22 .49 .28 (.06)
---------------------------------------------------------------------------------
Total from investment operations (.01) .13 .41 .76 .31 .09
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.21) (.23) (.25) (.30) (.37) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 4.97 $ 5.19 $ 5.29 $ 5.13 $ 4.67 $ 4.73
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.20)% 2.48% 8.43% 17.16% 7.03% 1.94%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1,036,942 $ 658,107 $ 242,705 $ 79,782 $ 8,138 $ 4
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 851,453 $ 408,515 $ 150,040 $ 34,744 $ 2,307 $ 2
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 4.68% 4.20% 3.82% 4.57% 5.40% 8.17%
Total expenses 0.90% 0.96% 0.99% 1.02% 1.06% 0.92%
Expenses after payments and waivers and
reduction to custodian expenses 0.90% 0.96% 0.99% 1.02% 1.03% 0.92%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 56% 5 98% 5 88% 5 117% 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. 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, 2006 $349,624,128 $358,722,507
Year Ended December 31, 2005 890,029,144 873,786,459
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, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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, 2006, the market value
of these securities comprised 12.5% of the Fund's net assets and resulted in
unrealized cumulative gains of $1,049,117.
38 | OPPENHEIMER STRATEGIC BOND FUND/VA
- --------------------------------------------------------------------------------
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, 2006, the Fund had purchased $76,433,222
of securities issued on a when-issued basis or forward commitment and sold
$8,873,380 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, 2006, securities with an aggregate
market value of $1,407,053, representing 0.09% 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.
39 | OPPENHEIMER STRATEGIC BOND 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, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $27,777,201 expiring by 2014.
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, 2006, it is estimated that the Fund will not utilize
any capital loss carryforward to offset realized capital gains. During the year
ended December 31, 2005, the Fund utilized $4,343,176 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
post-October losses of $878,699 and unused capital loss carryforwards as
follows:
EXPIRING
------------------------
2007 $ 203,423
2008 253,735
2009 9,904,928
2010 6,861,637
-----------
Total $17,223,723
===========
- --------------------------------------------------------------------------------
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.
40 | OPPENHEIMER STRATEGIC BOND 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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $1,396 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 11,674,239 $ 58,734,923 23,774,819 $ 120,696,837
Dividends and/or distributions reinvested 4,678,286 23,204,298 5,623,068 28,059,108
Redeemed (8,624,531) (43,537,839) (42,307,482) (210,959,907)
-------------------------------------------------------------
Net increase (decrease) 7,727,994 $ 38,401,382 (12,909,595) $ (62,203,962)
=============================================================
- -----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 79,809,378 $ 408,064,928 80,659,335 $ 414,986,342
Dividends and/or distributions reinvested 6,483,106 32,674,854 2,388,070 12,131,395
Redeemed (4,354,862) (22,146,437) (2,226,542) (11,463,078)
-------------------------------------------------------------
Net increase 81,937,622 $ 418,593,345 80,820,863 $ 415,654,659
=============================================================
41 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
-----------------------------------------------------------
Investment securities $700,411,916 $565,239,252
U.S. government and
government agency obligations 11,599,717 10,633,868
To Be Announced (TBA)
mortgage-related securities 349,624,128 358,722,507
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $200 million of net assets 0.60
Over $1 billion of net assets 0.50
- --------------------------------------------------------------------------------
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, 2006, the Fund paid
$9,972 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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.
42 | OPPENHEIMER STRATEGIC BOND FUND/VA
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, 2006, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) JUNE 30, 2006 APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Argentine Peso (ARP) 7/20/06 19,000ARP $ 6,136,440 $ 2,945 $ 1,508
Brazilian Real (BRR) 8/2/06-2/21/07 45,431BRR 20,554,206 2,771,716 --
British Pound Sterling (GBP) 8/15/06-12/27/06 2,100GBP 3,891,576 30,985 --
Chiliean Peso (CLP) 9/11/06-9/29/06 2,501,000CLP 4,636,049 -- --
Colombian Peso (COP) 7/6/06 2,427,225COP 942,703 -- 642
Euro (EUR) 10/3/06 11,955EUR 15,389,283 296,156 --
Indian Rupee (INR) 7/10/06 280,000INR 6,080,128 -- 22,084
Japanese Yen (JPY) 7/6/06-12/15/06 7,934,000JPY 70,706,329 215,706 409,279
Malaysian Ringgit (MYR) 11/16/06-11/17/06 12,420MYR 3,407,230 -- 113,469
Mexican Nuevo Peso (MXN) 7/14/06-7/25/06 22,000MXN 1,937,716 -- 26,316
Phillipine Peso (PHP) 7/20/06 320,000PHP 6,016,041 -- 1,259
South Korean Won (KRW) 8/2/06-9/5/06 6,733,000KRW 7,108,471 -- 39,806
Swiss Franc (CHF) 8/8/06-8/9/06 32,600CHF 26,786,898 104,271 137,930
Thailand Baht (THB) 7/17/06 158,000THB 4,143,267 1,075 2,200
Turkish Lira (TRY) 7/19/06-9/22/06 14,320TRY 8,891,125 150,825 --
----------------------------
3,573,679 754,493
----------------------------
CONTRACTS TO SELL
Australian Dollar (AUD) 8/22/06 16,640AUD 12,356,473 343,176 --
British Pound Sterling (GBP) 8/7/06 2,400GBP 4,441,966 -- 228,755
Canadian Dollar (CAD) 7/26/06-8/17/06 7,505CAD 6,728,848 -- 72,727
Chinese Renminbi (Yuan) (CNY) 7/20/06 49,000CNY 6,143,472 -- 6,774
Czech Koruna (CZK) 7/20/06 130,000CZK 5,844,223 -- 71,320
Euro (EUR) 7/6/06-12/6/06 31,895EUR 40,947,941 6,604 956,382
Japanese Yen (JPY) 7/20/06-11/30/06 2,060,000JPY 18,210,710 182,244 37,045
Hungarian Forint (HUF) 10/3/06 2,266,000HUF 10,195,933 -- 233,216
Slovakia Koruna (SKK) 10/3/06 154,000SKK 5,134,623 -- 93,377
Swiss Franc (CHF) 7/20/06 7,400CHF 6,067,265 -- 49,537
Taiwan Dollar (TWD) 7/20/06 200,000TWD 6,193,410 -- 313,439
Turkish Lira (TRY) 9/21/06-9/22/06 13,155TRY 8,010,865 -- 43,618
----------------------------
532,024 2,106,190
----------------------------
Total unrealized appreciation and depreciation $ 4,105,703 $ 2,860,683
============================
- --------------------------------------------------------------------------------
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, 2006, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2006 (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Euro-Bundesobligation, 5 yr 9/7/06 101 $ 14,095,276 $ (45,722)
Euro-Bundesobligation, 10 yr 9/7/06 31 4,572,503 (24,032)
Euro-Schatz 9/7/06 165 21,946,395 (29,221)
FTSE 100 Index 9/15/06 14 1,508,035 73,395
IBEX 35 Index 7/21/06 11 1,620,602 101,726
Japan (Government of) Bonds, 10 yr 9/8/06 33 37,962,688 (248,766)
Japan (Government of) Mini Bonds, 10 yr 9/7/06 26 2,991,000 (16,005)
MSCI Taiwan Stock Index 7/28/06 54 1,499,580 35,039
NASDAQ 100 E-Mini Index 9/15/06 161 5,124,630 35,476
Standard & Poor's ASX 200 Index 9/21/06 16 1,509,984 70,252
Standard & Poor's/MIB Index, 10 yr 9/15/06 7 1,641,642 83,449
United Kingdom Long Gilt 9/27/06 4 805,518 (10,265)
U.S. Long Bonds 9/20/06 587 62,607,219 (22,562)
U.S. Treasury Nts., 2 yr 9/29/06 79 16,019,719 (21,000)
U.S. Treasury Nts., 10 yr 9/20/06 1,066 111,780,094 169,540
---------------
151,304
---------------
CONTRACTS TO SELL
Australia (Commonwealth of)
Bonds, 10 yr 9/15/06 68 5,134,719 58,442
CAC-40 10 Index 7/21/06 50 3,180,679 (226,381)
Canada (Government of)
Bonds, 10 yr 9/20/06 66 6,523,139 54,877
DAX Index 9/15/06 39 7,141,370 (450,388)
Euro-Bundesobligation,10 yr 9/7/06 28 4,130,003 20,291
FTSE 100 Index 9/15/06 49 5,278,122 (249,746)
MSCI Singapore Index 7/28/06 43 1,583,789 (52,535)
Nikkei 225 Index 9/7/06 47 6,369,888 39,732
Standard & Poor's 500 E-Mini 9/15/06 481 30,769,570 (311,039)
Standard & Poor's/Toronto Stock
Exchange 60 Index 9/14/06 13 1,530,234 (87,380)
U.S. Treasury Nts., 2 yr 9/29/06 309 62,659,406 75,520
U.S. Treasury Nts., 5 yr 9/29/06 271 28,023,094 128,302
U.S. Treasury Nts., 10 yr 9/20/06 25 2,621,484 (15,329)
---------------
(1,015,634)
---------------
$ (864,330)
===============
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 and put 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, 2006 was as follows:
PUT OPTIONS
------------------------------
PRINCIPAL/
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- --------------------------------------------------------------------------------
Options outstanding as of December 31, 2005 -- $ --
Options written 6,757,000,000 141,679
------------------------------
Options outstanding as of June 30, 2006 6,757,000,000 $ 141,679
==============================
- --------------------------------------------------------------------------------
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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 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 UNREALIZED
REFERENCED FUND UPON RATE PAID APPRECIATION
COUNTERPARTY DEBT OBLIGATION CREDIT EVENT BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Hungary (Republic of) $ 2,300,000 0.4000% $ 56,997
Mexico (Government of) 2,380,000 0.6475 1,428
- ------------------------------------------------------------------------------------------------------------------------
Credit Suisse
First Boston, Inc.
(Nassau Branch) General Motors Corp. 2,000,000 7.0000 17,391
- ------------------------------------------------------------------------------------------------------------------------
Deutsche Bank:
Philippines (Republic of) 2,000,000 3.6900 (100,200)
Ukraine (Republic of) 1,600,000 1.8800 23,446
- ------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank Russian Federation 730,000 2.4000 (69,304)
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital Services, Inc.:
Colombia (Republic of) 1,080,000 3.7000 (79,476)
Indonesia (Government of) 1,600,000 1.6800 35,363
Mexico (Government of) 2,145,000 0.6450 17,005
NBG Finance plc 5,180,000 0.2500 5,836
Philippines (Republic of) 3,345,000 2.9800 113,520
Philippines (Republic of) 3,330,000 4.8500 (290,357)
Ukraine (Republic of) 1,165,000 1.7700 26,663
Ukraine (Republic of) 346,000 1.6500 9,922
- ------------------------------------------------------------------------------------------------------------------------
UBS AG:
Brazil (Government of) 900,000 4.5000 (103,073)
Ukraine (Republic of) 1,600,000 1.8400 31,264
---------------
$ (303,575)
===============
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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 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
Holdings, Inc. Russia (Government of) $ 2,380,000 0.6475% $ 3,227
- ------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
General Motors Corp. 700,000 9.8000 15,494
General Motors Corp. 1,300,000 5.5500 (125,144)
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Indonesia Government 1,600,000 1.6700 (44,249)
Istanbul Bond Co. SA for
Finansbank 5,180,000 1.3000 (196,840)
- ------------------------------------------------------------------------------------------------------------------------
UBS AG Indonesia (Republic of) 375,000 2.3000 --
---------------
$ (347,512)
===============
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) on the notional amount of the swap in an
amount equal to the daily change in such valuation. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss).
Interest rate swaps are subject to credit risk (if the counterparty fails
to meet its obligations) and interest rate risk. The Fundcould 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, 2006, 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, 2006 JUNE 30, 2006 RATE INDEX DATES (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Six-Month
1,260,000PLZ 4.340% 5.520% WIBO 3/24/10 $ 1,683
Six-Month
2,016,000PLZ 4.130 5.550 WIBO 3/24/10 3,334
90-Day
73,200,000TWD 2.320 1.641 CPTW 6/27/11 (1,467)
- ------------------------------------------------------------------------------------------------------------------------
28-Day
Credit Suisse First MXN
Boston International 9,530,000MXN 7.345 10.000 TIIE 7/9/15 18,284
- ------------------------------------------------------------------------------------------------------------------------
Credit Suisse First
Boston, Inc. Six-Month
(Nassau Branch) 3,640,000PLZ 4.600 4.480 WIBO 7/1/10 (17,213)
- ------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Six-Month
360,000,000HUF 8.440 7.33 BUBOR 7/4/11 --
Six-Month
930,000 4.684 5.250 LIBOR 6/23/15 19,811
- ------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, 5 yr. 73,400,000INR 2.320 1.641 IRS 6/27/11 5,162
- ------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
15,887,992BRR 18.330 17.180 BZDI 1/2/08 178,175
1,682,090BRR 26.244 17.720 BZDI 1/2/07 7,213
2,744,000BRR 22.423 18.160 BZDI 1/2/08 61,901
21,000,000BRR 3.457 14.550 BZDI 1/4/10 (295,738)
4,710,000MXN 7.335 10.000 MXN TIIE 6/24/15 8,969
9,160,000MXN 7.335 10.220 MXN TIIE 1/30/15 29,912
7,875,000MXN 7.335 10.430 MXN TIIE 5/29/15 35,209
7,875,000MXN 7.335 10.300 MXN TIIE 6/1/15 29,372
7,990,000MXN 7.305 10.290 MXN TIIE 6/14/15 29,174
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, 2006 JUNE 30, 2006 RATE INDEX DATES (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
3,307,000BRR 23.882% 18.000% BZDI 1/2/07 $ 23,443
1,314,230BRR 26.413 17.170 BZDI 1/2/08 10,763
1,606,280BRR 26.413 17.170 BZDI 1/2/08 13,155
9,100,000MXN 7.315 10.700 MXN TIIE 5/8/15 53,753
6,090,000MXN 7.330 9.410 MXN TIIE 8/31/20 (22,624)
12,220,000MXN 7.340 9.500 MXN TIIE 8/28/25 (54,791)
18,300,000MXN 7.340 9.510 MXN TIIE 8/26/25 (80,364)
37,300,000MXN 7.335 8.700 MXN TIIE 2/5/16 (211,321)
23,010,000MXN 7.345 9.840 MXN TIIE 12/31/09 71,106
4,100,000MXN 7.345 10.850 MXN TIIE 3/5/15 27,916
- ------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank:
9,700,000MXN 7.340 9.760 MXN TIIE 8/17/15 6,037
Three-Month
82,000,000 5.124 5.570 LIBOR 5/26/16 (1,260,906)
Three-Month
39,520,000ZAR 8.290 7.430 JIBA 6/23/08 50,562
- ------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
Six-Month
11,490,000GBP 5.25 5.259 WIBO 5/21/09 17,456
28-Day
9,440,000MXN 7.345 9.990 MXN TIIE 7/19/15 18,852
Six-Month
4,680,000PLZ 4.600 4.530 WIBO 7/5/10 (51,108)
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
1,760,273BRR 18.680 16.880 BZDI 1/2/08 5,663
3,540,000BRR 17.488 17.590 BZDI 1/2/07 21,056
Six-Month
178,000,000JPY 1.522 0.079 BBA LIBOR 10/5/13 44,510
Six-Month
603,000,000JPY 0.079 0.670 BBA LIBOR 10/5/08 (44,032)
- ------------------------------------------------------------------------------------------------------------------------
Six-Month
UBS AG 67,760,000NOK 4.220 3.345 LIBOR 2/6/12 253,791
- ------------------------------------------------------------------------------------------------------------------------
WestPac Banking Corp. 8,135,000NZD 6.750 7.499 NDBB 6/29/16 1,014
---------------
$ (992,288)
===============
Notional amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
BRR Brazilian Real
GBP British Pound Sterling
HUF Hungarian Forint
INR Indian Rupee
JPY Japanese Yen
MXN Mexican Nuevo Peso
NOK Norwegian Krone
NZD New Zealand Dollar
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
48 | OPPENHEIMER STRATEGIC BOND FUND/VA
Index abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
BUBOR Budapest Interbank Offered Rate
BZDI Brazil Cetip Interbank Deposit Rate
CPTW Bloomberg Taiwan Secondary Commercial Papers
IRS India Swap Composites
JIBA South Africa Johannesburg Interbank Agreed Rate
LIBOR London-Interbank Offered Rate
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
NDBB New Zealand Bank Bill
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 unrealized gain (loss) related to the daily change
in the valuation of the notional amount of the swap, as well as the amount due
to (owed by) the Fund at termination or settlement, is combined and separately
disclosed as an asset (liability). The Fund also records any periodic payments
received from (paid to) the counterparty, including at termination, under such
contracts as realized gain (loss). Total return swaps are subject to risks (if
the counterparty fails to meet its obligations).
As of June 30, 2006, the Fund had entered into the following total return swap
agreements:
NOTIONAL TERMINATION UNREALIZED
SWAP COUNTERPARTY SWAP DESCRIPTION AMOUNT DATES APPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Six-Month BBA LIBOR $ 1,620,000 5/13/15 $ 87,871
Received or paid monthly. The Counterparty pays
the Fund a Floating Payment which is the sum of
the Notional Amount, the Lehman Brothers CMBS
Index Spread and the Financial Spread on the
initial Notional Amount for the Swap Interest
Accrual Period. In addition, the Counterparty,
pays the Fund the Total Return Amount if it is
a positive value for a given Index Period. If
it is a negative, the Fund pays the
Counterparty the absolute value of the Total
Return Amount for a given Index Period, on
each Payment Date. 2,540,000 12/1/06 5,184
- -----------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month BBA LIBOR 920,000 1/14/15 19,787
Six-Month BBA LIBOR 920,000 1/20/15 32,233
49 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS Continued
NOTIONAL TERMINATION UNREALIZED
SWAP COUNTERPARTY SWAP DESCRIPTION AMOUNT DATES APPRECIATION
- -----------------------------------------------------------------------------------------------------------------------
Received or paid monthly. If the Carry Amount,
plus the Spread Return Amount (Spread Change
times Duration times Notional Amount), is
positive, the Counterparty pays the Fund. The
payment is based on the Carry Amount which is
the Spread on the Lehman Brothers CMBS AAA 8.5+
Index as of the close of one Business Day prior
to the Period End Day plus 15 basis points
times the Notional Amount times the Day Count
Basis.
Lehman Brothers If it is negative, the Fund pays the Counterparty
Special Financing, Inc. the absolute value of the Spread Return Amount. $ 2,820,000 12/1/06 $ 5,756
-------------
$ 150,831
=============
Abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
11. 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, 2006 was as follows:
CALL SWAPTIONS
------------------------------
NOTIONAL AMOUNT OF
AMOUNT PREMIUMS
- --------------------------------------------------------------------------------
Swaptions outstanding as of December 31, 2005 $ 9,000,000 $ 36,900
Swaptions written 18,600,000 20,683
Swaptions closed or expired (9,000,000) (36,900)
------------------------------
Swaptions outstanding as of June 30, 2006 $ 18,600,000 $ 20,683
==============================
As of June 30, 2006, the Fund had entered into the following swaption contracts:
NOTIONAL EXPIRATION EXERCISE PREMIUM VALUE
SWAPTIONS AMOUNT DATE PRICE RECEIVED SEE NOTE 7
- --------------------------------------------------------------------------------
Mexican Nuevo Peso $ 18,600,000 9/15/06 9.35* $ 20,683 $ 14,854
* Exercise price is denoted in the following currency:
MXN--Mexican Nuevo Peso
- --------------------------------------------------------------------------------
12. ILLIQUID OR RESTRICTED SECURITIES AND CURRENCY
As of June 30, 2006, 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,
50 | OPPENHEIMER STRATEGIC BOND FUND/VA
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 and currency is as follows:
VALUATION UNREALIZED
ACQUISITION AS OF APPRECIATION
SECURITY DATES COST JUNE 30, 2006 (DEPRECIATION)
- --------------------------------------------------------------------------------
Huntsman Corp. 7/15/04 $ 39,675 $ 96,601 $ 56,926
Prandium, Inc. 3/19/99-9/25/02 284,000 242 (283,758)
-------------------------------------------
$ 323,675 $ 96,843 $ (226,832)
===========================================
CURRENCY
Argentine Peso 6/21/06-6/26/06 $ 227,975 $ 229,203 $ 1,227
===========================================
- --------------------------------------------------------------------------------
13. 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of June 30, 2006, the Fund had
on loan securities valued at $263,864,152, which are included in the Statement
of Assets and Liabilities as "Investments, at value" and, when applicable, as
"Investments sold." Collateral of $255,251,417 was received for the loans, all
of which was received in cash and subsequently invested in approved investments
or held as cash.
- --------------------------------------------------------------------------------
14. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
52 | OPPENHEIMER STRATEGIC BOND FUND/VA
OPPENHEIMER MAIN STREET SMALL CAP FUND(R)/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- ------------------------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,080.30 $3.98
- ------------------------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,020.98 3.87
- ------------------------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,078.90 5.22
- ------------------------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.79 5.07
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- --------------------------------------------
Non-Service shares 0.77%
- --------------------------------------------
Service shares 1.01
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--97.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--17.7%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.2%
Aftermarket Technology Corp. 1,2 20,500 $ 509,425
- --------------------------------------------------------------------------------
ArvinMeritor, Inc. 84,700 1,455,993
- --------------------------------------------------------------------------------
Autoliv, Inc. 12,600 712,782
- --------------------------------------------------------------------------------
Borg-Warner Automotive, Inc. 3,600 234,360
- --------------------------------------------------------------------------------
Drew Industries, Inc. 1,2 1,900 61,560
- --------------------------------------------------------------------------------
GenTek, Inc. 1 1,500 40,275
- --------------------------------------------------------------------------------
IMPCO Technologies, Inc. 1 3,500 37,345
- --------------------------------------------------------------------------------
Lear Corp. 2 35,500 788,455
- --------------------------------------------------------------------------------
Modine Manufacturing Co. 23,800 555,968
- --------------------------------------------------------------------------------
Sauer-Danfoss, Inc. 2 11,000 279,620
- --------------------------------------------------------------------------------
Shiloh Industries, Inc. 1 5,900 88,736
- --------------------------------------------------------------------------------
Tenneco, Inc. 1 64,400 1,674,400
- --------------------------------------------------------------------------------
TRW Automotive Holdings Corp. 1 6,100 166,408
-------------
6,605,327
- --------------------------------------------------------------------------------
AUTOMOBILES--0.1%
Thor Industries, Inc. 2 12,800 620,160
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
Building Materials Holding Corp. 2 2,200 61,314
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--1.3%
Alderwoods Group, Inc. 1 13,600 264,656
- --------------------------------------------------------------------------------
Bright Horizons Family Solutions, Inc. 1,2 400 15,076
- --------------------------------------------------------------------------------
Career Education Corp. 1 10,600 316,834
- --------------------------------------------------------------------------------
Corinthian Colleges, Inc. 1 32,500 466,700
- --------------------------------------------------------------------------------
DeVry, Inc 1,2 37,700 828,269
- --------------------------------------------------------------------------------
INVESTools, Inc. 1 16,500 131,010
- --------------------------------------------------------------------------------
ITT Educational Services, Inc. 1 7,000 460,670
- --------------------------------------------------------------------------------
Jackson Hewitt Tax Service, Inc. 49,800 1,561,230
- --------------------------------------------------------------------------------
Regis Corp. 16,800 598,248
- --------------------------------------------------------------------------------
Sotheby's 1 39,800 1,044,750
- --------------------------------------------------------------------------------
Steiner Leisure Ltd. 1,2 12,300 486,219
- --------------------------------------------------------------------------------
Stewart Enterprises, Inc. 2 50,800 292,100
- --------------------------------------------------------------------------------
Strayer Education, Inc. 4,700 456,464
- --------------------------------------------------------------------------------
Vertrue, Inc. 1,2 3,100 133,393
-------------
7,055,619
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.6%
AFC Enterprises, Inc. 1,2 18,200 232,050
- --------------------------------------------------------------------------------
Ambassadors Group, Inc. 2 14,400 415,872
- --------------------------------------------------------------------------------
Ameristar Casinos, Inc. 700 13,615
- --------------------------------------------------------------------------------
Aztar Corp. 1 19,900 1,034,004
- --------------------------------------------------------------------------------
Bally Total Fitness Holding Corp. 1,2 3,600 24,408
- --------------------------------------------------------------------------------
Bluegreen Corp. 1,2 900 10,314
- --------------------------------------------------------------------------------
Bob Evans Farms, Inc. 2 40,414 1,212,824
- --------------------------------------------------------------------------------
Brinker International, Inc. 15,400 559,020
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Buffalo Wild Wings, Inc. 1 9,000 $ 344,790
- --------------------------------------------------------------------------------
Burger King Holdings, Inc. 1,2 21,300 335,475
- --------------------------------------------------------------------------------
CBRL Group, Inc. 22,000 746,240
- --------------------------------------------------------------------------------
Choice Hotels International, Inc. 10,300 624,180
- --------------------------------------------------------------------------------
CKE Restaurants, Inc. 2 70,600 1,172,666
- --------------------------------------------------------------------------------
Darden Restaurants, Inc. 12,500 492,500
- --------------------------------------------------------------------------------
Denny's Corp. 1,2 86,100 317,709
- --------------------------------------------------------------------------------
Domino's Pizza, Inc. 49,600 1,227,104
- --------------------------------------------------------------------------------
Dover Downs Gaming & Entertainment,
Inc. 2 24,000 471,360
- --------------------------------------------------------------------------------
IHOP Corp. 2 26,200 1,259,696
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc. 1,2 14,200 364,230
- --------------------------------------------------------------------------------
Jack in the Box, Inc. 1 39,100 1,532,720
- --------------------------------------------------------------------------------
Landry's Restaurants, Inc. 2 11,200 363,440
- --------------------------------------------------------------------------------
Lone Star Steakhouse & Saloon, Inc. 100 2,623
- --------------------------------------------------------------------------------
Luby's, Inc. 1,2 22,700 236,761
- --------------------------------------------------------------------------------
Marcus Corp. (The) 2 5,100 106,488
- --------------------------------------------------------------------------------
McCormick & Schmick's Seafood
Restaurants, Inc. 1 19,000 452,200
- --------------------------------------------------------------------------------
Monarch Casino & Resort, Inc. 1,2 10,900 306,508
- --------------------------------------------------------------------------------
Morton's Restaurant Group, Inc. 1 2,200 33,704
- --------------------------------------------------------------------------------
MTR Gaming Group, Inc. 1 10,400 97,552
- --------------------------------------------------------------------------------
Multimedia Games, Inc. 1,2 24,800 251,224
- --------------------------------------------------------------------------------
Navigant International, Inc. 1,2 3,300 52,899
- --------------------------------------------------------------------------------
O'Charley's, Inc. 1,2 2,400 40,800
- --------------------------------------------------------------------------------
Papa John's International, Inc. 1,2 21,700 720,440
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc. 1 27,200 833,680
- --------------------------------------------------------------------------------
Rare Hospitality International, Inc. 1 36,200 1,041,112
- --------------------------------------------------------------------------------
Ruby Tuesday, Inc. 2 600 14,646
- --------------------------------------------------------------------------------
Ryan's Restaurant Group, Inc. 1 9,200 109,572
- --------------------------------------------------------------------------------
Shuffle Master, Inc. 1,2 19,200 629,376
- --------------------------------------------------------------------------------
Six Flags, Inc. 1,2 56,600 318,092
- --------------------------------------------------------------------------------
Speedway Motorsports, Inc. 4,500 169,830
- --------------------------------------------------------------------------------
Sunterra Corp. 1,2 20,000 204,800
- --------------------------------------------------------------------------------
Tim Hortons, Inc. 1,2 8,900 229,175
- --------------------------------------------------------------------------------
Vail Resorts, Inc. 1,2 33,800 1,253,980
-------------
19,859,679
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.6%
American Greetings Corp., Cl. A 2 57,300 1,203,873
- --------------------------------------------------------------------------------
Avatar Holdings, Inc. 1,2 700 39,879
- --------------------------------------------------------------------------------
Champion Enterprises, Inc. 1,2 58,800 649,152
- --------------------------------------------------------------------------------
CSS Industries, Inc. 2 550 15,813
- --------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 2 41,000 1,498,550
- --------------------------------------------------------------------------------
Furniture Brands International, Inc. 2 62,400 1,300,416
- --------------------------------------------------------------------------------
Hooker Furniture Corp. 2 2,600 43,602
6 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
Interface, Inc., Cl. A 1,2 34,700 $ 397,315
- --------------------------------------------------------------------------------
Kimball International, Inc., Cl. B 2 8,300 163,593
- --------------------------------------------------------------------------------
La-Z-Boy, Inc. 2 66,500 931,000
- --------------------------------------------------------------------------------
Leggett & Platt, Inc. 31,900 796,862
- --------------------------------------------------------------------------------
Lifetime Brands, Inc. 2 2,900 62,843
- --------------------------------------------------------------------------------
Mestek, Inc. 1,2 100 1,660
- --------------------------------------------------------------------------------
National Presto Industries, Inc. 800 41,824
- --------------------------------------------------------------------------------
Palm Harbor Homes, Inc. 1,2 3,900 68,601
- --------------------------------------------------------------------------------
Sealy Corp. 1 1,400 18,578
- --------------------------------------------------------------------------------
Skyline Corp. 2 300 12,834
- --------------------------------------------------------------------------------
Snap-On, Inc. 20,400 824,568
- --------------------------------------------------------------------------------
Standard Pacific Corp. 2 12,800 328,960
- --------------------------------------------------------------------------------
Stanley Furniture Co., Inc. 2 12,500 299,625
- --------------------------------------------------------------------------------
Tupperware Brands Corp. 1,700 33,473
-------------
8,733,021
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.1%
Blair Corp. 1,067 31,743
- --------------------------------------------------------------------------------
Blue Nile, Inc. 1,2 2,400 77,184
- --------------------------------------------------------------------------------
FTD Group, Inc. 1 2,300 31,050
- --------------------------------------------------------------------------------
PetMed Express, Inc. 1,2 11,100 121,767
- --------------------------------------------------------------------------------
Sportsman's Guide, Inc. 1 1,400 42,700
- --------------------------------------------------------------------------------
Stamps.com, Inc. 1,2 6,400 178,048
- --------------------------------------------------------------------------------
ValueVision Media, Inc., Cl. A 1 10,200 112,506
-------------
594,998
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.3%
Callaway Golf Co. 19,500 253,305
- --------------------------------------------------------------------------------
Hasbro, Inc. 25,100 454,561
- --------------------------------------------------------------------------------
JAKKS Pacific, Inc. 1,2 23,800 478,142
- --------------------------------------------------------------------------------
Marvel Entertainment, Inc. 1,2 23,300 466,000
- --------------------------------------------------------------------------------
Steinway Musical Instruments, Inc. 1 6,100 149,572
-------------
1,801,580
- --------------------------------------------------------------------------------
MEDIA--0.8%
Catalina Marketing Corp. 2 22,600 643,196
- --------------------------------------------------------------------------------
Citadel Broadcasting Corp. 800 7,120
- --------------------------------------------------------------------------------
Cox Radio, Inc., Cl. A 1,2 35,200 507,584
- --------------------------------------------------------------------------------
Cumulus Media, Inc., Cl. A 1,2 16,700 178,189
- --------------------------------------------------------------------------------
Emmis Communications Corp., Cl. A 1,2 10,200 159,528
- --------------------------------------------------------------------------------
Entravision Communications Corp. 1 10,900 93,413
- --------------------------------------------------------------------------------
Harris Interactive, Inc. 1,2 1,400 7,980
- --------------------------------------------------------------------------------
Knology, Inc. 1 2,800 26,040
- --------------------------------------------------------------------------------
Live Nation 1 1,600 32,576
- --------------------------------------------------------------------------------
LodgeNet Entertainment Corp. 1 4,100 76,465
- --------------------------------------------------------------------------------
Meredith Corp. 1,700 84,218
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Readers Digest Assn., Inc. (The), Cl. A,
Non-Vtg. 2 60,600 $ 845,976
- --------------------------------------------------------------------------------
Scholastic Corp. 1 900 23,373
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., Cl. A 2 43,000 368,080
- --------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., Cl. A 1,2 2,200 11,242
- --------------------------------------------------------------------------------
Wiley (John) & Sons, Inc., Cl. A 11,000 365,200
- --------------------------------------------------------------------------------
World Wrestling Federation
Entertainment, Inc. 2 40,000 675,600
-------------
4,105,780
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.0%
99 Cents Only Stores 1 31,500 329,490
- --------------------------------------------------------------------------------
Big Lots, Inc. 1,2 102,500 1,750,700
- --------------------------------------------------------------------------------
Bon-Ton Stores, Inc. 2 11,900 260,372
- --------------------------------------------------------------------------------
Conn's, Inc. 1,2 12,900 342,495
- --------------------------------------------------------------------------------
Dillard's, Inc., Cl. A 2 33,200 1,057,420
- --------------------------------------------------------------------------------
Dollar Tree Stores, Inc. 1 31,600 837,400
- --------------------------------------------------------------------------------
Family Dollar Stores, Inc. 30,800 752,444
- --------------------------------------------------------------------------------
Fred's, Inc. 2 2,800 37,380
- --------------------------------------------------------------------------------
Retail Ventures, Inc. 1,2 21,100 376,002
-------------
5,743,703
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--6.0%
American Eagle Outfitters, Inc. 14,900 507,196
- --------------------------------------------------------------------------------
AnnTaylor Stores Corp. 1 18,800 815,544
- --------------------------------------------------------------------------------
Asbury Automotive Group, Inc. 1 12,500 261,750
- --------------------------------------------------------------------------------
AutoNation, Inc. 1 10,534 225,849
- --------------------------------------------------------------------------------
Barnes & Noble, Inc. 22,900 835,850
- --------------------------------------------------------------------------------
Buckle, Inc. (The) 2 14,200 594,554
- --------------------------------------------------------------------------------
Build-A-Bear-Workshop, Inc. 1,2 3,800 81,738
- --------------------------------------------------------------------------------
Cache, Inc. 1,2 7,000 121,380
- --------------------------------------------------------------------------------
Casual Male Retail Group, Inc. 1,2 36,000 361,800
- --------------------------------------------------------------------------------
Cato Corp., Cl. A 2 27,950 722,508
- --------------------------------------------------------------------------------
Charlotte Russe Holding, Inc. 1,2 19,700 471,618
- --------------------------------------------------------------------------------
Charming Shoppes, Inc. 1,2 133,800 1,503,912
- --------------------------------------------------------------------------------
Children's Place Retail Stores, Inc. 1,2 16,300 978,815
- --------------------------------------------------------------------------------
Christopher & Banks Corp. 2 34,700 1,006,300
- --------------------------------------------------------------------------------
Circuit City Stores, Inc./Circuit City
Group 29,200 794,824
- --------------------------------------------------------------------------------
Claire's Stores, Inc. 18,400 469,384
- --------------------------------------------------------------------------------
CSK Auto Corp. 1,2 2,500 29,925
- --------------------------------------------------------------------------------
Deb Shops, Inc. 2 500 12,055
- --------------------------------------------------------------------------------
Dick's Sporting Goods, Inc. 1 16,900 669,240
- --------------------------------------------------------------------------------
Dress Barn, Inc. (The) 1,2 55,300 1,401,855
- --------------------------------------------------------------------------------
Finish Line, Inc. (The), Cl. A 2 8,200 97,006
- --------------------------------------------------------------------------------
GameStop Corp., Cl. A 1,2 15,700 659,400
- --------------------------------------------------------------------------------
Genesco, Inc. 1,2 27,800 941,586
7 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
-------------------------------------------------------------------------------
SPECIALTY RETAIL Continued
Group 1 Automotive, Inc. 23,700 $ 1,335,258
-------------------------------------------------------------------------------
Guess?, Inc. 1,2 30,500 1,273,375
-------------------------------------------------------------------------------
Gymboree Corp. 1 47,300 1,644,148
-------------------------------------------------------------------------------
Haverty Furniture Cos., Inc. 2 6,200 97,278
-------------------------------------------------------------------------------
Hibbett Sporting Goods, Inc. 1,2 31,387 750,149
-------------------------------------------------------------------------------
Lithia Motors, Inc., Cl. A 2 8,700 263,784
-------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The) 40,750 1,234,725
-------------------------------------------------------------------------------
Midas, Inc. 1 900 16,560
-------------------------------------------------------------------------------
Monro Muffler Brake, Inc. 500 16,280
-------------------------------------------------------------------------------
OfficeMax, Inc. 7,400 301,550
-------------------------------------------------------------------------------
Pantry, Inc. (The) 1 23,900 1,375,206
-------------------------------------------------------------------------------
Payless ShoeSource, Inc. 1 68,800 1,869,296
-------------------------------------------------------------------------------
RadioShack Corp. 2 25,800 361,200
-------------------------------------------------------------------------------
Rent-A-Center, Inc. 1 42,100 1,046,606
-------------------------------------------------------------------------------
Ross Stores, Inc. 15,800 443,190
-------------------------------------------------------------------------------
Select Comfort Corp. 1,2 54,400 1,249,568
-------------------------------------------------------------------------------
Shoe Carnival, Inc. 1 12,500 298,250
-------------------------------------------------------------------------------
Sonic Automotive, Inc. 2 37,700 836,186
-------------------------------------------------------------------------------
Stage Stores, Inc. 2 36,550 1,206,150
-------------------------------------------------------------------------------
Stein Mart, Inc. 7,600 112,480
-------------------------------------------------------------------------------
Syms Corp. 1 3,200 58,880
-------------------------------------------------------------------------------
Talbots, Inc. (The) 2 32,700 603,315
-------------------------------------------------------------------------------
Too, Inc. 1 43,200 1,658,448
-------------------------------------------------------------------------------
Trans World Entertainment Corp. 1,2 2,900 20,938
-------------------------------------------------------------------------------
United Auto Group, Inc. 2 60,800 1,298,080
-------------------------------------------------------------------------------
United Retail Group, Inc. 1 8,500 131,835
-------------------------------------------------------------------------------
Wet Seal, Inc., Cl. A 1 63,200 308,416
-------------
33,375,240
-------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.7%
Brown Shoe Co., Inc. 35,550 1,211,544
-------------------------------------------------------------------------------
Cherokee, Inc. 2 7,200 297,792
-------------------------------------------------------------------------------
Columbia Sportswear Co. 1,2 9,100 411,866
-------------------------------------------------------------------------------
Deckers Outdoor Corp. 1 9,200 354,752
-------------------------------------------------------------------------------
Jones Apparel Group, Inc. 12,000 381,480
-------------------------------------------------------------------------------
Kellwood Co. 2 29,300 857,611
-------------------------------------------------------------------------------
Liz Claiborne, Inc. 20,000 741,200
-------------------------------------------------------------------------------
Phillips/Van Heusen Corp. 33,500 1,278,360
-------------------------------------------------------------------------------
Russell Corp. 2 2,200 39,952
-------------------------------------------------------------------------------
Skechers U.S.A., Inc., Cl. A 1 48,400 1,166,924
-------------------------------------------------------------------------------
Steven Madden Ltd. 29,800 882,676
-------------------------------------------------------------------------------
Stride Rite Corp. 9,700 127,943
-------------------------------------------------------------------------------
Warnaco Group, Inc. (The) 1,2 9,900 184,932
-------------------------------------------------------------------------------
Wolverine World Wide, Inc. 58,750 1,370,638
-------------
9,307,670
VALUE
SHARES SEE NOTE 1
-------------------------------------------------------------------------------
CONSUMER STAPLES--2.7%
-------------------------------------------------------------------------------
BEVERAGES--0.2%
Boston Beer Co., Inc., Cl. A 1,2 7,600 $ 222,604
-------------------------------------------------------------------------------
Hansen Natural Corp. 1,2 2,100 399,777
-------------------------------------------------------------------------------
Jones Soda Co. 1,2 3,400 30,600
-------------------------------------------------------------------------------
MGP Ingredients, Inc. 5,300 123,066
-------------------------------------------------------------------------------
National Beverage Corp. 10,500 150,675
-------------------------------------------------------------------------------
PepsiAmericas, Inc. 900 19,899
-------------
946,621
-------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.2%
Andersons, Inc. (The) 2 12,600 524,286
-------------------------------------------------------------------------------
Arden Group, Inc., Cl. A 1,205 136,370
-------------------------------------------------------------------------------
BJ's Wholesale Club, Inc. 1,2 2,400 68,040
-------------------------------------------------------------------------------
Casey's General Stores, Inc. 2 48,500 1,212,985
-------------------------------------------------------------------------------
Ingles Markets, Inc., Cl. A 1,500 25,500
-------------------------------------------------------------------------------
Longs Drug Stores, Inc. 36,000 1,642,320
-------------------------------------------------------------------------------
Nash Finch Co. 2 1,800 38,322
-------------------------------------------------------------------------------
Pathmark Stores, Inc. 1 12,500 117,625
-------------------------------------------------------------------------------
Performance Food Group Co. 1,2 49,400 1,500,772
-------------------------------------------------------------------------------
Smart & Final, Inc. 1,2 8,200 138,088
-------------------------------------------------------------------------------
Spartan Stores, Inc. 8,200 119,966
-------------------------------------------------------------------------------
SUPERVALU, Inc. 19,900 610,930
-------------------------------------------------------------------------------
Weis Markets, Inc. 2 4,700 193,640
-------------------------------------------------------------------------------
Wild Oats Markets, Inc. 1,2 21,500 421,400
-------------
6,750,244
-------------------------------------------------------------------------------
FOOD PRODUCTS--0.8%
Corn Products International, Inc. 2,300 70,380
-------------------------------------------------------------------------------
Darling International, Inc. 1,2 7,300 33,069
-------------------------------------------------------------------------------
Dean Foods Co. 1 5,300 197,107
-------------------------------------------------------------------------------
Del Monte Foods Co. 86,100 966,903
-------------------------------------------------------------------------------
Delta & Pine Land Co. 2 25,400 746,760
-------------------------------------------------------------------------------
Flowers Foods, Inc. 2 44,200 1,265,888
-------------------------------------------------------------------------------
Hain Celestial Group, Inc. 1,2 7,000 180,320
-------------------------------------------------------------------------------
J&J Snack Foods Corp. 2 10,700 353,849
-------------------------------------------------------------------------------
Lance, Inc. 2 4,800 110,496
-------------------------------------------------------------------------------
Premium Standard Farms, Inc. 10,500 170,415
-------------------------------------------------------------------------------
Seaboard Corp. 2 400 512,000
-------------
4,607,187
-------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.1%
Energizer Holdings, Inc. 1 7,600 445,132
-------------------------------------------------------------------------------
WD-40 Co. 2 5,200 174,564
-------------
619,696
-------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.2%
Chattem, Inc. 1,2 7,300 221,701
8 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS Continued
Inter Parfums, Inc. 2 2,300 $ 39,606
- --------------------------------------------------------------------------------
Mannatech, Inc. 2 15,800 199,238
- --------------------------------------------------------------------------------
NBTY, Inc. 1 17,500 418,425
- --------------------------------------------------------------------------------
Parlux Fragrances, Inc. 1,2 24,400 236,436
-------------
1,115,406
- --------------------------------------------------------------------------------
TOBACCO--0.2%
Loews Corp./Carolina Group 14,600 750,002
- --------------------------------------------------------------------------------
Vector Group Ltd. 2 21,035 341,819
-------------
1,091,821
- --------------------------------------------------------------------------------
ENERGY--8.1%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.8%
CHC Helicopter Corp., Cl. A 1,400 33,486
- --------------------------------------------------------------------------------
Dril-Quip, Inc. 1,2 10,500 865,620
- --------------------------------------------------------------------------------
Ensign Energy Services, Inc. 27,200 558,961
- --------------------------------------------------------------------------------
Global Industries Ltd. 1,2 17,700 295,590
- --------------------------------------------------------------------------------
Grey Wolf, Inc. 1,2 189,500 1,459,150
- --------------------------------------------------------------------------------
Gulfmark Offshore, Inc. 1,2 5,200 134,316
- --------------------------------------------------------------------------------
Helix Energy Solutions Group, Inc. 1 7,500 302,700
- --------------------------------------------------------------------------------
Helmerich & Payne, Inc. 4,400 265,144
- --------------------------------------------------------------------------------
Hydril Co. 1,2 600 47,112
- --------------------------------------------------------------------------------
Leader Energy Services Ltd. 1,3 74,600 220,532
- --------------------------------------------------------------------------------
Lone Star Technologies, Inc. 1 25,700 1,388,314
- --------------------------------------------------------------------------------
Lufkin Industries, Inc. 2 11,400 677,502
- --------------------------------------------------------------------------------
Matrix Service Co. 1,2 13,900 159,016
- --------------------------------------------------------------------------------
Maverick Tube Corp. 1,2 14,800 935,212
- --------------------------------------------------------------------------------
Mullen Group Income Fund 3,000 80,572
- --------------------------------------------------------------------------------
NATCO Group, Inc., Cl. A 1,2 9,800 393,960
- --------------------------------------------------------------------------------
NS Group, Inc. 1,2 29,900 1,646,892
- --------------------------------------------------------------------------------
Oceaneering International, Inc. 1 29,900 1,370,915
- --------------------------------------------------------------------------------
Parker Drilling Co. 1,2 98,800 709,384
- --------------------------------------------------------------------------------
Pason Systems, Inc. 20,600 301,720
- --------------------------------------------------------------------------------
Prairie Schooner Petroleum Ltd. 1,3 1,200 16,426
- --------------------------------------------------------------------------------
RPC, Inc. 2 24,100 585,148
- --------------------------------------------------------------------------------
Technicoil Corp. 1 7,100 15,265
- --------------------------------------------------------------------------------
Technicoil Corp. 1 72,900 156,732
- --------------------------------------------------------------------------------
Tetra Technologies, Inc. 1,2 31,000 938,990
- --------------------------------------------------------------------------------
Tidewater, Inc. 12,600 619,920
- --------------------------------------------------------------------------------
Todco, Cl. A 16,500 674,025
- --------------------------------------------------------------------------------
Trican Well Service Ltd. 23,200 463,460
- --------------------------------------------------------------------------------
Trico Marine Services, Inc. 1,2 6,000 204,000
- --------------------------------------------------------------------------------
Unit Corp. 1 16,400 932,996
- --------------------------------------------------------------------------------
Universal Compression Holdings, Inc. 1,2 21,200 1,334,964
- --------------------------------------------------------------------------------
Veritas DGC, Inc. 1,2 36,400 1,877,512
- --------------------------------------------------------------------------------
W-H Energy Services, Inc. 1,2 24,800 1,260,584
- --------------------------------------------------------------------------------
Western Lakota Energy Sevices, Inc. 1 9,000 118,517
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
Willbros Group, Inc. 1,2 5,000 $ 94,700
-------------
21,139,337
- --------------------------------------------------------------------------------
OIL & GAS--4.3%
Alberta Clipper Energy, Inc. 1 7,887 31,229
- --------------------------------------------------------------------------------
Atlas America, Inc. 1 5,002 224,140
- --------------------------------------------------------------------------------
Atlas Energy Ltd. 1 64,300 288,005
- --------------------------------------------------------------------------------
Atlas Energy Ltd. 1 27,900 124,966
- --------------------------------------------------------------------------------
Berry Petroleum Co., Cl. A 2 16,400 543,660
- --------------------------------------------------------------------------------
Birchcliff Energy Ltd. 1 4,700 22,525
- --------------------------------------------------------------------------------
Callon Petroleum Co. 1,2 18,800 363,592
- --------------------------------------------------------------------------------
Capitol Energy Resources Ltd. 1 24,500 107,323
- --------------------------------------------------------------------------------
Celtic Exploration Ltd. 1 7,400 84,653
- --------------------------------------------------------------------------------
Celtic Exploration Ltd. 1 6,300 70,196
- --------------------------------------------------------------------------------
Chamaelo Exploration Ltd. 1 57,580 259,969
- --------------------------------------------------------------------------------
Cimarex Energy Co. 2 22,700 976,100
- --------------------------------------------------------------------------------
Clear Energy, Inc. 1 36,133 115,232
- --------------------------------------------------------------------------------
Comstock Resources, Inc. 1,2 53,100 1,585,566
- --------------------------------------------------------------------------------
Crew Energy, Inc. 1 7,666 92,022
- --------------------------------------------------------------------------------
Cyries Energy, Inc. 1 15,840 146,864
- --------------------------------------------------------------------------------
Delphi Energy Corp. 1 5,000 18,812
- --------------------------------------------------------------------------------
Delphi Energy Corp. 1 35,000 131,685
- --------------------------------------------------------------------------------
Duvernay Oil Corp. 1 4,500 157,982
- --------------------------------------------------------------------------------
Edge Petroleum Corp. 1,2 18,100 361,638
- --------------------------------------------------------------------------------
Ember Resources, Inc. 1 5,887 17,298
- --------------------------------------------------------------------------------
Ember Resources, Inc. 1 9,700 28,501
- --------------------------------------------------------------------------------
EXCO Resources, Inc. 1 10,200 116,280
- --------------------------------------------------------------------------------
Exploration Co. (The) of Delaware 1 20,700 220,662
- --------------------------------------------------------------------------------
Find Energy Ltd. 1 4,200 36,006
- --------------------------------------------------------------------------------
Find Energy Ltd. 1 28,100 240,900
- --------------------------------------------------------------------------------
Foundation Coal Holdings, Inc. 2 17,800 835,354
- --------------------------------------------------------------------------------
Frontier Oil Corp. 24,200 784,080
- --------------------------------------------------------------------------------
Galleon Energy, Inc., Cl. A 1 10,350 201,010
- --------------------------------------------------------------------------------
Galleon Energy, Inc., Subscription
Receipts 1 11,250 218,490
- --------------------------------------------------------------------------------
General Maritime Corp. 2 17,800 657,888
- --------------------------------------------------------------------------------
Harvest Natural Resources, Inc. 1 3,400 46,036
- --------------------------------------------------------------------------------
Highpine Oil & Gas Ltd. 1 511 8,514
- --------------------------------------------------------------------------------
Highpine Oil & Gas Ltd. 1 1,700 28,326
- --------------------------------------------------------------------------------
Holly Corp. 19,900 959,180
- --------------------------------------------------------------------------------
KCS Energy, Inc. 1 42,300 1,256,310
- --------------------------------------------------------------------------------
Mahalo Energy Ltd. 1,3 19,500 60,091
- --------------------------------------------------------------------------------
Midnight Oil Exploration Ltd. 1 45,050 147,301
- --------------------------------------------------------------------------------
Mission Oil & Gas, Inc. 1 8,732 111,389
- --------------------------------------------------------------------------------
Mission Oil & Gas, Inc. 1,4 6,400 81,641
- --------------------------------------------------------------------------------
OMI Corp. 2 50,400 1,091,160
9 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Open Range Energy Corp. 1 910 $ 2,935
- --------------------------------------------------------------------------------
Paramount Resources Ltd., Cl. A 1 25,200 812,685
- --------------------------------------------------------------------------------
Penn Virginia Corp. 8,900 621,932
- --------------------------------------------------------------------------------
PetroQuest Energy, Inc. 1,2 41,500 509,620
- --------------------------------------------------------------------------------
Pogo Producing Co. 17,600 811,360
- --------------------------------------------------------------------------------
ProEx Energy Ltd. 1 12,840 155,626
- --------------------------------------------------------------------------------
ProspEx Resources Ltd. 1 33,020 115,361
- --------------------------------------------------------------------------------
Real Resources, Inc. 1 4,800 88,836
- --------------------------------------------------------------------------------
Redstar Oil & Gas, Inc. 1 35,955 49,924
- --------------------------------------------------------------------------------
Remington Oil & Gas Corp. 1 27,800 1,222,366
- --------------------------------------------------------------------------------
Sequoia Oil & Gas Trust 275 4,008
- --------------------------------------------------------------------------------
Sequoia Oil & Gas Trust 3,600 52,470
- --------------------------------------------------------------------------------
St. Mary Land & Exploration Co. 2 15,200 611,800
- --------------------------------------------------------------------------------
Stone Energy Corp. 1 9,300 432,915
- --------------------------------------------------------------------------------
Swift Energy Co. 1,2 35,800 1,536,894
- --------------------------------------------------------------------------------
Tesoro Corp. 11,400 847,704
- --------------------------------------------------------------------------------
Thunder Energy Trust 11,833 88,300
- --------------------------------------------------------------------------------
TransMontaigne, Inc. 1 5,000 56,050
- --------------------------------------------------------------------------------
True Energy Trust 5,550 68,312
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1 26,300 81,282
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1,4 21,300 65,829
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1 77,900 237,866
- --------------------------------------------------------------------------------
USEC, Inc. 2 46,300 548,655
- --------------------------------------------------------------------------------
VAALCO Energy, Inc. 1,2 37,000 361,120
- --------------------------------------------------------------------------------
Vault Energy Trust 3,200 24,366
- --------------------------------------------------------------------------------
Vero Energy, Inc. 1 2,482 12,073
- --------------------------------------------------------------------------------
W&T Offshore, Inc. 2 21,100 820,579
- --------------------------------------------------------------------------------
West Energy Ltd. 1 8,600 31,818
- --------------------------------------------------------------------------------
Western Refining, Inc. 15,800 340,964
- --------------------------------------------------------------------------------
Zenas Energy Corp. 1 17,437 53,422
-------------
23,519,648
- --------------------------------------------------------------------------------
FINANCIALS--13.4%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--1.5%
American Capital Strategies Ltd. 2 20,900 699,732
- --------------------------------------------------------------------------------
Apollo Investment Corp. 700 12,936
- --------------------------------------------------------------------------------
Calamos Asset Management, Inc., Cl. A 2 12,600 365,274
- --------------------------------------------------------------------------------
GAMCO Investors, Inc., Cl. A 2 1,400 51,464
- --------------------------------------------------------------------------------
GFI Group, Inc. 1 2,800 151,060
- --------------------------------------------------------------------------------
Greenhill & Co., Inc. 2 8,500 516,460
- --------------------------------------------------------------------------------
Investment Technology Group, Inc. 1 900 45,774
- --------------------------------------------------------------------------------
Janus Capital Group, Inc. 34,300 613,970
- --------------------------------------------------------------------------------
Jefferies Group, Inc. 21,900 648,897
- --------------------------------------------------------------------------------
Knight Capital Group, Inc., Cl. A 1,2 101,400 1,544,322
- --------------------------------------------------------------------------------
LaBranche & Co., Inc. 1,2 56,200 680,582
- --------------------------------------------------------------------------------
Lazard Ltd., Cl. A 2 3,400 137,360
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
optionsXpress Holdings, Inc. 11,900 $ 277,389
- --------------------------------------------------------------------------------
Penson Worldwide, Inc. 1 7,000 120,470
- --------------------------------------------------------------------------------
Piper Jaffray Cos., Inc. 1,2 20,800 1,273,168
- --------------------------------------------------------------------------------
Raymond James Financial, Inc. 21,350 646,265
- --------------------------------------------------------------------------------
Sanders Morris Harris Group, Inc. 2 1,700 25,687
- --------------------------------------------------------------------------------
Stifel Financial Corp. 1,2 6,900 243,639
- --------------------------------------------------------------------------------
SWS Group, Inc. 2 15,700 378,684
- --------------------------------------------------------------------------------
Tradestation Group, Inc. 1,2 6,300 79,821
-------------
8,512,954
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.6%
BancorpSouth, Inc. 2 19,400 528,650
- --------------------------------------------------------------------------------
BOK Financial Corp. 100 4,967
- --------------------------------------------------------------------------------
Capital Corp. of the West 2 720 23,040
- --------------------------------------------------------------------------------
Capitol Bancorp Ltd. 2 2,300 89,585
- --------------------------------------------------------------------------------
Central Pacific Financial Corp. 2 1,800 69,660
- --------------------------------------------------------------------------------
City Holding Co. 10,300 372,242
- --------------------------------------------------------------------------------
Columbia Banking System, Inc. 2 9,590 358,474
- --------------------------------------------------------------------------------
Commerce Bancshares, Inc. 1,760 88,088
- --------------------------------------------------------------------------------
Community Bank System, Inc. 2 7,800 157,326
- --------------------------------------------------------------------------------
Community Trust Bancorp, Inc. 3,615 126,272
- --------------------------------------------------------------------------------
First Citizens BancShares, Inc., Cl. A 2 1,200 240,600
- --------------------------------------------------------------------------------
First Commonwealth Financial Corp. 2 5,600 71,120
- --------------------------------------------------------------------------------
First Indiana Corp. 2 3,250 84,598
- --------------------------------------------------------------------------------
First Republic Bank 2 22,000 1,007,600
- --------------------------------------------------------------------------------
First Security Group, Inc. 2 14,900 172,840
- --------------------------------------------------------------------------------
First South Bancorp, Inc. 2 600 20,538
- --------------------------------------------------------------------------------
FirstMerit Corp. 1,900 39,786
- --------------------------------------------------------------------------------
Greater Bay Bancorp 33,200 954,500
- --------------------------------------------------------------------------------
Greene County Bancshares, Inc. 2 2,200 68,112
- --------------------------------------------------------------------------------
Hancock Holding Co. 2 7,200 403,200
- --------------------------------------------------------------------------------
Hanmi Financial Corp. 10,500 204,120
- --------------------------------------------------------------------------------
Independent Bank Corp. 11,250 295,875
- --------------------------------------------------------------------------------
Intervest Bancshares Corp. 1 600 24,300
- --------------------------------------------------------------------------------
MainSource Financial Group, Inc. 2 2,183 38,050
- --------------------------------------------------------------------------------
Nara Bancorp, Inc. 1,100 20,625
- --------------------------------------------------------------------------------
National Penn Bancshares, Inc. 2 4,600 91,356
- --------------------------------------------------------------------------------
Pacific Capital Bancorp 2 10,910 339,519
- --------------------------------------------------------------------------------
Preferred Bank 500 26,805
- --------------------------------------------------------------------------------
Provident Bankshares Corp. 2 17,451 635,042
- --------------------------------------------------------------------------------
Republic Bancorp, Inc., Cl. A 2 3,434 70,740
- --------------------------------------------------------------------------------
Southwest Bancorp, Inc. 600 15,300
- --------------------------------------------------------------------------------
Sterling Financial Corp., Western US 2 22,275 679,610
- --------------------------------------------------------------------------------
SVB Financial Group 1,2 7,200 327,312
- --------------------------------------------------------------------------------
Taylor Capital Group, Inc. 2 1,300 53,053
- --------------------------------------------------------------------------------
TCF Financial Corp. 27,000 714,150
10 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Texas Regional Bancshares, Inc., Cl. A 20 $ 758
- --------------------------------------------------------------------------------
Union Bankshares Corp. 800 34,512
- --------------------------------------------------------------------------------
Virginia Commerce Bancorp, Inc. 1,2 1,200 28,680
- --------------------------------------------------------------------------------
WesBanco, Inc. 2 3,300 102,267
- --------------------------------------------------------------------------------
Wilmington Trust Corp. 4,200 177,156
-------------
8,760,428
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.8%
Ace Cash Express, Inc. 1,2 4,200 122,934
- --------------------------------------------------------------------------------
Advance America Cash Advance
Centers, Inc. 1,700 29,818
- --------------------------------------------------------------------------------
Advanta Corp., Cl. B 2 27,600 992,220
- --------------------------------------------------------------------------------
AmeriCredit Corp. 1 26,400 737,088
- --------------------------------------------------------------------------------
ASTA Funding, Inc. 2 15,400 576,730
- --------------------------------------------------------------------------------
Cash America International, Inc. 27,900 892,800
- --------------------------------------------------------------------------------
Dollar Financial Corp. 1,2 11,400 205,200
- --------------------------------------------------------------------------------
EZCORP, Inc., Cl. A 1 8,300 312,827
- --------------------------------------------------------------------------------
First Cash Financial Services, Inc. 1 23,500 464,125
- --------------------------------------------------------------------------------
Student Loan Corp. (The) 2 100 20,200
- --------------------------------------------------------------------------------
World Acceptance Corp. 1,2 4,300 152,736
-------------
4,506,678
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.3%
Asset Acceptance Capital Corp. 1 400 7,920
- --------------------------------------------------------------------------------
CapitalSource, Inc. 2 12,700 297,942
- --------------------------------------------------------------------------------
Financial Federal Corp. 2 3,400 94,554
- --------------------------------------------------------------------------------
International Securities Exchange,
Inc., Cl. A 2 29,400 1,119,258
- --------------------------------------------------------------------------------
Medallion Financial Corp. 6,500 84,240
- --------------------------------------------------------------------------------
Pico Holdings, Inc. 1 2,300 74,175
- --------------------------------------------------------------------------------
Resource America, Inc., Cl. A 2 3,300 62,865
-------------
1,740,954
- --------------------------------------------------------------------------------
INSURANCE--4.7%
Affirmative Insurance Holdings, Inc. 2,000 31,300
- --------------------------------------------------------------------------------
Alfa Corp. 2 2,700 44,712
- --------------------------------------------------------------------------------
Alleghany Corp. 88 24,320
- --------------------------------------------------------------------------------
American Equity Investment Life
Holding Co. 2 48,900 521,274
- --------------------------------------------------------------------------------
American Physicians Capital, Inc. 1 9,600 504,864
- --------------------------------------------------------------------------------
AmerUs Group Co. 2 17,300 1,012,915
- --------------------------------------------------------------------------------
Arch Capital Group Ltd. 1 13,300 790,818
- --------------------------------------------------------------------------------
Argonaut Group, Inc. 1 35,000 1,051,400
- --------------------------------------------------------------------------------
Assurant, Inc. 5,100 246,840
- --------------------------------------------------------------------------------
Berkley (W.R.) Corp. 8,250 281,573
- --------------------------------------------------------------------------------
Bristol West Holdings, Inc. 2 20,200 323,200
- --------------------------------------------------------------------------------
CNA Surety Corp. 1 9,500 164,160
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Commerce Group, Inc. (The) 8,800 $ 259,952
- --------------------------------------------------------------------------------
Darwin Professional Underwriters, Inc. 1 9,700 171,302
- --------------------------------------------------------------------------------
Delphi Financial Group, Inc., Cl. A 37,650 1,368,954
- --------------------------------------------------------------------------------
Direct General Corp. 2 22,000 372,240
- --------------------------------------------------------------------------------
Donegal Group, Inc., Cl. A 2 10,066 195,381
- --------------------------------------------------------------------------------
EMC Insurance Group, Inc. 2 3,900 112,164
- --------------------------------------------------------------------------------
FBL Financial Group, Inc., Cl. A 2 2,500 81,000
- --------------------------------------------------------------------------------
Fidelity National Title Group, Inc., Cl. A 2 1,936 38,081
- --------------------------------------------------------------------------------
FPIC Insurance Group, Inc. 1,2 12,000 465,000
- --------------------------------------------------------------------------------
Great American Financial
Resources, Inc. 2 2,900 60,697
- --------------------------------------------------------------------------------
Hanover Insurance Group, Inc. 20,400 968,184
- --------------------------------------------------------------------------------
Harleysville Group, Inc. 18,900 599,508
- --------------------------------------------------------------------------------
HCC Insurance Holdings, Inc. 9,000 264,960
- --------------------------------------------------------------------------------
Horace Mann Educators Corp. 41,100 696,645
- --------------------------------------------------------------------------------
Independence Holding Co. 2 640 14,342
- --------------------------------------------------------------------------------
Infinity Property & Casualty Corp. 31,100 1,275,100
- --------------------------------------------------------------------------------
James River Group, Inc. 1 800 19,920
- --------------------------------------------------------------------------------
LandAmerica Financial Group, Inc. 2 22,900 1,479,340
- --------------------------------------------------------------------------------
National Financial Partners Corp. 3,000 132,930
- --------------------------------------------------------------------------------
National Western Life Insurance
Co., Cl. A 500 119,825
- --------------------------------------------------------------------------------
Navigators Group, Inc. (The) 1 5,100 223,482
- --------------------------------------------------------------------------------
Odyssey Re Holdings Corp. 2 7,500 197,625
- --------------------------------------------------------------------------------
Ohio Casualty Corp. 47,200 1,403,256
- --------------------------------------------------------------------------------
Old Republic International Corp. 25,850 552,415
- --------------------------------------------------------------------------------
Partnerre Holdings Ltd. 1,700 108,885
- --------------------------------------------------------------------------------
Phoenix Cos., Inc. (The) 92,100 1,296,768
- --------------------------------------------------------------------------------
Presidential Life Corp. 2 6,500 159,770
- --------------------------------------------------------------------------------
ProCentury Corp. 15,000 205,650
- --------------------------------------------------------------------------------
Protective Life Corp. 10,000 466,200
- --------------------------------------------------------------------------------
Reinsurance Group of America, Inc. 7,100 348,965
- --------------------------------------------------------------------------------
Republic Cos. Group, Inc. 31,000 549,010
- --------------------------------------------------------------------------------
RLI Corp. 2 18,700 900,966
- --------------------------------------------------------------------------------
Safety Insurance Group, Inc. 2 12,200 580,110
- --------------------------------------------------------------------------------
Seabright Insurance Holdings, Inc. 1 6,600 106,326
- --------------------------------------------------------------------------------
Selective Insurance Group, Inc. 2 26,300 1,469,381
- --------------------------------------------------------------------------------
StanCorp Financial Group, Inc. 11,500 585,465
- --------------------------------------------------------------------------------
State Auto Financial Corp. 18,600 605,244
- --------------------------------------------------------------------------------
Stewart Information Services Corp. 2 10,100 366,731
- --------------------------------------------------------------------------------
Tower Group, Inc. 2 14,600 441,650
- --------------------------------------------------------------------------------
U.S.I. Holdings Corp. 1,2 14,800 198,468
- --------------------------------------------------------------------------------
United America Indemnity Ltd., Cl. A 1 5,606 116,829
- --------------------------------------------------------------------------------
United Fire & Casualty Co. 2 2,800 84,364
- --------------------------------------------------------------------------------
Unitrin, Inc. 6,300 274,617
11 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Zenith National Insurance Corp. 22,600 $ 896,542
-------------
25,831,620
- --------------------------------------------------------------------------------
REAL ESTATE--2.4%
Acadia Realty Trust 1,100 26,015
- --------------------------------------------------------------------------------
Agree Realty Corp. 2 4,600 156,262
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities, Inc. 4,500 399,060
- --------------------------------------------------------------------------------
AMB Property Corp. 2,200 111,210
- --------------------------------------------------------------------------------
Ashford Hospitality Trust 2 2,800 35,336
- --------------------------------------------------------------------------------
Associated Estates Realty Corp. 2 2,500 31,000
- --------------------------------------------------------------------------------
Brandywine Realty Trust 11,314 363,971
- --------------------------------------------------------------------------------
Camden Property Trust 900 66,195
- --------------------------------------------------------------------------------
CarrAmerica Realty Corp. 2,500 111,375
- --------------------------------------------------------------------------------
CB Richard Ellis Group, Inc., Cl. A 1 8,400 209,160
- --------------------------------------------------------------------------------
CBL & Associates Properties, Inc. 8,800 342,584
- --------------------------------------------------------------------------------
CentraCore Properties Trust 2 1,600 39,600
- --------------------------------------------------------------------------------
Colonial Properties Trust 2 7,854 387,988
- --------------------------------------------------------------------------------
Corporate Office Properties Trust 4,000 168,320
- --------------------------------------------------------------------------------
Crescent Real Estate Equities, Inc. 5,200 96,512
- --------------------------------------------------------------------------------
Digital Realty Trust, Inc. 10,700 264,183
- --------------------------------------------------------------------------------
EastGroup Properties, Inc. 3,300 154,044
- --------------------------------------------------------------------------------
Entertainment Properties Trust 1,800 77,490
- --------------------------------------------------------------------------------
Equity Inns, Inc. 2 18,100 299,736
- --------------------------------------------------------------------------------
Equity Lifestyle Properties, Inc. 1,100 48,213
- --------------------------------------------------------------------------------
Equity One, Inc. 12,300 257,070
- --------------------------------------------------------------------------------
Federal Realty Investment Trust 1,700 119,000
- --------------------------------------------------------------------------------
First Industrial Realty Trust, Inc. 2 8,100 307,314
- --------------------------------------------------------------------------------
First Potomac Realty Trust 800 23,832
- --------------------------------------------------------------------------------
Friedman, Billings, Ramsey Group,
Inc., Cl. A 2 2,300 25,231
- --------------------------------------------------------------------------------
Glenborough Realty Trust, Inc. 2 800 17,232
- --------------------------------------------------------------------------------
Glimcher Realty Trust 2 5,500 136,455
- --------------------------------------------------------------------------------
Gramercy Capital Corp. 2 3,800 98,420
- --------------------------------------------------------------------------------
Health Care REIT, Inc. 2 4,000 139,800
- --------------------------------------------------------------------------------
Healthcare Realty Trust, Inc. 2 4,000 127,400
- --------------------------------------------------------------------------------
Heritage Property Investment Trust 2 4,600 160,632
- --------------------------------------------------------------------------------
Highwoods Properties, Inc. 5,600 202,608
- --------------------------------------------------------------------------------
Hospitality Properties Trust 6,300 276,696
- --------------------------------------------------------------------------------
HRPT Properties Trust 5,400 62,424
- --------------------------------------------------------------------------------
Inland Real Estate Corp. 2 3,900 58,032
- --------------------------------------------------------------------------------
Innkeepers USA Trust 7,400 127,872
- --------------------------------------------------------------------------------
Jones Lang LaSalle, Inc. 10,100 884,255
- --------------------------------------------------------------------------------
Kilroy Realty Corp. 2,800 202,300
- --------------------------------------------------------------------------------
LaSalle Hotel Properties 900 41,670
- --------------------------------------------------------------------------------
Lexington Corporate Properties Trust 2 7,500 162,000
- --------------------------------------------------------------------------------
Liberty Property Trust 7,400 327,080
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE Continued
Longview Fibre Co. 14,900 $ 284,441
- --------------------------------------------------------------------------------
LTC Properties, Inc. 2 2,400 53,640
- --------------------------------------------------------------------------------
Macerich Co. (The) 600 42,120
- --------------------------------------------------------------------------------
Mack-Cali Realty Corp. 3,200 146,944
- --------------------------------------------------------------------------------
Maguire Properties, Inc. 2 6,000 211,020
- --------------------------------------------------------------------------------
Mid-America Apartment
Communities, Inc. 2 6,200 345,650
- --------------------------------------------------------------------------------
National Retail Properties, Inc. 2 13,000 259,350
- --------------------------------------------------------------------------------
Nationwide Health Properties, Inc. 7,400 166,574
- --------------------------------------------------------------------------------
Omega Healthcare Investors, Inc. 2 1,100 14,542
- --------------------------------------------------------------------------------
Pan Pacific Retail Properties, Inc. 2,600 180,362
- --------------------------------------------------------------------------------
Parkway Properties, Inc. 2 600 27,300
- --------------------------------------------------------------------------------
Pennsylvania Real Estate
Investment Trust 2 4,900 197,813
- --------------------------------------------------------------------------------
Post Properties, Inc. 1,600 72,544
- --------------------------------------------------------------------------------
PS Business Parks, Inc. 2,300 135,700
- --------------------------------------------------------------------------------
RAIT Investment Trust 2 800 23,360
- --------------------------------------------------------------------------------
Ramco-Gershenson Properties Trust 2 2,100 56,553
- --------------------------------------------------------------------------------
Realty Income Corp. 2 2,000 43,800
- --------------------------------------------------------------------------------
Redwood Trust, Inc. 2 800 39,064
- --------------------------------------------------------------------------------
Regency Centers Corp. 2,200 136,730
- --------------------------------------------------------------------------------
Senior Housing Properties Trust 12,200 218,502
- --------------------------------------------------------------------------------
Simon Property Group, Inc. 158 13,105
- --------------------------------------------------------------------------------
SL Green Realty Corp. 1,500 164,205
- --------------------------------------------------------------------------------
Sovran Self Storage, Inc. 2 4,000 203,160
- --------------------------------------------------------------------------------
Spirit Finance Corp. 2 12,400 139,624
- --------------------------------------------------------------------------------
Strategic Hotels & Resorts, Inc. 23,000 477,020
- --------------------------------------------------------------------------------
Stratus Properties, Inc. 1 2,000 53,600
- --------------------------------------------------------------------------------
Sunstone Hotel Investors, Inc. 5,900 171,454
- --------------------------------------------------------------------------------
Tanger Factory Outlet Centers, Inc. 2 8,400 271,908
- --------------------------------------------------------------------------------
Trammell Crow Co. 1,2 32,100 1,128,957
- --------------------------------------------------------------------------------
Trizec Properties, Inc. 4,400 126,016
- --------------------------------------------------------------------------------
U-Store-It Trust 4,300 81,098
- --------------------------------------------------------------------------------
United Dominion Realty Trust, Inc. 2,400 67,224
- --------------------------------------------------------------------------------
Ventas, Inc. 7,000 237,160
- --------------------------------------------------------------------------------
Weingarten Realty Investors 4,600 176,088
-------------
13,112,205
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.1%
Accredited Home Lenders
Holding Co. 1,2 21,000 1,004,010
- --------------------------------------------------------------------------------
Anchor BanCorp Wisconsin, Inc. 2 200 6,034
- --------------------------------------------------------------------------------
Astoria Financial Corp. 22,950 698,828
- --------------------------------------------------------------------------------
Bank Mutual Corp. 2 21,436 261,948
- --------------------------------------------------------------------------------
BankUnited Financial Corp., Cl. A 2 36,800 1,123,136
- --------------------------------------------------------------------------------
Citizens First Bancorp, Inc. 2,700 72,117
12 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE Continued
Commercial Capital Bancorp, Inc. 18,200 $ 286,650
- --------------------------------------------------------------------------------
Corus Bankshares, Inc. 2 25,300 662,354
- --------------------------------------------------------------------------------
Downey Financial Corp. 2 4,900 332,465
- --------------------------------------------------------------------------------
Federal Agricultural Mortgage Corp.,
Non-Vtg. 2 8,100 224,370
- --------------------------------------------------------------------------------
First Defiance Financial Corp. 2 1,300 34,255
- --------------------------------------------------------------------------------
First Financial Holdings, Inc. 2,200 70,400
- --------------------------------------------------------------------------------
First Niagara Financial Group, Inc. 2 3,300 46,266
- --------------------------------------------------------------------------------
First Place Financial Corp. 2 6,100 140,361
- --------------------------------------------------------------------------------
FirstFed Financial Corp. 1,2 15,000 865,050
- --------------------------------------------------------------------------------
Fremont General Corp. 2 2,500 46,400
- --------------------------------------------------------------------------------
Horizon Financial Corp. 2 1,800 49,374
- --------------------------------------------------------------------------------
ITLA Capital Corp. 1,800 94,644
- --------------------------------------------------------------------------------
KBNT Bancorp, Inc. 2 4,400 72,688
- --------------------------------------------------------------------------------
MAF Bancorp, Inc. 2 17,900 766,836
- --------------------------------------------------------------------------------
Ocwen Financial Corp. 1,2 20,400 259,284
- --------------------------------------------------------------------------------
PFF Bancorp, Inc. 2 16,710 554,104
- --------------------------------------------------------------------------------
PMI Group, Inc. (The) 17,400 775,692
- --------------------------------------------------------------------------------
Provident Financial Services, Inc. 27,000 484,650
- --------------------------------------------------------------------------------
Radian Group, Inc. 13,400 827,852
- --------------------------------------------------------------------------------
TierOne Corp. 2 14,000 472,780
- --------------------------------------------------------------------------------
Triad Guaranty, Inc. 1,2 1,900 92,872
- --------------------------------------------------------------------------------
Washington Federal, Inc. 2 1,800 41,742
- --------------------------------------------------------------------------------
Webster Financial Corp. 14,400 683,136
- --------------------------------------------------------------------------------
WSFS Financial Corp. 5,500 337,975
-------------
11,388,273
- --------------------------------------------------------------------------------
HEALTH CARE--6.8%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.7%
Albany Molecular Research, Inc. 1 19,900 212,532
- --------------------------------------------------------------------------------
Alnylam Pharmaceuticals, Inc. 1,2 6,700 101,036
- --------------------------------------------------------------------------------
Anadys Pharmaceuticals, Inc. 1,2 2,600 7,592
- --------------------------------------------------------------------------------
Applera Corp./Applied Biosystems
Group 27,200 879,920
- --------------------------------------------------------------------------------
deCODE genetics, Inc. 1,2 8,200 50,758
- --------------------------------------------------------------------------------
Digene Corp. 1,2 9,900 383,526
- --------------------------------------------------------------------------------
Diversa Corp. 1,2 13,600 131,376
- --------------------------------------------------------------------------------
Indevus Pharmaceuticals, Inc. 1,2 4,700 25,709
- --------------------------------------------------------------------------------
Isis Pharmaceuticals, Inc. 1,2 14,000 84,700
- --------------------------------------------------------------------------------
Kendle International, Inc. 1 12,700 466,471
- --------------------------------------------------------------------------------
Lexicon Genetics, Inc. 1,2 4,300 18,877
- --------------------------------------------------------------------------------
Ligand Pharmaceuticals, Inc., Cl. B 1,2 17,100 144,495
- --------------------------------------------------------------------------------
Luminex Corp. 1 17,600 306,064
- --------------------------------------------------------------------------------
Myriad Genetics, Inc. 1,2 8,000 202,000
- --------------------------------------------------------------------------------
Novavax, Inc. 1 28,500 143,640
- --------------------------------------------------------------------------------
QLT PhotoTherapeutics, Inc. 1 900 6,372
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BIOTECHNOLOGY Continued
Regeneron Pharmaceuticals, Inc. 1,2 14,200 $ 182,044
- --------------------------------------------------------------------------------
Renovis, Inc. 1,2 3,900 59,709
- --------------------------------------------------------------------------------
Savient Pharmaceuticals, Inc. 1,2 13,200 69,300
- --------------------------------------------------------------------------------
Techne Corp. 1 8,100 412,452
- --------------------------------------------------------------------------------
Third Wave Technologies, Inc. 1,2 8,500 25,330
-------------
3,913,903
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.8%
Abaxis, Inc. 1,2 11,300 252,781
- --------------------------------------------------------------------------------
Analogic Corp. 2 4,500 209,745
- --------------------------------------------------------------------------------
Bio-Rad Laboratories, Inc., Cl. A 1,2 6,400 415,616
- --------------------------------------------------------------------------------
BioLase Technology, Inc. 1,2 9,000 75,600
- --------------------------------------------------------------------------------
Candela Corp. 1 15,400 244,244
- --------------------------------------------------------------------------------
Datascope Corp. 2 4,400 135,696
- --------------------------------------------------------------------------------
DJO, Inc. 1,2 25,100 924,433
- --------------------------------------------------------------------------------
Edwards Lifesciences Corp. 1 13,700 622,391
- --------------------------------------------------------------------------------
Encore Medical Corp. 1 5,400 25,974
- --------------------------------------------------------------------------------
Haemonetics Corp. 1 8,700 404,637
- --------------------------------------------------------------------------------
ICU Medical, Inc. 1,2 8,800 371,712
- --------------------------------------------------------------------------------
IDEXX Laboratories, Inc. 1 7,900 593,527
- --------------------------------------------------------------------------------
Immucor, Inc. 1,2 14,500 278,835
- --------------------------------------------------------------------------------
Integra LifeSciences Holdings Corp. 1,2 18,700 725,747
- --------------------------------------------------------------------------------
Medical Action Industries, Inc. 1,2 2,200 48,598
- --------------------------------------------------------------------------------
Meridian Bioscience, Inc. 2 15,900 396,705
- --------------------------------------------------------------------------------
Molecular Devices Corp. 1,2 11,900 363,664
- --------------------------------------------------------------------------------
Natus Medical, Inc. 1,2 8,200 81,098
- --------------------------------------------------------------------------------
Neurometrix, Inc. 1,2 5,700 173,622
- --------------------------------------------------------------------------------
Palomar Medical Technologies, Inc. 1,2 16,400 748,332
- --------------------------------------------------------------------------------
Quidel Corp. 1 10,600 100,700
- --------------------------------------------------------------------------------
Steris Corp. 7,700 176,022
- --------------------------------------------------------------------------------
Thermo Electron Corp. 1 10,100 366,024
- --------------------------------------------------------------------------------
Thoratec Corp. 1 26,800 371,716
- --------------------------------------------------------------------------------
Varian, Inc. 1 29,300 1,216,243
- --------------------------------------------------------------------------------
Ventana Medical Systems, Inc. 1 2,300 108,514
- --------------------------------------------------------------------------------
Vital Images, Inc. 1,2 10,200 251,940
- --------------------------------------------------------------------------------
Vital Signs, Inc. 1,400 69,342
- --------------------------------------------------------------------------------
Zoll Medical Corp. 1 2,300 75,348
-------------
9,828,806
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.2%
Air Methods Corp. 1 7,900 206,822
- --------------------------------------------------------------------------------
AMERIGROUP Corp. 1 17,400 540,096
- --------------------------------------------------------------------------------
AMICAS, Inc. 1,2 24,700 79,781
- --------------------------------------------------------------------------------
AMN Healthcare Services, Inc. 1,2 1,700 34,510
- --------------------------------------------------------------------------------
Chemed Corp. 2 24,300 1,325,079
- --------------------------------------------------------------------------------
Computer Programs & Systems, Inc. 2 7,900 315,684
13 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Cross Country Healthcare, Inc. 1,2 9,600 $ 174,624
- --------------------------------------------------------------------------------
Genesis HealthCare Corp. 1,2 21,000 994,770
- --------------------------------------------------------------------------------
Health Net, Inc. 1 6,700 302,639
- --------------------------------------------------------------------------------
HealthExtras, Inc. 1,2 600 18,132
- --------------------------------------------------------------------------------
Healthways, Inc. 1 26,400 1,389,696
- --------------------------------------------------------------------------------
Humana, Inc. 1 6,800 365,160
- --------------------------------------------------------------------------------
LCA-Vision, Inc. 17,100 904,761
- --------------------------------------------------------------------------------
LHC Group, Inc. 1,2 2,600 51,792
- --------------------------------------------------------------------------------
Magellan Health Services, Inc. 1 38,000 1,721,780
- --------------------------------------------------------------------------------
Manor Care, Inc. 13,400 628,728
- --------------------------------------------------------------------------------
MedCath Corp. 1 5,500 103,620
- --------------------------------------------------------------------------------
Molina Healthcare, Inc. 1,2 13,400 509,870
- --------------------------------------------------------------------------------
National HealthCare Corp. 2 2,800 124,740
- --------------------------------------------------------------------------------
NovaMed Eyecare, Inc. 1 200 1,350
- --------------------------------------------------------------------------------
Odyssey Healthcare, Inc. 1,2 25,700 451,549
- --------------------------------------------------------------------------------
Omnicell, Inc. 1,2 4,700 64,954
- --------------------------------------------------------------------------------
Option Care, Inc. 2 10,300 123,394
- --------------------------------------------------------------------------------
Owens & Minor, Inc. 2 12,000 343,200
- --------------------------------------------------------------------------------
Parexel International Corp. 1,2 3,200 92,320
- --------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. 1 32,000 1,449,600
- --------------------------------------------------------------------------------
Per-Se Technologies, Inc. 1,2 34,200 861,156
- --------------------------------------------------------------------------------
Phase Forward, Inc. 1,2 13,000 149,760
- --------------------------------------------------------------------------------
PSS World Medical, Inc. 1,2 47,100 831,315
- --------------------------------------------------------------------------------
Res-Care, Inc. 1 16,600 332,000
- --------------------------------------------------------------------------------
Schein (Henry), Inc. 1 7,100 331,783
- --------------------------------------------------------------------------------
Sierra Health Services, Inc. 1 24,500 1,103,235
- --------------------------------------------------------------------------------
Sunrise Senior Living, Inc. 1 20,200 558,530
- --------------------------------------------------------------------------------
Trizetto Group, Inc. 1 2,000 29,580
- --------------------------------------------------------------------------------
U.S. Physical Therapy, Inc. 1,2 4,600 67,344
- --------------------------------------------------------------------------------
WellCare Health Plans, Inc. 1 16,600 814,230
-------------
17,397,584
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.1%
Alpharma, Inc., Cl. A 55,100 1,324,604
- --------------------------------------------------------------------------------
Andrx Corp. 1 49,900 1,157,181
- --------------------------------------------------------------------------------
BioMimetic Therapeutics, Inc. 1 21,100 139,893
- --------------------------------------------------------------------------------
Bradley Pharmaceuticals, Inc. 1,2 10,100 103,020
- --------------------------------------------------------------------------------
CNS, Inc. 2 12,100 296,450
- --------------------------------------------------------------------------------
DepoMed, Inc. 1,2 17,200 100,964
- --------------------------------------------------------------------------------
Durect Corp. 1,2 8,700 33,669
- --------------------------------------------------------------------------------
Emisphere Technologies, Inc. 1,2 2,400 20,472
- --------------------------------------------------------------------------------
Endo Pharmaceuticals Holdings, Inc. 1,2 21,700 715,666
- --------------------------------------------------------------------------------
Hi-Tech Pharmacal Co., Inc. 1 9,200 152,444
- --------------------------------------------------------------------------------
King Pharmaceuticals, Inc. 1 44,600 758,200
- --------------------------------------------------------------------------------
Mylan Laboratories, Inc. 34,600 692,000
- --------------------------------------------------------------------------------
New River Pharmaceuticals, Inc. 1,2 13,300 379,050
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PHARMACEUTICALS Continued
Pain Therapeutics, Inc. 1,2 24,700 $ 206,245
- --------------------------------------------------------------------------------
Penwest Pharmaceuticals Co. 1 2,200 48,026
- --------------------------------------------------------------------------------
Perrigo Co. 2 9,900 159,390
-------------
6,287,274
- --------------------------------------------------------------------------------
INDUSTRIALS--18.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.4%
AAR Corp. 1,2 22,800 506,844
- --------------------------------------------------------------------------------
Alliant Techsystems, Inc. 1 8,800 671,880
- --------------------------------------------------------------------------------
Armor Holdings, Inc. 1,2 15,900 871,797
- --------------------------------------------------------------------------------
Astronics Corp., Cl. B 1 650 8,125
- --------------------------------------------------------------------------------
Aviall, Inc. 1 1,900 90,288
- --------------------------------------------------------------------------------
BE Aerospace, Inc. 1 14,600 333,756
- --------------------------------------------------------------------------------
Cubic Corp. 2 3,800 74,518
- --------------------------------------------------------------------------------
Curtiss-Wright Corp. 2 3,700 114,256
- --------------------------------------------------------------------------------
DRS Technologies, Inc. 11,300 550,875
- --------------------------------------------------------------------------------
DynCorp International, Inc., Cl. A 1 59,600 618,648
- --------------------------------------------------------------------------------
Esterline Technologies Corp. 1,2 8,400 349,356
- --------------------------------------------------------------------------------
Kaman Corp., Cl. A 15,000 273,000
- --------------------------------------------------------------------------------
Ladish Co., Inc. 1,2 2,800 104,916
- --------------------------------------------------------------------------------
LMI Aerospace, Inc. 1 1,400 25,480
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1,2 65,500 1,057,170
- --------------------------------------------------------------------------------
Sequa Corp., Cl. A 1 3,000 244,500
- --------------------------------------------------------------------------------
Teledyne Technologies, Inc. 1,2 23,700 776,412
- --------------------------------------------------------------------------------
Triumph Group, Inc. 1,2 16,900 811,200
- --------------------------------------------------------------------------------
United Industrial Corp. 2 7,200 325,800
-------------
7,808,821
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.9%
EGL, Inc. 1 22,500 1,129,500
- --------------------------------------------------------------------------------
Forward Air Corp. 2 14,850 604,841
- --------------------------------------------------------------------------------
Hub Group, Inc., Cl. A 1 58,800 1,442,364
- --------------------------------------------------------------------------------
Pacer International, Inc. 46,200 1,505,196
-------------
4,681,901
- --------------------------------------------------------------------------------
AIRLINES--0.8%
AMR Corp. 1 41,500 1,054,930
- --------------------------------------------------------------------------------
Continental Airlines, Inc., Cl. B 1,2 64,600 1,925,080
- --------------------------------------------------------------------------------
ExpressJet Holdings, Inc. 1 21,700 149,947
- --------------------------------------------------------------------------------
Mesa Air Group, Inc. 1 52,100 513,185
- --------------------------------------------------------------------------------
Republic Airways Holdings, Inc. 1 12,000 204,240
- --------------------------------------------------------------------------------
US Airways Group, Inc. 1 11,900 601,426
- --------------------------------------------------------------------------------
World Air Holdings, Inc. 1 2,500 21,475
-------------
4,470,283
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--1.2%
American Woodmark Corp. 4,800 168,192
14 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
BUILDING PRODUCTS Continued
Ameron International Corp. 2 5,800 $ 388,716
- --------------------------------------------------------------------------------
Builders FirstSource, Inc. 1 30,500 620,980
- --------------------------------------------------------------------------------
Goodman Global, Inc. 1 12,600 191,268
- --------------------------------------------------------------------------------
Insteel Industries, Inc. 2 7,600 183,920
- --------------------------------------------------------------------------------
Jacuzzi Brands, Inc. 1,2 1,400 12,320
- --------------------------------------------------------------------------------
Lennox International, Inc. 26,600 704,368
- --------------------------------------------------------------------------------
NCI Building Systems, Inc. 1,2 26,000 1,382,420
- --------------------------------------------------------------------------------
PW Eagle, Inc. 2 12,500 378,000
- --------------------------------------------------------------------------------
Universal Forest Products, Inc. 2 22,000 1,380,060
- --------------------------------------------------------------------------------
USG Corp. 1 16,300 1,188,759
-------------
6,599,003
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--3.9%
Administaff, Inc. 2 33,200 1,188,892
- --------------------------------------------------------------------------------
Allied Waste Industries, Inc. 1 26,900 305,584
- --------------------------------------------------------------------------------
American Ecology Corp. 2 11,500 304,750
- --------------------------------------------------------------------------------
Banta Corp. 23,600 1,093,388
- --------------------------------------------------------------------------------
Bowne & Co., Inc. 2 3,800 54,340
- --------------------------------------------------------------------------------
CBIZ, Inc. 1,2 38,900 288,249
- --------------------------------------------------------------------------------
CDI Corp. 900 26,100
- --------------------------------------------------------------------------------
Central Parking Corp. 2 13,300 212,800
- --------------------------------------------------------------------------------
Cenveo, Inc. 1,2 33,600 603,120
- --------------------------------------------------------------------------------
Clean Harbors, Inc. 1,2 12,900 519,999
- --------------------------------------------------------------------------------
CompX International, Inc. 400 7,160
- --------------------------------------------------------------------------------
Consolidated Graphics, Inc. 1 8,800 458,128
- --------------------------------------------------------------------------------
Corporate Executive Board Co. 2,800 280,560
- --------------------------------------------------------------------------------
Corrections Corp. of America 1 1,700 89,998
- --------------------------------------------------------------------------------
Dun & Bradstreet Corp. 1 6,700 466,856
- --------------------------------------------------------------------------------
Ennis, Inc. 2 12,100 238,128
- --------------------------------------------------------------------------------
Exponent, Inc. 1 13,900 234,910
- --------------------------------------------------------------------------------
Geo Group, Inc. (The) 1 7,600 266,380
- --------------------------------------------------------------------------------
Harland (John H.) Co. 23,900 1,039,650
- --------------------------------------------------------------------------------
Healthcare Services Group, Inc. 2 13,274 278,090
- --------------------------------------------------------------------------------
Heidrick & Struggles International,
Inc. 1,2 8,900 301,176
- --------------------------------------------------------------------------------
HNI Corp. 3,900 176,865
- --------------------------------------------------------------------------------
ICT Group, Inc. 1 2,900 71,137
- --------------------------------------------------------------------------------
Ikon Office Solutions, Inc. 93,300 1,175,580
- --------------------------------------------------------------------------------
Kforce, Inc. 1,2 22,200 343,878
- --------------------------------------------------------------------------------
Knoll, Inc. 24,700 453,492
- --------------------------------------------------------------------------------
Korn-Ferry International 1,2 43,400 850,206
- --------------------------------------------------------------------------------
Labor Ready, Inc. 1,2 39,100 885,615
- --------------------------------------------------------------------------------
Manpower, Inc. 13,000 839,800
- --------------------------------------------------------------------------------
Miller (Herman), Inc. 1,700 43,809
- --------------------------------------------------------------------------------
Mine Safety Appliances Co. 2 1,300 52,260
- --------------------------------------------------------------------------------
Mobile Mini, Inc. 1 6,500 190,190
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
NCO Group, Inc. 1,2 4,300 $ 113,692
- --------------------------------------------------------------------------------
On Assignment, Inc. 1 20,600 189,314
- --------------------------------------------------------------------------------
PHH Corp. 1 41,300 1,137,402
- --------------------------------------------------------------------------------
Republic Services, Inc. 3,400 137,156
- --------------------------------------------------------------------------------
Robert Half International, Inc. 2,600 109,200
- --------------------------------------------------------------------------------
Sirva, Inc. 1 5,300 34,291
- --------------------------------------------------------------------------------
SITEL Corp. 1,2 14,300 56,056
- --------------------------------------------------------------------------------
Sourcecorp, Inc. 1 9,100 225,589
- --------------------------------------------------------------------------------
Spherion Corp. 1 53,000 483,360
- --------------------------------------------------------------------------------
Standard Register Co. (The) 11,400 135,090
- --------------------------------------------------------------------------------
Steelcase, Inc., Cl. A 16,100 264,845
- --------------------------------------------------------------------------------
Synagro Technologies, Inc. 3,200 12,576
- --------------------------------------------------------------------------------
Team, Inc. 1 6,700 167,835
- --------------------------------------------------------------------------------
TeleTech Holdings, Inc. 1 49,900 631,734
- --------------------------------------------------------------------------------
Tetra Tech, Inc. 1 44,200 784,108
- --------------------------------------------------------------------------------
United Stationers, Inc. 1 19,300 951,876
- --------------------------------------------------------------------------------
Viad Corp. 2 11,900 372,470
- --------------------------------------------------------------------------------
Volt Information Sciences, Inc. 1 6,100 284,260
- --------------------------------------------------------------------------------
Waste Connections, Inc. 1,2 29,400 1,070,160
- --------------------------------------------------------------------------------
Watson Wyatt & Co. Holdings 5,900 207,326
- --------------------------------------------------------------------------------
West Corp. 1 11,000 527,010
-------------
21,236,440
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--1.2%
Baker (Michael) Corp. 1 6,400 138,880
- --------------------------------------------------------------------------------
Comfort Systems USA, Inc. 32,000 457,280
- --------------------------------------------------------------------------------
EMCOR Group, Inc. 1 34,400 1,674,248
- --------------------------------------------------------------------------------
Granite Construction, Inc. 27,800 1,258,506
- --------------------------------------------------------------------------------
Infrasource Services, Inc. 1 22,100 402,441
- --------------------------------------------------------------------------------
Insituform Technologies, Inc., Cl. A 1,2 15,500 354,795
- --------------------------------------------------------------------------------
McDermott International, Inc. 1 2,400 109,128
- --------------------------------------------------------------------------------
Perini Corp. 1,2 11,300 254,250
- --------------------------------------------------------------------------------
Quanta Services, Inc. 1,2 89,700 1,554,501
- --------------------------------------------------------------------------------
Sterling Construction Co., Inc. 1 7,400 204,240
- --------------------------------------------------------------------------------
Williams Scotsman International, Inc. 1,2 20,900 456,456
-------------
6,864,725
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--2.0%
Acuity Brands, Inc. 43,900 1,708,149
- --------------------------------------------------------------------------------
Baldor Electric Co. 2 31,600 988,764
- --------------------------------------------------------------------------------
Encore Wire Corp. 1,2 17,400 625,356
- --------------------------------------------------------------------------------
Franklin Electric Co., Inc. 2 5,500 284,020
- --------------------------------------------------------------------------------
General Cable Corp. 1 46,000 1,610,000
- --------------------------------------------------------------------------------
Genlyte Group, Inc. (The) 1,2 13,800 999,534
- --------------------------------------------------------------------------------
Hubbell, Inc., Cl. B 10,700 509,855
- --------------------------------------------------------------------------------
II-VI, Inc. 1 8,800 161,040
15 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT Continued
LaBarge, Inc. 1,2 3,300 $ 43,791
- --------------------------------------------------------------------------------
Lamson & Sessions Co. (The) 1,2 10,800 306,288
- --------------------------------------------------------------------------------
LSI Industries, Inc. 17,400 295,626
- --------------------------------------------------------------------------------
Power-One, Inc. 1,2 7,600 50,160
- --------------------------------------------------------------------------------
Preformed Line Products Co. 2 400 15,160
- --------------------------------------------------------------------------------
Smith (A.O.) Corp. 2 29,500 1,367,620
- --------------------------------------------------------------------------------
Superior Essex, Inc. 1,2 13,100 392,083
- --------------------------------------------------------------------------------
Thomas & Betts Corp. 1 10,800 554,040
- --------------------------------------------------------------------------------
Vicor Corp. 2 20,600 341,342
- --------------------------------------------------------------------------------
Woodward Governor Co. 2 21,100 643,761
-------------
10,896,589
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.1%
Carlisle Cos., Inc. 1,700 134,810
- --------------------------------------------------------------------------------
Raven Industries, Inc. 2 2,700 85,050
- --------------------------------------------------------------------------------
Teleflex, Inc. 7,700 415,954
- --------------------------------------------------------------------------------
Walter Industries, Inc. 2 1,500 86,475
-------------
722,289
- --------------------------------------------------------------------------------
MACHINERY--4.5%
AGCO Corp. 1,2 37,200 979,104
- --------------------------------------------------------------------------------
Albany International Corp., Cl. A 39,900 1,691,361
- --------------------------------------------------------------------------------
American Railcar Industries, Inc. 2 15,400 509,894
- --------------------------------------------------------------------------------
American Science & Engineering, Inc. 1 1,800 104,256
- --------------------------------------------------------------------------------
Ampco-Pittsburgh Corp. 3,600 103,140
- --------------------------------------------------------------------------------
Astec Industries, Inc. 1 22,000 750,640
- --------------------------------------------------------------------------------
Badger Meter, Inc. 2 2,600 70,200
- --------------------------------------------------------------------------------
Barnes Group, Inc. 2 40,800 813,960
- --------------------------------------------------------------------------------
Briggs & Stratton Corp. 2 6,600 205,326
- --------------------------------------------------------------------------------
Bucyrus International, Inc., Cl. A 2 24,500 1,237,250
- --------------------------------------------------------------------------------
Cascade Corp. 2 5,600 221,480
- --------------------------------------------------------------------------------
CIRCOR International, Inc. 2 6,000 182,940
- --------------------------------------------------------------------------------
Clarcor, Inc. 2 6,800 202,572
- --------------------------------------------------------------------------------
Columbus McKinnon Corp. 1 11,800 256,532
- --------------------------------------------------------------------------------
Crane Co. 16,600 690,560
- --------------------------------------------------------------------------------
Cummins, Inc. 6,400 782,400
- --------------------------------------------------------------------------------
Dynamic Materials Corp. 14,200 478,966
- --------------------------------------------------------------------------------
Federal Signal Corp. 2 3,500 52,990
- --------------------------------------------------------------------------------
Flow International Corp. 1 15,500 218,085
- --------------------------------------------------------------------------------
Flowserve Corp. 1 32,000 1,820,800
- --------------------------------------------------------------------------------
Graco, Inc. 4,400 202,312
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc. 2 2,000 65,480
- --------------------------------------------------------------------------------
Harsco Corp. 3,200 249,472
- --------------------------------------------------------------------------------
Kaydon Corp. 2 37,900 1,414,049
- --------------------------------------------------------------------------------
Lincoln Electric Holdings, Inc. 7,900 494,935
- --------------------------------------------------------------------------------
Lindsay Manufacturing Co. 2 4,100 111,192
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY Continued
Manitowoc Co., Inc. (The) 22,700 $ 1,010,150
- --------------------------------------------------------------------------------
Middleby Corp. (The) 1,2 1,600 138,496
- --------------------------------------------------------------------------------
Miller Industries, Inc. 1 8,000 165,600
- --------------------------------------------------------------------------------
Mueller Industries, Inc. 28,400 938,052
- --------------------------------------------------------------------------------
NACCO Industries, Inc., Cl. A 8,900 1,222,949
- --------------------------------------------------------------------------------
Nordson Corp. 28,800 1,416,384
- --------------------------------------------------------------------------------
Robbins & Myers, Inc. 2 7,100 185,594
- --------------------------------------------------------------------------------
SPX Corp. 16,400 917,580
- --------------------------------------------------------------------------------
Sun Hydraulics Corp. 2 4,900 101,822
- --------------------------------------------------------------------------------
Tennant Co. 2 7,600 382,128
- --------------------------------------------------------------------------------
Terex Corp. 1 1,200 118,440
- --------------------------------------------------------------------------------
Titan International, Inc. 2 10,600 198,326
- --------------------------------------------------------------------------------
Toro Co. (The) 19,100 891,970
- --------------------------------------------------------------------------------
Trinity Industries, Inc. 2 19,050 769,620
- --------------------------------------------------------------------------------
Valmont Industries, Inc. 2 17,500 813,575
- --------------------------------------------------------------------------------
Wabtec Corp. 49,900 1,866,260
-------------
25,046,842
- --------------------------------------------------------------------------------
MARINE--0.2%
Horizon Lines, Inc., Cl. A 8,400 134,568
- --------------------------------------------------------------------------------
Kirby Corp. 1 25,800 1,019,100
-------------
1,153,668
- --------------------------------------------------------------------------------
ROAD & RAIL--1.4%
Amerco 1,2 6,200 624,092
- --------------------------------------------------------------------------------
Arkansas Best Corp. 2 35,300 1,772,413
- --------------------------------------------------------------------------------
Celadon Group, Inc. 1 28,500 628,140
- --------------------------------------------------------------------------------
Dollar Thrifty Automotive Group, Inc. 1,2 12,000 540,840
- --------------------------------------------------------------------------------
Heartland Express, Inc. 2 23,200 415,048
- --------------------------------------------------------------------------------
Laidlaw International, Inc. 26,200 660,240
- --------------------------------------------------------------------------------
Ryder Systems, Inc. 13,700 800,491
- --------------------------------------------------------------------------------
SCS Transportation, Inc. 1 12,400 341,372
- --------------------------------------------------------------------------------
Swift Transportation Co., Inc. 1 45,600 1,448,256
- --------------------------------------------------------------------------------
U.S. Xpress Enterprises, Inc., Cl. A 1 6,300 170,226
- --------------------------------------------------------------------------------
Universal Truckload Services, Inc. 1 2,600 88,738
-------------
7,489,856
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.3%
Applied Industrial Technologies, Inc. 58,075 1,411,803
- --------------------------------------------------------------------------------
BlueLinx Holdings, Inc. 2 6,600 85,998
- --------------------------------------------------------------------------------
GATX Corp. 11,200 476,000
- --------------------------------------------------------------------------------
Interline Brands, Inc. 1 36,200 846,356
- --------------------------------------------------------------------------------
MSC Industrial Direct Co., Inc., Cl. A 12,100 575,597
- --------------------------------------------------------------------------------
Rush Enterprises, Inc., Cl. A 1,2 12,300 223,491
- --------------------------------------------------------------------------------
UAP Holding Corp. 66,800 1,456,908
- --------------------------------------------------------------------------------
United Rentals, Inc. 1,2 42,200 1,349,556
- --------------------------------------------------------------------------------
Watsco, Inc. 2 7,400 442,668
16 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS Continued
WESCO International, Inc. 1 7,400 $ 510,600
-------------
7,378,977
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--18.5%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.9%
Anaren Microwave, Inc. 1 19,300 395,457
- --------------------------------------------------------------------------------
Avocent Corp. 1 13,500 354,375
- --------------------------------------------------------------------------------
Bel Fuse, Inc., Cl. A 4,800 130,320
- --------------------------------------------------------------------------------
Belden CDT, Inc. 2 49,900 1,649,195
- --------------------------------------------------------------------------------
Black Box Corp. 2 12,500 479,125
- --------------------------------------------------------------------------------
Carrier Access Corp. 1 10,900 90,143
- --------------------------------------------------------------------------------
CommScope, Inc. 1,2 56,200 1,765,804
- --------------------------------------------------------------------------------
Digi International, Inc. 1,2 7,500 93,975
- --------------------------------------------------------------------------------
Ditech Networks, Inc. 1,2 19,800 172,656
- --------------------------------------------------------------------------------
EMS Technologies, Inc. 1 9,500 170,715
- --------------------------------------------------------------------------------
Finisar Corp. 1,2 27,900 91,233
- --------------------------------------------------------------------------------
Foundry Networks, Inc. 1,2 22,900 244,114
- --------------------------------------------------------------------------------
Harmonic, Inc. 1,2 3,500 15,680
- --------------------------------------------------------------------------------
MasTec, Inc. 1,2 11,400 150,594
- --------------------------------------------------------------------------------
Oplink Communications, Inc. 1,2 15,600 285,636
- --------------------------------------------------------------------------------
Packeteer, Inc. 1,2 39,400 446,796
- --------------------------------------------------------------------------------
Performance Technologies, Inc. 1,2 9,400 64,860
- --------------------------------------------------------------------------------
Polycom, Inc. 1 84,700 1,856,624
- --------------------------------------------------------------------------------
Radyne Corp. 1,2 2,600 29,588
- --------------------------------------------------------------------------------
Redback Networks, Inc. 1 43,000 788,620
- --------------------------------------------------------------------------------
Sirenza Microdevices, Inc. 1,2 16,200 196,668
- --------------------------------------------------------------------------------
Stratex Networks, Inc. 1 9,200 31,188
- --------------------------------------------------------------------------------
Sycamore Networks, Inc. 1 101,000 410,060
- --------------------------------------------------------------------------------
Tellabs, Inc. 1 24,700 328,757
- --------------------------------------------------------------------------------
ViaSat, Inc. 1,2 16,100 413,448
-------------
10,655,631
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.6%
Advanced Digital Information Corp. 1 43,600 513,172
- --------------------------------------------------------------------------------
Brocade Communications Systems,
Inc. 1,2 276,300 1,696,482
- --------------------------------------------------------------------------------
Emulex Corp. 1 44,200 719,134
- --------------------------------------------------------------------------------
Hypercom Corp. 1 46,100 431,035
- --------------------------------------------------------------------------------
Imation Corp. 23,100 948,255
- --------------------------------------------------------------------------------
Komag, Inc. 1,2 32,900 1,519,322
- --------------------------------------------------------------------------------
LaserCard Corp. 1 3,800 49,742
- --------------------------------------------------------------------------------
Palm, Inc. 1,2 75,200 1,210,720
- --------------------------------------------------------------------------------
Seagate Technology 24,272 549,518
- --------------------------------------------------------------------------------
Western Digital Corp. 1 60,100 1,190,581
-------------
8,827,961
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--3.2%
Acacia Research Corp. 1 5,000 $ 70,300
- --------------------------------------------------------------------------------
Agilysys, Inc. 11,000 198,000
- --------------------------------------------------------------------------------
Anixter International, Inc. 2 3,800 180,348
- --------------------------------------------------------------------------------
Arrow Electronics, Inc. 1 23,000 740,600
- --------------------------------------------------------------------------------
Avnet, Inc. 1 22,000 440,440
- --------------------------------------------------------------------------------
AVX Corp. 2 24,300 383,697
- --------------------------------------------------------------------------------
Brightpoint, Inc. 2 64,670 874,985
- --------------------------------------------------------------------------------
CalAmp Corp. 1 13,200 117,348
- --------------------------------------------------------------------------------
Checkpoint Systems, Inc. 1,2 21,100 468,631
- --------------------------------------------------------------------------------
Coherent, Inc. 1 13,500 455,355
- --------------------------------------------------------------------------------
CPI International, Inc. 1 8,900 129,050
- --------------------------------------------------------------------------------
CTS Corp. 2 5,300 78,917
- --------------------------------------------------------------------------------
Daktronics, Inc. 2 3,700 106,819
- --------------------------------------------------------------------------------
Dionex Corp. 1,2 100 5,466
- --------------------------------------------------------------------------------
DTS, Inc. 1 500 9,740
- --------------------------------------------------------------------------------
Electro Scientific Industries, Inc. 1,2 18,500 332,815
- --------------------------------------------------------------------------------
Fargo Electronics, Inc. 1,2 4,400 111,716
- --------------------------------------------------------------------------------
Global Imaging Systems, Inc. 1 13,700 565,536
- --------------------------------------------------------------------------------
Insight Enterprises, Inc. 1 42,400 807,720
- --------------------------------------------------------------------------------
Itron, Inc. 1,2 12,200 722,972
- --------------------------------------------------------------------------------
Keithley Instruments, Inc. 2 1,800 22,914
- --------------------------------------------------------------------------------
Kemet Corp. 1 41,500 382,630
- --------------------------------------------------------------------------------
Littlefuse, Inc. 1 10,400 357,552
- --------------------------------------------------------------------------------
Merix Corp. 1,2 7,600 83,372
- --------------------------------------------------------------------------------
Mettler-Toledo International, Inc. 1 12,400 751,068
- --------------------------------------------------------------------------------
MTS Systems Corp. 2 17,900 707,229
- --------------------------------------------------------------------------------
Multi-Fineline Electronix, Inc. 1,2 800 26,552
- --------------------------------------------------------------------------------
Newport Corp. 1,2 28,500 459,420
- --------------------------------------------------------------------------------
Park Electrochemical Corp. 20,700 533,025
- --------------------------------------------------------------------------------
PC Connection, Inc. 1,2 3,400 19,890
- --------------------------------------------------------------------------------
Planar Systems, Inc. 1 12,200 146,888
- --------------------------------------------------------------------------------
Plexus Corp. 1 50,400 1,724,184
- --------------------------------------------------------------------------------
RadiSys Corp. 1,2 19,500 428,220
- --------------------------------------------------------------------------------
Rofin-Sinar Technologies, Inc. 1 23,800 1,367,786
- --------------------------------------------------------------------------------
Rogers Corp. 1,2 17,700 997,218
- --------------------------------------------------------------------------------
ScanSource, Inc. 1,2 13,200 387,024
- --------------------------------------------------------------------------------
Solectron Corp. 1 185,600 634,752
- --------------------------------------------------------------------------------
Staktek Holdings, Inc. 1 1,000 4,860
- --------------------------------------------------------------------------------
Tech Data Corp. 1 26,000 996,060
- --------------------------------------------------------------------------------
Technitrol, Inc. 2 800 18,520
- --------------------------------------------------------------------------------
TTM Technologies, Inc. 1 30,900 447,123
- --------------------------------------------------------------------------------
Zygo Corp. 1 23,400 383,526
-------------
17,680,268
17 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--2.4%
24/7 Real Media, Inc. 1,2 23,500 $ 206,330
- --------------------------------------------------------------------------------
Art Technology Group, Inc. 1 40,700 121,286
- --------------------------------------------------------------------------------
Chordiant Software, Inc. 1 8,400 25,452
- --------------------------------------------------------------------------------
CyberSource Corp. 1 4,100 47,970
- --------------------------------------------------------------------------------
Digital Insight Corp. 1 44,500 1,525,905
- --------------------------------------------------------------------------------
Digital River, Inc. 1,2 38,500 1,555,015
- --------------------------------------------------------------------------------
EarthLink, Inc. 1 152,800 1,323,248
- --------------------------------------------------------------------------------
eCollege.com, Inc. 1,2 6,300 133,182
- --------------------------------------------------------------------------------
InfoSpace, Inc. 1,2 26,700 605,289
- --------------------------------------------------------------------------------
Interwoven, Inc. 1 17,000 145,860
- --------------------------------------------------------------------------------
iPass, Inc. 1,2 25,000 140,000
- --------------------------------------------------------------------------------
j2 Global Communications, Inc. 1,2 33,200 1,036,504
- --------------------------------------------------------------------------------
Knot, Inc. (The) 1 6,300 131,859
- --------------------------------------------------------------------------------
LivePerson, Inc. 1 300 1,455
- --------------------------------------------------------------------------------
Move, Inc. 1 67,200 368,256
- --------------------------------------------------------------------------------
Online Resources & Communications
Corp. 1 500 5,170
- --------------------------------------------------------------------------------
Open Text Corp. 1,2 13,000 187,720
- --------------------------------------------------------------------------------
RealNetworks, Inc. 1 118,300 1,265,810
- --------------------------------------------------------------------------------
S1 Corp. 1,2 11,300 54,240
- --------------------------------------------------------------------------------
Savvis, Inc. 1 1,946 57,621
- --------------------------------------------------------------------------------
Sohu.com, Inc. 1 7,900 203,741
- --------------------------------------------------------------------------------
SonicWALL, Inc. 1 74,100 666,159
- --------------------------------------------------------------------------------
Stellent, Inc. 2,800 26,740
- --------------------------------------------------------------------------------
TheStreet.com, Inc. 3,300 42,306
- --------------------------------------------------------------------------------
Travelzoo, Inc. 1 4,900 148,666
- --------------------------------------------------------------------------------
United Online, Inc. 107,400 1,288,800
- --------------------------------------------------------------------------------
Vignette Corp. 1,2 16,000 233,280
- --------------------------------------------------------------------------------
webMethods, Inc. 1 62,900 620,823
- --------------------------------------------------------------------------------
Websense, Inc. 1,2 39,700 815,438
-------------
12,984,125
- --------------------------------------------------------------------------------
IT SERVICES--2.1%
Acxiom Corp. 13,300 332,500
- --------------------------------------------------------------------------------
BISYS Group, Inc. (The) 1 46,600 638,420
- --------------------------------------------------------------------------------
CACI International, Inc., Cl. A 1 4,600 268,318
- --------------------------------------------------------------------------------
Ceridian Corp. 1 30,500 745,420
- --------------------------------------------------------------------------------
CheckFree Corp. 1 12,700 629,412
- --------------------------------------------------------------------------------
CIBER, Inc. 1,2 10,200 67,218
- --------------------------------------------------------------------------------
Convergys Corp. 1 41,800 815,100
- --------------------------------------------------------------------------------
Covansys Corp. 1,2 7,400 93,018
- --------------------------------------------------------------------------------
CSG Systems International, Inc. 1 63,400 1,568,516
- --------------------------------------------------------------------------------
DST Systems, Inc. 1 300 17,850
- --------------------------------------------------------------------------------
Forrester Research, Inc. 1,2 16,400 458,872
- --------------------------------------------------------------------------------
Gartner, Inc., Cl. A 1,2 27,200 386,240
- --------------------------------------------------------------------------------
Global Payments, Inc. 12,400 602,020
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES Continued
infoUSA, Inc. 25,100 $ 258,781
- --------------------------------------------------------------------------------
Integral Systems, Inc. 1,800 48,294
- --------------------------------------------------------------------------------
Keane, Inc. 1 8,800 110,000
- --------------------------------------------------------------------------------
Lightbridge, Inc. 1 12,700 164,465
- --------------------------------------------------------------------------------
ManTech International Corp. 1 600 18,516
- --------------------------------------------------------------------------------
Maximus, Inc. 15,600 361,140
- --------------------------------------------------------------------------------
MoneyGram International, Inc. 21,000 712,950
- --------------------------------------------------------------------------------
MPS Group, Inc. 1 112,000 1,686,720
- --------------------------------------------------------------------------------
NCI, Inc., Cl. A 1 13,100 171,610
- --------------------------------------------------------------------------------
Perot Systems Corp., Cl. A 1,2 28,600 414,128
- --------------------------------------------------------------------------------
Sabre Holdings Corp. 6,600 145,200
- --------------------------------------------------------------------------------
Startek, Inc. 2 14,600 218,270
- --------------------------------------------------------------------------------
Sykes Enterprises, Inc. 1 36,200 584,992
- --------------------------------------------------------------------------------
TNS, Inc. 1 4,700 97,243
- --------------------------------------------------------------------------------
Tyler Technologies, Inc. 1,2 14,400 161,280
-------------
11,776,493
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.3%
ADE Corp. 1 18,300 594,567
- --------------------------------------------------------------------------------
Advanced Energy Industries, Inc. 1,2 34,500 456,780
- --------------------------------------------------------------------------------
Agere Systems, Inc. 1 36,600 538,020
- --------------------------------------------------------------------------------
Amkor Technology, Inc. 1,2 67,000 633,820
- --------------------------------------------------------------------------------
ANADIGICS, Inc. 1,2 27,100 182,112
- --------------------------------------------------------------------------------
Asyst Technologies, Inc. 1 45,100 339,603
- --------------------------------------------------------------------------------
Atmel Corp. 1 108,700 603,285
- --------------------------------------------------------------------------------
Cirrus Logic, Inc. 1,2 69,600 566,544
- --------------------------------------------------------------------------------
Cohu, Inc. 300 5,265
- --------------------------------------------------------------------------------
Conexant Systems, Inc. 1,2 42,200 105,500
- --------------------------------------------------------------------------------
Cymer, Inc. 1 38,400 1,784,064
- --------------------------------------------------------------------------------
Diodes, Inc. 1,2 2,524 104,595
- --------------------------------------------------------------------------------
Exar Corp. 1,2 4,200 55,734
- --------------------------------------------------------------------------------
FormFactor, Inc. 1,2 11,800 526,634
- --------------------------------------------------------------------------------
Intersil Corp., Cl. A 28,400 660,300
- --------------------------------------------------------------------------------
Intevac, Inc. 1 17,100 370,728
- --------------------------------------------------------------------------------
IXYS Corp. 1 2,600 24,960
- --------------------------------------------------------------------------------
Kopin Corp. 1,2 16,100 58,121
- --------------------------------------------------------------------------------
Kulicke & Soffa Industries, Inc. 1,2 33,000 244,530
- --------------------------------------------------------------------------------
Lam Research Corp. 1 15,400 717,948
- --------------------------------------------------------------------------------
Lattice Semiconductor Corp. 1 8,900 55,002
- --------------------------------------------------------------------------------
LSI Logic Corp. 1 70,700 632,765
- --------------------------------------------------------------------------------
LTX Corp. 1 65,600 459,856
- --------------------------------------------------------------------------------
Mattson Technology, Inc. 1 1,700 16,609
- --------------------------------------------------------------------------------
Micrel, Inc. 1,2 89,500 895,895
- --------------------------------------------------------------------------------
Microtune, Inc. 1 8,500 53,210
- --------------------------------------------------------------------------------
MKS Instruments, Inc. 1 26,800 539,216
- --------------------------------------------------------------------------------
Monolithic Power Systems, Inc. 1 8,700 102,921
18 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued
Netlogic Microsystems, Inc. 1,2 3,800 $ 122,550
- --------------------------------------------------------------------------------
NVIDIA Corp. 1 26,800 570,572
- --------------------------------------------------------------------------------
OmniVision Technologies, Inc. 1,2 56,800 1,199,616
- --------------------------------------------------------------------------------
ON Semiconductor Corp. 1,2 167,800 986,664
- --------------------------------------------------------------------------------
PDF Solutions, Inc. 1,2 8,300 103,003
- --------------------------------------------------------------------------------
Photronics, Inc. 1,2 7,900 116,920
- --------------------------------------------------------------------------------
Silicon Image, Inc. 1 19,000 204,820
- --------------------------------------------------------------------------------
Supertex, Inc. 1,2 8,900 355,466
- --------------------------------------------------------------------------------
Transmeta Corp. 1,2 49,400 80,028
- --------------------------------------------------------------------------------
Trident Microsystems, Inc. 1,2 25,400 482,092
- --------------------------------------------------------------------------------
TriQuint Semiconductor, Inc. 1,2 120,600 537,876
- --------------------------------------------------------------------------------
Ultratech, Inc. 1,2 5,700 89,718
- --------------------------------------------------------------------------------
Veeco Instruments, Inc. 1,2 31,700 755,728
- --------------------------------------------------------------------------------
Zoran Corp. 1 62,000 1,509,080
-------------
18,442,717
- --------------------------------------------------------------------------------
SOFTWARE--4.0%
Actuate Corp. 1 40,200 162,408
- --------------------------------------------------------------------------------
Advent Software, Inc. 1,2 27,500 991,925
- --------------------------------------------------------------------------------
Altiris, Inc. 1,2 12,100 218,284
- --------------------------------------------------------------------------------
Ansoft Corp. 1,2 24,600 503,808
- --------------------------------------------------------------------------------
Ansys, Inc. 1,2 1,398 66,852
- --------------------------------------------------------------------------------
Aspen Technology, Inc. 1,2 59,400 779,328
- --------------------------------------------------------------------------------
BEA Systems, Inc. 1 63,000 824,670
- --------------------------------------------------------------------------------
Blackbaud, Inc. 53,989 1,225,550
- --------------------------------------------------------------------------------
BMC Software, Inc. 1 34,600 826,940
- --------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 33,000 565,950
- --------------------------------------------------------------------------------
Catapult Communications Corp. 1,2 3,000 32,700
- --------------------------------------------------------------------------------
Compuware Corp. 1 7,300 48,910
- --------------------------------------------------------------------------------
ePlus, inc. 1 1,000 11,330
- --------------------------------------------------------------------------------
FactSet Research Systems, Inc. 4,800 227,040
- --------------------------------------------------------------------------------
Fair Isaac Corp. 17,900 649,949
- --------------------------------------------------------------------------------
FileNet Corp. 1 12,600 339,318
- --------------------------------------------------------------------------------
Hyperion Solutions Corp. 1 2,300 63,480
- --------------------------------------------------------------------------------
Informatica Corp. 1,2 75,100 988,316
- --------------------------------------------------------------------------------
Intergraph Corp. 1 34,400 1,083,256
- --------------------------------------------------------------------------------
Internet Security Systems, Inc. 1,2 33,700 635,245
- --------------------------------------------------------------------------------
InterVoice-Brite, Inc. 1,2 7,400 52,688
- --------------------------------------------------------------------------------
JDA Software Group, Inc. 1 19,700 276,391
- --------------------------------------------------------------------------------
Lawson Software, Inc. 1 166,500 1,115,550
- --------------------------------------------------------------------------------
Macrovision Corp. 1 1,600 34,432
- --------------------------------------------------------------------------------
Magma Design Automation, Inc. 1,2 5,300 38,955
- --------------------------------------------------------------------------------
Manhattan Associates, Inc. 1 6,000 121,740
- --------------------------------------------------------------------------------
MapInfo Corp. 1,2 8,300 108,315
- --------------------------------------------------------------------------------
McAfee, Inc. 1 10,000 242,700
- --------------------------------------------------------------------------------
Mentor Graphics Corp. 1,2 25,400 329,692
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
MICROS Systems, Inc. 1 23,800 $ 1,039,584
- --------------------------------------------------------------------------------
MicroStrategy, Inc., Cl. A 1 16,700 1,628,584
- --------------------------------------------------------------------------------
MRO Software, Inc. 1,2 22,700 455,589
- --------------------------------------------------------------------------------
MSC.Software Corp. 1 12,200 218,380
- --------------------------------------------------------------------------------
Net 1 UEPS Technologies, Inc. 1 6,600 180,510
- --------------------------------------------------------------------------------
Open Solutions, Inc. 1,2 3,200 85,152
- --------------------------------------------------------------------------------
Parametric Technology Corp. 1 15,000 190,650
- --------------------------------------------------------------------------------
Radiant Systems, Inc. 1 5,700 60,249
- --------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 26,200 803,554
- --------------------------------------------------------------------------------
SPSS, Inc. 1 16,700 536,738
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 41,800 784,586
- --------------------------------------------------------------------------------
TIBCO Software, Inc. 1 164,900 1,162,545
- --------------------------------------------------------------------------------
Transaction Systems Architects,
Inc., Cl. A 1 45,500 1,896,895
- --------------------------------------------------------------------------------
Ultimate Software Group, Inc. (The) 1,2 12,900 247,164
- --------------------------------------------------------------------------------
VA Software Corp. 1 43,200 167,616
- --------------------------------------------------------------------------------
Verint Systems, Inc. 1 800 23,352
-------------
22,046,870
- --------------------------------------------------------------------------------
MATERIALS--8.0%
- --------------------------------------------------------------------------------
CHEMICALS--2.3%
Agrium, Inc. 11,900 276,318
- --------------------------------------------------------------------------------
Airgas, Inc. 9,600 357,600
- --------------------------------------------------------------------------------
Arch Chemicals, Inc. 2 11,500 414,575
- --------------------------------------------------------------------------------
CF Industries Holdings, Inc. 600 8,556
- --------------------------------------------------------------------------------
Cytec Industries, Inc. 4,600 246,836
- --------------------------------------------------------------------------------
FMC Corp. 7,200 463,608
- --------------------------------------------------------------------------------
Fuller (H.B.) Co. 34,000 1,481,380
- --------------------------------------------------------------------------------
Georgia Gulf Corp. 2 19,700 492,894
- --------------------------------------------------------------------------------
Hercules, Inc. 1,2 60,000 915,600
- --------------------------------------------------------------------------------
MacDermid, Inc. 2 16,400 472,320
- --------------------------------------------------------------------------------
NewMarket Corp. 2 21,800 1,069,508
- --------------------------------------------------------------------------------
Olin Corp. 17,100 306,603
- --------------------------------------------------------------------------------
OM Group, Inc. 1 23,900 737,315
- --------------------------------------------------------------------------------
Pioneer Cos., Inc. 1 14,300 390,104
- --------------------------------------------------------------------------------
PolyOne Corp. 1 144,400 1,267,832
- --------------------------------------------------------------------------------
Schulman (A.), Inc. 2 23,200 531,048
- --------------------------------------------------------------------------------
Sensient Technologies Corp. 18,800 393,108
- --------------------------------------------------------------------------------
Spartech Corp. 38,100 861,060
- --------------------------------------------------------------------------------
Stepan Co. 2 3,300 104,214
- --------------------------------------------------------------------------------
Tronox, Inc., Cl. A 20,600 267,388
- --------------------------------------------------------------------------------
Valspar Corp. (The) 23,900 631,199
- --------------------------------------------------------------------------------
W.R. Grace & Co. 1,2 79,900 934,830
- --------------------------------------------------------------------------------
Westlake Chemical Corp. 4,700 140,060
-------------
12,763,956
19 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.4%
Eagle Materials, Inc. 17,800 $ 845,500
- --------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 4,300 391,945
- --------------------------------------------------------------------------------
Texas Industries, Inc. 2 13,100 695,610
- --------------------------------------------------------------------------------
U.S. Concrete, Inc. 1,2 17,900 197,795
-------------
2,130,850
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.9%
AEP Industries, Inc. 1 2,500 83,550
- --------------------------------------------------------------------------------
AptarGroup, Inc. 3,100 153,791
- --------------------------------------------------------------------------------
Bemis Co., Inc. 3,600 110,232
- --------------------------------------------------------------------------------
Caraustar Industries, Inc. 1 5,800 52,200
- --------------------------------------------------------------------------------
Graphic Packaging Corp. 1 3,700 14,023
- --------------------------------------------------------------------------------
Greif, Inc., Cl. A 2 9,700 727,112
- --------------------------------------------------------------------------------
Myers Industries, Inc. 2 27,100 465,849
- --------------------------------------------------------------------------------
Packaging Corp. of America 32,800 722,256
- --------------------------------------------------------------------------------
Pactiv Corp. 1 30,300 749,925
- --------------------------------------------------------------------------------
Rock-Tenn Co., Cl. A 2 11,600 185,020
- --------------------------------------------------------------------------------
Silgan Holdings, Inc. 31,300 1,158,413
- --------------------------------------------------------------------------------
Sonoco Products Co. 1,400 44,310
- --------------------------------------------------------------------------------
Temple-Inland, Inc. 15,500 664,485
-------------
5,131,166
- --------------------------------------------------------------------------------
METALS & MINING--4.1%
A. M. Castle & Co. 2 12,400 399,900
- --------------------------------------------------------------------------------
AK Steel Holding Corp. 1,2 122,700 1,696,941
- --------------------------------------------------------------------------------
Aleris International, Inc. 1 20,900 958,265
- --------------------------------------------------------------------------------
AMCOL International Corp. 2 11,000 289,850
- --------------------------------------------------------------------------------
Amerigo Resources Ltd. 66,000 135,394
- --------------------------------------------------------------------------------
Brush Engineered Materials, Inc. 1,2 12,900 268,965
- --------------------------------------------------------------------------------
Carpenter Technology Corp. 14,700 1,697,850
- --------------------------------------------------------------------------------
Century Aluminum Co. 1,2 29,400 1,049,286
- --------------------------------------------------------------------------------
Chaparral Steel Co. 1 23,800 1,714,070
- --------------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 2 11,400 903,906
- --------------------------------------------------------------------------------
Commercial Metals Co. 35,800 920,060
- --------------------------------------------------------------------------------
Compass Minerals International, Inc. 4,700 117,265
- --------------------------------------------------------------------------------
Dynatec Corp. 1 73,900 89,371
- --------------------------------------------------------------------------------
FNX Mining Co., Inc. 1 3,100 29,437
- --------------------------------------------------------------------------------
Gibraltar Industries, Inc. 15,200 440,800
- --------------------------------------------------------------------------------
Inmet Mining Corp. 8,800 328,729
- --------------------------------------------------------------------------------
LionOre Mining International Ltd. 1 24,300 131,916
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 1,5 900 28,396
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 1,5 3,200 101,376
- --------------------------------------------------------------------------------
Metal Management, Inc. 30,400 930,848
- --------------------------------------------------------------------------------
Olympic Steel, Inc. 2 8,700 307,893
- --------------------------------------------------------------------------------
Quanex Corp. 2 40,423 1,741,019
- --------------------------------------------------------------------------------
Reliance Steel & Aluminum Co. 23,329 1,935,141
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING Continued
RTI International Metals, Inc. 1,2 5,000 $ 279,200
- --------------------------------------------------------------------------------
Ryerson, Inc. 28,400 766,800
- --------------------------------------------------------------------------------
Schnitzer Steel Industries, Inc. 2 26,700 947,316
- --------------------------------------------------------------------------------
Steel Dynamics, Inc. 34,800 2,287,752
- --------------------------------------------------------------------------------
Steel Technologies, Inc. 1,900 36,936
- --------------------------------------------------------------------------------
United States Steel Corp. 4,700 329,564
- --------------------------------------------------------------------------------
Wheeling-Pittsburgh Corp. 1,2 6,100 121,329
- --------------------------------------------------------------------------------
Worthington Industries, Inc. 2 77,000 1,613,150
-------------
22,598,725
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Buckeye Technologies, Inc. 1,2 10,400 79,456
- --------------------------------------------------------------------------------
Deltic Timber Corp. 2 4,100 231,117
- --------------------------------------------------------------------------------
Glatfelter 26,000 412,620
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 35,000 766,500
- --------------------------------------------------------------------------------
MeadWestvaco Corp. 5,700 159,201
- --------------------------------------------------------------------------------
Neenah Paper, Inc. 1,100 33,495
-------------
1,682,389
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.9%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.6%
Alaska Communications Systems
Group, Inc. 2 28,300 357,995
- --------------------------------------------------------------------------------
CenturyTel, Inc. 21,900 813,585
- --------------------------------------------------------------------------------
Cincinnati Bell, Inc. 1 92,600 379,660
- --------------------------------------------------------------------------------
Citizens Communications Co. 62,600 816,930
- --------------------------------------------------------------------------------
Commonwealth Telephone
Enterprises, Inc. 500 16,580
- --------------------------------------------------------------------------------
Consolidated Communications
Holdings, Inc. 3,000 49,890
- --------------------------------------------------------------------------------
CT Communications, Inc. 2,400 54,888
- --------------------------------------------------------------------------------
FairPoint Communications, Inc. 2 16,100 231,840
- --------------------------------------------------------------------------------
General Communication, Inc., Cl. A 1,2 9,800 120,736
- --------------------------------------------------------------------------------
Golden Telecom, Inc. 1,100 27,885
- --------------------------------------------------------------------------------
North Pittsburgh Systems, Inc. 2 7,600 209,456
- --------------------------------------------------------------------------------
Vonage Holdings Corp. 1,2 31,200 268,008
-------------
3,347,453
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
@Road, Inc. 1 14,200 78,384
- --------------------------------------------------------------------------------
Centennial Communications Corp. 2 4,500 23,400
- --------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A 1,2 34,300 265,139
- --------------------------------------------------------------------------------
Leap Wireless International, Inc. 1 11,200 531,440
- --------------------------------------------------------------------------------
UbiquiTel, Inc. 1,2 76,700 793,078
-------------
1,691,441
20 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
UTILITIES--2.0%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.5%
ALLETE, Inc. 2 3,000 $ 142,050
- --------------------------------------------------------------------------------
Cleco Corp. 2 38,800 902,100
- --------------------------------------------------------------------------------
El Paso Electric Co. 1,2 2,400 48,384
- --------------------------------------------------------------------------------
Green Mountain Power Corp. 100 3,399
- --------------------------------------------------------------------------------
IDACORP, Inc. 2 20,400 699,516
- --------------------------------------------------------------------------------
Pepco Holdings, Inc. 20,900 492,822
- --------------------------------------------------------------------------------
UIL Holdings Corp. 2 7,600 427,804
-------------
2,716,075
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.0%
Canadian Hydro Developers, Inc. 1 14,000 64,965
- --------------------------------------------------------------------------------
GAS UTILITIES--0.9%
Atmos Energy Corp. 19,100 533,081
- --------------------------------------------------------------------------------
Cascade Natural Gas Corp. 700 14,763
- --------------------------------------------------------------------------------
Laclede Group, Inc. (The) 2 10,000 343,600
- --------------------------------------------------------------------------------
New Jersey Resources Corp. 2 15,400 720,412
- --------------------------------------------------------------------------------
Nicor, Inc. 2 26,800 1,112,200
- --------------------------------------------------------------------------------
Northwest Natural Gas Co. 2 1,200 44,436
- --------------------------------------------------------------------------------
ONEOK, Inc. 23,900 813,556
- --------------------------------------------------------------------------------
Peoples Energy Corp. 2 18,200 653,562
- --------------------------------------------------------------------------------
Southwest Gas Corp. 2 4,000 125,360
- --------------------------------------------------------------------------------
UGI Corp. 27,000 664,740
-------------
5,025,710
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.6%
Alliant Energy Corp. 19,500 668,850
- --------------------------------------------------------------------------------
Avista Corp. 2 48,200 1,100,406
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc. 53,500 668,750
- --------------------------------------------------------------------------------
CH Energy Group, Inc. 2 9,600 460,800
- --------------------------------------------------------------------------------
Energy East Corp. 300 7,179
- --------------------------------------------------------------------------------
OGE Energy Corp. 2 16,000 560,480
-------------
3,466,465
-------------
Total Common Stocks (Cost $477,515,697) 536,317,384
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Simon Property Group, Inc., 6% Cv.,
Non-Vtg. (Cost $3,213) 60 4,110
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.1%
- --------------------------------------------------------------------------------
Undivided interest of 2.44% in joint repurchase agreement
(Principal Amount/Value $250,160,000, with a maturity
value of $250,253,185) with DB Alex Brown LLC, 4.47%,
dated 6/30/06, to be repurchased at $6,097,270 on
7/3/06, collateralized by U.S. Treasury Bonds,
3.625%, 5/15/13 with a value of
$255,439,773 (Cost $6,095,000) $ 6,095,000 $ 6,095,000
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments Purchased with
Cash Collateral from Securities Loaned)
(Cost $483,613,910) 542,416,494
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--23.1%
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--3.2%
Citigroup Mortgage Loan Trust, Inc.,
Series 2006-HE1, Cl. A1, 5.38%,
7/25/06 6 3,700,340 3,700,340
- --------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates,
Series 2005-17, Cl. 4AV1, 5.43%,
7/25/06 6 3,117,664 3,117,664
- --------------------------------------------------------------------------------
Countrywide Asset-Backed Certificates,
Series 2006-2, Cl. 2A1, 5.39%,
7/25/06 6 2,706,824 2,706,824
- --------------------------------------------------------------------------------
GSAA Home Equity Trust,
Series 2005-15, Cl. 2A1, 5.41%,
7/25/06 6 1,624,252 1,624,252
- --------------------------------------------------------------------------------
Specialty Underwriting & Residential
Finance Trust, Series 2006 BC1,
Cl. A2A, 5.40%, 7/25/06 6 2,642,123 2,642,123
- --------------------------------------------------------------------------------
Structured Asset Investment Loan Trust,
Series 2005-11, Cl. A4, 5.41%,
7/25/06 6 1,522,934 1,522,934
- --------------------------------------------------------------------------------
Whitehawk CDO Funding Corp., 5.38%,
9/15/06 6 2,250,000 2,250,000
-------------
17,564,137
- --------------------------------------------------------------------------------
BANK FLOATING RATE NOTE--0.7%
Bank of America, 5.32%, 7/3/06 6 3,999,936 3,999,936
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--8.7%
Undivided interest of 0.67% in joint repurchase agreement
(Principal Amount/Value $4,500,000,000, with a maturity
value of $4,502,006,250) with Nomura Securities, 5.35%,
dated 6/30/06, to be repurchased at $30,013,375 on
7/3/06, collateralized by U.S. Agency Mortgages,
0.00%--8.50%, 3/1/07--3/1/43, with
a value of $4,590,000,000 6 30,000,000 30,000,000
21 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 1.78% in joint repurchase
agreement (Principal Amount/Value $1,000,000,000,
with a maturity value of $1,000,444,375)
with Bank of America NA, 5.3325%, dated
6/30/06, to be repurchased at $17,845,638
on 7/3/06, collateralized by U.S. Agency
Mortgages, 5%, 6/1/35, with a
value of $1,020,000,000 6 $17,837,711 $ 17,837,711
--------------
47,837,711
- --------------------------------------------------------------------------------
MASTER FLOATING NOTE--0.5%
CDC Financial Products, Inc., 5.41%,
7/3/06 6 3,000,000 3,000,000
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--7.7%
American Express Credit Corp.,
5.21%, 7/17/06 6 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Bear Stearns, 5.37%, 7/3/06 6 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Beta Finance, Inc., 5.37%, 7/3/06 6 2,999,242 2,999,242
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/3/06 6 3,000,000 3,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/3/06 6 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Citigroup Funding, Inc., 5.36%, 7/3/06 6 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Dorada Finance, Inc., 5.37%, 7/3/06 6 3,500,000 3,500,000
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc., 5.47%,
7/3/06 6 3,000,000 3,000,000
- --------------------------------------------------------------------------------
HSBC Finance Corp., 5.13%, 7/6/06 6 2,000,000 2,000,000
- --------------------------------------------------------------------------------
K2 (USA) LLC, 5.39%, 7/3/06 6 2,998,683 2,998,683
- --------------------------------------------------------------------------------
LINKS Finance LLC, 5.37%, 7/3/06 6 3,000,037 3,000,037
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.36%,
7/31/06 6 2,000,000 2,000,000
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.37%,
7/3/06 6 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Sigma Finance, Inc., 5.37%, 7/3/06 6 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Tango Finance Corp., 5.38%, 7/3/06 6 3,498,775 3,498,775
--------------
42,496,737
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT--2.3%
Calyon NY, 5.32%, 7/3/06 6 $ 4,999,932 $ 4,999,932
- --------------------------------------------------------------------------------
Natexis Banques Populaires NY, 5.37%,
7/3/06 6 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Natexis Banques Populaires NY, 5.39%,
7/3/06 6 1,999,660 1,999,660
- --------------------------------------------------------------------------------
Nordea Bank New York, 5.32%,
7/3/06 6 3,699,652 3,699,652
--------------
12,699,244
--------------
Total Investments Purchased with Cash
Collateral from Securities Loaned
(Cost $127,597,765) 127,597,765
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $611,211,675) 121.2% 670,014,259
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (21.2) (117,272,720)
------------------------------
NET ASSETS 100.0% $ 552,741,539
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security. See Note 5 of accompanying Notes.
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 $297,049 or 0.05% of the Fund's net assets
as of June 30, 2006.
4. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2006 was $147,470, which represents 0.03%
of the Fund's net assets, all of which is considered restricted. See Note 4 of
accompanying Notes.
5. The Fund holds securities which have been issued by the same entity and that
trade on separate exchanges.
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 5 of accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value (cost $611,211,675)--see accompanying statement of investments $670,014,259
- --------------------------------------------------------------------------------------------------------------
Cash 3,983,609
- --------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $7,263) 7,250
- --------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 9,754,205
Investments sold 1,923,967
Interest and dividends 438,996
Other 7,725
------------
Total assets 686,130,011
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 127,598,358
- --------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,373,802
Distribution and service plan fees 280,509
Shares of beneficial interest redeemed 99,465
Shareholder communications 15,246
Trustees' compensation 5,623
Transfer and shareholder servicing agent fees 1,987
Other 13,482
------------
Total liabilities 133,388,472
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $552,741,539
============
- --------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 30,923
- --------------------------------------------------------------------------------------------------------------
Additional paid-in capital 476,490,854
- --------------------------------------------------------------------------------------------------------------
Accumulated net investment income 285,866
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 17,131,294
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 58,802,602
------------
NET ASSETS $552,741,539
============
- --------------------------------------------------------------------------------------------------------------
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 $61,706,293 and 3,429,556 shares of beneficial interest outstanding) $ 17.99
- --------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $491,035,246 and 27,493,846 shares of beneficial interest outstanding) $ 17.86
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, 2006
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $5,046) $ 2,124,201
- --------------------------------------------------------------------------------------
Interest 233,920
- --------------------------------------------------------------------------------------
Portfolio lending fees 228,950
-----------
Total investment income 2,587,071
- --------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------
Management fees 1,677,437
- --------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 506,949
- --------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,033
Service shares 5,227
- --------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 3,766
Service shares 28,326
- --------------------------------------------------------------------------------------
Trustees' compensation 3,268
- --------------------------------------------------------------------------------------
Custodian fees and expenses 951
- --------------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------------
Other 26,368
-----------
Total expenses 2,258,075
- --------------------------------------------------------------------------------------
NET INVESTMENT INCOME 328,996
- --------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- --------------------------------------------------------------------------------------
Net realized gain on:
Investments 17,412,484
Foreign currency transactions 42,052
-----------
Net realized gain 17,454,536
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 9,360,728
Translation of assets and liabilities denominated in foreign currencies 124,223
-----------
Net change in unrealized appreciation 9,484,951
- --------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $27,268,483
===========
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, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net investment income $ 328,996 $ 128,062
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 17,454,536 13,592,611
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 9,484,951 14,125,091
------------------------------
Net increase in net assets resulting from operations 27,268,483 27,845,764
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (79,081) --
Service shares (90,296) --
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (1,560,912) (1,015,976)
Service shares (11,399,106) (4,826,305)
- ----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Non-Service shares 15,043,608 3,420,313
Service shares 163,870,931 122,016,957
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Total increase 193,053,627 147,440,753
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 359,687,912 212,247,159
------------------------------
End of period (including accumulated net investment income of $285,866
and $126,247, respectively) $552,741,539 $359,687,912
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.18 $ 16.05 $ 13.44 $ 9.31 $ 11.05 $ 11.09
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 1 .04 1 .01 1 (.03) (.01) -- 2
Net realized and unrealized gain (loss) 1.35 1.51 2.60 4.16 (1.73) (.04)
---------------------------------------------------------------------------------
Total from investment operations 1.38 1.55 2.61 4.13 (1.74) (.04)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.03) -- -- -- -- --
Distributions from net realized gain (.54) (.42) -- -- -- --
---------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.57) (.42) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.99 $ 17.18 $ 16.05 $ 13.44 $ 9.31 $ 11.05
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.03% 9.92% 19.42% 44.36% (15.75)% (0.36)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $61,706 $44,820 $38,636 $27,551 $19,577 $18,514
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $55,332 $39,708 $30,871 $20,271 $20,505 $15,307
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.34% 0.23% 0.06% (0.30)% (0.09)% (0.01)%
Total expenses 0.77% 0.81% 5 0.83% 5 1.01% 5 1.00% 5 1.05% 5
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 110% 147% 130% 121% 213%
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, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.06 $ 15.97 $ 13.40 $ 9.29 $ 11.05 $ 10.61
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 2 -- 2,3 (.02) 2 (.02) (.01) -- 3
Net realized and unrealized gain (loss) 1.33 1.51 2.59 4.13 (1.75) .44
-----------------------------------------------------------------------------------
Total from investment operations 1.34 1.51 2.57 4.11 (1.76) .44
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income -- 3 -- -- -- -- --
Distributions from net realized gain (.54) (.42) -- -- -- --
-----------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (.54) (.42) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.86 $ 17.06 $ 15.97 $ 13.40 $ 9.29 $ 11.05
===================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4 7.89% 9.71% 19.18% 44.24% (15.93)% 4.15%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $491,036 $314,868 $173,612 $ 62,660 $ 6,111 $ 108
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $409,964 $221,324 $112,279 $ 25,018 $ 2,228 $ 26
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 0.12% 0.02% (0.14)% (0.43)% (0.26)% (0.34)%
Total expenses 1.01% 1.04% 1.06% 1.23% 1.21% 1.19%
Expenses after payments and waivers
and reduction
to custodian expenses 1.01% 1.04% 1.06% 1.23% 1.19% 1.19%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 48% 110% 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.
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, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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.
28 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2006, the Fund had no estimated capital loss carryforward
available for federal income tax purposes. During the six months ended June 30,
2006, it is estimated that the Fund will utilize $2,735 of capital loss
carryforward to offset realized capital gains. During the year ended December
31, 2005, the Fund did not utilize any capital loss carryforward to offset
capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax
purposes post-October losses of $2,735.
- --------------------------------------------------------------------------------
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.
29 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $1,282 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,017,074 $ 18,638,206 951,013 $ 15,158,198
Dividends and/or distributions reinvested 91,722 1,639,993 65,759 1,015,976
Redeemed (287,561) (5,234,591) (815,388) (12,753,861)
-----------------------------------------------------------------
Net increase 821,235 $ 15,043,608 201,384 $ 3,420,313
=================================================================
- -----------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 9,385,895 $170,265,186 9,011,249 $144,257,571
Dividends and/or distributions reinvested 639,766 11,362,246 313,963 4,826,305
Redeemed (989,824) (17,756,501) (1,735,515) (27,066,919)
-----------------------------------------------------------------
Net increase 9,035,837 $163,870,931 7,589,697 $122,016,957
=================================================================
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
-----------------------------------------------------------------
Investment securities $ 372,651,353 $ 220,152,815
30 | OPPENHEIMER MAIN STREET SMALL CAP 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
average annual rate as shown in the following table:
FEE SCHEDULE
----------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
----------------------------------------------
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$10,082 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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.
- --------------------------------------------------------------------------------
4. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2006, 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, 2006 APPRECIATION
- ------------------------------------------------------------------------------------------------
Mission Oil & Gas, Inc. 1/18/05 $34,507 $ 81,641 $47,134
Tusk Energy Corp. 11/15/04 38,148 65,829 27,681
--------------------------------------------
$72,655 $147,470 $74,815
============================================
31 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of June 30, 2006, the Fund had
on loan securities valued at $125,564,114, which are included in the Statement
of Assets and Liabilities as "Investments, at value" and, when applicable, as
"Investments sold." Collateral of $127,598,358 was received for the loans, all
of which was received in cash and subsequently invested in approved investments
or held as cash.
- --------------------------------------------------------------------------------
6. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
33 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
OPPENHEIMER CORE BOND FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 995.20 $3.87
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,020.93 3.92
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 993.50 5.50
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.29 5.57
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------------
Non-Service shares 0.78%
- ---------------------------------------
Service shares 1.11
- --------------------------------------------------------------------------------
5 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--11.8%
- --------------------------------------------------------------------------------
Ace Securities Corp., Home Equity
Loan Pass-Through Certificates,
Series 2002-HE7, Cl. A2B, 5.503%,
11/25/35 1 $ 960,000 $ 961,095
- --------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile
Asset-Backed Certificates, Series
2005-1A, Cl. A2, 5.327%, 4/20/08 1 640,000 640,472
- --------------------------------------------------------------------------------
Argent Securities, Inc., Home
Equity Asset-Backed Securities:
Series 2004-W8, Cl. A2,
5.803%, 5/25/34 1 3,130,000 3,148,554
Series 2006-W5, Cl. A2B,
5.423%, 5/26/36 1 1,230,000 1,230,743
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset
Trust, Automobile Asset-Backed
Securities, Series 2004-2, Cl. A3,
3.58%, 1/15/09 2,250,000 2,202,797
- --------------------------------------------------------------------------------
Centex Home Equity Co. LLC,
Home Equity Loan Asset-Backed
Certificates:
Series 2005-B, Cl. AF1,
4.05%, 3/26/35 80,062 79,785
Series 2005-C, Cl. AF1,
4.196%, 6/25/35 501,742 499,303
Series 2005-D, Cl. AF1,
5.04%, 10/25/35 1,272,617 1,262,910
Series 2005-D, Cl. AV2,
5.593%, 10/25/35 1 1,920,000 1,922,238
Series 2006-A, Cl. AV2,
5.423%, 5/16/36 1 1,540,000 1,540,930
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance
Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 310,000 291,713
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust,
Inc., CMO Asset-Backed Pass-Through
Certificates, Series 2005-WF2, Cl. AF2,
4.922%, 8/25/35 1 1,990,792 1,966,297
- --------------------------------------------------------------------------------
Consumer Credit Reference Index
Securities Program, Credit Card
Asset-Backed Certificates, Series
2002-B, Cl. FX, 10.421%, 3/22/07 2 1,520,000 1,547,081
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2002-4, Cl. A1,
5.693%, 2/25/33 1 35,747 35,801
Series 2005-7, Cl. AF1B,
4.317%, 11/25/35 1 557,952 555,333
Series 2005-16, Cl. 2AF2,
5.382%, 5/25/36 1 670,000 663,246
Series 2005-17, Cl. 1AF1,
5.523%, 5/25/36 1 1,199,686 1,201,252
Series 2005-17, Cl. 1AF2,
5.363%, 5/25/36 1 440,000 435,433
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Asset-Backed Certificates, Home
Equity Receivables:
Series 2005-FF10, Cl. A3, 5.533%,
11/25/35 1 $ 2,840,000 $ 2,843,198
Series 2006-FF5, Cl. 2A1, 5.373%,
5/15/36 1 931,995 932,559
Series 2006-FF9, Cl. 2A2, 7/7/36 1,3 630,000 630,000
Series 2006-FF10, Cl. A3, 5.413%,
7/25/36 1 1,240,000 1,240,000
- --------------------------------------------------------------------------------
Household Home Equity Loan
Trust, Home Equity Loan
Pass-Through Certificates, Series
2005-3, Cl. A1, 5.527%, 1/20/35 1 1,120,756 1,122,460
- --------------------------------------------------------------------------------
Lehman XS Trust, Home Equity
Asset-Backed Pass-Through
Certificates, Series 2005-4,
Cl. 2A1B, 5.17%,
10/25/35 1,206,365 1,197,297
- --------------------------------------------------------------------------------
Litigation Settlement Monetized
Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%,
4/25/31 4 3,185,258 3,213,257
- --------------------------------------------------------------------------------
Morgan Stanley ABS Capital I,
Home Equity Receivables, Series
2005-WMC6, Cl. A2B, 5.583%,
7/25/35 1 770,000 772,072
- --------------------------------------------------------------------------------
NC Finance Trust, CMO, Home
Equity Pass-Through Certificates,
Series 1999-I, Cl. ECFD, 1.079%,
1/25/29 4 3,370,016 707,703
- --------------------------------------------------------------------------------
Onyx Acceptance Owner Trust,
Automobile Receivable
Obligations, Series 2005-B, Cl. A2,
4.03%, 4/15/08 613,337 612,410
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2006-2, Cl. 2A2, 5.435%,
7/1/36 1 2,080,000 2,080,000
- --------------------------------------------------------------------------------
Popular ABS Mortgage
Pass-Through Trust, Home Equity
Pass-Through Certificates:
Series 2004-5, Cl. AF2, 3.735%,
11/10/34 1 620,000 615,240
Series 2005-1, Cl. AF2, 3.914%,
5/25/35 1 450,000 444,447
Series 2005-2, Cl. AF2, 4.415%,
4/25/35 1 730,000 720,501
Series 2005-6, Cl. A3, 5.68%,
1/25/36 1 690,000 680,877
6 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc., Home Equity
Asset-Backed Pass-Through
Certificates:
Series 2004-RS7, Cl. AI3,
4.45%, 7/25/28 $ 1,500,000 $ 1,486,272
Series 2006-RS4, Cl. A1,
5.163%, 7/25/36 1 840,000 840,000
- --------------------------------------------------------------------------------
Structured Asset Investment Loan
Trust, Home Equity Asset-Backed
Securities, Series 2006-2, Cl. A1,
5.383%, 4/25/36 1 1,082,143 1,082,875
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Home Equity Asset-Backed Securities:
Series 2002-AL1, Cl. B2, 3.45%,
2/25/32 2,666,265 2,281,196
Series 2003-25XS, Cl. A4, 4.51%,
8/25/33 120,629 120,077
- --------------------------------------------------------------------------------
Tobacco Settlement Authority,
Asset-Backed Securities, Series
2001-A, 6.79%, 6/1/10 1,740,000 1,779,115
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Home Equity Asset-Backed
Certificates:
Series 2004-2, Cl. AI1B,
2.94%, 9/25/18 1 270,583 269,801
Series 2006-2, Cl. A2, 5.45%, 7/7/36 1 1,230,000 1,230,000
--------------
Total Asset-Backed Securities
(Cost $49,710,573) 47,086,340
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--68.7%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--57.7%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--57.5%
Fannie Mae Whole Loan, CMO
Pass-Through Certificates, Trust
2004-W9, Cl. 2A2, 7%, 2/25/44 735,808 749,281
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
4.50%, 5/1/19 11,808,703 11,169,208
5%, 8/1/33 4,709,191 4,420,584
5%, 7/1/36 3 2,538,000 2,370,649
6%, 7/1/17-10/1/29 10,305,859 10,265,794
6.50%, 4/1/18-4/1/34 1,735,410 1,754,723
7%, 5/1/29-3/1/35 9,173,900 9,402,418
8%, 4/1/16 865,916 915,909
9%, 8/1/22-5/1/25 247,702 265,520
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Multiclass Mtg.
Participation Certificates, Series
3138, Cl. PA, 5.50%, 2/15/27 6,677,887 6,637,598
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage
Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 2195, Cl. LH, 6.50%, 10/15/29 $ 1,740,757 $ 1,754,962
Series 2326, Cl. ZP, 6.50%, 6/15/31 602,716 610,535
Series 2500, Cl. FD, 5.699%, 3/15/32 1 438,663 442,619
Series 2526, Cl. FE, 5.599%, 6/15/29 1 673,270 676,957
Series 2551, Cl. FD, 5.481%, 1/15/33 1 522,902 529,142
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
CMO Pass-Through Participation
Certificates, Series 151, Cl. F,
9%, 5/15/21 43,829 43,737
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. IO, 14.583%, 6/1/26 5 766,802 186,568
Series 183, Cl. IO, 11.406%, 4/1/27 5 1,135,683 285,863
Series 184, Cl. IO, 17.356%, 12/1/26 5 1,256,269 301,738
Series 192, Cl. IO, 16.117%, 2/1/28 5 299,439 71,084
Series 200, Cl. IO, 15.003%, 1/1/29 5 358,410 88,511
Series 206, Cl. IO, (7.643)%, 12/1/29 5 762,751 195,689
Series 2003-118, Cl. S,
11.815%, 12/25/33 5 4,098,930 396,275
Series 2130, Cl. SC, 0.276%, 3/15/29 5 816,180 45,014
Series 2796, Cl. SD, 3.291%, 7/15/26 5 1,291,906 73,825
Series 2920, Cl. S, (0.636)%, 1/15/35 5 4,903,502 163,273
Series 3000, Cl. SE, (0.768)%, 7/15/25 5 5,448,481 112,143
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Principal-Only Stripped Mtg.-Backed
Security, Series 176, Cl. PO, 4.272%,
6/1/26 6 312,406 244,533
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 3/1/19 394,365 373,741
5%, 6/1/18-3/1/34 8,002,289 7,651,065
5%, 7/1/36 3 31,102,000 29,080,370
5%, 11/1/33 7 2,228,328 2,093,768
5.50%, 1/1/33-1/1/34 25,353,483 24,467,165
5.50%, 7/1/21-7/1/36 3 40,410,000 38,959,909
6%, 5/1/29-11/1/32 5,522,167 5,462,601
6%, 7/1/21-7/1/36 3 18,825,000 18,728,416
6.50%, 3/1/11-11/1/31 9,518,091 9,620,579
6.50%, 7/1/36 3 7,277,000 7,315,655
7%, 11/1/17-7/1/35 5,609,833 5,753,608
7.50%, 1/1/08-4/1/08 8,439 8,488
7.50%, 1/1/33 4 32,200 33,423
8%, 5/1/17 11,024 11,533
8.50%, 7/1/32 84,152 90,589
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.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates:
Trust 1989-17, Cl. E, 10.40%, 4/25/19 $ 79,900 $ 85,786
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 1,730,555 1,760,178
Trust 1998-58, Cl. PC,
6.50%, 10/25/28 1,437,433 1,460,670
Trust 2001-70, Cl. LR, 6%, 9/25/30 419,105 418,960
Trust 2001-72, Cl. NH, 6%, 4/25/30 201,427 201,122
Trust 2001-74, Cl. PD, 6%, 5/25/30 83,671 83,422
Trust 2002-77, Cl. WF,
5.652%, 12/18/32 1 787,043 794,305
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 3,964,000 3,798,794
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,908,000 1,815,972
Trust 2005-100, Cl. BQ,
5.50%, 11/25/25 1,120,000 1,045,724
Trust 2006-50, Cl. KS,
4.684%, 6/25/36 1 1,349,274 1,142,260
Trust 2006-50, Cl. SK,
4.684%, 6/25/36 1 562,666 498,058
Trust 2006-57, Cl. PA,
5.50%, 8/25/27 4,486,891 4,453,816
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates, Interest-Only Stripped
Mtg.-Backed Security:
Trust 222, Cl. 2, 15.989%, 6/1/23 5 2,474,251 559,021
Trust 240, Cl. 2, 17.776%, 9/1/23 5 2,928,501 737,483
Trust 252, Cl. 2, 10.09%, 11/1/23 5 1,926,711 475,554
Trust 273, Cl. 2, 16.613%, 8/1/26 5 577,887 136,632
Trust 303, Cl. IO, (3.954)%, 11/1/29 5 331,197 88,667
Trust 319, Cl. 2, 12.37%, 2/1/32 5 524,884 139,913
Trust 321, Cl. 2, 7.306%, 4/1/32 5 5,786,003 1,546,827
Trust 329, Cl. 2, 10.71%, 1/1/33 5 2,558,968 680,906
Trust 331, Cl. 9, 8.134%, 2/1/33 5 1,382,809 342,979
Trust 334, Cl. 17, 16.815%, 2/1/33 5 946,749 240,790
Trust 344, Cl. 2, 9.523%, 12/1/33 5 4,561,750 1,210,138
Trust 2002-47, Cl. NS,
1.932%, 4/25/32 5 1,546,374 122,437
Trust 2002-51, Cl. S, 2.057%, 8/25/32 5 1,419,577 112,206
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security:
Trust 2001-65, Cl. S,
11.78%, 11/25/31 5 $ 2,402,837 $ 205,714
Trust 2001-81, Cl. S,
5.531%, 1/25/32 5 608,800 44,186
Trust 2002-52, Cl. SD,
(0.844)%, 9/25/32 5 1,700,532 123,246
Trust 2002-77, Cl. SH,
5.839%, 12/18/32 5 731,018 62,714
Trust 2002-84, Cl. SA,
12.859, 12/25/32 5 2,083,045 173,441
Trust 2003-4, Cl. S,
12.602%, 2/25/33 5 1,393,818 135,216
Trust 2003-33, Cl. SP,
14.996%, 5/25/33 5 2,139,700 220,140
Trust 2004-54, Cl. DS,
(1.633)%, 11/25/30 5 1,192,120 50,039
Trust 2005-6, Cl. SE,
0.164%, 2/25/35 5 3,357,615 118,032
Trust 2005-19, Cl. SA,
(0.572)%, 3/25/35 5 12,461,553 435,440
Trust 2005-40, Cl. SA,
(0.408)%, 5/25/35 5 2,815,609 92,735
Trust 2005-71, Cl. SA,
5.83%, 8/25/25 5 3,451,980 132,106
Trust 2006-33, CL. SP,
16.252%, 5/25/36 5 4,648,516 312,322
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Principal-Only Stripped
Mtg.-Backed Security, Trust
1993-184, Cl. M, 5.329%, 9/25/23 6 681,783 529,981
--------------
230,412,994
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.2%
Government National Mortgage
Assn.:
7%, 1/15/09-5/15/09 25,191 25,611
8.50%, 8/15/17-12/15/17 337,640 360,269
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB,
(4.709)%, 1/16/27 5 1,284,458 62,657
Series 2002-15, Cl. SM,
(7.383)%, 2/16/32 5 1,512,594 73,949
Series 2004-11, Cl. SM,
(6.58)%, 1/17/30 5 1,093,873 52,668
--------------
575,154
8 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-AGENCY--11.0%
- --------------------------------------------------------------------------------
COMMERCIAL--9.6%
Asset Securitization Corp.,
Commercial Interest-Only Stripped
Mtg.-Backed Security, Series
1997-D4, Cl. PS1, 4.194%, 4/14/29 5 $ 39,939,607 $ 955,323
- --------------------------------------------------------------------------------
Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1996-MD6,
Cl. A3, 7.694%, 11/13/29 1 1,200,000 1,226,484
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates, Series
2005-3, Cl. A2, 4.501%, 7/10/43 2,100,000 2,011,916
- --------------------------------------------------------------------------------
Banc of America Funding Corp.,
CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1,
6.50%, 7/20/32 1,897,447 1,871,134
- --------------------------------------------------------------------------------
Banc of America Mortgage
Securities, Inc., CMO Pass-Through
Certificates:
Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 1,435,409 1,429,129
Series 2005-E, Cl. 2A2,
4.977%, 6/25/35 1 256,405 255,844
- --------------------------------------------------------------------------------
Capital Lease Funding
Securitization LP, Interest-Only
Corporate-Backed Pass-Through
Certificates, Series 1997-CTL1,
7.29%, 6/22/24 5 19,766,409 745,387
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust,
Inc., CMO, Series 2006-WF1,
Cl. A2B, 5.536%, 3/1/36 460,000 456,255
- --------------------------------------------------------------------------------
Countrywide Alternative Loan
Trust, CMO, Series 2005-J3,
Cl. 3A1, 6.50%, 9/25/34 2,787,013 2,792,312
- --------------------------------------------------------------------------------
Deutsche Alt-A Securities, Inc.
Mortgage Loan Trust, CMO, Series
2006-AB2, Cl. A7, 5.961%, 5/1/36 2,923,219 2,913,535
- --------------------------------------------------------------------------------
Deutsche Alt-B Securities, Inc.
Mortgage Loan Trust, CMO, Series
2006-AB3, Cl. A7, 6.36%, 4/25/08 910,000 910,000
- --------------------------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1,
Cl. D, 7.619%, 4/29/39 1,2 404,375 404,880
- --------------------------------------------------------------------------------
GE Capital Commercial Mortgage
Corp., Commercial Mtg.
Obligations, Series 2005-C3, Cl. A2,
4.853%, 7/10/45 1,190,000 1,156,407
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg.
Pass-Through Certificates, Series
1997-C1, Cl. A3, 6.869%, 7/15/29 7 632,308 637,742
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
Greenwich Capital Commercial
Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2,
4.305%, 8/10/42 $ 1,460,000 $ 1,399,548
Series 2005-GG5, Cl. A2,
5.117%, 4/10/37 1,290,000 1,260,941
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates:
Series 2005-LDP2, Cl. A2,
4.575%, 7/15/42 510,000 489,389
Series 2005-LDP4, Cl. A2,
4.79%, 10/15/42 1,720,000 1,659,198
- --------------------------------------------------------------------------------
LB-UBS Commercial Mortgage
Trust, Commercial Mtg.
Pass-Through Certificates, Series
2005-C5, Cl. A2, 4.885%, 9/15/30 1,430,000 1,390,176
- --------------------------------------------------------------------------------
Lehman Brothers Commercial
Conduit Mortgage Trust,
Interest-Only Stripped Mtg.-Backed
Security, Series 1998-C1, Cl. IO,
6.392%, 2/18/30 5 16,297,680 360,650
- --------------------------------------------------------------------------------
Lehman Structured Securities Corp.,
CMO, Series 2002-GE1, Cl. A,
2.514%, 7/26/24 4 319,410 236,363
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO
Pass-Through Certificates:
Series 2004-6, Cl. 10A1, 6%, 7/25/34 2,200,553 2,180,693
Series 2004-9, Cl. A3, 4.70%, 8/25/34 1 2,321,760 2,299,691
- --------------------------------------------------------------------------------
Residential Accredit Loans, Inc., CMO
Asset-Backed Pass-Through
Certificates:
Series 2003-QS1, Cl. A2,
5.75%, 1/25/33 1,116,757 1,104,789
Series 2006-QS5, Cl. A2,
6%, 4/25/08 3,380,242 3,368,658
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Inc., Interest-Only
Commercial Mtg. Pass-Through
Certificates, Series 1999-C1, Cl. X,
(4.78)%, 5/18/32 5 300,687,468 794,386
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust, Commercial Mtg.
Obligations, Series 2005-C17,
Cl. A2, 4.782%, 3/15/42 2,520,000 2,443,402
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., CMO Pass-Through
Certificates, Series 2005-AR5, Cl. A1,
4.675%, 5/25/35 1 1,189,740 1,187,134
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed
Securities Trust, CMO, Series
2004-DD, Cl. 2A1, 4.513%, 1/25/35 1 382,781 381,117
--------------
38,322,483
9 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OTHER--0.3%
Salomon Brothers Mortgage
Securities VI, Inc., Interest-Only
Stripped Mtg.-Backed Security,
Series 1987-3, Cl. B,
59.422%, 10/23/17 5 $ 15,049 $ 3,305
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VI, Inc., Principal-Only
Stripped Mtg.-Backed Security,
Series 1987-3, Cl. A, 6.867%, 10/23/17 6 22,273 20,030
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., CMO
Pass-Through Certificates, Series
2005-AR8, Cl. 2AB1, 5.573%, 7/25/45 1 1,446,596 1,448,697
--------------
1,472,032
- --------------------------------------------------------------------------------
RESIDENTIAL--1.1%
Countrywide Alternative Loan
Trust, CMO, Series 2005-J1, Cl. 3A1,
6.50%, 8/25/32 3,311,898 3,304,655
- --------------------------------------------------------------------------------
Lehman XS Trust, Home Equity
Mtg. Pass-Through Certificates,
Series 2005-10, Cl. 2-A3B, 5.55%,
1/25/36 1,115,810 1,101,081
--------------
4,405,736
--------------
Total Mortgage-Backed Obligations
(Cost $280,262,921) 275,188,399
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.6%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
5.125%, 4/18/11 4,760,000 4,690,604
6.625%, 9/15/09 4,775,000 4,941,796
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts.:
6%, 5/15/11 1,815,000 1,856,061
6.625%, 9/15/09 7,8 2,260,000 2,338,171
- --------------------------------------------------------------------------------
Tennessee Valley Authority Bonds,
Series A, 6.79%, 5/23/12 2,486,000 2,644,433
- --------------------------------------------------------------------------------
U.S. Treasury Bonds,
8.875%, 8/15/17 630,000 822,298
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
4.875%, 5/15/09-5/31/11 7 4,251,000 4,215,044
5.125%, 5/15/16 7 896,000 895,230
--------------
Total U.S. Government Obligations
(Cost $23,004,144) 22,403,637
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--32.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.5%
- --------------------------------------------------------------------------------
AUTOMOBILES--2.2%
DaimlerChrysler North America
Holdings Corp., 7.30% Nts., 1/15/12 $ 1,930,000 $ 2,010,674
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.80% Sr. Unsec. Nts., 1/12/09 650,000 594,155
9.75% Sr. Unsec. Nts., 9/15/10 2,7 3,510,000 3,422,959
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.,
8% Bonds, 11/1/31 7 1,660,000 1,599,719
- --------------------------------------------------------------------------------
Hyundai Motor Manufacturing
Alabama LLC, 5.30% Sr. Unsec. Nts.,
12/19/08 2 1,115,000 1,091,882
--------------
8,719,389
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.3%
Caesars Entertainment, Inc.,
7.50% Sr. Unsec. Nts., 9/1/09 2,060,000 2,140,223
- --------------------------------------------------------------------------------
Hilton Hotels Corp.,
8.25% Sr. Unsec. Nts., 2/15/11 1,475,000 1,553,411
- --------------------------------------------------------------------------------
Hyatt Equities LLC,
6.875% Nts., 6/15/07 2 1,965,000 1,977,114
- --------------------------------------------------------------------------------
MGM Mirage, Inc.,
6% Sr. Sec. Nts., 10/1/09 1,665,000 1,627,538
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd.,
7% Sr. Unsec. Unsub. Nts., 10/15/07 545,000 552,701
- --------------------------------------------------------------------------------
Yum! Brands, Inc.,
7.70% Sr. Nts., 7/1/12 1,335,000 1,437,649
--------------
9,288,636
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--2.6%
Beazer Homes USA, Inc.,
6.875% Sr. Unsec. Nts., 7/15/15 7 1,150,000 1,052,250
- --------------------------------------------------------------------------------
Centex Corp.,
4.875% Sr. Unsec. Nts., 8/15/08 1,230,000 1,202,487
- --------------------------------------------------------------------------------
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 7 1,200,000 1,122,754
6.125% Nts., 1/15/14 7 1,035,000 985,826
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.,
6.50% Sr. Nts., 1/15/14 7 1,725,000 1,561,125
- --------------------------------------------------------------------------------
KB Home, 5.75% Sr. Unsec. Unsub.
Nts., 2/1/14 7 1,445,000 1,277,708
- --------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec.
Nts., 3/1/09 1,490,000 1,544,483
- --------------------------------------------------------------------------------
Pulte Homes, Inc.,
4.875% Nts., 7/15/09 1,670,000 1,612,078
--------------
10,358,711
10 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA--3.9%
Chancellor Media CCU,
8% Sr. Unsec. Nts., 11/1/08 $ 1,005,000 $ 1,045,451
- --------------------------------------------------------------------------------
Clear Channel Communications,
Inc., 6.25% Nts., 3/15/11 1,370,000 1,346,707
- --------------------------------------------------------------------------------
Cox Communications, Inc.,
4.625% Unsec. Nts., 1/15/10 2,375,000 2,267,213
- --------------------------------------------------------------------------------
EchoStar DBS Corp.,
5.75% Sr. Unsec. Nts., 10/1/08 875,000 857,500
- --------------------------------------------------------------------------------
Liberty Media Corp.:
5.70% Sr. Unsec. Nts., 5/15/13 7 1,200,000 1,095,758
7.875% Sr. Nts., 7/15/09 480,000 499,333
- --------------------------------------------------------------------------------
Reed Elsevier Capital, Inc.,
4.625% Nts., 6/15/12 860,000 797,701
- --------------------------------------------------------------------------------
TCI Communications, Inc.,
9.80% Sr. Unsec. Debs., 2/1/12 2,210,000 2,552,243
- --------------------------------------------------------------------------------
Time Warner Entertainment Co. LP,
8.375% Sr. Nts., 7/15/33 1,825,000 2,070,607
- --------------------------------------------------------------------------------
Tribune Co., 5.50% Nts.,
Series E, 10/6/08 1,115,000 1,098,157
- --------------------------------------------------------------------------------
Univision Communications, Inc.,
3.50% Sr. Unsec. Nts., 10/15/07 7 1,915,000 1,851,370
--------------
15,482,040
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.6%
Federated Department Stores, Inc.,
6.625% Sr. Unsec. Nts., 9/1/08 1,455,000 1,478,981
- --------------------------------------------------------------------------------
May Department Stores Co.,
7.90% Unsec. Debs., 10/15/07 785,000 801,330
--------------
2,280,311
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.9%
Gap, Inc. (The):
6.90% Nts., 9/15/07 1,315,000 1,323,432
9.393% Unsub. Nts., 12/15/08 1 466,000 501,452
- --------------------------------------------------------------------------------
Limited Brands, Inc.,
6.125% Sr. Unsec. Nts., 12/1/12 7 2,025,000 1,991,446
--------------
3,816,330
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.3%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.2%
Ahold Finance USA, Inc.,
6.25% Sr. Unsec. Unsub. Nts., 5/1/09 1,610,000 1,597,925
- --------------------------------------------------------------------------------
Albertson's, Inc.,
8% Sr. Unsec. Debs., 5/1/31 7 1,795,000 1,626,764
- --------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub.
Debs., 4/15/31 1,500,000 1,652,415
- --------------------------------------------------------------------------------
Kroger Co. (The), 5.50% Unsec.
Unsub. Nts., 2/1/13 2,065,000 1,984,971
- --------------------------------------------------------------------------------
Safeway, Inc.,
6.50% Sr. Unsec. Nts., 3/1/11 2,035,000 2,058,724
--------------
8,920,799
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.1%
Tyson Foods, Inc.,
7.25% Sr. Unsec. Nts., 10/1/06 $ 395,000 $ 396,208
- --------------------------------------------------------------------------------
ENERGY--2.5%
- --------------------------------------------------------------------------------
OIL & GAS--2.5%
Kinder Morgan Energy Partners LP,
7.30% Sr. Unsec. Nts., 8/15/33 1,140,000 1,170,624
- --------------------------------------------------------------------------------
Kinder Morgan, Inc.,
6.50% Sr. Unsec. Nts., 9/1/12 1,665,000 1,584,034
- --------------------------------------------------------------------------------
Pemex Project Funding Master
Trust, 7.875% Unsec. Unsub. Nts.,
2/1/09 2,835,000 2,948,400
- --------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman
SPV, 4.623% Sr. Nts., Cl. A1, 6/15/10 2 3,133,333 3,065,772
- --------------------------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 2 1,293,306 1,196,081
--------------
9,964,911
- --------------------------------------------------------------------------------
FINANCIALS--9.0%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--1.0%
Goldman Sachs Capital, Inc. (The),
6.345% Sub. Bonds, 2/15/34 3,135,000 2,931,777
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.,
5% Sr. Unsub. Nts., Series C, 2/3/14 1,110,000 1,039,517
--------------
3,971,294
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--2.6%
Barclays Bank plc,
6.278% Perpetual Bonds 9 2,720,000 2,374,614
- --------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual
Bonds, Series A 2,9 2,600,000 2,336,168
- --------------------------------------------------------------------------------
HSBC Finance Capital Trust IX,
5.911% Nts., 11/30/35 1 2,100,000 2,007,602
- --------------------------------------------------------------------------------
National City Bank,
6.20% Sub. Nts., 12/15/11 178,000 181,842
- --------------------------------------------------------------------------------
Popular North America, Inc.,
4.70% Nts., 6/30/09 2,485,000 2,403,475
- --------------------------------------------------------------------------------
Wachovia Bank NA,
5.60% Sub. Nts., 3/15/16 1,085,000 1,053,948
--------------
10,357,649
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.2%
CIT Group, Inc., 7.75% Sr. Unsec.
Unsub. Nts., 4/2/12 1,885,000 2,045,777
- --------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub.
Nts., 6/15/32 7 890,000 919,152
- --------------------------------------------------------------------------------
JPMorgan Chase & Co., 5.15% Sub.
Nts., 10/1/15 2,195,000 2,052,496
--------------
5,017,425
11 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE--2.6%
Marsh & McLennan Cos., Inc.:
5.875% Sr. Unsec. Bonds, 8/1/33 $ 1,470,000 $ 1,280,715
7.125% Sr. Unsec. Nts., 6/15/09 1,050,000 1,081,181
- --------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub.
Nts., 12/1/34 1,006,000 892,871
- --------------------------------------------------------------------------------
MetLife, Inc., 5.70% Sr. Unsec. Nts.,
6/15/35 1,170,000 1,047,168
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc.:
5.90% Nts., 7/1/12 1,020,000 1,020,193
6.25% Sr. Unsec. Nts., 11/15/11 105,000 106,795
- --------------------------------------------------------------------------------
Prudential Holdings LLC,
8.695% Bonds, Series C, 12/18/23 2 2,055,000 2,445,658
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 2,035,000 2,445,282
--------------
10,319,863
- --------------------------------------------------------------------------------
REAL ESTATE--1.6%
EOP Operating LP,
8.10% Unsec. Nts., 8/1/10 1,925,000 2,071,804
- --------------------------------------------------------------------------------
iStar Financial, Inc.,
5.15% Sr. Unsec. Nts., 3/1/12 2,215,000 2,108,545
- --------------------------------------------------------------------------------
Vornado Realty LP, 5.625%
Sr. Unsec. Unsub. Nts., 6/15/07 2,225,000 2,216,073
--------------
6,396,422
- --------------------------------------------------------------------------------
HEALTH CARE--0.4%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.4%
HCA, Inc., 5.50% Sr. Unsec. Nts., 12/1/09 1,680,000 1,627,344
- --------------------------------------------------------------------------------
INDUSTRIALS--0.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.5%
BAE Systems Holdings, Inc.,
4.75% Nts., 8/15/10 2 2,060,000 1,975,643
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--0.4%
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Xerox Corp.,
9.75% Sr. Unsec. Nts., 1/15/09 1,405,000 1,506,863
- --------------------------------------------------------------------------------
MATERIALS--0.5%
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.5%
MeadWestvaco Corp.,
6.85% Unsec. Unsub. Nts., 4/1/12 1,930,000 1,966,504
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.3%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.3%
AT&T Wireless Services, Inc.,
8.125% Sr. Unsec. Nts., 5/1/12 1,545,000 1,702,159
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
British Telecommunications plc,
8.875% Bonds, 12/15/30 $ 1,015,000 $ 1,250,939
- --------------------------------------------------------------------------------
Telus Corp., 8% Nts., 6/1/11 245,000 265,580
- --------------------------------------------------------------------------------
Verizon Global Funding Corp.:
5.85% Nts., 9/15/35 7 1,155,000 1,008,032
7.25% Sr. Unsec. Unsub. Nts.,
12/1/10 1,010,000 1,058,731
--------------
5,285,441
- --------------------------------------------------------------------------------
UTILITIES--3.5%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.8%
FirstEnergy Corp., 7.375%
Sr. Unsub. Nts., Series C, 11/15/31 1,865,000 2,006,809
- --------------------------------------------------------------------------------
Mission Energy Holding Co.,
13.50% Sr. Sec. Nts., 7/15/08 1,070,000 1,198,400
--------------
3,205,209
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.6%
IPALCO Enterprises, Inc.,
8.375% Sr. Sec. Nts., 11/14/08 1 1,180,000 1,218,350
- --------------------------------------------------------------------------------
TXU Energy Co.,
6.125% Nts., 3/15/08 1,430,000 1,432,727
--------------
2,651,077
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--2.1%
CenterPoint Energy, Inc.,
7.25% Sr. Nts., Series B, 9/1/10 1,990,000 2,073,727
- --------------------------------------------------------------------------------
Dominion Resources, Inc.,
8.125% Sr. Unsub. Nts., 6/15/10 1,950,000 2,094,495
- --------------------------------------------------------------------------------
NiSource Finance Corp.,
7.875% Sr. Unsec. Nts., 11/15/10 2,138,000 2,289,400
- --------------------------------------------------------------------------------
PSEG Funding Trust I,
5.381% Nts., 11/16/07 1,835,000 1,822,391
--------------
8,280,013
--------------
Total Corporate Bonds and Notes
(Cost $135,603,788) 131,788,082
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts.,
Exp. 9/19/10 10 (Cost $14,872) 5,408 1,839
12 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.5%
- --------------------------------------------------------------------------------
Undivided interest of 0.41% in joint repurchase
agreement (Principal Amount/Value
$2,439,041,000, with a maturity value of
$2,440,006,454) with UBS Warburg LLC, 4.75%,
dated 6/30/06, to be repurchased at $10,087,992
on 7/3/06, collateralized by Federal National
Mortgage Assn., 5%-6%, 10/1/35-3/1/36,
with a value of $2,494,907,407
(Cost $10,084,000) $ 10,084,000 $ 10,084,000
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
Investments Purchased with Cash Collateral
from Securities Loaned) (Cost $498,680,298) 486,552,297
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH
COLLATERAL FROM SECURITIES LOANED--5.1%
- --------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTES--0.6%
Money Market Securities Trust,
Series A, 5.27%, 7/17/06 11 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Whitehawk CDO Funding Corp.,
5.38%, 9/15/06 11 1,500,000 1,500,000
--------------
2,500,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.5%
Undivided interest of 1.78% in joint
repurchase agreement (Principal Amount/Value
$1,000,000,000, with a maturity value of
$1,000,444,375) with Bank of America NA,
5.3325%, dated 6/30/06, to be repurchased at
$17,817,147 on 7/3/06, collateralized by U.S.
Agency Mortgages, 5%, 6/1/35,
with a value of $1,020,000,000 11 17,809,233 17,809,233
--------------
Total Investments Purchased with
Cash Collateral from Securities
Loaned (Cost $20,309,233) 20,309,233
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $518,989,531) 126.6% 506,861,530
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (26.6) (106,395,353)
-----------------------------
NET ASSETS 100.0% $ 400,466,177
=============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Represents the current interest rate for a variable or increasing rate
security.
2. 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 $19,463,238 or 4.86% of the Fund's net
assets as of June 30, 2006.
3. When-issued security or forward commitment to be delivered and settled after
June 30, 2006. See Note 1 of accompanying Notes.
4. Illiquid security. The aggregate value of illiquid securities as of June 30,
2006 was $4,190,746, which represents 1.05% of the Fund's net assets. See Note 8
of accompanying Notes.
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 $13,467,192 or 3.36% of the Fund's net assets
as of June 30, 2006.
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 $794,544 or 0.20% of the Fund's net assets as of June
30, 2006.
7. Partial or fully-loaned security. See Note 9 of accompanying Notes.
8. 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 $2,069,178. See Note 5 of accompanying Notes.
9. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.
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 9 of accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------
Investments, at value (cost $518,989,531)--see accompanying
statement of investments $ 506,861,530
- -------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 41,405
- -------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $16,624,279 sold on a when-issued
basis or forward commitment) 29,054,286
Interest and principal paydowns 3,648,587
Shares of beneficial interest sold 227,764
Futures margins 108,673
Other 17,534
--------------
Total assets 539,959,779
- -------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------
Bank overdraft 996,491
- -------------------------------------------------------------------------------------
Return of collateral for securities loaned 20,309,233
- -------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 21,740
- -------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $113,818,432 purchased on a
when-issued basis or forward commitment) 117,596,606
Shares of beneficial interest redeemed 496,743
Trustees' compensation 14,895
Shareholder communications 11,654
Distribution and service plan fees 8,690
Transfer and shareholder servicing agent fees 1,852
Other 35,698
--------------
Total liabilities 139,493,602
- -------------------------------------------------------------------------------------
NET ASSETS $ 400,466,177
==============
- -------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 37,966
- -------------------------------------------------------------------------------------
Additional paid-in capital 441,296,543
- -------------------------------------------------------------------------------------
Accumulated net investment income 9,832,046
- -------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (39,007,000)
- -------------------------------------------------------------------------------------
Net unrealized depreciation on investments (11,693,378)
--------------
NET ASSETS $ 400,466,177
==============
- -------------------------------------------------------------------------------------
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 $381,956,562 and 36,204,933
shares of beneficial interest outstanding) $ 10.55
- -------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price
per share (based on net assets of $18,509,615 and 1,761,423
shares of beneficial interest outstanding) $ 10.51
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------
Interest $ 11,031,882
- -------------------------------------------------------------------------------------
Fee income 482,585
- -------------------------------------------------------------------------------------
Portfolio lending fees 38,797
--------------
Total investment income 11,553,264
- -------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------
Management fees 1,527,809
- -------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 15,824
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,093
Service shares 4,964
- -------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 31,933
Service shares 1,019
- -------------------------------------------------------------------------------------
Custodian fees and expenses 20,210
- -------------------------------------------------------------------------------------
Trustees' compensation 4,597
- -------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------
Other 20,933
--------------
Total expenses 1,633,132
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME 9,920,132
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (6,195,593)
Closing and expiration of futures contracts 564,460
Foreign currency transactions 11,505
Swap contracts 128,970
--------------
Net realized loss (5,490,658)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (6,422,106)
Futures contracts 15,859
Swap contracts (6,294)
--------------
Net change in unrealized depreciation (6,412,541)
- -------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,983,067)
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER CORE BOND FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------
Net investment income $ 9,920,132 $ 21,402,707
- ------------------------------------------------------------------------------------------------------------------------
Net realized loss (5,490,658) (480,546)
- ------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (6,412,541) (8,992,109)
-------------------------------
Net increase (decrease) in net assets resulting from operations (1,983,067) 11,930,052
- ------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (21,803,446) (24,996,468)
Service shares (608,147) (231,902)
- ------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (24,979,681) (60,382,816)
Service shares 8,088,649 7,684,268
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Total decrease (41,285,692) (65,996,866)
- ------------------------------------------------------------------------------------------------------------------------
Beginning of period 441,751,869 507,748,735
-------------------------------
End of period (including accumulated net investment income
of $9,832,046 and $22,323,507, respectively) $ 400,466,177 $ 441,751,869
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER CORE BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.19 $ 11.50 $ 11.42 $ 11.31 $ 11.21 $ 11.25
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .26 1 .51 1 .43 1 .51 .65 .81
Net realized and unrealized gain (loss) (.31) (.23) .18 .23 .27 .03
Payment from affiliate -- -- -- -- .01 --
-----------------------------------------------------------------------------
Total from investment operations (.05) .28 .61 .74 .93 .84
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.59) (.59) (.53) (.63) (.83) (.88)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.55 $ 11.19 $ 11.50 $ 11.42 $ 11.31 $ 11.21
=============================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
- -----------------------------------------------------------------------------------------------------------------------------------
Total return at net asset value 2 (0.48)% 2.59% 5.49% 6.78% 9.02% 7.79%
Total return before payment from affiliate 3 N/A N/A N/A N/A 8.93% N/A
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 381,956 $430,642 $504,244 $618,234 $724,787 $693,701
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 407,398 $466,033 $552,293 $691,931 $686,932 $638,820
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income before payment from affiliate 4.77% 4.56% 3.82% 4.03% 5.91% 3 7.93%
Net investment income after payment from affiliate N/A N/A N/A N/A 6.07% N/A
Total expenses 0.78% 0.76% 5 0.75% 5 0.73% 5 0.73% 5 0.77% 5
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 6 111% 6 95% 6 101% 157% 186%
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, 2006 $ 733,868,285 $ 783,879,632
Year Ended December 31, 2005 2,420,041,493 2,423,498,913
Year Ended December 31, 2004 2,841,348,053 2,925,500,296
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER CORE BOND FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 1
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.15 $ 11.47 $ 11.39 $ 11.30 $ 10.46
- ------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .23 2 .47 2 .40 2 .43 .11
Net realized and unrealized gain (loss) (.30) (.22) .18 .28 .72
Payment from affiliate -- -- -- -- .01
------------------------------------------------------------------
Total from investment operations (.07) .25 .58 .71 .84
- ------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.57) (.57) (.50) (.62) --
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.51 $ 11.15 $ 11.47 $ 11.39 $ 11.30
==================================================================
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
- ------------------------------------------------------------------------------------------------------------------------
Total return at net asset value 3 (0.65)% 2.33% 5.22% 6.56% 8.03%
Total return before payment from affiliate 4 N/A N/A N/A N/A 7.94%
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 18,510 $ 11,110 $ 3,505 $ 3,835 $ 2,435
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 12,805 $ 7,213 $ 3,002 $ 3,903 $ 834
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income before payment from affiliate 4.45% 4.29% 3.55% 3.73% 4.37% 4
Net investment income after payment from affiliate N/A N/A N/A N/A 5.04%
Total expenses 1.11% 1.03% 6 0.99% 6 0.98% 6 0.98% 6,7
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 8 111% 8 95% 8 101% 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. 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. The Manager voluntarily reimbursed the Class $3,723 from an error in the
calculation of the Fund's net asset value per share.
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%.
8. 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, 2006 $ 733,868,285 $ 783,879,632
Year Ended December 31, 2005 2,420,041,493 2,423,498,913
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
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Core Bond Fund/VA (the Fund), is a separate series of Oppenheimer
Variable Account Funds, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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, 2006, the Fund had purchased $113,818,432
of securities issued on a when-issued basis or forward commitment and sold
19 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
$16,624,279 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.
- --------------------------------------------------------------------------------
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.
20 | OPPENHEIMER CORE BOND FUND/VA
As of June 30, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $38,491,057 expiring by 2014.
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, 2006, it is estimated that the Fund will not utilize
any capital loss carryforward to offset realized capital gains. During the year
ended December 31, 2005, the Fund did not utilize any capital loss carryforward
to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
post-October losses of $3,057,550 and unused capital loss carryforwards as
follows:
EXPIRING
-------------------------
2010 $ 29,885,554
2013 57,295
------------
Total $ 29,942,849
============
- --------------------------------------------------------------------------------
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $494 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
21 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 488,240 $ 5,246,564 1,220,400 $ 13,663,072
Dividends and/or distributions reinvested 2,058,871 21,803,446 2,291,152 24,996,468
Redeemed (4,826,707) (52,029,691) (8,857,827) (99,042,356)
----------------------------------------------------------------
Net decrease (2,279,596) $ (24,979,681) (5,346,275) $ (60,382,816)
================================================================
- --------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 792,542 $ 8,407,802 767,551 $ 8,537,370
Dividends and/or distributions reinvested 57,590 608,147 21,295 231,902
Redeemed (85,315) (927,300) (97,717) (1,085,004)
----------------------------------------------------------------
Net increase 764,817 $ 8,088,649 691,129 $ 7,684,268
================================================================
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
------------------------------------------------------------------------------
Investment securities $205,551,403 $232,242,161
U.S. government and government agency obligations 48,087,434 55,995,947
To Be Announced (TBA) mortgage-related securities 733,868,285 783,879,632
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
-------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $200 million of net assets 0.60
Over $1 billion of net assets 0.50
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$9,996 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
22 | OPPENHEIMER CORE BOND 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 periodically 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. 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, 2006, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2006 (DEPRECIATION)
- -------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 9/20/06 299 $ 31,890,219 $ 64,826
U.S. Treasury Nts., 5 yr. 9/29/06 208 21,508,500 (64,652)
------------
174
------------
CONTRACTS TO SELL
Euro-Bundesobligation, 10 yr. 9/7/06 74 10,915,007 61,155
U.S. Treasury Nts., 2 yr. 9/29/06 563 114,165,844 290,852
U.S. Treasury Nts., 10 yr. 9/20/06 209 21,915,609 62,777
------------
414,784
------------
$ 414,958
============
23 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. CREDIT DEFAULT 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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 is as
follows:
NOTIONAL AMOUNT ANNUAL
RECEIVED BY THE INTEREST UNREALIZED
FUND UPON RATE PAID APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank Weyerhaeuser Co. $2,010,000 0.580% $ (160)
- --------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Arrow Electronics, Inc. 2,010,000 0.790 (659)
Arrow Electronics, Inc. 1,000,000 0.770 872
Belo Corp. 1,170,000 0.650 4,454
Belo Corp. 655,000 0.670 1,925
Belo Corp. 1,295,000 0.675 3,524
Federated Department Stores, Inc. 2,005,000 0.445 (2,583)
--------
$ 7,373
========
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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 is as
follows:
NOTIONAL AMOUNT ANNUAL
PAID BY THE INTEREST UNREALIZED
FUND UPON RATE RECEIVED APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION CREDIT EVENT BY THE FUND (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank:
Allied Waste North America, Inc. $ 630,000 2.00% $ (2,671)
Allied Waste North America, Inc. 990,000 2.00 (4,198)
General Motors Acceptance Corp. 465,000 2.30 (1,023)
General Motors Corp. 640,000 6.40 (83)
General Motors Corp. 380,000 6.40 (49)
- --------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Countrywide Home Loans, Inc. 1,270,000 0.40 (5,734)
Countrywide Home Loans, Inc. 765,000 0.42 (2,290)
General Motors Acceptance Corp. 1,355,000 3.15 13,873
Hyundai Motor Manufacturing Alabama LLC 875,000 0.40 (65)
J.C. Penney Corp., Inc. 2,005,000 0.61 (2,225)
---------
$ (4,465)
=========
24 | OPPENHEIMER CORE BOND FUND/VA
- --------------------------------------------------------------------------------
7. 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 unrealized gain (loss) related to the daily change
in the valuation of the notional amount of the swap, as well as the amount due
to (owed by) the Fund at termination or settlement, is combined and separately
disclosed as an asset (liability). The Fund also records any periodic payments
received from (paid to) the counterparty, including at termination, under such
contracts as realized gain (loss). Total return swaps are subject to risks (if
the counterparty fails to meet its obligations).
As of June 30, 2006, the Fund had entered into the following total return swap
agreements:
SWAP NOTIONAL TERMINATION UNREALIZED
COUNTERPARTY SWAP DESCRIPTION AMOUNT DATES APPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------------
Received or paid monthly. The Counterparty
pays the Fund a Floating Payment which is the
sum of the Notional Amount, the Lehman
Brothers CMBS Index Spread and the Financial
Spread on the initial Notional Amount for the
Swap Interest Accrual Period. In addition,
the Counterparty, pays the Fund the Total
Return Amount if it is a positive value for a
given Index Period. If it is a negative, the
Fund pays the Counterparty the absolute value
of the Total Return Amount for a given Index
Deutsche Bank AG Period, on each Payment Date. $3,900,000 12/1/06 $ 7,960
- ----------------------------------------------------------------------------------------------------------------------------------
Received or paid monthly. If the Carry
Amount, plus the Spread Return Amount (Spread
Change times Duration times Notional Amount),
is positive, the Counterparty pays the Fund.
The payment is based on the Carry Amount
which is the Spread on the Lehman Brothers
CMBS AAA 8.5+ Index as of the close of one
Business Day prior to the Period End Day plus
15 basis points times the Notional Amount
times the Day Count Basis. If it is negative,
Lehman Brothers Special the Fund pays the Counterparty the absolute
Financing, Inc. value of the Spread Return Amount. 4,310,000 12/1/06 8,797
---------
$ 16,757
Abbreviation is as follows: =========
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of June 30, 2006, 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.
- --------------------------------------------------------------------------------
9. 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion
25 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. SECURITIES LENDING Continued
of the interest earned from the collateral. 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. The Fund continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower. As of June 30, 2006,
the Fund had on loan securities valued at $21,339,381, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Investments sold." Collateral of $20,309,233 was received for
the loans, all of which was received in cash and subsequently invested in
approved investments or held as cash.
- --------------------------------------------------------------------------------
10. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss.
26 | 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
27 | OPPENHEIMER CORE BOND FUND/VA
OPPENHEIMER HIGH INCOME FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,023.80 $3.77
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.08 3.77
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,022.90 5.08
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.79 5.07
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------
Non-Service shares 0.75%
- ------------------------------------
Service shares 1.01
- --------------------------------------------------------------------------------
5 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--85.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--31.4%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.6%
Collins & Aikman Floorcoverings, Inc.,
9.75% Sr. Sub. Nts., Series B, 2/15/10 $ 800,000 $ 790,000
- --------------------------------------------------------------------------------
Eagle-Picher, Inc., 9.75% Sr. Nts.,
9/1/13 1 200,000 135,000
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 1,250,000 1,165,625
9% Sr. Unsec. Nts., 7/1/15 445,000 427,200
- --------------------------------------------------------------------------------
Keystone Automotive Operations,
Inc., 9.75% Sr. Unsec. Sub. Nts., 11/1/13 200,000 190,000
- --------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 900,000 868,500
- --------------------------------------------------------------------------------
Tenneco Automotive, Inc., 10.25%
Sr. Sec. Nts., Series B, 7/15/13 1,500,000 1,651,875
- --------------------------------------------------------------------------------
United Components, Inc., 9.375% Sr.
Sub. Nts., 6/15/13 400,000 396,000
- --------------------------------------------------------------------------------
Visteon Corp.:
7% Sr. Unsec. Nts., 3/10/14 800,000 657,000
8.25% Sr. Unsec. Nts., 8/1/10 1,800,000 1,692,000
---------------
7,973,200
- --------------------------------------------------------------------------------
AUTOMOBILES--3.7%
Ford Motor Co., 7.45% Bonds,
7/16/31 800,000 582,000
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.625% Nts., 10/1/08 2,200,000 2,036,175
5.80% Sr. Unsec. Nts., 1/12/09 1,200,000 1,096,901
7.375% Nts., 10/28/09 2,700,000 2,498,027
9.473% Nts., 4/15/12 2 2,730,000 2,775,460
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.875% Nts., 9/15/11 3,490,000 3,333,571
7.25% Nts., 3/2/11 500,000 485,223
8% Bonds, 11/1/31 2,610,000 2,515,220
- --------------------------------------------------------------------------------
General Motors Corp.:
7.20% Nts., 1/15/11 600,000 534,000
8.375% Sr. Unsec. Debs., 7/15/33 500,000 405,000
- --------------------------------------------------------------------------------
Hertz Corp.:
8.875% Sr. Nts., 1/1/14 3 490,000 504,700
10.50% Sr. Sub. Nts., 1/1/16 3 1,970,000 2,098,050
---------------
18,864,327
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.2%
SGS International, Inc., 12%
Sr. Sub. Nts., 12/15/13 3 895,000 899,475
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.2%
Education Management LLC/
Education Management Corp.,
10.25% Sr. Sub. Nts., 6/1/16 3 830,000 830,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--8.3%
American Casino & Entertainment
Properties LLC, 7.85% Sr. Sec. Nts.,
2/1/12 $ 1,300,000 $ 1,309,750
- --------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub.
Nts., 3/15/08 940,000 925,900
- --------------------------------------------------------------------------------
Aztar Corp., 9% Sr. Unsec. Sub. Nts.,
8/15/11 450,000 473,625
- --------------------------------------------------------------------------------
Boyd Gaming Corp., 8.75% Sr. Sub.
Nts., 4/15/12 1,200,000 1,263,000
- --------------------------------------------------------------------------------
CCM Merger, Inc., 8% Unsec. Nts.,
8/1/13 3 1,140,000 1,083,000
- --------------------------------------------------------------------------------
Domino's, Inc., 8.25% Sr. Unsec. Sub.
Nts., 7/1/11 875,000 912,188
- --------------------------------------------------------------------------------
French Lick Resorts & Casino LLC,
10.75% First Mtg. Nts., 4/15/14 3 1,310,000 1,260,875
- --------------------------------------------------------------------------------
Gaylord Entertainment Co.:
6.75% Sr. Unsec. Unsub. Nts., 11/15/14 500,000 471,250
8% Sr. Nts., 11/15/13 700,000 702,625
- --------------------------------------------------------------------------------
Greektown Holdings, Inc.,
10.75% Sr. Nts., 12/1/13 3 1,435,000 1,521,100
- --------------------------------------------------------------------------------
Intrawest Corp., 7.50% Sr. Unsec. Nts.,
10/15/13 917,000 917,000
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 950,000 901,313
9% Sr. Sub. Nts., 3/15/12 600,000 629,250
- --------------------------------------------------------------------------------
Kerzner International Ltd., 6.75%
Sr. Unsec. Sub. Nts., 10/1/15 280,000 293,650
- --------------------------------------------------------------------------------
Mandalay Resort Group:
9.375% Sr. Sub. Nts., 2/15/10 41,000 43,358
10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 800,000 833,000
- --------------------------------------------------------------------------------
MGM Mirage, Inc.:
6.75% Sr. Nts., 4/1/13 3 510,000 488,963
8.375% Sr. Unsec. Sub. Nts., 2/1/11 3,600,000 3,708,000
9.75% Sr. Unsec. Sub. Nts., 6/1/07 800,000 826,000
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 440,000 416,350
6.375% Sr. Sub. Nts., 7/15/09 800,000 783,000
6.875% Sr. Unsec. Sub. Nts., 2/15/15 915,000 866,963
8% Sr. Sub. Nts., 4/1/12 1,700,000 1,736,125
- --------------------------------------------------------------------------------
NCL Corp., 10.625% Sr. Unsub. Nts.,
7/15/14 800,000 790,000
- --------------------------------------------------------------------------------
Park Place Entertainment Corp.:
7.875% Sr. Sub. Nts., 3/15/10 1,000,000 1,042,500
9.375% Sr. Unsec. Sub. Nts., 2/15/07 1,500,000 1,530,000
- --------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts., 3/1/15 145,000 135,938
6.875% Sr. Sub. Nts., 12/1/11 150,000 147,375
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc., 8.25%
Sr. Unsec. Sub. Nts., 3/15/12 2,250,000 2,266,875
- --------------------------------------------------------------------------------
Pokagon Gaming Authority, 10.375%
Sr. Nts., 6/15/14 3 610,000 633,638
6 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Six Flags, Inc.:
9.625% Sr. Nts., 6/1/14 $ 957,000 $ 875,655
9.75% Sr. Nts., 4/15/13 1,350,000 1,247,063
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc., 7.875% Sr. Nts., 5/1/12 1,500,000 1,573,125
- --------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 2,400,000 2,244,000
6.875% Sr. Unsec. Sub. Nts., 3/1/16 480,000 450,000
- --------------------------------------------------------------------------------
Trump Entertainment Resorts, Inc.,
8.50% Sec. Nts., 6/1/15 2,200,000 2,125,750
- --------------------------------------------------------------------------------
Universal City Development Partners
Ltd., 11.75% Sr. Nts., 4/1/10 1,000,000 1,093,750
- --------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub. Nts.,
2/15/14 1,100,000 1,050,500
- --------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn Las Vegas
Capital Corp., 6.625% Nts., 12/1/14 2,100,000 1,989,750
---------------
41,562,204
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.3%
Beazer Homes USA, Inc.,
8.375% Sr. Nts., 4/15/12 500,000 502,500
- --------------------------------------------------------------------------------
D.R. Horton, Inc., 9.75% Sr. Sub. Nts.,
9/15/10 300,000 330,895
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.:
7.75% Sr. Unsec. Sub. Nts., 5/15/13 900,000 825,750
8.875% Sr. Sub. Nts., 4/1/12 800,000 800,000
- --------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 150,000 156,188
9.50% Sr. Unsec. Sub. Nts., 2/15/11 350,000 366,188
- --------------------------------------------------------------------------------
Sealy Mattress Co., 8.25% Sr. Sub.
Nts., 6/15/14 460,000 462,300
- --------------------------------------------------------------------------------
Standard Pacific Corp.:
7.75% Sr. Nts., 3/15/13 650,000 617,500
9.25% Sr. Sub. Nts., 4/15/12 700,000 699,125
- --------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 500,000 520,000
- --------------------------------------------------------------------------------
WCI Communities, Inc.,
9.125% Sr. Sub. Nts., 5/1/12 800,000 754,000
- --------------------------------------------------------------------------------
William Lyon Homes, Inc.,
10.75% Sr. Nts., 4/1/13 800,000 772,000
---------------
6,806,446
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.4%
Leslie's Poolmart, Inc., 7.75% Sr. Unsec.
Nts., 2/1/13 845,000 823,875
- --------------------------------------------------------------------------------
Rexnord Corp., 10.125% Sr. Unsec. Sub.
Nts., 12/15/12 700,000 775,138
- --------------------------------------------------------------------------------
Steinway Musical Instruments, Inc., 7%
Sr. Nts., 3/1/14 3 275,000 267,438
---------------
1,866,451
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA--13.0%
Adelphia Communications Corp.:
7.875% Sr. Unsec. Nts., 5/1/09 1 $ 360,000 $ 194,400
8.125% Sr. Nts., Series B, 7/15/03 1 575,000 316,250
8.375% Sr. Nts., Series B, 2/1/08 1 1,000,000 555,000
10.25% Sr. Unsec. Sub. Nts., 6/15/11 1 1,000,000 580,000
10.875% Sr. Unsec. Nts., 10/1/10 1 1,000,000 550,000
- --------------------------------------------------------------------------------
Allbritton Communications Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/12 700,000 696,500
- --------------------------------------------------------------------------------
AMC Entertainment, Inc.:
8% Sr. Unsec. Sub. Nts., 3/1/14 1,050,000 967,313
9.50% Sr. Unsec. Sub. Nts., 2/1/11 192,000 189,600
- --------------------------------------------------------------------------------
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 900,000 801,000
10.25% Sr. Unsec. Sub. Nts.,
Series B, 5/1/09 1,200,000 1,125,000
- --------------------------------------------------------------------------------
Block Communications, Inc.,
8.25% Sr. Nts., 12/15/15 3 625,000 603,125
- --------------------------------------------------------------------------------
Charter Communications Holdings II
LLC/Charter Communications
Holdings II Capital Corp.:
10.25% Sr. Nts., 9/15/10 3 1,145,000 1,150,725
10.25% Sr. Unsec. Nts., 9/15/10 600,000 604,500
- --------------------------------------------------------------------------------
Charter Communications Holdings
LLC/Charter Communications
Holdings Capital Corp., 8.375% Sr. Nts.,
Second Lien, 4/30/14 3 4,850,000 4,880,313
- --------------------------------------------------------------------------------
Cinemark USA, Inc., 9% Sr. Unsec.
Sub. Nts., 2/1/13 400,000 422,000
- --------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr. Unsec.
Disc. Nts., 3/15/14 4 2,700,000 2,106,000
- --------------------------------------------------------------------------------
CSC Holdings, Inc.:
7.625% Sr. Unsec. Debs., 7/15/18 1,500,000 1,492,500
7.625% Sr. Unsec. Unsub. Nts.,
Series B, 4/1/11 1,700,000 1,708,500
- --------------------------------------------------------------------------------
Dex Media East LLC/Dex Media East
Finance Co., 9.875% Sr. Unsec. Nts.,
11/15/09 800,000 850,000
- --------------------------------------------------------------------------------
Dex Media West LLC/Dex Media
West Finance Co.:
8.50% Sr. Nts., 8/15/10 700,000 729,750
9.875% Sr. Sub. Nts., 8/15/13 1,172,000 1,276,009
- --------------------------------------------------------------------------------
Dex Media, Inc.:
0%/9% Unsec. Disc. Nts., 11/15/13 4 500,000 423,750
0%/9% Unsec. Disc. Nts., 11/15/13 4 500,000 423,750
8% Unsec. Nts., 11/15/13 3,950,000 3,989,500
- --------------------------------------------------------------------------------
Dow Jones CDX High Yield Index,
8.625% Pass-Through Certificates,
Series 6-T1, 6/29/11 3 2,000,000 1,965,000
- --------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 500,000 471,250
7.125% Sr. Nts., 2/1/16 3 800,000 774,000
7 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Emmis Operating Co., 6.875% Sr.
Unsec. Sub. Nts., 5/15/12 $ 1,200,000 $ 1,182,000
- --------------------------------------------------------------------------------
Granite Broadcasting Corp.,
9.75% Sr. Sec. Nts., 12/1/10 610,000 561,200
- --------------------------------------------------------------------------------
Gray Television, Inc., 9.25% Sr. Sub.
Nts., 12/15/11 500,000 522,500
- --------------------------------------------------------------------------------
Lamar Media Corp.:
6.625% Sr. Unsec. Sub. Nts., 8/15/15 1,872,000 1,740,960
7.25% Sr. Unsec. Sub. Nts., 1/1/13 200,000 196,500
- --------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr. Sub.
Nts., 5/15/13 785,000 720,238
- --------------------------------------------------------------------------------
Marquee Holdings, Inc., 0%/12%
Sr. Disc. Nts., 8/15/14 4 2,200,000 1,581,250
- --------------------------------------------------------------------------------
Mediacom Broadband LLC/
Mediacom Broadband Corp.,
8.50% Sr. Nts., 10/15/15 280,000 270,200
- --------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital
Corp., 9.50% Sr. Unsec. Nts., 1/15/13 957,000 957,000
- --------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 1,400,000 1,232,000
6.875% Sr. Unsec. Sub. Nts., 10/1/13 800,000 732,000
- --------------------------------------------------------------------------------
Paxson Communications Corp.,
11.318% Sr. Sec. Nts., 1/15/13 2,3 1,165,000 1,173,738
- --------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 1,100,000 990,000
8.875% Sr. Unsec. Nts., 5/15/11 1,157,000 1,116,505
- --------------------------------------------------------------------------------
Quebecor World Capital Corp.,
8.75% Sr. Nts., 3/15/16 3 460,000 422,050
- --------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts., 1/15/13 3 4,135,000 3,824,875
6.875% Sr. Disc. Nts.,
Series A-2, 1/15/13 3 2,960,000 2,738,000
6.875% Sr. Nts., 1/15/13 2,700,000 2,497,500
8.875% Sr. Nts., Series A-3, 1/15/16 3 2,755,000 2,792,881
- --------------------------------------------------------------------------------
R.H. Donnelley Financial Corp. I,
10.875% Sr. Sub. Nts., 12/15/12 3 1,000,000 1,102,500
- --------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec.
Sub. Nts., Series B, 7/1/11 800,000 833,000
- --------------------------------------------------------------------------------
Rainbow National Services LLC,
8.75% Sr. Nts., 9/1/12 3 900,000 949,500
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.,
8% Sr. Unsec. Sub. Nts., 3/15/12 3,700,000 3,774,000
- --------------------------------------------------------------------------------
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 1,400,000 1,431,500
10.875% Sr. Unsec. Nts.,
Series B, 6/15/09 400,000 396,000
- --------------------------------------------------------------------------------
WMG Holdings Corp., 0%/9.50%
Sr. Disc. Nts., 12/15/14 4 2,365,000 1,714,625
---------------
65,298,257
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.9%
Bon-Ton Stores, Inc. (The), 10.25%
Sr. Nts., 3/15/14 3 $ 2,600,000 $ 2,424,500
- --------------------------------------------------------------------------------
Neiman Marcus Group, Inc.:
9% Sr. Nts., 10/15/15 3 1,645,000 1,727,250
10.375% Sr. Sub. Nts., 10/15/15 3 625,000 667,188
---------------
4,818,938
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.8%
Asbury Automotive Group, Inc.,
9% Sr. Sub. Nts., 6/15/12 600,000 597,000
- --------------------------------------------------------------------------------
Atlantic Broadband Finance LLC,
9.375% Sr. Unsec. Sub. Nts., 1/15/14 400,000 378,000
- --------------------------------------------------------------------------------
Boise Cascade LLC, 7.125% Sr. Unsec.
Sub. Nts., 10/15/14 550,000 489,500
- --------------------------------------------------------------------------------
Linens `N Things, Inc., 10.702%
Sr. Sec. Nts., 1/15/14 2,3 1,335,000 1,271,588
- --------------------------------------------------------------------------------
Petco Animal Supplies, Inc., 10.75%
Sr. Sub. Nts., 11/1/11 750,000 795,000
- --------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr. Unsec.
Sub. Nts., Series B, 5/1/10 350,000 350,000
---------------
3,881,088
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.0%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 3 1,075,000 1,134,125
- --------------------------------------------------------------------------------
Levi Strauss & Co.:
9.74% Sr. Unsec. Unsub. Nts., 4/1/12 2 1,100,000 1,124,750
9.75% Sr. Unsec. Unsub. Nts., 1/15/15 755,000 758,775
- --------------------------------------------------------------------------------
Oxford Industries, Inc.,
8.875% Sr. Nts., 6/1/11 500,000 502,500
- --------------------------------------------------------------------------------
Quiksilver, Inc., 6.875% Sr. Unsec.
Nts., 4/15/15 975,000 911,625
- --------------------------------------------------------------------------------
Russell Corp., 9.25% Sr. Nts., 5/1/10 800,000 841,000
---------------
5,272,775
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.6%
- --------------------------------------------------------------------------------
BEVERAGES--0.1%
Constellation Brands, Inc., 8.125%
Sr. Sub. Nts., 1/15/12 500,000 516,250
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.7%
Jean Coutu Group (PJC), Inc. (The),
8.50% Sr. Sub. Nts., 8/1/14 2,100,000 1,942,500
- --------------------------------------------------------------------------------
Real Time Data Co., 11% Disc. Nts.,
5/31/09 1,5 476,601 --
- --------------------------------------------------------------------------------
Rite Aid Corp.:
8.125% Sr. Sec. Nts., 5/1/10 900,000 909,000
9.50% Sr. Sec. Nts., 2/15/11 450,000 469,125
---------------
3,320,625
8 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.3%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts., 2/15/15 $ 350,000 $ 326,375
8.625% Sr. Sub. Nts., 12/15/12 1,000,000 1,035,000
- --------------------------------------------------------------------------------
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09 687,000 659,520
8.875% Sr. Unsec. Nts., 3/15/11 146,000 137,605
- --------------------------------------------------------------------------------
Hines Nurseries, Inc., 10.25% Sr.
Unsec. Sub. Nts., 10/1/11 1,200,000 1,158,000
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
Escrow Shares, 3/15/10 5 1,000,000 46,040
- --------------------------------------------------------------------------------
Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08 925,000 934,250
8% Sr. Nts., Series B, 10/15/09 900,000 913,500
- --------------------------------------------------------------------------------
United Biscuits Finance plc, 10.625%
Sr. Sub. Nts., 4/15/11 [EUR] 1,000,000 1,349,398
---------------
6,559,688
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.4%
Church & Dwight Co., Inc., 6% Sr.
Unsec. Sub. Nts., 12/15/12 900,000 837,000
- --------------------------------------------------------------------------------
Nutro Products, Inc., 10.75% Sr. Sub.
Nts., 4/15/14 3 920,000 951,050
---------------
1,788,050
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.7%
Elizabeth Arden, Inc., 7.75% Sr.
Unsec. Sub. Nts., 1/15/14 1,150,000 1,135,625
- --------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 1,000,000 1,040,000
9.375% Sr. Unsec. Sub. Nts., 6/1/11 1,295,000 1,354,894
---------------
3,530,519
- --------------------------------------------------------------------------------
TOBACCO--0.4%
Reynolds American, Inc., 7.25% Sr.
Sec. Nts., 6/1/13 3 2,265,000 2,225,363
- --------------------------------------------------------------------------------
ENERGY--7.9%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.7%
Basic Energy Services, Inc.,
7.125% Sr. Nts., 4/15/16 3 455,000 425,425
- --------------------------------------------------------------------------------
Dresser, Inc., 9.875% Sr. Unsec. Sub.
Nts., 4/15/11 2 400,000 407,000
- --------------------------------------------------------------------------------
Hanover Compressor Co., 8.625% Sr.
Unsec. Sub. Nts., 12/15/10 700,000 728,000
- --------------------------------------------------------------------------------
Hanover Equipment Trust, 8.50%
Sr. Sec. Nts., Series A, 9/1/08 221,000 227,630
- --------------------------------------------------------------------------------
PHI, Inc., 7.125% Sr. Nts., 4/15/13 3 545,000 516,388
- --------------------------------------------------------------------------------
RathGibson, Inc., 11.25% Sr. Nts.,
2/15/14 3 460,000 476,100
- --------------------------------------------------------------------------------
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts., 5/15/10 800,000 802,000
---------------
3,582,543
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS--7.2%
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 $ 900,000 $ 866,250
- --------------------------------------------------------------------------------
Atlas Pipeline Partners LP,
8.125% Sr. Nts., 12/15/15 3 450,000 450,563
- --------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Unsec. Nts., 6/15/15 550,000 512,875
6.875% Sr. Unsec. Nts., 1/15/16 1,520,000 1,444,000
- --------------------------------------------------------------------------------
Clayton Williams Energy, Inc.,
7.75% Sr. Unsec. Nts., 8/1/13 195,000 180,375
- --------------------------------------------------------------------------------
Compton Petroleum Finance Corp.,
7.625% Sr. Nts., 12/1/13 1,400,000 1,344,000
- --------------------------------------------------------------------------------
Copano Energy LLC, 8.125% Sr.
Nts., 3/1/16 3 275,000 275,000
- --------------------------------------------------------------------------------
El Paso Corp.:
7.75% Sr. Nts., 1/15/32 1,300,000 1,272,375
7.875% Sr. Unsec. Nts., 6/15/12 3,207,000 3,279,158
- --------------------------------------------------------------------------------
El Paso Energy Corp.,
7.625% Nts., 7/15/11 350,000 355,250
- --------------------------------------------------------------------------------
El Paso Production Holding Co.,
7.75% Sr. Unsec. Nts., 6/1/13 3,000,000 3,037,500
- --------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 1,000,000 1,007,500
- --------------------------------------------------------------------------------
Foundation PA Coal Co., 7.25% Sr.
Unsec. Nts., 8/1/14 850,000 833,000
- --------------------------------------------------------------------------------
Frontier Oil Corp., 6.625% Sr. Unsec.
Nts., 10/1/11 450,000 433,125
- --------------------------------------------------------------------------------
Inergy LP/Inergy Finance Corp.,
8.25% Sr. Unsec. Nts., 3/1/16 1,165,000 1,182,475
- --------------------------------------------------------------------------------
Massey Energy Co., 6.625% Sr. Nts.,
11/15/10 400,000 396,000
- --------------------------------------------------------------------------------
Newfield Exploration Co., 6.625%
Sr. Unsec. Sub. Nts., 9/1/14 1,300,000 1,244,750
- --------------------------------------------------------------------------------
Pacific Energy Partners LP/Pacific
Energy Finance Corp., 6.25% Sr.
Unsec. Nts., 9/15/15 195,000 190,125
- --------------------------------------------------------------------------------
Peabody Energy Corp., 6.875% Sr.
Unsec. Nts., Series B, 3/15/13 1,200,000 1,185,000
- --------------------------------------------------------------------------------
Plains Exploration & Production Co.,
7.125% Sr. Nts., 6/15/14 600,000 594,000
- --------------------------------------------------------------------------------
Pogo Producing Co.:
6.875% Sr. Unsec. Sub. Nts., 10/1/17 200,000 186,250
7.875% Sr. Sub. Nts., 5/1/13 3 440,000 443,300
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc.,
9.50% Sr. Nts., 2/1/13 1,000,000 1,093,728
- --------------------------------------------------------------------------------
Quicksilver Resources, Inc.,
7.125% Sr. Sub. Nts., 4/1/16 1,515,000 1,427,888
- --------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 445,000 412,738
7.375% Sr. Sub. Nts., 7/15/13 400,000 399,000
7.50% Sr. Sub. Nts., 5/15/16 445,000 441,663
9 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Southern Natural Gas Co.:
7.35% Nts., 2/15/31 $ 1,100,000 $ 1,060,940
8% Sr. Unsub. Nts., 3/1/32 500,000 519,153
8.875% Sr. Nts., 3/15/10 700,000 742,877
- --------------------------------------------------------------------------------
Stone Energy Corp.:
6.75% Sr. Unsec. Sub. Nts., 12/15/14 860,000 867,525
8.25% Sr. Unsec. Sub. Nts., 12/15/11 5 1,300,000 1,319,500
- --------------------------------------------------------------------------------
Targa Resources, Inc., 8.50% Sr. Nts.,
11/1/13 3 950,000 921,500
- --------------------------------------------------------------------------------
Teekay Shipping Corp.,
8.875% Sr. Nts., 7/15/11 375,000 394,688
- --------------------------------------------------------------------------------
Tennessee Gas Pipeline Co.,
7.50% Bonds, 4/1/17 965,000 970,433
- --------------------------------------------------------------------------------
Tesoro Corp.:
6.25% Sr. Nts., 11/1/12 3 515,000 491,825
6.625% Sr. Nts., 11/1/15 3 515,000 490,538
- --------------------------------------------------------------------------------
Transcontinental Gas Pipe Line Corp.:
6.40% Sr. Nts., 4/15/16 3 635,000 611,188
8.875% Sr. Unsub. Nts.,
Series B, 7/15/12 200,000 221,500
- --------------------------------------------------------------------------------
Whiting Petroleum Corp.:
7.25% Sr. Sub. Nts., 5/1/12 800,000 772,000
7.25% Sr. Unsec. Sub. Nts., 5/1/13 200,000 192,500
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The):
7.125% Nts., 9/1/11 150,000 150,750
8.75% Unsec. Nts., 3/15/32 1,400,000 1,529,500
- --------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc.,
6.50% Nts., 12/1/08 5 300,000 297,000
---------------
36,041,305
- --------------------------------------------------------------------------------
FINANCIALS--3.9%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.9%
Berry Plastics Corp.,
10.75% Sr. Sub. Nts., 7/15/12 1,900,000 2,066,250
- --------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc., 12%
Sr. Unsec. Sub. Nts., Series B, 9/30/08 5 1,550,000 1,170,250
- --------------------------------------------------------------------------------
E*TRADE Financial Corp.:
7.375% Sr. Unsec. Nts., 9/15/13 691,000 694,455
8% Sr. Nts., 6/15/11 825,000 845,625
---------------
4,776,580
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.1%
Bank Plus Corp., 12% Sr. Nts., 7/18/07 5 517,000 555,775
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.5%
Affinia Group, Inc., 9% Sr. Unsec.
Sub. Nts., 11/30/14 270,000 246,375
- --------------------------------------------------------------------------------
BCP Crystal US Holdings Corp.,
9.625% Sr. Sub. Nts., 6/15/14 1,560,000 1,700,400
- --------------------------------------------------------------------------------
Crystal US Holdings 3 LLC/Crystal
US Sub 3 Corp., 0%/10.50% Sr.
Unsec. Disc. Nts., Series B, 10/1/14 4 1,600,000 1,260,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES Continued
Dow Jones CDX High Yield Index,
8.125% Pass-Through Certificates,
Series 6-T3, 6/29/11 3 $ 4,500,000 $ 4,415,625
- --------------------------------------------------------------------------------
JSG Funding plc, 7.75% Sr. Unsec.
Sub. Nts., 4/1/15 865,000 787,150
- --------------------------------------------------------------------------------
Nell AF Sarl, 8.375% Sr. Nts., 8/15/15 3 3,540,000 3,420,525
- --------------------------------------------------------------------------------
Universal City Florida:
8.375% Sr. Unsec. Nts., 5/1/10 270,000 272,700
9.899% Sr. Unsec. Nts., 5/1/10 2 270,000 280,125
---------------
12,382,900
- --------------------------------------------------------------------------------
REAL ESTATE--0.4%
Felcor Lodging LP, 8.50% Sr. Nts.,
6/1/11 2 837,000 891,405
- --------------------------------------------------------------------------------
Host Marriott LP, 6.375% Sr. Nts.,
Series O, 3/15/15 1,025,000 968,625
---------------
1,860,030
- --------------------------------------------------------------------------------
HEALTH CARE--5.1%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Angiotech Pharmaceuticals, Inc.,
7.75% Sr. Sub. Nts., 4/1/14 3 455,000 436,800
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.3%
Inverness Medical Innovations, Inc.,
8.75% Sr. Sub. Nts., 2/15/12 600,000 585,000
- --------------------------------------------------------------------------------
Universal Hospital Services, Inc.,
10.125% Sr. Unsec. Nts., 11/1/11 800,000 836,000
---------------
1,421,000
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.6%
AmeriPath, Inc., 10.50% Sr. Unsec.
Sub. Nts., 4/1/13 700,000 737,625
- --------------------------------------------------------------------------------
Community Health Systems, Inc.,
6.50% Sr. Unsec. Sub. Nts., 12/15/12 900,000 858,375
- --------------------------------------------------------------------------------
DaVita, Inc.:
6.625% Sr. Unsec. Nts., 3/15/13 890,000 849,950
7.25% Sr. Unsec. Sub. Nts., 3/15/15 1,910,000 1,843,150
- --------------------------------------------------------------------------------
Extendicare Health Services, Inc.:
6.875% Sr. Sub. Nts., 5/1/14 600,000 630,000
9.50% Sr. Unsec. Sub. Nts., 7/1/10 500,000 524,375
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital
Trust II, 7.875% Nts., 2/1/08 1,600,000 1,628,000
- --------------------------------------------------------------------------------
Genesis HealthCare Corp.,
8% Sr. Sub. Nts., 10/15/13 400,000 420,500
- --------------------------------------------------------------------------------
HCA, Inc.:
6.30% Sr. Unsec. Nts., 10/1/12 800,000 756,417
6.375% Nts., 1/15/15 700,000 652,084
8.75% Sr. Nts., 9/1/10 2,800,000 2,965,942
- --------------------------------------------------------------------------------
HEALTHSOUTH Corp.,
10.75% Sr. Nts., 6/15/16 3 1,755,000 1,728,675
10 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 $ 185,000 $ 177,138
6.875% Sr. Sub. Nts., 12/15/15 285,000 272,175
- --------------------------------------------------------------------------------
Psychiatric Solutions, Inc., 7.75% Sr.
Unsec. Sub. Nts., 7/15/15 485,000 477,119
- --------------------------------------------------------------------------------
Rotech Healthcare, Inc., 9.50% Sr.
Unsec. Sub. Nts., 4/1/12 600,000 502,500
- --------------------------------------------------------------------------------
Select Medical Corp., 7.625% Sr.
Unsec. Sub. Nts., 2/1/15 2,475,000 2,165,625
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 774,000 694,665
7.375% Nts., 2/1/13 57,000 52,298
9.875% Sr. Nts., 7/1/14 2,200,000 2,211,000
- --------------------------------------------------------------------------------
Triad Hospitals, Inc., 7% Sr. Sub. Nts.,
11/15/13 270,000 263,925
- --------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 650,000 679,250
10.75% Sr. Unsec. Sub. Nts., 8/15/14 650,000 708,500
- --------------------------------------------------------------------------------
Vanguard Health Holding Co. I LLC,
0%/11.25% Sr. Disc. Nts., 10/1/15 4 1,760,000 1,249,600
---------------
23,048,888
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.1%
Valeant Pharmaceuticals
International, Inc., 7% Sr.
Nts., 12/15/11 800,000 764,000
- --------------------------------------------------------------------------------
INDUSTRIALS--6.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.4%
Alliant Techsystems, Inc.,
6.75% Sr. Sub. Nts., 4/1/16 910,000 878,150
- --------------------------------------------------------------------------------
BE Aerospace, Inc., 8.875% Sr. Unsec.
Sub. Nts., 5/1/11 57,000 59,280
- --------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 735,000 714,788
6.875% Sr. Unsec. Sub. Nts., 11/1/13 300,000 290,250
7.625% Sr. Sub. Nts., 2/1/18 320,000 320,000
- --------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 684,000 641,250
6.125% Sr. Unsec. Sub. Nts., 1/15/14 1,100,000 1,050,500
6.375% Sr. Unsec. Sub. Nts.,
Series B, 10/15/15 1,280,000 1,228,800
7.625% Sr. Sub. Nts., 6/15/12 500,000 510,000
- --------------------------------------------------------------------------------
TRW Automotive, Inc.:
9.375% Sr. Nts., 2/15/13 580,000 619,150
11% Sr. Sub. Nts., 2/15/13 454,000 498,265
---------------
6,810,433
- --------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp., 13% Sr. Unsec.
Nts., 2/1/09 1,5 1,575,000 70,875
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.6%
Associated Materials, Inc., 9.75% Sr.
Sub. Nts., 4/15/12 $ 700,000 $ 700,000
- --------------------------------------------------------------------------------
Goodman Global Holding Co., Inc.,
7.875% Sr. Unsec. Sub. Nts., 12/15/12 1,060,000 1,017,600
- --------------------------------------------------------------------------------
Jacuzzi Brands, Inc., 9.625%
Sr. Sec. Nts., 7/1/10 544,000 577,320
- --------------------------------------------------------------------------------
Nortek, Inc., 8.50% Sr. Unsec.
Unsub. Nts., 9/1/14 600,000 583,500
---------------
2,878,420
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.2%
Allied Waste North America, Inc.:
7.25% Sr. Nts., 3/15/15 225,000 216,000
7.375% Sr. Sec. Nts., Series B, 4/15/14 2,250,000 2,148,750
9.25% Sr. Sec. Debs., Series B, 9/1/12 283,000 301,395
- --------------------------------------------------------------------------------
American Pad & Paper Co.,
13% Sr. Sub. Nts., Series B, 11/15/05 1,5 200,000 --
- --------------------------------------------------------------------------------
Avis Budget Car Rental LLC/Avis
Budget Finance, Inc.:
7.576% Sr. Nts., 5/15/14 2,3 180,000 180,450
7.75% Sr. Nts., 5/15/16 3 455,000 439,075
- --------------------------------------------------------------------------------
Cenveo Corp., 7.875%
Sr. Sub. Nts., 12/1/13 900,000 882,000
- --------------------------------------------------------------------------------
Comforce Operating, Inc.,
12% Sr. Nts., Series B, 12/1/07 750,000 754,688
- --------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 890,000 841,050
7.50% Sr. Nts., 5/1/11 500,000 506,250
---------------
6,269,658
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.3%
Belden & Blake Corp., 8.75%
Sec. Nts., 7/15/12 650,000 663,000
- --------------------------------------------------------------------------------
Dayton Superior Corp.,
13% Sr. Unsec. Sub. Nts., 6/15/09 100,000 87,750
- --------------------------------------------------------------------------------
General Cable Corp.,
9.50% Sr. Nts., 11/15/10 500,000 532,500
- --------------------------------------------------------------------------------
UCAR Finance, Inc.,
10.25% Sr. Nts., 2/15/12 400,000 424,000
---------------
1,707,250
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.3%
Covalence Specialty Materials Corp.,
10.25% Sr. Sub. Nts., 3/1/16 3 1,175,000 1,133,875
- --------------------------------------------------------------------------------
Great Lakes Dredge & Dock Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/13 250,000 231,563
---------------
1,365,438
11 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY--1.2%
Case New Holland, Inc.,
7.125% Sr. Nts., 3/1/14 3 $ 730,000 $ 700,800
- --------------------------------------------------------------------------------
Douglas Dynamics LLC,
7.75% Sr. Nts., 1/15/12 3 600,000 573,000
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc.,
8.375% Sr. Unsec. Nts., 5/15/15 740,000 759,425
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The):
7.125% Sr. Nts., 11/1/13 150,000 147,750
10.50% Sr. Sub. Nts., 8/1/12 520,000 566,800
- --------------------------------------------------------------------------------
Milacron Escrow Corp.,
11.50% Sr. Sec. Nts., 5/15/11 1,700,000 1,585,250
- --------------------------------------------------------------------------------
Trinity Industries, Inc.,
6.50% Sr. Nts., 3/15/14 1,000,000 980,000
- --------------------------------------------------------------------------------
Wolverine Tube, Inc.,
7.375% Sr. Nts., 8/1/08 3 650,000 529,750
---------------
5,842,775
- --------------------------------------------------------------------------------
ROAD & RAIL--0.5%
Kansas City Southern Railway Co.
(The), 7.50% Sr. Nts., 6/15/09 500,000 502,500
- --------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 150,000 138,750
7.50% Sr. Unsec. Nts., 11/1/13 928,000 904,800
9.625% Sr. Nts., 12/1/12 1,100,000 1,174,250
---------------
2,720,300
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.9%
Interline Brands, Inc.,
8.125% Sr. Sub. Nts., 6/15/14 175,000 175,438
- --------------------------------------------------------------------------------
United Rentals, Inc.,
7% Sr. Sub. Nts., 2/15/14 5,000,000 4,593,750
---------------
4,769,188
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Horizon Lines LLC, 9% Nts., 11/1/12 473,000 482,460
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--3.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.6%
Loral Skynet Corp.,
14% Sr. Sec. Nts., 11/21/15 6 198,000 228,690
- --------------------------------------------------------------------------------
Lucent Technologies, Inc.,
6.45% Unsec. Debs., 3/15/29 2,900,000 2,479,500
- --------------------------------------------------------------------------------
Nortel Networks Ltd.,
9.73% Sr. Nts., 7/15/11 2,3 435,000 444,788
- --------------------------------------------------------------------------------
Orion Network Systems, Inc.,
12.50% Sr. Unsub. Disc. Nts., 1/15/07 1 1,150,000 12
---------------
3,152,990
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.1%
Seagate Technology Hdd Holdings,
8% Sr. Nts., 5/15/09 700,000 721,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.3%
Flextronics International Ltd., 6.25%
Sr. Sub. Nts., 11/15/14 $ 300,000 $ 282,375
- --------------------------------------------------------------------------------
Sanmina-SCI Corp.:
6.75% Unsec. Sub. Nts., 3/1/13 470,000 440,625
8.125% Sr. Sub. Nts., 3/1/16 550,000 539,000
- --------------------------------------------------------------------------------
Solectron Corp., 8% Sr. Sub. Nts.,
3/15/16 3 240,000 237,600
---------------
1,499,600
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 1,5 [EUR] 846,550 --
- --------------------------------------------------------------------------------
NorthPoint Communications Group,
Inc., 12.875% Nts., 2/15/10 1,5 240,208 --
- --------------------------------------------------------------------------------
PSINet, Inc., 10.50% Sr. Unsec. Nts.,
12/1/06 1,5 [EUR] 1,000,000 --
---------------
--
- --------------------------------------------------------------------------------
IT SERVICES--1.2%
DI Finance/DynCorp International
LLC, 9.50% Sr. Unsec. Sub. Nts.,
Series B, 2/15/13 1,186,000 1,239,370
- --------------------------------------------------------------------------------
iPayment Holdings, Inc.,
9.75% Sr. Sub. Nts., 5/15/14 3 750,000 750,000
- --------------------------------------------------------------------------------
Iron Mountain, Inc., 8.625% Sr.
Unsec. Sub. Nts., 4/1/13 1,000,000 1,005,000
- --------------------------------------------------------------------------------
SunGard Data Systems, Inc.:
9.125% Sr. Unsec. Nts., 8/15/13 3 930,000 969,525
10.25% Sr. Sub. Nts., 8/15/15 3 2,090,000 2,170,988
---------------
6,134,883
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.8%
Advanced Micro Devices, Inc.,
7.75% Sr. Unsec. Nts., 11/1/12 1,655,000 1,692,238
- --------------------------------------------------------------------------------
Amkor Technology, Inc.,
7.75% Sr. Nts., 5/15/13 2,250,000 2,044,688
---------------
3,736,926
- --------------------------------------------------------------------------------
MATERIALS--10.5%
- --------------------------------------------------------------------------------
CHEMICALS--2.4%
Chemtura Corp.,
6.875% Sr. Nts., 6/1/16 255,000 247,669
- --------------------------------------------------------------------------------
Crompton Corp.,
9.875% Sr. Nts., 8/1/12 800,000 904,000
- --------------------------------------------------------------------------------
Equistar Chemicals LP/Equistar
Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 400,000 415,000
10.125% Sr. Unsec. Nts., 9/1/08 57,000 60,278
10.625% Sr. Unsec. Nts., 5/1/11 1,400,000 1,510,250
- --------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc,
10.125% Sr. Unsec. Sub. Nts., 7/1/09 825,000 841,500
12 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CHEMICALS Continued
Huntsman International LLC,
7.875% Sr. Sub. Nts., 1/1/15 2,3 $ 420,000 $ 395,850
- --------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 2 332,000 372,670
11.625% Sr. Unsec. Nts., 10/15/10 37,000 41,070
- --------------------------------------------------------------------------------
IMC Global, Inc.:
10.875% Sr. Unsec. Nts., 8/1/13 57,000 63,698
10.875% Sr. Unsec. Nts., Series B, 6/1/08 11,000 11,770
- --------------------------------------------------------------------------------
Ineos Group Holdings plc,
8.50% Nts., 2/15/16 3 2,110,000 1,986,038
- --------------------------------------------------------------------------------
Innophos, Inc., 8.875% Sr.
Unsec. Sub. Nts., 8/15/14 800,000 792,000
- --------------------------------------------------------------------------------
KI Holdings, Inc., 0%/9.875%
Sr. Unsec. Sub. Disc. Nts., 11/15/14 4 750,000 540,000
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08 34,000 35,105
9.50% Sr. Sec. Nts., 12/15/08 59,000 60,918
9.625% Sr. Sec. Nts., Series A, 5/1/07 1,000,000 1,020,000
10.50% Sr. Sec. Nts., 6/1/13 800,000 884,000
11.125% Sr. Sec. Nts., 7/15/12 300,000 327,000
- --------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.:
7.50% Sr. Sub. Nts., 11/15/14 400,000 394,000
10.625% Sr. Unsec. Sub. Nts., 5/15/11 291,000 312,461
- --------------------------------------------------------------------------------
Tronox Worldwide LLC/Tronox
Finance Corp., 9.50% Sr. Nts., 12/1/12 3 955,000 988,425
---------------
12,203,702
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.4%
NTK Holdings, Inc., 0%/10.75%
Sr. Disc. Nts., 3/1/14 4 2,420,000 1,763,575
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--4.0%
Ball Corp., 6.625% Sr. Nts., 3/15/18 910,000 850,850
- --------------------------------------------------------------------------------
Crown Americas, Inc.,
7.75% Sr. Nts., 11/15/15 3 760,000 752,400
- --------------------------------------------------------------------------------
Graham Packaging Co., Inc.,
9.875% Sr. Unsec. Sub. Nts., 10/15/14 2,600,000 2,587,000
- --------------------------------------------------------------------------------
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11 1,000,000 1,002,500
9.50% Sr. Sub. Nts., 8/15/13 500,000 497,500
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
7.50% Sr. Unsec. Unsub. Nts., 6/1/13 350,000 315,000
8.25% Sr. Unsec. Nts., 10/1/12 2,550,000 2,403,375
- --------------------------------------------------------------------------------
MDP Acquisitions plc,
9.625% Sr. Nts., 10/1/12 800,000 828,000
- --------------------------------------------------------------------------------
Owens-Brockway Glass
Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 500,000 506,250
8.25% Sr. Unsec. Nts., 5/15/13 1,657,000 1,669,428
8.75% Sr. Sec. Nts., 11/15/12 1,350,000 1,412,438
8.875% Sr. Sec. Nts., 2/15/09 300,000 310,500
- --------------------------------------------------------------------------------
Pliant Corp., 11.625% Sr. Sec.
Nts., 6/15/09 1,6 540,268 587,541
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING Continued
Solo Cup Co., 8.50% Sr. Sub.
Nts., 2/15/14 $ 2,250,000 $ 1,957,500
- --------------------------------------------------------------------------------
Stone Container Corp.:
8.375% Sr. Nts., 7/1/12 850,000 807,500
9.75% Sr. Unsec. Nts., 2/1/11 601,000 620,532
- --------------------------------------------------------------------------------
Stone Container Finance Co. of
Canada II, 7.375% Sr. Unsec. Nts.,
7/15/14 300,000 267,000
- --------------------------------------------------------------------------------
Tekni-Plex, Inc., 10.875% Sr. Sec. Nts.,
8/15/12 3 290,000 321,900
- --------------------------------------------------------------------------------
TriMas Corp., 9.875% Sr. Unsec. Sub.
Nts., 6/15/12 2,300,000 2,116,000
---------------
19,813,214
- --------------------------------------------------------------------------------
METALS & MINING--2.4%
AK Steel Corp., 7.75% Sr.
Unsec. Nts., 6/15/12 1,107,000 1,090,395
- --------------------------------------------------------------------------------
Century Aluminum Co., 7.50% Sr.
Unsec. Nts., 8/15/14 1,000,000 1,005,000
- --------------------------------------------------------------------------------
Gibraltar Industries, Inc.,
8% Sr. Sub. Nts., 12/1/15 3 1,075,000 1,075,000
- --------------------------------------------------------------------------------
IMCO Recycling, Inc.,
10.375% Sr. Sec. Nts., 10/15/10 700,000 759,500
- --------------------------------------------------------------------------------
IPSCO, Inc., 8.75% Sr. Nts., 6/1/13 300,000 323,250
- --------------------------------------------------------------------------------
Ispat Inland ULC,
9.75% Sr. Sec. Nts., 4/1/14 1,364,000 1,505,882
- --------------------------------------------------------------------------------
Jorgensen (Earle M.) Co.,
9.75% Sr. Sec. Nts., 6/1/12 800,000 856,000
- --------------------------------------------------------------------------------
Koppers Industry, Inc.,
9.875% Sr. Sec. Nts., 10/15/13 614,000 661,585
- --------------------------------------------------------------------------------
Northwest Pipeline Corp.,
8.125% Sr. Nts., 3/1/10 200,000 209,000
- --------------------------------------------------------------------------------
Novelis, Inc., 7.75% Sr. Nts., 2/15/15 2,3 1,915,000 1,847,975
- --------------------------------------------------------------------------------
Oregon Steel Mills, Inc.,
10% Sr. Nts., 7/15/09 1,300,000 1,365,000
- --------------------------------------------------------------------------------
Steel Dynamics, Inc.,
9.50% Sr. Nts., 3/15/09 400,000 412,500
- --------------------------------------------------------------------------------
United States Steel Corp.:
9.75% Sr. Nts., 5/15/10 505,000 540,350
10.75% Sr. Nts., 8/1/08 389,000 420,120
---------------
12,071,557
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--1.3%
Abitibi-Consolidated Co. of Canada,
8.375% Sr. Unsec. Sub. Nts., 4/1/15 1,200,000 1,101,000
- --------------------------------------------------------------------------------
Abitibi-Consolidated, Inc.:
8.55% Nts., 8/1/10 600,000 571,500
8.85% Unsec. Bonds, 8/1/30 500,000 425,000
- --------------------------------------------------------------------------------
Appleton Papers, Inc.,
8.125% Sr. Nts., 6/15/11 380,000 385,700
13 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS Continued
Buckeye Technologies, Inc.,
8.50% Sr. Nts., 10/1/13 $ 350,000 $ 334,250
- --------------------------------------------------------------------------------
Domtar, Inc., 7.125% Nts., 8/15/15 800,000 700,000
- --------------------------------------------------------------------------------
Inland Fiber Group LLC,
9.625% Sr. Unsec. Nts., 11/15/07 1,5 1,700,000 1,105,000
- --------------------------------------------------------------------------------
JSG Holding plc, 11.50% Sr. Nts.,
10/1/15 3,6 [EUR] 307,825 404,059
- --------------------------------------------------------------------------------
Mercer International, Inc.,
9.25% Sr. Nts., 2/15/13 620,000 554,900
- --------------------------------------------------------------------------------
Norske Skog Canada Ltd.,
7.375% Sr. Unsec. Nts., 3/1/14 5 1,000,000 900,000
- --------------------------------------------------------------------------------
Tembec Industries, Inc.,
7.75% Sr. Nts., 3/15/12 490,000 252,350
---------------
6,733,759
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--8.2%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--4.0%
AT&T Corp., 9.05% Sr. Unsec. Nts.,
11/15/11 76,000 80,766
- --------------------------------------------------------------------------------
Citizens Communications Co.,
6.25% Sr. Nts., 1/15/13 3 3,600,000 3,420,000
- --------------------------------------------------------------------------------
Intelsat Bermuda Ltd.,
11.25% Sr. Nts., 6/15/16 3,7 1,480,000 1,524,400
- --------------------------------------------------------------------------------
Intelsat Subsidiary Holding Co. Ltd.:
8.25% Sr. Nts., 1/15/13 2 1,500,000 1,496,250
8.625% Sr. Nts., 1/15/15 2 625,000 629,688
- --------------------------------------------------------------------------------
Nordic Telephone Co. Holdings ApS,
8.875% Sr. Nts., 5/1/16 3 455,000 469,788
- --------------------------------------------------------------------------------
PanAmSat Corp.:
9% Sr. Nts., 6/15/16 3,7 1,395,000 1,422,900
9% Sr. Unsec. Nts., 8/15/14 1,300,000 1,326,000
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc.:
7.25% Unsec. Unsub. Nts., 2/15/11 900,000 879,750
7.90% Unsec. Nts., 8/15/10 757,000 757,000
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc., 7.25% Sr. Unsec.
Sub. Nts., 2/15/11 2 600,000 585,000
- --------------------------------------------------------------------------------
Qwest Corp., 8.875% Unsec.
Unsub. Nts., 3/15/12 2 3,200,000 3,392,000
- --------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 1,5 400,000 --
- --------------------------------------------------------------------------------
Time Warner Telecom Holdings, Inc.,
9.25% Sr. Unsec. Unsub. Nts., 2/15/14 1,950,000 2,008,500
- --------------------------------------------------------------------------------
Valor Telecommunications
Enterprises LLC, 7.75% Sr. Unsec.
Sub. Nts., 2/15/15 445,000 461,688
- --------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Nts., 8/1/13 3,7 655,000 671,375
8.625% Sr. Nts., 8/1/16 3,7 655,000 673,013
- --------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 1,5 1,000,000 --
---------------
19,798,118
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.2%
Alamosa Delaware, Inc.:
8.50% Sr. Nts., 1/31/12 $ 500,000 $ 532,500
11% Sr. Unsec. Nts., 7/31/10 57,000 62,700
- --------------------------------------------------------------------------------
American Cellular Corp.,
10% Sr. Nts., Series B, 8/1/11 2,110,000 2,231,325
- --------------------------------------------------------------------------------
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 500,000 501,250
7.50% Sr. Nts., 5/1/12 1,650,000 1,674,750
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc.,
Sr. Unsec. Disc. Nts., 10/1/07 1,5 1,834,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating Co.
LLC/Centennial Communications
Corp., 10.125% Sr. Nts., 6/15/13 2,200,000 2,326,500
- --------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 470,000 485,275
- --------------------------------------------------------------------------------
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13 769,000 759,388
9.318% Sr. Unsec. Nts., 10/15/12 2 290,000 293,625
- --------------------------------------------------------------------------------
IWO Holdings, Inc.,
8.818% Sr. Sec. Nts., 1/15/12 2 220,000 228,800
- --------------------------------------------------------------------------------
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 4,990,000 5,082,649
- --------------------------------------------------------------------------------
Nextel Partners, Inc.,
8.125% Sr. Nts., 7/1/11 700,000 735,875
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.:
7.50% Sec. Nts., 3/15/15 900,000 913,500
8% Sr. Sub. Nts., 12/15/12 600,000 616,500
- --------------------------------------------------------------------------------
Rural Cellular Corp.:
9.75% Sr. Sub. Nts., 1/15/10 2,457,000 2,460,071
9.875% Sr. Nts., 2/1/10 600,000 620,250
- --------------------------------------------------------------------------------
UbiquiTel Operating Co.,
9.875% Sr. Nts., 3/1/11 1,100,000 1,201,750
- --------------------------------------------------------------------------------
US Unwired, Inc.,
10% Sr. Sec. Nts., 6/15/12 500,000 557,500
---------------
21,284,208
- --------------------------------------------------------------------------------
UTILITIES--5.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.9%
Edison Mission Energy:
7.50% Sr. Nts., 6/15/13 3 445,000 438,325
7.75% Sr. Nts., 6/15/16 3 125,000 123,438
- --------------------------------------------------------------------------------
ESI Tractebel Acquisition Corp.,
7.99% Sec. Bonds, Series B, 12/30/11 812,000 840,366
- --------------------------------------------------------------------------------
Midwest Generation LLC,
8.75% Sr. Sec. Nts., 5/1/34 3,900,000 4,153,500
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW
Energy Finance Co. II, Inc., 7.375%
Sr. Sec. Nts., Series B, 9/1/10 700,000 703,500
- --------------------------------------------------------------------------------
MSW Energy Holdings LLC/MSW
Energy Finance Co., Inc.,
8.50% Sr. Sec. Nts., 9/1/10 400,000 414,000
14 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES Continued
Reliant Energy, Inc.,
6.75% Sr. Sec. Nts., 12/15/14 $ 600,000 $ 555,000
- --------------------------------------------------------------------------------
Reliant Resources, Inc.:
9.25% Sr. Sec. Nts., 7/15/10 157,000 157,785
9.50% Sr. Sec. Nts., 7/15/13 1,325,000 1,338,250
- --------------------------------------------------------------------------------
Sierra Pacific Resources, 6.75%
Sr. Unsec. Nts., 8/15/17 1,081,000 1,026,757
---------------
9,750,921
- --------------------------------------------------------------------------------
ENERGY TRADERS--2.8%
AES Corp. (The), 8.75% Sr. Sec.
Nts., 5/15/13 3 1,550,000 1,666,250
- --------------------------------------------------------------------------------
AES Red Oak LLC:
8.54% Sr. Sec. Bonds, Series A, 11/30/19 8 769,539 815,711
9.20% Sr. Sec. Bonds, Series B, 11/30/29 500,000 542,500
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 1,501,000 1,425,950
8.375% Sr. Unsec. Nts., 5/1/16 3 410,000 405,900
8.75% Sr. Nts., 2/15/12 424,000 432,480
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC:
8.30% Sr. Unsec. Nts., 5/1/11 3,100,000 3,076,750
8.50% Sr. Unsec. Nts., 10/1/21 600,000 565,500
9.125% Sr. Unsec. Nts., 5/1/31 1,200,000 1,170,000
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC, 8.625% Sec.
Pass-Through Certificates, Series A,
6/30/12 1,245,635 1,321,152
- --------------------------------------------------------------------------------
NRG Energy, Inc., 7.375%
Sr. Nts., 2/1/16 2,740,000 2,678,350
---------------
14,100,543
- --------------------------------------------------------------------------------
GAS UTILITIES--0.1%
SEMCO Energy, Inc., 7.125% Sr. Nts.,
5/15/08 400,000 399,145
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.3%
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 357,000 363,248
7.75% Sr. Nts., 8/1/10 400,000 408,000
- --------------------------------------------------------------------------------
NorthWestern Corp., 5.875%
Sr. Sec. Nts., 11/1/14 580,000 571,136
---------------
1,342,384
---------------
Total Corporate Bonds and Notes
(Cost $437,638,933) 428,306,799
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.8%
- --------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr.
Exchangeable, Non-Vtg. 5,6 13,764 --
- --------------------------------------------------------------------------------
Dobson Communications Corp.,
6% Cv., Series F (converts into
Dobson Communications Corp.,
Cl. A common stock), Non-Vtg. 3 885 155,096
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS Continued
- --------------------------------------------------------------------------------
e.spire Communications, Inc.,
12.75% Jr. Redeemable, Non-Vtg. 5,6 498 $ 50
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc.,
11.75% Cum. Exchangeable,
Series B, Non-Vtg. 5,9 8,000 --
- --------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25%
Exchangeable, Non-Vtg. 5,9 342 --
- --------------------------------------------------------------------------------
ION Media Networks, Inc.,
14.25% Cum., Non-Vtg. 9 228 1,960,958
- --------------------------------------------------------------------------------
Loral Skynet Corp., 12% Cum.,
Series A, Non-Vtg. 5,9 1,634 325,166
- --------------------------------------------------------------------------------
PTV, Inc., 10% Cum., Series A,
Non-Vtg. 9 22 66
- --------------------------------------------------------------------------------
Rural Cellular Corp., 11.375%
Cum., Series B, Non-Vtg. 9 245 297,063
- --------------------------------------------------------------------------------
Sovereign Real Estate Investment
Trust, 12% Non-Cum., Series A 3 10,000 1,377,500
---------------
Total Preferred Stocks
(Cost $4,898,467) 4,115,899
- --------------------------------------------------------------------------------
COMMON STOCKS--2.9%
- --------------------------------------------------------------------------------
Advanced Micro Devices, Inc. 9 3,460 84,493
- --------------------------------------------------------------------------------
Allegheny Technologies, Inc. 1,550 107,322
- --------------------------------------------------------------------------------
Allied Waste Industries, Inc. 9 8,400 95,424
- --------------------------------------------------------------------------------
American Tower Corp. 9 19,733 614,091
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp. 2,060 98,241
- --------------------------------------------------------------------------------
Apache Corp. 1,580 107,835
- --------------------------------------------------------------------------------
Archer-Daniels-Midland Co. 2,460 101,549
- --------------------------------------------------------------------------------
Ashland, Inc. 1,642 109,521
- --------------------------------------------------------------------------------
ATA Holdings Corp. 5,9 3,690 55,350
- --------------------------------------------------------------------------------
Avaya, Inc. 9 8,611 98,338
- --------------------------------------------------------------------------------
Baker Hughes, Inc. 1,170 95,765
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 760 106,461
- --------------------------------------------------------------------------------
Caterpillar, Inc. 1,430 106,506
- --------------------------------------------------------------------------------
Cebridge Connections Holding LLC 5,9 2,645 --
- --------------------------------------------------------------------------------
Centex Corp. 2,181 109,704
- --------------------------------------------------------------------------------
Charles River Laboratories
International, Inc. 9 8,360 307,648
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 15,390 465,548
- --------------------------------------------------------------------------------
Chevron Corp. 1,710 106,123
- --------------------------------------------------------------------------------
Chubb Corp. 2,070 103,293
- --------------------------------------------------------------------------------
Cincinnati Financial Corp. 2,240 105,302
- --------------------------------------------------------------------------------
Circuit City Stores, Inc./Circuit
City Group 3,420 93,092
- --------------------------------------------------------------------------------
Citigroup, Inc. 359 17,318
- --------------------------------------------------------------------------------
ConocoPhillips 1,611 105,569
- --------------------------------------------------------------------------------
Countrywide Financial Corp. 2,660 101,293
- --------------------------------------------------------------------------------
Covad Communications Group, Inc. 9 20,660 41,527
15 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
CSX Corp. 1,520 $ 107,069
- --------------------------------------------------------------------------------
Cummins, Inc. 930 113,693
- --------------------------------------------------------------------------------
D.R. Horton, Inc. 3,973 94,637
- --------------------------------------------------------------------------------
Dillard's, Inc., Cl. A 3,660 116,571
- --------------------------------------------------------------------------------
Dobson Communications
Corp., Cl. A 9 43,391 335,412
- --------------------------------------------------------------------------------
Dow Chemical Co. (The) 13,000 507,390
- --------------------------------------------------------------------------------
E*TRADE Financial Corp. 9 4,257 97,145
- --------------------------------------------------------------------------------
El Paso Corp. 45,000 675,000
- --------------------------------------------------------------------------------
Freeport-McMoRan Copper
& Gold, Inc., Cl. B 1,830 101,400
- --------------------------------------------------------------------------------
Globix Corp. 9 11,467 56,991
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 670 100,788
- --------------------------------------------------------------------------------
Gulfstream Holding, Inc. 5,9 56 --
- --------------------------------------------------------------------------------
Halliburton Co. 1,360 100,926
- --------------------------------------------------------------------------------
Hess Corp. 2,050 108,343
- --------------------------------------------------------------------------------
Horizon Natural Resources Co. 5,9 20,000 --
- --------------------------------------------------------------------------------
Huntsman Corp. 5,9 19,570 322,005
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. 9 42,107 197,903
- --------------------------------------------------------------------------------
iPCS, Inc. 9 10,189 492,129
- --------------------------------------------------------------------------------
KB Home 2,040 93,534
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 1,880 130,378
- --------------------------------------------------------------------------------
Leap Wireless International, Inc. 9 1,913 90,772
- --------------------------------------------------------------------------------
Lennar Corp., Cl. A 2,162 95,928
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series A 7,577 162,906
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 9 7,684 158,060
- --------------------------------------------------------------------------------
Lincoln National Corp. 1,810 102,156
- --------------------------------------------------------------------------------
Loral Space & Communications Ltd. 9 12,392 351,437
- --------------------------------------------------------------------------------
Louisiana-Pacific Corp. 4,184 91,630
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 2,078 92,471
- --------------------------------------------------------------------------------
Marathon Oil Corp. 1,324 110,289
- --------------------------------------------------------------------------------
National City Corp. 2,770 100,246
- --------------------------------------------------------------------------------
Navistar International Corp. 9 3,800 93,518
- --------------------------------------------------------------------------------
Norfolk Southern Corp. 1,940 103,247
- --------------------------------------------------------------------------------
NTL, Inc. 69,198 1,723,030
- --------------------------------------------------------------------------------
Nucor Corp. 1,926 104,486
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 1,031 105,729
- --------------------------------------------------------------------------------
Office Depot, Inc. 9 2,440 92,720
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 9 2,235 36,073
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 1,198 98,428
- --------------------------------------------------------------------------------
Polymer Group, Inc., Cl. A 9 24,040 612,299
- --------------------------------------------------------------------------------
Prandium, Inc. 5,9 62,829 628
- --------------------------------------------------------------------------------
Pulte Homes, Inc. 3,320 95,583
- --------------------------------------------------------------------------------
Quicksilver Resources, Inc. 9 15,000 552,150
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
Reynolds American, Inc. 940 $ 108,382
- --------------------------------------------------------------------------------
Ryder Systems, Inc. 1,890 110,433
- --------------------------------------------------------------------------------
Schlumberger Ltd. 1,570 102,223
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. 9 398 5,930
- --------------------------------------------------------------------------------
Teco Energy, Inc. 20,000 298,800
- --------------------------------------------------------------------------------
TVMAX Holdings, Inc. 5,9 7,500 7,500
- --------------------------------------------------------------------------------
TXU Corp. 1,760 105,230
- --------------------------------------------------------------------------------
United Rentals, Inc. 9 36,000 1,151,280
- --------------------------------------------------------------------------------
United States Steel Corp. 1,496 104,900
- --------------------------------------------------------------------------------
Valero Energy Corp. 1,652 109,891
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 935 31,313
- --------------------------------------------------------------------------------
Viatel Holding (Bermuda) Ltd. 5,9 2,701 27
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 2,250 102,525
- --------------------------------------------------------------------------------
Weatherford International Ltd. 9 1,930 95,767
- --------------------------------------------------------------------------------
Western Forest Products, Inc. 9 85,047 148,564
- --------------------------------------------------------------------------------
WRC Media Corp. 5,9 1,353 14
- --------------------------------------------------------------------------------
XO Holdings, Inc. 9 3,538 15,567
---------------
Total Common Stocks (Cost $15,021,258) 14,560,759
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
ASAT Finance LLC Wts.,
Exp. 11/1/06 5,9 500 --
- --------------------------------------------------------------------------------
COLO.com, Inc. Wts., Exp.
3/15/10 5,9 600 --
- --------------------------------------------------------------------------------
Concentric Network Corp. Wts.,
Exp. 12/15/07 5,9 750 --
- --------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc.
Wts., Exp. 9/30/08 5,9 1,750 --
- --------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/1/08 5,9 1,500 --
- --------------------------------------------------------------------------------
ICO Global Communication
Holdings Ltd. Wts., Exp. 8/1/06 5,9 16 --
- --------------------------------------------------------------------------------
Imperial Credit Industries, Inc. Wts.,
Exp. 1/31/08 5,9 5,148 --
- --------------------------------------------------------------------------------
iPCS, Inc. Wts., Exp. 6/15/10 5,9 750 --
- --------------------------------------------------------------------------------
Long Distance International, Inc.
Wts., Exp. 4/13/08 5,9 800 --
- --------------------------------------------------------------------------------
Ntelos, Inc. Wts., Exp. 8/15/10 5,9 1,000 --
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts.,
Exp. 9/19/10 9 20,000 6,800
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 9 651 4
- --------------------------------------------------------------------------------
XO Communications, Inc.:
Series A Wts., Exp. 1/16/10 9 7,093 6,100
Series B Wts., Exp. 1/16/10 9 5,319 2,553
Series C Wts., Exp. 1/16/10 9 5,319 1,862
---------------
Total Rights, Warrants and Certificates (Cost $72,452) 17,319
16 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES--0.2%
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., High Yield
Targeted Return Index Securities,
Series 2006-1, 7.548%, 5/1/16 5
(Cost $906,337) $ 900,000 $ 897,876
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--9.3%
- --------------------------------------------------------------------------------
Undivided interest of 1.91% in joint repurchase agreement
(Principal Amount/Value $2,439,041,000, with a maturity
value of $2,440,006,454) with UBS Warburg LLC, 4.75%,
dated 6/30/06, to be repurchased at $46,560,423 on
7/3/06, collateralized by Federal National Mortgage
Assn., 5%-6%, 10/1/35-3/1/36, with
a value of $2,494,907,407
(Cost $46,542,000) 46,542,000 46,542,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $505,079,447) 98.4% 494,440,652
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.6 7,899,515
------------------------------
NET ASSETS 100.0% $ 502,340,167
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
EUR Euro
1. Issue is in default. Non-income producing. See Note 1 of accompanying Notes.
2. Represents the current interest rate for a variable or increasing rate
security.
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 $85,717,945 or 17.06% of the Fund's net
assets as of June 30, 2006.
4. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
5. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2006 was $7,073,056, which represents 1.41%
of the Fund's net assets, of which $322,633 is considered restricted. See Note 7
of accompanying Notes.
6. Interest or dividend is paid-in-kind.
7. When-issued security or forward commitment to be delivered and settled after
June 30, 2006. See Note 1 of accompanying Notes.
8. 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 $715,550. See Note 6 of accompanying Notes.
9. Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value (cost $505,079,447)--see accompanying statement of investments $ 494,440,652
- -------------------------------------------------------------------------------------------------------
Cash 793,244
- -------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 9,208,560
Investments sold 2,873,878
Shares of beneficial interest sold 1,061,714
Futures margins 15,360
Other 16,670
--------------
Total assets 508,410,078
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $4,168,933 purchased on a when-issued basis or
forward commitment) 5,518,794
Shares of beneficial interest redeemed 360,939
Distribution and service plan fees 98,451
Shareholder communications 63,419
Trustees' compensation 14,005
Transfer and shareholder servicing agent fees 1,965
Other 12,338
--------------
Total liabilities 6,069,911
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 502,340,167
==============
- -------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 62,912
- -------------------------------------------------------------------------------------------------------
Additional paid-in capital 597,732,067
- -------------------------------------------------------------------------------------------------------
Accumulated net investment income 17,791,538
- -------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (102,546,005)
- -------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (10,700,345)
--------------
NET ASSETS $ 502,340,167
==============
- -------------------------------------------------------------------------------------------------------
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 $351,527,917 and 43,956,050 shares of beneficial interest outstanding) $ 8.00
- -------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based
on net assets of $150,812,250 and 18,956,266 shares of beneficial interest outstanding) $ 7.96
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $4,389) $ 20,523,511
- -------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $38) 255,570
- -------------------------------------------------------------------------------------------------------
Portfolio lending fees 48
--------------
Total investment income 20,779,129
- -------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------
Management fees 1,912,379
- -------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 195,850
- -------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,121
Service shares 5,052
- -------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 27,518
Service shares 11,602
- -------------------------------------------------------------------------------------------------------
Trustees' compensation 5,189
- -------------------------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------------------------
Custodian fees and expenses 96
- -------------------------------------------------------------------------------------------------------
Other 22,359
--------------
Total expenses 2,185,916
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 18,593,213
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 3,052,242
Closing and expiration of futures contracts 77,570
Foreign currency transactions 11,662
--------------
Net realized gain 3,141,474
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (9,522,960)
Translation of assets and liabilities denominated in foreign currencies 304,076
Futures contracts (12,393)
--------------
Net change in unrealized depreciation (9,231,277)
- -------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,503,410
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment income $ 18,593,213 $ 39,416,355
- ------------------------------------------------------------------------------------------------------------------
Net realized gain 3,141,474 4,793,340
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (9,231,277) (31,729,313)
----------------------------------
Net increase in net assets resulting from operations 12,503,410 12,480,382
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (28,179,781) (29,392,362)
Service shares (11,514,103) (8,541,230)
- ------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Non-Service shares (14,051,894) (74,783,236)
Service shares 3,240,023 27,161,237
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total decrease (38,002,345) (73,075,209)
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 540,342,512 613,417,721
----------------------------------
End of period (including accumulated net investment income of $17,791,538
and $38,892,209, respectively) $ 502,340,167 $ 540,342,512
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER HIGH INCOME FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.44 $ 8.80 $ 8.61 $ 7.51 $ 8.54 $ 9.27
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .29 1 .57 1 .58 1 .60 .58 .84
Net realized and unrealized gain (loss) (.09) (.37) .15 1.09 (.76) (.62)
---------------------------------------------------------------------------------
Total from investment operations .20 .20 .73 1.69 (.18) .22
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.64) (.56) (.54) (.59) (.85) (.95)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.00 $ 8.44 $ 8.80 $ 8.61 $ 7.51 $ 8.54
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.38% 2.31% 8.97% 23.96% (2.40)% 1.97%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 351,528 $ 384,726 $ 479,405 $ 480,112 $ 345,670 $ 344,788
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 374,655 $ 444,477 $ 460,877 $ 396,858 $ 335,894 $ 347,723
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 7.11% 6.79% 6.91% 8.31% 8.29% 9.94%
Total expenses 0.75% 0.75% 4 0.75% 4 0.76% 4 0.77% 4 0.79% 4
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 32% 64% 51% 48% 75% 46%
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.
21 | OPPENHEIMER HIGH INCOME FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.39 $ 8.76 $ 8.58 $ 7.49 $ 8.54 $ 8.40
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .28 2 .55 2 .56 2 .61 .88 .20
Net realized and unrealized gain (loss) (.09) (.38) .15 1.06 (1.08) (.06)
---------------------------------------------------------------------------------
Total from investment operations .19 .17 .71 1.67 (.20) .14
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.62) (.54) (.53) (.58) (.85) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.96 $ 8.39 $ 8.76 $ 8.58 $ 7.49 $ 8.54
=================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 2.29% 2.01% 8.73% 23.79% (2.67)% 1.67%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 150,812 $ 155,617 $ 134,013 $ 76,354 $ 17,705 $ 3
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 157,952 $ 141,287 $ 101,464 $ 41,246 $ 5,602 $ 2
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 6.87% 6.54% 6.63% 7.84% 8.91% 12.51%
Total expenses 1.01% 1.00% 5 1.01% 5 1.04% 5 1.02% 5,6 0.96% 5
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 32% 64% 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.
22 | 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, 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 investments in
high-yield fixed-income securities. The Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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, 2006, the market value
of these securities comprised 0.2% of the Fund's net assets and resulted in
unrealized cumulative losses of $8,461.
23 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2006, the Fund had purchased $4,168,933 of
securities issued on a when-issued basis or forward commitment.
- --------------------------------------------------------------------------------
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, 2006, securities with an aggregate
market value of $4,094,078, representing 0.82% 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.
24 | OPPENHEIMER HIGH INCOME 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.
As of June 30, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $101,202,223 expiring by
2014. 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, 2006, it is estimated that the Fund will utilize
$3,141,474 of capital loss carryforward to offset realized capital gains. During
the year ended December 31, 2005, the Fund utilized $3,158,488 of capital loss
carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
post-October losses of $178,616 and unused capital loss carryforwards as
follows:
EXPIRING
-----------------------------
2006 $ 243,089
2007 4,933,260
2008 11,572,833
2009 22,696,701
2010 56,061,391
2011 8,529,303
2012 128,504
-------------
Total $ 104,165,081
=============
- --------------------------------------------------------------------------------
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.
25 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $1,996 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and
former trustees and officers with a limited indemnification against liabilities
arising in connection with the performance of their duties to the Fund. In the
normal course of business, the Fund may also enter into contracts that provide
general indemnifications. The Fund's maximum exposure under these arrangements
is unknown as this would be dependent on future claims that may be made against
the Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,175,878 $ 17,875,363 10,721,772 $ 89,596,389
Dividends and/or distributions reinvested 3,544,627 28,179,781 3,524,264 29,392,362
Redeemed (7,348,076) (60,107,038) (23,117,209) (193,771,987)
--------------------------------------------------------------
Net decrease (1,627,571) $ (14,051,894) (8,871,173) $ (74,783,236)
==============================================================
- --------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 1,890,348 $ 15,513,583 9,211,332 $ 76,634,515
Dividends and/or distributions reinvested 1,455,639 11,514,103 1,027,826 8,541,230
Redeemed (2,935,147) (23,787,663) (6,989,741) (58,014,508)
--------------------------------------------------------------
Net increase 410,840 $ 3,240,023 3,249,417 $ 27,161,237
==============================================================
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $147,085,288 $195,322,352
26 | OPPENHEIMER HIGH INCOME 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
average annual rate as shown in the following table:
FEE SCHEDULE
-----------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Next $200 million of net assets 0.60
Over $1 billion of net assets 0.50
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the
Fund paid $9,985 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services,
personal service and account maintenance for the Fund's Service shares. Under
the plan, payments are made periodically 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, 2006, the Fund had no outstanding foreign currency
contracts.
27 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
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.
As of June 30, 2006, the Fund had outstanding futures contracts as follows:
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS JUNE 30, 2006 DEPRECIATION
- -----------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
Standard & Poor's 500 E-Mini 9/15/06 96 $6,141,120 $62,078
- --------------------------------------------------------------------------------
7. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2006, 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:
UNREALIZED
ACQUISITION VALUATION AS OF APPRECIATION
SECURITY DATES COST JUNE 30, 2006 (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------
Huntsman Corp. 7/15/04 $ 132,250 $ 322,005 $ 189,755
Prandium, Inc. 3/19/99-7/19/02 738,000 628 (737,372)
------------------------------------------------
$ 870,250 $ 322,633 $ (547,617)
================================================
28 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
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 U.S.
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 continues to receive the
economic benefit of interest or dividends paid on the securities loaned in the
form of a substitute payment received from the borrower. As of June 30, 2006,
the Fund had no securities on loan.
- --------------------------------------------------------------------------------
9. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
30 | OPPENHEIMER HIGH INCOME FUND/VA
OPPENHEIMER VALUE FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees 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, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,019.70 $8.70
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,016.22 8.69
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, 2006 is as follows:
CLASS EXPENSE RATIO
- ------------------------------------
Non-Service shares 1.73%
5 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--96.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--5.7%
- --------------------------------------------------------------------------------
MEDIA--5.7%
Liberty Global, Inc., Series A 1,953 $ 41,990
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 1 4,448 91,495
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 780 14,960
---------------
148,445
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.1%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.6%
Wal-Mart Stores, Inc. 880 42,390
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.7%
ConAgra Foods, Inc. 2,050 45,326
- --------------------------------------------------------------------------------
TOBACCO--4.8%
Altria Group, Inc. 1,690 124,097
- --------------------------------------------------------------------------------
ENERGY--9.4%
- --------------------------------------------------------------------------------
OIL & GAS--9.4%
BP plc, ADR 405 28,192
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 3,080 188,958
- --------------------------------------------------------------------------------
TotalFinaElf SA, Sponsored ADR 450 29,484
---------------
246,634
- --------------------------------------------------------------------------------
FINANCIALS--32.1%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--6.6%
Bear Stearns Cos., Inc. (The) 185 25,915
- --------------------------------------------------------------------------------
E*TRADE Financial Corp. 1 400 9,128
- --------------------------------------------------------------------------------
UBS AG 1,260 138,222
---------------
173,265
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--6.6%
Wachovia Corp. 2,290 123,843
- --------------------------------------------------------------------------------
Wells Fargo & Co. 745 49,975
---------------
173,818
- --------------------------------------------------------------------------------
CONSUMER FINANCE--4.6%
Capital One Financial Corp. 1,400 119,630
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.1%
Bank of America Corp. 1,680 80,808
- --------------------------------------------------------------------------------
INSURANCE--8.0%
Everest Re Group Ltd. 1,270 109,944
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 2,050 71,422
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 990 27,700
---------------
209,066
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--3.2%
Countrywide Financial Corp. 1,230 46,838
- --------------------------------------------------------------------------------
Freddie Mac 630 35,916
---------------
82,754
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE--5.5%
- --------------------------------------------------------------------------------
PHARMACEUTICALS--5.5%
Pfizer, Inc. 3,150 $ 73,931
- --------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 1,410 68,667
---------------
142,598
- --------------------------------------------------------------------------------
INDUSTRIALS--12.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--5.5%
Rockwell Collins, Inc. 200 11,174
- --------------------------------------------------------------------------------
United Technologies Corp. 2,080 131,914
---------------
143,088
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.0%
Cendant Corp. 1,590 25,901
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--6.0%
Siemens AG, Sponsored ADR 1,800 156,276
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--11.3%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.8%
Hutchinson Technology, Inc. 1 1,000 21,630
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.1%
eBay, Inc. 1 1,000 29,290
- --------------------------------------------------------------------------------
SOFTWARE--9.4%
Compuware Corp. 1 3,625 24,288
- --------------------------------------------------------------------------------
Microsoft Corp. 3,300 76,890
- --------------------------------------------------------------------------------
Novell, Inc. 1 4,950 32,819
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 4,060 76,206
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 3,290 35,071
---------------
245,274
- --------------------------------------------------------------------------------
MATERIALS--2.7%
- --------------------------------------------------------------------------------
CHEMICALS--1.4%
Dow Chemical Co. (The) 290 11,319
- --------------------------------------------------------------------------------
Praxair, Inc. 475 25,650
---------------
36,969
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.7%
Cemex SA de CV, Sponsored ADR 300 17,091
- --------------------------------------------------------------------------------
METALS & MINING--0.6%
Phelps Dodge Corp. 200 16,432
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.9%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.0%
IDT Corp., Cl. B 1 1,810 24,960
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--2.9%
Sprint Nextel Corp. 3,820 76,362
- --------------------------------------------------------------------------------
UTILITIES--5.7%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.5%
Reliant Energy, Inc. 1 1,060 12,699
- --------------------------------------------------------------------------------
ENERGY TRADERS--2.0%
AES Corp. (The) 1 2,820 52,029
6 | OPPENHEIMER VALUE FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--3.2%
CMS Energy Corp. 1 2,140 $ 27,692
- --------------------------------------------------------------------------------
PG&E Corp. 770 30,246
- --------------------------------------------------------------------------------
Sempra Energy 580 26,375
---------------
84,313
---------------
Total Common Stocks (Cost $2,281,201) 2,531,145
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.3%
- --------------------------------------------------------------------------------
Undivided interest of 0.004% in joint repurchase agreement
(Principal Amount/Value $2,439,041,000, with a
maturity value of $2,440,006,454) with UBS
Warburg LLC, 4.75%, dated 6/30/06, to be
repurchased at $87,034 on 7/3/06,
collateralized by Federal National
Mortgage Assn., 5%-6%,
10/1/35-3/1/36,
with a value of
$2,494,907,407 (Cost $87,000) $ 87,000 87,000
VALUE
SEE NOTE 1
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,368,201) 100.2% $ 2,618,145
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2) (5,259)
-------------------------------
NET ASSETS 100.0% $ 2,612,886
===============================
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, 2006
- ---------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------
Investments, at value (cost $2,368,201)--see accompanying statement of investments $ 2,618,145
- ---------------------------------------------------------------------------------------------------
Cash 1,990
- ---------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 3,688
Other 5,570
-------------
Total assets 2,629,393
- ---------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 8,776
Legal, auditing and other professional fees 4,591
Trustees' compensation 2,998
Other 142
-------------
Total liabilities 16,507
- ---------------------------------------------------------------------------------------------------
NET ASSETS $ 2,612,886
=============
- ---------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 230
- ---------------------------------------------------------------------------------------------------
Additional paid-in capital 2,132,982
- ---------------------------------------------------------------------------------------------------
Accumulated net investment income 4,966
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 224,764
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 249,944
-------------
NET ASSETS--applicable to 229,559 shares of beneficial interest outstanding $ 2,612,886
=============
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE $ 11.38
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- ---------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $778) $ 27,637
- ---------------------------------------------------------------------------------------------------
Interest 1,367
-------------
Total investment income 29,004
- ---------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------
Management fees 9,799
- ---------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 7,200
- ---------------------------------------------------------------------------------------------------
Shareholder communications 2,321
- ---------------------------------------------------------------------------------------------------
Trustees' compensation 1,691
- ---------------------------------------------------------------------------------------------------
Administration service fees 750
- ---------------------------------------------------------------------------------------------------
Custodian fees and expenses 155
- ---------------------------------------------------------------------------------------------------
Other 666
-------------
Total expenses 22,582
- ---------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,422
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 195,207
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (151,003)
- ---------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 50,626
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER VALUE FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ---------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------
Net investment income $ 6,422 $ 4,332
- ---------------------------------------------------------------------------------------------------
Net realized gain 195,207 444,863
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (151,003) (281,841)
-----------------------------
Net increase in net assets resulting from operations 50,626 167,354
- ---------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------
Dividends from net investment income -- (4,318)
- ---------------------------------------------------------------------------------------------------
Distributions from net realized gain -- (415,306)
- ---------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------
Total increase (decrease) 50,626 (252,270)
- ---------------------------------------------------------------------------------------------------
Beginning of period 2,562,260 2,814,530
-----------------------------
End of period (including accumulated net investment income
(loss) of $4,966 and $(1,456), respectively) $ 2,612,886 $ 2,562,260
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER VALUE FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 1
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.16 $ 12.26 $ 12.90 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 2 .02 2 (.01) 2 .03
Net realized and unrealized gain .19 .71 1.82 2.87
------------------------------------------------------------
Total from investment operations .22 .73 1.81 2.90
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.02) (.03) --
Distributions from net realized gain -- (1.81) (2.42) --
------------------------------------------------------------
Total dividends and/or distributions to shareholders -- (1.83) (2.45) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.38 $ 11.16 $ 12.26 $ 12.90
============================================================
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 1.97% 5.88% 14.50% 29.00%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,613 $ 2,562 $ 2,815 $ 3,871
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,635 $ 2,878 $ 3,370 $ 3,205
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.49% 0.15% (0.08)% 0.27%
Total expenses 1.73% 1.78% 5 1.82% 5 1.39% 5
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 86% 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, 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 Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). As of June 30, 2006,
all of the Non-Service shares were owned by the Manager.
The Fund currently offers Non-Service shares only. The shares are sold at
their offering price, which is the net assetvalue 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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.
12 | OPPENHEIMER VALUE FUND/VA
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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.
13 | OPPENHEIMER VALUE FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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.
There were no transactions of beneficial interest for the six months ended
June 30, 2006 and the year ended December 31, 2005.
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
-----------------------------------------------------------
Investment securities $1,360,724 $1,805,218
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
-------------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
- --------------------------------------------------------------------------------
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 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.
- --------------------------------------------------------------------------------
5. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among
14 | OPPENHEIMER VALUE FUND/VA
other things, that the Manager charged excessive fees for distribution and other
costs, and that by permitting and/or participating in those actions, the
Directors/Trustees and the Officers of the funds breached their fiduciary duties
to fund shareholders under the Investment Company Act of 1940 and at common law.
The plaintiffs sought unspecified damages, an accounting of all fees paid, and
an award of attorneys' fees and litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
16 | OPPENHEIMER VALUE FUND/VA
OPPENHEIMER MAIN STREET FUND(R)/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,030.50 $3.33
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.52 3.31
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,029.00 4.59
- --------------------------------------------------------------------------------
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------------
Non-Service shares 0.66%
- ------------------------------------------
Service shares 0.91
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.1%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.4%
Autoliv, Inc. 6,900 $ 390,333
- --------------------------------------------------------------------------------
Johnson Controls, Inc. 87,300 7,177,806
- --------------------------------------------------------------------------------
Tenneco, Inc. 1 7,300 189,800
---------------
7,757,939
- --------------------------------------------------------------------------------
AUTOMOBILES--0.0%
Thor Industries, Inc. 2 5,000 242,250
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.2%
CBRL Group, Inc. 2 6,600 223,872
- --------------------------------------------------------------------------------
Choice Hotels International, Inc. 2 5,800 351,480
- --------------------------------------------------------------------------------
CKE Restaurants, Inc. 2 11,000 182,710
- --------------------------------------------------------------------------------
Darden Restaurants, Inc. 12,100 476,740
- --------------------------------------------------------------------------------
Domino's Pizza, Inc. 2 6,900 170,706
- --------------------------------------------------------------------------------
International Game Technology 128,100 4,860,114
- --------------------------------------------------------------------------------
Jack in the Box, Inc. 1,2 4,300 168,560
- --------------------------------------------------------------------------------
McDonald's Corp. 119,100 4,001,760
- --------------------------------------------------------------------------------
MGM Mirage, Inc. 1,2 89,000 3,631,200
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts
Worldwide, Inc. 39,900 2,407,566
- --------------------------------------------------------------------------------
Vail Resorts, Inc. 1,2 4,800 178,080
- --------------------------------------------------------------------------------
Wendy's International, Inc. 8,200 477,978
- --------------------------------------------------------------------------------
Yum! Brands, Inc. 94,400 4,745,488
---------------
21,876,254
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.1%
American Greetings Corp., Cl. A 2 11,700 245,817
- --------------------------------------------------------------------------------
Black & Decker Corp. 7,300 616,558
- --------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 2 4,600 168,130
- --------------------------------------------------------------------------------
Furniture Brands International, Inc. 2 8,000 166,720
- --------------------------------------------------------------------------------
Leggett & Platt, Inc. 2 15,200 379,696
---------------
1,576,921
- --------------------------------------------------------------------------------
MEDIA--2.8%
Clear Channel
Communications, Inc. 2 272,800 8,443,160
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A 1 54,400 1,781,056
- --------------------------------------------------------------------------------
DirecTV Group, Inc. (The) 1 133,400 2,201,100
- --------------------------------------------------------------------------------
Gannett Co., Inc. 66,400 3,713,752
- --------------------------------------------------------------------------------
Live Nation 1,2 8,900 181,204
- --------------------------------------------------------------------------------
McGraw-Hill Cos., Inc. (The) 126,600 6,359,118
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 271,400 5,205,452
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 36,800 3,278,512
- --------------------------------------------------------------------------------
Time Warner, Inc. 106,400 1,840,720
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 1 11,673 418,360
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Walt Disney Co. (The) 527,900 $ 15,837,000
---------------
49,259,434
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.9%
Dillard's, Inc., Cl. A 2 20,100 640,185
- --------------------------------------------------------------------------------
Dollar Tree Stores, Inc. 1,2 27,500 728,750
- --------------------------------------------------------------------------------
Family Dollar Stores, Inc. 24,300 593,649
- --------------------------------------------------------------------------------
J.C. Penney Co., Inc. (Holding Co.) 118,800 8,020,188
- --------------------------------------------------------------------------------
Nordstrom, Inc. 182,900 6,675,850
---------------
16,658,622
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--2.6%
AnnTaylor Stores Corp. 1,2 8,800 381,744
- --------------------------------------------------------------------------------
AutoNation, Inc. 1 20,815 446,274
- --------------------------------------------------------------------------------
Barnes & Noble, Inc. 2 18,100 660,650
- --------------------------------------------------------------------------------
Best Buy Co., Inc. 67,500 3,701,700
- --------------------------------------------------------------------------------
Charming Shoppes, Inc. 1,2 13,200 148,368
- --------------------------------------------------------------------------------
Circuit City Stores, Inc./Circuit
City Group 2 34,000 925,480
- --------------------------------------------------------------------------------
Claire's Stores, Inc. 2 3,500 89,285
- --------------------------------------------------------------------------------
Dress Barn, Inc. (The) 1,2 7,400 187,590
- --------------------------------------------------------------------------------
GameStop Corp., Cl. A 1,2 11,800 495,600
- --------------------------------------------------------------------------------
Gap, Inc. (The) 304,000 5,289,600
- --------------------------------------------------------------------------------
Group 1 Automotive, Inc. 2 3,700 208,458
- --------------------------------------------------------------------------------
Guess?, Inc. 1,2 4,300 179,525
- --------------------------------------------------------------------------------
Gymboree Corp. 1,2 5,300 184,228
- --------------------------------------------------------------------------------
Home Depot, Inc. 193,200 6,914,628
- --------------------------------------------------------------------------------
Limited Brands, Inc. 157,200 4,022,748
- --------------------------------------------------------------------------------
Lowe's Cos., Inc. 154,200 9,355,314
- --------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The) 13,500 409,050
- --------------------------------------------------------------------------------
Michaels Stores, Inc. 17,900 738,196
- --------------------------------------------------------------------------------
Office Depot, Inc. 1 181,000 6,878,000
- --------------------------------------------------------------------------------
Pantry, Inc. (The) 1,2 2,700 155,358
- --------------------------------------------------------------------------------
Payless ShoeSource, Inc. 1 1,100 29,887
- --------------------------------------------------------------------------------
RadioShack Corp. 2 5,300 74,200
- --------------------------------------------------------------------------------
Rent-A-Center, Inc. 1,2 9,600 238,656
- --------------------------------------------------------------------------------
Staples, Inc. 99,550 2,421,056
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 28,500 651,510
- --------------------------------------------------------------------------------
Too, Inc. 1 8,800 337,832
---------------
45,124,937
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.1%
Brown Shoe Co., Inc. 2 5,000 170,400
- --------------------------------------------------------------------------------
Columbia Sportswear Co. 1,2 3,900 176,514
- --------------------------------------------------------------------------------
Liz Claiborne, Inc. 2 9,900 366,894
- --------------------------------------------------------------------------------
Phillips/Van Heusen Corp. 2 2,100 80,136
6 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS Continued
Skechers U.S.A., Inc., Cl. A 1,2 6,900 $ 166,359
---------------
960,303
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.2%
- --------------------------------------------------------------------------------
BEVERAGES--1.7%
Coca-Cola Co. (The) 312,400 13,439,448
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. (The) 39,700 1,276,355
- --------------------------------------------------------------------------------
PepsiCo, Inc. 252,550 15,163,102
---------------
29,878,905
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.6%
Costco Wholesale Corp. 128,700 7,352,631
- --------------------------------------------------------------------------------
Kroger Co. (The) 292,100 6,385,306
- --------------------------------------------------------------------------------
Longs Drug Stores, Inc. 2 3,900 177,918
- --------------------------------------------------------------------------------
Performance Food Group Co. 1,2 5,300 161,014
- --------------------------------------------------------------------------------
Safeway, Inc. 217,800 5,662,800
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 178,300 8,588,711
---------------
28,328,380
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.6%
Campbell Soup Co. 110,900 4,115,499
- --------------------------------------------------------------------------------
ConAgra Foods, Inc. 248,100 5,485,491
- --------------------------------------------------------------------------------
Dean Foods Co. 1 11,400 423,966
- --------------------------------------------------------------------------------
Del Monte Foods Co. 25,300 284,119
- --------------------------------------------------------------------------------
Heinz (H.J.) Co. 34,800 1,434,456
---------------
11,743,531
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.5%
Colgate-Palmolive Co. 161,600 9,679,840
- --------------------------------------------------------------------------------
Procter & Gamble Co. (The) 319,315 17,753,914
---------------
27,433,754
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.0%
NBTY, Inc. 1 6,700 160,197
- --------------------------------------------------------------------------------
TOBACCO--1.8%
Altria Group, Inc. 322,500 23,681,175
- --------------------------------------------------------------------------------
Loews Corp./Carolina Group 11,600 595,892
- --------------------------------------------------------------------------------
Reynolds American, Inc. 2 61,800 7,125,540
---------------
31,402,607
- --------------------------------------------------------------------------------
ENERGY--13.9%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.8%
Grey Wolf, Inc. 1,2 13,600 104,720
- --------------------------------------------------------------------------------
NS Group, Inc. 1,2 6,700 369,036
- --------------------------------------------------------------------------------
Schlumberger Ltd. 199,600 12,995,956
- --------------------------------------------------------------------------------
Unit Corp. 1,2 4,900 278,761
- --------------------------------------------------------------------------------
Veritas DGC, Inc. 1,2 8,300 428,114
---------------
14,176,587
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS--13.1%
Anadarko Petroleum Corp. 199,400 $ 9,509,386
- --------------------------------------------------------------------------------
Apache Corp. 122,600 8,367,450
- --------------------------------------------------------------------------------
Canadian Natural Resources Ltd. 41,400 2,288,998
- --------------------------------------------------------------------------------
Chevron Corp. 477,226 29,616,646
- --------------------------------------------------------------------------------
Cimarex Energy Co. 2 14,000 602,000
- --------------------------------------------------------------------------------
Comstock Resources, Inc. 1,2 9,000 268,740
- --------------------------------------------------------------------------------
ConocoPhillips 374,683 24,552,977
- --------------------------------------------------------------------------------
Devon Energy Corp. 176,600 10,668,406
- --------------------------------------------------------------------------------
EOG Resources, Inc. 119,000 8,251,460
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 1,092,716 67,038,127
- --------------------------------------------------------------------------------
Foundation Coal Holdings, Inc. 2 9,400 441,142
- --------------------------------------------------------------------------------
Frontier Oil Corp. 2 19,400 628,560
- --------------------------------------------------------------------------------
Hess Corp. 150,300 7,943,355
- --------------------------------------------------------------------------------
Holly Corp. 6,400 308,480
- --------------------------------------------------------------------------------
KCS Energy, Inc. 1 5,000 148,500
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 152,446 10,572,130
- --------------------------------------------------------------------------------
Marathon Oil Corp. 131,600 10,962,280
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 136,026 13,949,466
- --------------------------------------------------------------------------------
OMI Corp. 2 8,600 186,190
- --------------------------------------------------------------------------------
Paramount Resources Ltd., Cl. A 1 110,500 3,563,558
- --------------------------------------------------------------------------------
Pogo Producing Co. 2 11,600 534,760
- --------------------------------------------------------------------------------
Remington Oil & Gas Corp. 1 7,200 316,584
- --------------------------------------------------------------------------------
St. Mary Land & Exploration Co. 2 6,900 277,725
- --------------------------------------------------------------------------------
Sunoco, Inc. 92,700 6,423,183
- --------------------------------------------------------------------------------
Swift Energy Co. 1,2 7,300 313,389
- --------------------------------------------------------------------------------
Talisman Energy, Inc. 61,300 1,069,716
- --------------------------------------------------------------------------------
Tesoro Corp. 2 14,400 1,070,784
- --------------------------------------------------------------------------------
Valero Energy Corp. 189,910 12,632,813
- --------------------------------------------------------------------------------
W&T Offshore, Inc. 2 10,400 404,456
---------------
232,911,261
- --------------------------------------------------------------------------------
FINANCIALS--23.5%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--5.2%
American Capital Strategies Ltd. 2 19,600 656,208
- --------------------------------------------------------------------------------
Ameriprise Financial, Inc. 64,600 2,885,682
- --------------------------------------------------------------------------------
Bank of New York Co., Inc. (The) 202,200 6,510,840
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 62,100 8,698,968
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 113,100 17,013,633
- --------------------------------------------------------------------------------
Janus Capital Group, Inc. 2 33,400 597,860
- --------------------------------------------------------------------------------
Jefferies Group, Inc. 2 19,400 574,822
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. 170,000 11,075,500
- --------------------------------------------------------------------------------
Mellon Financial Corp. 188,200 6,479,726
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 233,500 16,242,260
- --------------------------------------------------------------------------------
Morgan Stanley 291,700 18,438,357
- --------------------------------------------------------------------------------
Northern Trust Corp. 2,800 154,840
- --------------------------------------------------------------------------------
Piper Jaffray Cos., Inc. 1,2 2,800 171,388
7 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
Raymond James Financial, Inc. 2 10,200 $ 308,754
- --------------------------------------------------------------------------------
Schwab (Charles) Corp. 116,600 1,863,268
- --------------------------------------------------------------------------------
State Street Corp. 12,800 743,552
---------------
92,415,658
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--4.5%
BB&T Corp. 105,100 4,371,109
- --------------------------------------------------------------------------------
Comerica, Inc. 21,200 1,102,188
- --------------------------------------------------------------------------------
Huntington Bancshares, Inc. 19,100 450,378
- --------------------------------------------------------------------------------
KeyCorp 83,400 2,975,712
- --------------------------------------------------------------------------------
M&T Bank Corp. 36,500 4,304,080
- --------------------------------------------------------------------------------
National City Corp. 202,800 7,339,332
- --------------------------------------------------------------------------------
North Fork Bancorporation, Inc. 9,600 289,632
- --------------------------------------------------------------------------------
PNC Financial Services Group, Inc. 38,400 2,694,528
- --------------------------------------------------------------------------------
Regions Financial Corp. 2 2,905 96,214
- --------------------------------------------------------------------------------
SunTrust Banks, Inc. 70,500 5,376,330
- --------------------------------------------------------------------------------
TCF Financial Corp. 2 13,600 359,720
- --------------------------------------------------------------------------------
U.S. Bancorp 546,570 16,878,082
- --------------------------------------------------------------------------------
UnionBanCal Corp. 6,500 419,835
- --------------------------------------------------------------------------------
Wachovia Corp. 357,300 19,322,784
- --------------------------------------------------------------------------------
Wells Fargo & Co. 226,300 15,180,204
---------------
81,160,128
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
American Express Co. 77,500 4,124,550
- --------------------------------------------------------------------------------
AmeriCredit Corp. 1,2 40,500 1,130,760
- --------------------------------------------------------------------------------
Capital One Financial Corp. 27,777 2,373,545
---------------
7,628,855
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.0%
Bank of America Corp. 803,409 38,643,973
- --------------------------------------------------------------------------------
CIT Group, Inc. 105,000 5,490,450
- --------------------------------------------------------------------------------
Citigroup, Inc. 723,388 34,896,237
- --------------------------------------------------------------------------------
International Securities
Exchange, Inc., Cl. A 2 4,500 171,315
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 640,544 26,902,848
- --------------------------------------------------------------------------------
Moody's Corp. 10,600 577,276
---------------
106,682,099
- --------------------------------------------------------------------------------
INSURANCE--6.4%
ACE Ltd. 106,200 5,372,658
- --------------------------------------------------------------------------------
AFLAC, Inc. 59,500 2,757,825
- --------------------------------------------------------------------------------
Allstate Corp. 231,400 12,664,522
- --------------------------------------------------------------------------------
American International Group, Inc. 330,040 19,488,862
- --------------------------------------------------------------------------------
AmerUs Group Co. 2 12,100 708,455
- --------------------------------------------------------------------------------
Aon Corp. 122,900 4,279,378
- --------------------------------------------------------------------------------
Assurant, Inc. 14,100 682,440
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Berkley (W.R.) Corp. 12,300 $ 419,799
- --------------------------------------------------------------------------------
Chubb Corp. 132,000 6,586,800
- --------------------------------------------------------------------------------
Fidelity National Title Group,
Inc., Cl. A 2 5,190 102,087
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 190,900 6,650,956
- --------------------------------------------------------------------------------
Hanover Insurance Group, Inc. 11,200 531,552
- --------------------------------------------------------------------------------
Hartford Financial Services Group,
Inc. (The) 101,800 8,612,280
- --------------------------------------------------------------------------------
LandAmerica Financial Group, Inc. 2 3,600 232,560
- --------------------------------------------------------------------------------
Lincoln National Corp. 103,759 5,856,158
- --------------------------------------------------------------------------------
Loews Corp. 22,500 797,625
- --------------------------------------------------------------------------------
MBIA, Inc. 2 16,400 960,220
- --------------------------------------------------------------------------------
MetLife, Inc. 106,700 5,464,107
- --------------------------------------------------------------------------------
Old Republic International Corp. 13,000 277,810
- --------------------------------------------------------------------------------
Principal Financial Group, Inc. (The) 155,400 8,648,010
- --------------------------------------------------------------------------------
Progressive Corp. 47,000 1,208,370
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 132,400 10,287,480
- --------------------------------------------------------------------------------
Safeco Corp. 7,200 405,720
- --------------------------------------------------------------------------------
St. Paul Travelers Cos., Inc. (The) 233,300 10,400,514
- --------------------------------------------------------------------------------
StanCorp Financial Group, Inc. 9,800 498,918
---------------
113,895,106
- --------------------------------------------------------------------------------
REAL ESTATE--0.1%
CB Richard Ellis Group, Inc., Cl. A 1,2 22,200 552,780
- --------------------------------------------------------------------------------
Jones Lang LaSalle, Inc. 2 6,600 577,830
---------------
1,130,610
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.9%
Astoria Financial Corp. 2 22,450 683,603
- --------------------------------------------------------------------------------
BankUnited Financial Corp., Cl. A 2 2,900 88,508
- --------------------------------------------------------------------------------
Golden West Financial Corp. 24,900 1,847,580
- --------------------------------------------------------------------------------
Hudson City Bancorp, Inc. 40,000 533,200
- --------------------------------------------------------------------------------
MGIC Investment Corp. 2 9,700 630,500
- --------------------------------------------------------------------------------
PMI Group, Inc. (The) 2 13,600 606,288
- --------------------------------------------------------------------------------
Radian Group, Inc. 2 16,100 994,658
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 226,629 10,329,750
- --------------------------------------------------------------------------------
Webster Financial Corp. 2 3,600 170,784
---------------
15,884,871
- --------------------------------------------------------------------------------
HEALTH CARE--11.2%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.1%
Amgen, Inc. 1 251,300 16,392,299
- --------------------------------------------------------------------------------
Applera Corp./Applied
Biosystems Group 35,100 1,135,485
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 51,300 3,034,908
---------------
20,562,692
8 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Becton, Dickinson & Co. 107,300 $ 6,559,249
- --------------------------------------------------------------------------------
Biomet, Inc. 16,600 519,414
- --------------------------------------------------------------------------------
Boston Scientific Corp. 1 140,300 2,362,652
- --------------------------------------------------------------------------------
Medtronic, Inc. 41,800 1,961,256
- --------------------------------------------------------------------------------
Thermo Electron Corp. 1,2 18,900 684,936
---------------
12,087,507
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.3%
Aetna, Inc. 42,100 1,681,053
- --------------------------------------------------------------------------------
AmerisourceBergen Corp. 52,300 2,192,416
- --------------------------------------------------------------------------------
Cardinal Health, Inc. 156,800 10,086,944
- --------------------------------------------------------------------------------
Caremark Rx, Inc. 175,200 8,737,224
- --------------------------------------------------------------------------------
CIGNA Corp. 27,100 2,669,621
- --------------------------------------------------------------------------------
Express Scripts, Inc. 1 21,300 1,528,062
- --------------------------------------------------------------------------------
Genesis HealthCare Corp. 1,2 1,700 80,529
- --------------------------------------------------------------------------------
HCA, Inc. 131,100 5,656,965
- --------------------------------------------------------------------------------
Humana, Inc. 1 24,000 1,288,800
- --------------------------------------------------------------------------------
Laboratory Corp. of America
Holdings 1 13,500 840,105
- --------------------------------------------------------------------------------
Manor Care, Inc. 2 7,900 370,668
- --------------------------------------------------------------------------------
McKesson Corp. 165,900 7,843,752
- --------------------------------------------------------------------------------
Pediatrix Medical Group, Inc. 1,2 14,600 661,380
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 55,600 3,331,552
- --------------------------------------------------------------------------------
Sierra Health Services, Inc. 1,2 18,000 810,540
- --------------------------------------------------------------------------------
Sunrise Senior Living, Inc. 1,2 8,200 226,730
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 351,948 15,760,231
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 179,412 13,055,811
---------------
76,822,383
- --------------------------------------------------------------------------------
PHARMACEUTICALS--5.1%
Abbott Laboratories 236,000 10,291,960
- --------------------------------------------------------------------------------
Alpharma, Inc., Cl. A 2 15,300 367,812
- --------------------------------------------------------------------------------
Andrx Corp. 1 10,900 252,771
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 288,100 7,450,266
- --------------------------------------------------------------------------------
Endo Pharmaceuticals
Holdings, Inc. 1,2 8,300 273,734
- --------------------------------------------------------------------------------
Johnson & Johnson 381,906 22,883,808
- --------------------------------------------------------------------------------
King Pharmaceuticals, Inc. 1 51,500 875,500
- --------------------------------------------------------------------------------
Merck & Co., Inc. 582,900 21,235,047
- --------------------------------------------------------------------------------
Mylan Laboratories, Inc. 18,400 368,000
- --------------------------------------------------------------------------------
Pfizer, Inc. 932,700 21,890,469
- --------------------------------------------------------------------------------
Sciele Pharma, Inc. 1,2 5,600 129,864
- --------------------------------------------------------------------------------
Wyeth 94,100 4,178,981
---------------
90,198,212
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INDUSTRIALS--13.0%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.6%
Alliant Techsystems, Inc. 1,2 8,600 $ 656,610
- --------------------------------------------------------------------------------
Armor Holdings, Inc. 1,2 8,700 477,021
- --------------------------------------------------------------------------------
Boeing Co. 222,500 18,224,975
- --------------------------------------------------------------------------------
General Dynamics Corp. 145,800 9,544,068
- --------------------------------------------------------------------------------
Honeywell International, Inc. 35,400 1,426,620
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 147,800 10,603,172
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 153,000 9,801,180
- --------------------------------------------------------------------------------
Raytheon Co. 211,300 9,417,641
- --------------------------------------------------------------------------------
United Technologies Corp. 67,400 4,274,508
---------------
64,425,795
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.9%
EGL, Inc. 1 7,900 396,580
- --------------------------------------------------------------------------------
FedEx Corp. 67,700 7,911,422
- --------------------------------------------------------------------------------
United Parcel Service, Inc., Cl. B 92,400 7,607,292
---------------
15,915,294
- --------------------------------------------------------------------------------
AIRLINES--0.1%
AMR Corp. 1,2 16,100 409,262
- --------------------------------------------------------------------------------
Continental Airlines, Inc., Cl. B 1,2 19,700 587,060
- --------------------------------------------------------------------------------
Southwest Airlines Co. 27,200 445,264
- --------------------------------------------------------------------------------
US Airways Group, Inc. 1 9,400 475,076
---------------
1,916,662
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.5%
Lennox International, Inc. 2 7,800 206,544
- --------------------------------------------------------------------------------
Masco Corp. 2 237,000 7,024,680
- --------------------------------------------------------------------------------
USG Corp. 1,2 14,600 1,064,778
---------------
8,296,002
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.6%
Administaff, Inc. 2 5,300 189,793
- --------------------------------------------------------------------------------
Allied Waste Industries, Inc. 1,2 23,900 271,504
- --------------------------------------------------------------------------------
Cendant Corp. 157,100 2,559,159
- --------------------------------------------------------------------------------
Manpower, Inc. 14,200 917,320
- --------------------------------------------------------------------------------
Monster Worldwide, Inc. 1 10,700 456,462
- --------------------------------------------------------------------------------
Republic Services, Inc. 16,500 665,610
- --------------------------------------------------------------------------------
Robert Half International, Inc. 2 18,500 777,000
- --------------------------------------------------------------------------------
Waste Management, Inc. 152,200 5,460,936
---------------
11,297,784
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.1%
EMCOR Group, Inc. 1 3,400 165,478
- --------------------------------------------------------------------------------
Granite Construction, Inc. 2 10,600 479,862
- --------------------------------------------------------------------------------
Quanta Services, Inc. 1,2 21,300 369,129
---------------
1,014,469
9 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9%
Acuity Brands, Inc. 2 10,300 $ 400,773
- --------------------------------------------------------------------------------
Cooper Industries Ltd., Cl. A 5,900 548,228
- --------------------------------------------------------------------------------
Emerson Electric Co. 103,500 8,674,335
- --------------------------------------------------------------------------------
Hubbell, Inc., Cl. B 4,300 204,895
- --------------------------------------------------------------------------------
Rockwell Automation, Inc. 84,400 6,077,644
- --------------------------------------------------------------------------------
Smith (A.O.) Corp. 2 3,900 180,804
---------------
16,086,679
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--3.6%
3M Co. 213,200 17,220,164
- --------------------------------------------------------------------------------
General Electric Co. 1,325,600 43,691,776
- --------------------------------------------------------------------------------
Teleflex, Inc. 2,900 156,658
- --------------------------------------------------------------------------------
Tyco International Ltd. 122,900 3,379,750
---------------
64,448,348
- --------------------------------------------------------------------------------
MACHINERY--2.1%
AGCO Corp. 1,2 10,500 276,360
- --------------------------------------------------------------------------------
Caterpillar, Inc. 104,400 7,775,712
- --------------------------------------------------------------------------------
Cummins, Inc. 3,900 476,775
- --------------------------------------------------------------------------------
Danaher Corp. 51,400 3,306,048
- --------------------------------------------------------------------------------
Eaton Corp. 92,100 6,944,340
- --------------------------------------------------------------------------------
Flowserve Corp. 1,2 14,300 813,670
- --------------------------------------------------------------------------------
Illinois Tool Works, Inc. 201,900 9,590,250
- --------------------------------------------------------------------------------
Ingersoll-Rand Co. Ltd., Cl. A 122,400 5,236,272
- --------------------------------------------------------------------------------
Kaydon Corp. 2 4,400 164,164
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 6,500 289,250
- --------------------------------------------------------------------------------
Paccar, Inc. 2,500 205,950
- --------------------------------------------------------------------------------
Parker-Hannifin Corp. 2,800 217,280
- --------------------------------------------------------------------------------
SPX Corp. 16,800 939,960
- --------------------------------------------------------------------------------
Toro Co. (The) 2 9,200 429,640
- --------------------------------------------------------------------------------
Trinity Industries, Inc. 2 13,200 533,280
- --------------------------------------------------------------------------------
Wabtec Corp. 5,200 194,480
---------------
37,393,431
- --------------------------------------------------------------------------------
ROAD & RAIL--0.6%
Arkansas Best Corp. 2 4,600 230,966
- --------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 38,700 3,066,975
- --------------------------------------------------------------------------------
CSX Corp. 86,400 6,086,016
- --------------------------------------------------------------------------------
Laidlaw International, Inc. 11,400 287,280
- --------------------------------------------------------------------------------
Norfolk Southern Corp. 5,900 313,998
- --------------------------------------------------------------------------------
Ryder Systems, Inc. 2 9,400 549,242
---------------
10,534,477
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.0%
Applied Industrial Technologies, Inc. 4,650 113,042
- --------------------------------------------------------------------------------
MSC Industrial Direct Co., Inc., Cl. A 2 5,500 261,635
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS Continued
WESCO International, Inc. 1,2 3,800 $ 262,200
---------------
636,877
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--16.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.3%
Cisco Systems, Inc. 1 953,800 18,627,714
- --------------------------------------------------------------------------------
CommScope, Inc. 1,2 11,800 370,756
- --------------------------------------------------------------------------------
InterDigital Communications Corp. 1,2 5,000 174,550
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 1,2 524,100 1,268,322
- --------------------------------------------------------------------------------
Motorola, Inc. 670,200 13,504,530
- --------------------------------------------------------------------------------
Polycom, Inc. 1,2 24,500 537,040
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 147,800 5,922,346
- --------------------------------------------------------------------------------
Tellabs, Inc. 1 32,000 425,920
---------------
40,831,178
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--3.4%
Apple Computer, Inc. 1 92,900 5,306,448
- --------------------------------------------------------------------------------
Brocade Communications
Systems, Inc. 1,2 60,300 370,242
- --------------------------------------------------------------------------------
Dell, Inc. 1 609,400 14,875,454
- --------------------------------------------------------------------------------
Hewlett-Packard Co. 674,500 21,368,160
- --------------------------------------------------------------------------------
International Business Machines
Corp. 217,700 16,723,714
- --------------------------------------------------------------------------------
NCR Corp. 1,2 16,000 586,240
- --------------------------------------------------------------------------------
Western Digital Corp. 1,2 72,100 1,428,301
---------------
60,658,559
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.5%
Agilent Technologies, Inc. 1 183,900 5,803,884
- --------------------------------------------------------------------------------
Arrow Electronics, Inc. 1,2 24,700 795,340
- --------------------------------------------------------------------------------
Brightpoint, Inc. 2 8,800 119,064
- --------------------------------------------------------------------------------
Mettler-Toledo International, Inc. 1 1,800 109,026
- --------------------------------------------------------------------------------
Plexus Corp. 1,2 10,200 348,942
- --------------------------------------------------------------------------------
Solectron Corp. 1 243,900 834,138
- --------------------------------------------------------------------------------
Tech Data Corp. 1,2 7,700 294,987
---------------
8,305,381
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.7%
Digital Insight Corp. 1,2 5,000 171,450
- --------------------------------------------------------------------------------
Digital River, Inc. 1,2 4,500 181,755
- --------------------------------------------------------------------------------
EarthLink, Inc. 1,2 49,500 428,670
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1 24,900 10,441,317
- --------------------------------------------------------------------------------
United Online, Inc. 2 40,100 481,200
---------------
11,704,392
- --------------------------------------------------------------------------------
IT SERVICES--1.3%
Ceridian Corp. 1 20,400 498,576
10 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES Continued
Computer Sciences Corp. 1 87,700 $ 4,248,188
- --------------------------------------------------------------------------------
Convergys Corp. 1 15,800 308,100
- --------------------------------------------------------------------------------
CSG Systems International, Inc. 1,2 1,300 32,162
- --------------------------------------------------------------------------------
First Data Corp. 267,700 12,057,208
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 22,400 1,016,064
- --------------------------------------------------------------------------------
Global Payments, Inc. 2 10,800 524,340
- --------------------------------------------------------------------------------
MoneyGram International, Inc. 2 8,900 302,155
- --------------------------------------------------------------------------------
MPS Group, Inc. 1 6,700 100,902
- --------------------------------------------------------------------------------
Paychex, Inc. 94,100 3,668,018
---------------
22,755,713
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.3%
Xerox Corp. 1 415,600 5,780,996
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.1%
Advanced Micro Devices, Inc. 1 267,300 6,527,466
- --------------------------------------------------------------------------------
Analog Devices, Inc. 86,800 2,789,752
- --------------------------------------------------------------------------------
Applied Materials, Inc. 416,600 6,782,248
- --------------------------------------------------------------------------------
Cymer, Inc. 1,2 9,700 450,662
- --------------------------------------------------------------------------------
Freescale Semiconductor, Inc., Cl. B 1 239,743 7,048,444
- --------------------------------------------------------------------------------
Intel Corp. 1,121,800 21,258,110
- --------------------------------------------------------------------------------
Intersil Corp., Cl. A 2 32,100 746,325
- --------------------------------------------------------------------------------
Lam Research Corp. 1,2 23,700 1,104,894
- --------------------------------------------------------------------------------
LSI Logic Corp. 1 75,400 674,830
- --------------------------------------------------------------------------------
MEMC Electronic Materials, Inc. 1 16,000 600,000
- --------------------------------------------------------------------------------
Micrel, Inc. 1,2 9,000 90,090
- --------------------------------------------------------------------------------
Micron Technology, Inc. 1,2 320,200 4,822,212
- --------------------------------------------------------------------------------
National Semiconductor Corp. 114,200 2,723,670
- --------------------------------------------------------------------------------
NVIDIA Corp. 1 102,000 2,171,580
- --------------------------------------------------------------------------------
OmniVision Technologies, Inc. 1,2 18,000 380,160
- --------------------------------------------------------------------------------
ON Semiconductor Corp. 1,2 34,600 203,448
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 503,300 15,244,957
- --------------------------------------------------------------------------------
Zoran Corp. 1 6,900 167,946
---------------
73,786,794
- --------------------------------------------------------------------------------
SOFTWARE--3.4%
BEA Systems, Inc. 1,2 82,300 1,077,307
- --------------------------------------------------------------------------------
BMC Software, Inc. 1 35,000 836,500
- --------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1,2 22,400 384,160
- --------------------------------------------------------------------------------
Fair Isaac Corp. 2 16,400 595,484
- --------------------------------------------------------------------------------
Intuit, Inc. 1 22,700 1,370,853
- --------------------------------------------------------------------------------
Microsoft Corp. 1,734,800 40,420,840
- --------------------------------------------------------------------------------
MicroStrategy, Inc., Cl. A 1,2 3,600 351,072
- --------------------------------------------------------------------------------
Oracle Corp. 1 969,100 14,042,259
- --------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 2 4,800 147,216
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 52,400 983,548
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
TIBCO Software, Inc. 1 50,800 $ 358,140
---------------
60,567,379
- --------------------------------------------------------------------------------
MATERIALS--2.7%
- --------------------------------------------------------------------------------
CHEMICALS--0.8%
Air Products & Chemicals, Inc. 67,100 4,289,032
- --------------------------------------------------------------------------------
Fuller (H.B.) Co. 3,400 148,138
- --------------------------------------------------------------------------------
Hercules, Inc. 1 11,100 169,386
- --------------------------------------------------------------------------------
NewMarket Corp. 2 3,200 156,992
- --------------------------------------------------------------------------------
OM Group, Inc. 1,2 5,600 172,760
- --------------------------------------------------------------------------------
PPG Industries, Inc. 64,400 4,250,400
- --------------------------------------------------------------------------------
Rohm & Haas Co. 91,400 4,580,968
- --------------------------------------------------------------------------------
Tronox, Inc., Cl. B 2 11,719 154,339
---------------
13,922,015
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.0%
Eagle Materials, Inc. 2 5,000 237,500
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.1%
Packaging Corp. of America 2 9,000 198,180
- --------------------------------------------------------------------------------
Pactiv Corp. 1 24,500 606,375
- --------------------------------------------------------------------------------
Temple-Inland, Inc. 14,700 630,189
---------------
1,434,744
- --------------------------------------------------------------------------------
METALS & MINING--1.7%
AK Steel Holding Corp. 1,2 51,200 708,096
- --------------------------------------------------------------------------------
Carpenter Technology Corp. 2 7,300 843,150
- --------------------------------------------------------------------------------
Chaparral Steel Co. 1,2 2,800 201,656
- --------------------------------------------------------------------------------
Commercial Metals Co. 2 15,400 395,780
- --------------------------------------------------------------------------------
Freeport-McMoRan Copper
& Gold, Inc., Cl. B 129,400 7,170,054
- --------------------------------------------------------------------------------
Nucor Corp. 157,200 8,528,100
- --------------------------------------------------------------------------------
Phelps Dodge Corp. 71,700 5,890,872
- --------------------------------------------------------------------------------
Quanex Corp. 2 10,650 458,696
- --------------------------------------------------------------------------------
Reliance Steel & Aluminum Co. 2 11,200 929,040
- --------------------------------------------------------------------------------
Schnitzer Steel Industries, Inc. 2 5,000 177,400
- --------------------------------------------------------------------------------
Southern Copper Corp. 2 42,100 3,752,373
- --------------------------------------------------------------------------------
Steel Dynamics, Inc. 2 8,200 539,068
- --------------------------------------------------------------------------------
United States Steel Corp. 11,200 785,344
- --------------------------------------------------------------------------------
Worthington Industries, Inc. 2 11,900 249,305
---------------
30,628,934
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.1%
Louisiana-Pacific Corp. 17,600 385,440
- --------------------------------------------------------------------------------
MeadWestvaco Corp. 18,400 513,912
---------------
899,352
11 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.0%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
AT&T, Inc. 183,678 $ 5,122,779
- --------------------------------------------------------------------------------
BellSouth Corp. 198,400 7,182,080
- --------------------------------------------------------------------------------
CenturyTel, Inc. 21,400 795,010
- --------------------------------------------------------------------------------
Citizens Communications Co. 49,400 644,670
- --------------------------------------------------------------------------------
Embarq Corp. 1 9,496 389,241
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc. 1,2 1,095,700 8,864,213
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 170,856 5,721,967
---------------
28,719,960
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Leap Wireless International, Inc. 1 2,400 113,880
- --------------------------------------------------------------------------------
Sprint Nextel Corp. 298,723 5,971,473
---------------
6,085,353
- --------------------------------------------------------------------------------
UTILITIES--1.2%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
American Electric Power Co., Inc. 200,500 6,867,125
- --------------------------------------------------------------------------------
Edison International, Inc. 61,300 2,390,700
- --------------------------------------------------------------------------------
Progress Energy, Inc. 2 20,500 878,835
- --------------------------------------------------------------------------------
Progress Energy, Inc., Contingent
Value Obligation 1,3 32,000 8,960
---------------
10,145,620
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.0%
Mirant Corp. 1,2 7,500 201,000
- --------------------------------------------------------------------------------
GAS UTILITIES--0.0%
ONEOK, Inc. 2 19,000 646,760
- --------------------------------------------------------------------------------
UGI Corp. 2 5,600 137,872
---------------
784,632
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.6%
Alliant Energy Corp. 2 10,800 370,440
- --------------------------------------------------------------------------------
Avista Corp. 2 4,100 93,603
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc. 2 30,300 378,750
- --------------------------------------------------------------------------------
Duke Energy Corp. 83,300 2,446,521
- --------------------------------------------------------------------------------
PG&E Corp. 163,800 6,434,062
---------------
9,723,376
---------------
Total Common Stocks
(Cost $1,509,432,784) 1,757,098,699
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Wachovia Corp., Dividend
Equalization Preferred Shares 1
(Cost $0) 6,000 $ 12
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Dime Bancorp, Inc. Wts.,
Exp. 1/2/10 1 31,900 7,018
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 4,837 1,306
---------------
Total Rights, Warrants
and Certificates (Cost $0) 8,324
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.7%
- --------------------------------------------------------------------------------
Undivided interest of 0.50% in joint repurchase
agreement (Principal Amount/Value $2,439,041,000,
with a maturity value of $2,440,006,454) with
UBS Warburg LLC, 4.75%, dated 6/30/06, to
be repurchased at $12,188,823 on 7/3/06,
collateralized by Federal National
Mortgage Assn., 5%-6%, 10/1/35-3/1/36,
with a value of $2,494,907,407
(Cost $12,184,000) $ 12,184,000 12,184,000
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments Purchased
with Cash Collateral from
Securities Loaned)
(Cost $1,521,616,784) 1,769,291,035
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--4.9%
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--0.6%
Citigroup Mortgage Loan Trust, Inc.,
Series 2006-HE1, Cl. A1, 5.38%,
7/25/06 4 2,960,272 2,960,272
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2005-17, Cl. 4AV1,
5.43%, 7/25/06 4 1,558,832 1,558,832
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2006-2, Cl. 2A1,
5.39%, 7/25/06 4 2,706,824 2,706,824
- --------------------------------------------------------------------------------
GSAA Home Equity Trust, Series
2005-15, Cl. 2A1, 5.41%, 7/25/06 4 1,624,252 1,624,252
- --------------------------------------------------------------------------------
Money Market Trust, Series A,
5.27%, 7/17/06 4 1,000,000 1,000,000
---------------
9,850,180
- --------------------------------------------------------------------------------
BANK FLOATING RATE NOTE--0.3%
Bank of America, 5.32%, 7/3/06 4 4,999,920 4,999,920
12 | OPPENHEIMER MAIN STREET FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.7%
Undivided interest of 0.0006% in joint
repurchase agreement (Principal Amount/Value
$4,500,000,000, with a maturity value of
$4,502,006,250) with Nomura Securities, 5.35%,
dated 6/30/06, to be repurchased at $25,486 on
7/3/06, collateralized by U.S. Agency Mortgages,
0.00%--8.50%, 3/1/07--3/1/43, with
a value of $4,590,000,000 4 $ 25,475 $ 25,475
- --------------------------------------------------------------------------------
Undivided interest of 1.28% in joint repurchase
agreement (Principal Amount/Value $1,000,000,000,
with a maturity value of $1,000,444,375) with
Bank of America NA, 5.3325%, dated 6/30/06,
to be repurchased at $12,854,597 on 7/3/06,
collateralized by U.S. Agency Mortgages,
5%, 6/1/35, with a value
of $1,020,000,000 4 12,848,887 12,848,887
---------------
12,874,362
- --------------------------------------------------------------------------------
MASTER FLOATING NOTE--0.2%
CDC Financial Products, Inc.,
5.41%, 7/3/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Citigroup Global Markets, Inc., 5.38%,
7/3/06 4 1,400,000 1,400,000
--------------
4,400,000
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--2.6%
American Express Credit Corp.,
5.21%, 7/17/06 4 2,000,000 2,000,000
- --------------------------------------------------------------------------------
American Honda Finance Corp.,
5.07%, 7/18/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Bear Stearns, 5.37%, 7/3/06 4 2,000,000 2,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/3/06 4 2,000,000 2,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/3/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Citigroup Funding, Inc., 5.36%, 7/3/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Dorada Finance, Inc., 5.37%, 7/3/06 4 4,000,000 4,000,000
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc., 5.47%,
7/3/06 4 4,000,000 4,000,000
- --------------------------------------------------------------------------------
HSBC Finance Corp., 5.13%, 7/6/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Landsbanki Islands, 5.29%, 7/17/06 4 4,000,000 4,000,000
- --------------------------------------------------------------------------------
LINKS Finance LLC, 5.37%, 7/3/06 4 3,000,037 3,000,037
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.36%,
7/31/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.37%,
7/3/06 4 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Sigma Finance, Inc., 5.37%, 7/3/06 4 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Tango Finance Corp., 5.38%, 7/3/06 4 4,498,426 4,498,426
---------------
45,998,463
- --------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT--0.5%
Calyon NY, 5.32%, 7/3/06 4 4,999,932 4,999,932
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT Continued
Natexis Banques Populaires NY,
5.37%, 7/3/06 4 $ 2,000,000 $ 2,000,000
- --------------------------------------------------------------------------------
Natexis Banques Populaires NY,
5.39%, 7/3/06 4 1,999,660 1,999,660
---------------
8,999,592
---------------
Total Investments Purchased
with Cash Collateral from Securities
Loaned (Cost $87,122,517) 87,122,517
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,608,739,301) 104.4% 1,856,413,552
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (4.4) (77,444,873)
------------------------------
NET ASSETS 100.0% $1,778,968,679
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security. See Note 7 of accompanying Notes.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2006 was $8,960, which represents less than 0.005% of the Fund's net assets. See
Note 6 of accompanying Notes.
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 accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $1,608,739,301)--see accompanying statement of investments $ 1,856,413,552
- -------------------------------------------------------------------------------------------------------------------
Cash 314,153
- -------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 23,744,767
Shares of beneficial interest sold 4,857,571
Interest and dividends 2,108,377
Other 29,214
----------------
Total assets 1,887,467,634
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 87,426,411
- -------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 20,016,318
Shares of beneficial interest redeemed 532,221
Distribution and service plan fees 456,135
Shareholder communications 24,961
Trustees' compensation 23,803
Transfer and shareholder servicing agent fees 2,088
Other 17,018
----------------
Total liabilities 108,498,955
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,778,968,679
================
- -------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 80,390
- -------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,654,952,750
- -------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 9,105,874
- -------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (132,842,084)
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 247,671,749
----------------
NET ASSETS $ 1,778,968,679
================
- -------------------------------------------------------------------------------------------------------------------
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 $1,000,864,323 and 45,090,828 shares of beneficial interest outstanding) $ 22.20
- -------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $778,104,356 and 35,299,623 shares of beneficial interest outstanding) $ 22.04
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------------
Dividends $ 15,527,596
- -------------------------------------------------------------------------------------------------------------------
Interest 284,419
- -------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 96,852
----------------
Total investment income 15,908,867
- -------------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------------
Management fees 5,733,627
- -------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 858,372
- -------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,175
Service shares 5,101
- -------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 52,303
Service shares 33,845
- -------------------------------------------------------------------------------------------------------------------
Trustees' compensation 10,501
- -------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 4,759
- -------------------------------------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------------------------------------
Other 41,658
----------------
Total expenses 6,746,091
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 9,162,776
- -------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain on:
Investments 47,140,619
Foreign currency transactions 262,179
Net realized gain 47,402,798
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (2,687,716)
Translation of assets and liabilities denominated in foreign currencies (192,427)
----------------
Net change in unrealized appreciation (2,880,143)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 53,685,431
================
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, 2006 DECEMBER 31,
(UNAUDITED) 2005
- -------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment income $ 9,162,776 $ 19,278,527
- -------------------------------------------------------------------------------------------------------------------
Net realized gain 47,402,798 46,249,002
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (2,880,143) 29,278,464
-----------------------------------
Net increase in net assets resulting from operations 53,685,431 94,805,993
- -------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (12,723,204) (16,043,833)
Service shares (6,609,246) (4,680,411)
- -------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (144,285,567) (165,951,406)
Service shares 169,077,047 199,901,024
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Total increase 59,144,461 108,031,367
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 1,719,824,218 1,611,792,851
-----------------------------------
End of period (including accumulated net investment income of $9,105,874
and $19,275,548, respectively) $ 1,778,968,679 $ 1,719,824,218
===================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER MAIN STREET FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.79 $ 20.84 $ 19.20 $ 15.32 $ 18.99 $ 21.26
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .26 1 .27 1 .18 .16 .13
Net realized and unrealized gain (loss) .54 .97 1.53 3.86 (3.70) (2.29)
----------------------------------------------------------------------------------------
Total from investment operations .67 1.23 1.80 4.04 (3.54) (2.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.26) (.28) (.16) (.16) (.13) (.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.20 $ 21.79 $ 20.84 $ 19.20 $ 15.32 $ 18.99
========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.05% 5.98% 9.46% 26.72% (18.80)% (10.16)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,000,864 $1,121,476 $1,238,948 $1,214,960 $ 890,740 $1,074,945
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,093,985 $1,156,299 $1,216,081 $1,003,396 $ 999,275 $1,028,913
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.13% 1.26% 1.39% 1.10% 0.94% 0.73%
Total expenses 0.66% 0.67% 4 0.67% 4 0.70% 4 0.69% 4 0.73% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 88% 82% 85% 98% 69%
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, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 21.63 $ 20.70 $ 19.10 $ 15.26 $ 18.95 $ 21.24
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .10 1 .21 1 .25 1 .14 .13 .14
Net realized and unrealized gain (loss) .53 .96 1.49 3.85 (3.70) (2.32)
----------------------------------------------------------------------------------------
Total from investment operations .63 1.17 1.74 3.99 (3.57) (2.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.22) (.24) (.14) (.15) (.12) (.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.04 $ 21.63 $ 20.70 $ 19.10 $ 15.26 $ 18.95
========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.90% 5.74% 9.15% 26.44% (18.99)% (10.27)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 778,105 $ 598,348 $ 372,845 $ 166,717 $ 51,929 $ 21,545
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 693,373 $ 462,272 $ 262,660 $ 98,210 $ 34,604 $ 10,306
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.89% 1.02% 1.30% 0.83% 0.87% 0.66%
Total expenses 0.91% 0.91% 4 0.92% 4 0.96% 4 0.84% 4 0.88% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 88% 82% 85% 98% 69%
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.
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, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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.
19 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2006, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $116,393,102 expiring by
2014. 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, 2006, it is estimated that the Fund will utilize
$47,402,798 of capital loss carryforward to offset realized capital gains.
During the year ended December 31, 2005, the Fund utilized $44,990,386 of
capital loss carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax purposes
post-October losses of $651 and unused capital loss carryforwards as follows:
EXPIRING
-------------------------
2009 $ 10,477,990
2010 126,747,906
2011 26,569,353
------------
Total $163,795,249
============
- --------------------------------------------------------------------------------
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
20 | OPPENHEIMER MAIN STREET FUND/VA
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $901 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,209,687 $ 27,141,887 3,666,887 $ 75,624,029
Dividends and/or distributions reinvested 570,547 12,723,204 783,008 16,043,833
Redeemed (8,161,537) (184,150,658) (12,430,546) (257,619,268)
--------------------------------------------------------------
Net decrease (6,381,303) $(144,285,567) (7,980,651) $(165,951,406)
==============================================================
- --------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 9,316,984 $ 207,181,017 10,831,089 $ 224,276,509
Dividends and/or distributions reinvested 298,058 6,604,957 229,657 4,680,411
Redeemed (1,978,984) (44,708,927) (1,404,971) (29,055,896)
--------------------------------------------------------------
Net increase 7,636,058 $ 169,077,047 9,655,775 $ 199,901,024
==============================================================
21 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
--------------------------------------------------------
Investment securities $778,712,999 $777,708,447
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
---------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$10,004 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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.
22 | OPPENHEIMER MAIN STREET FUND/VA
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, 2006, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of June 30, 2006, 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of June 30, 2006, the Fund had
on loan securities valued at $86,579,820, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Investments sold". Collateral of $87,426,411 was received for the loans, all of
which was received in cash and subsequently invested in approved investments or
held as cash.
- --------------------------------------------------------------------------------
8. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
24 | OPPENHEIMER MAIN STREET FUND/VA
OPPENHEIMER BALANCED FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $ 993.90 $3.71
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.08 3.77
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 992.50 4.95
- --------------------------------------------------------------------------------
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, 2006 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------------
Non-Service shares 0.75%
- ------------------------------------------
Service shares 1.00
- --------------------------------------------------------------------------------
6 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--52.3%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--4.8%
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.8%
Liberty Media Holding
Corp.-Interactive, Series A 1 250,550 $ 4,324,493
- --------------------------------------------------------------------------------
MEDIA--4.0%
Liberty Global, Inc., Series A 2 355,107 7,634,801
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 1 360,129 7,407,854
- --------------------------------------------------------------------------------
Liberty Media Holding Corp.-Capital,
Series A 1 73,470 6,154,582
--------------
21,197,237
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.4%
- --------------------------------------------------------------------------------
BEVERAGES--1.6%
Constellation Brands, Inc., Cl. A 1,2 213,800 5,345,000
- --------------------------------------------------------------------------------
Diageo plc, Sponsored ADR 2 48,600 3,282,930
--------------
8,627,930
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Wal-Mart Stores, Inc. 94,200 4,537,614
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.3%
ConAgra Foods, Inc. 71,900 1,589,709
- --------------------------------------------------------------------------------
TOBACCO--2.7%
Altria Group, Inc. 2 194,700 14,296,821
- --------------------------------------------------------------------------------
ENERGY--2.5%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.4%
Halliburton Co. 2 31,000 2,300,510
- --------------------------------------------------------------------------------
OIL & GAS--2.1%
BP plc, ADR 47,400 3,299,514
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 49,100 3,012,285
- --------------------------------------------------------------------------------
Kinder Morgan, Inc. 2 15,800 1,578,262
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 73,000 1,450,967
- --------------------------------------------------------------------------------
Talisman Energy, Inc. 85,800 1,497,253
--------------
10,838,281
- --------------------------------------------------------------------------------
FINANCIALS--11.2%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--2.3%
Bear Stearns Cos., Inc. (The) 15,900 2,227,272
- --------------------------------------------------------------------------------
UBS AG 92,467 10,135,028
--------------
12,362,300
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.4%
Wachovia Corp. 2 136,415 7,377,323
- --------------------------------------------------------------------------------
CONSUMER FINANCE--1.4%
Capital One Financial Corp. 87,300 7,459,785
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.9%
Bank of America Corp. 2 205,068 9,863,771
- --------------------------------------------------------------------------------
INSURANCE--2.8%
Everest Re Group Ltd. 66,200 5,730,934
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 176,000 6,131,840
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
Platinum Underwriters Holdings Ltd. 102,200 $ 2,859,556
-------------
14,722,330
- --------------------------------------------------------------------------------
REAL ESTATE--0.5%
Host Hotels & Resorts, Inc. 2 128,000 2,799,360
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.9%
Countrywide Financial Corp. 80,200 3,054,016
- --------------------------------------------------------------------------------
Freddie Mac 34,000 1,938,340
--------------
4,992,356
- --------------------------------------------------------------------------------
HEALTH CARE--5.6%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.9%
Amgen, Inc. 1 42,900 2,798,367
- --------------------------------------------------------------------------------
Human Genome Sciences, Inc. 1,2 146,600 1,568,620
- --------------------------------------------------------------------------------
MedImmune, Inc. 1 138,000 3,739,800
- --------------------------------------------------------------------------------
Myogen, Inc. 1,2 40,300 1,168,700
- --------------------------------------------------------------------------------
Vanda Pharmaceuticals, Inc. 1 146,300 1,218,679
--------------
10,494,166
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.6%
Beckman Coulter, Inc. 55,500 3,083,025
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.4%
Manor Care, Inc. 2 43,400 2,036,328
- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.7%
Medicines Co. (The) 1,2 70,800 1,384,140
- --------------------------------------------------------------------------------
MGI Pharma, Inc. 1,2 32,800 705,200
- --------------------------------------------------------------------------------
Pfizer, Inc. 2 258,200 6,059,954
- --------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 2 131,200 6,389,440
--------------
14,538,734
- --------------------------------------------------------------------------------
INDUSTRIALS--7.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.7%
Empresa Brasileira de
Aeronautica SA, ADR 2 101,400 3,698,058
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1,2 595,764 9,615,631
- --------------------------------------------------------------------------------
United Technologies Corp. 96,900 6,145,398
--------------
19,459,087
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.8%
Cendant Corp. 601,100 9,791,919
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.4%
Gamesa Corporacion Tecnologica SA 96,300 2,064,372
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.6%
Siemens AG, Sponsored ADR 2 99,800 8,664,636
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--10.8%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.9%
Cisco Systems, Inc. 1,2 351,600 6,866,748
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1,2 168,300 2,691,117
7 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
QUALCOMM, Inc. 2 17,400 $ 697,218
--------------
10,255,083
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.0%
Hutchinson Technology, Inc. 1,2 89,700 1,940,211
- --------------------------------------------------------------------------------
International Business
Machines Corp. 2 41,300 3,172,666
--------------
5,112,877
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.5%
eBay, Inc. 1,2 99,000 2,899,710
- --------------------------------------------------------------------------------
SOFTWARE--7.4%
Compuware Corp. 1 572,300 3,834,410
- --------------------------------------------------------------------------------
Microsoft Corp. 2 628,700 14,648,710
- --------------------------------------------------------------------------------
Novell, Inc. 1,2 597,500 3,961,425
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 286,300 5,373,851
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1,2 1,083,450 11,549,577
--------------
39,367,973
- --------------------------------------------------------------------------------
MATERIALS--0.9%
- --------------------------------------------------------------------------------
CHEMICALS--0.6%
Praxair, Inc. 2 55,400 2,991,600
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. 1 21 313
--------------
2,991,913
- --------------------------------------------------------------------------------
METALS & MINING--0.3%
Companhia Vale do Rio Doce,
Sponsored ADR 2 77,400 1,592,892
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.7%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.2%
IDT Corp., Cl. B 1,2 479,400 6,610,926
- --------------------------------------------------------------------------------
WorldCom, Inc./WorldCom Group 1,3 375,000 --
- --------------------------------------------------------------------------------
XO Holdings, Inc. 1 85 374
--------------
6,611,300
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.5%
Sprint Nextel Corp. 2 129,600 2,590,704
- --------------------------------------------------------------------------------
UTILITIES--1.9%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.7%
Reliant Energy, Inc. 1,2 297,500 3,564,050
- --------------------------------------------------------------------------------
ENERGY TRADERS--1.2%
AES Corp. (The) 1,2 355,500 6,558,975
--------------
Total Common Stocks (Cost $239,917,984) 278,967,564
VALUE
UNITS SEE NOTE 1
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09 1,3 2,593 $ --
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 8,881 2,398
- --------------------------------------------------------------------------------
Sterling Chemicals, Inc. Wts.,
Exp. 12/19/08 1 36 --
- --------------------------------------------------------------------------------
XO Communications, Inc.:
Series A Wts., Exp. 1/16/10 1 171 147
Series B Wts., Exp. 1/16/10 1 128 61
Series C Wts., Exp. 1/16/10 1 128 45
--------------
Total Rights, Warrants and Certificates
(Cost $38,932) 2,651
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--5.6%
- --------------------------------------------------------------------------------
Ace Securities Corp., Home Equity
Loan Pass-Through Certificates,
Series 2002-HE7, Cl. A2B,
5.503%, 11/25/35 4 $ 510,000 510,582
- --------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile
Asset-Backed Certificates, Series
2005-1A, Cl. A2, 5.327%, 4/20/08 4 370,000 370,273
- --------------------------------------------------------------------------------
Argent Securities, Inc., Home Equity
Asset-Backed Securities:
Series 2004-W8, Cl. A2,
5.803%, 5/25/34 4 1,760,000 1,770,433
Series 2006-W5, Cl. A2B,
5.423%, 5/26/36 4 670,000 670,405
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust,
Automobile Loan Certificates,
Series 2005-A, Cl. A2, 3.66%, 12/26/07 787,149 785,745
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust,
Automobile Asset-Backed Securities,
Series 2004-2, Cl. A3, 3.58%, 1/15/09 1,270,000 1,243,357
- --------------------------------------------------------------------------------
Capital One Prime Auto Receivables
Trust, Automobile Loan Asset-Backed
Securities, Series 2005-1, Cl. A2,
4.24%, 11/15/07 913,188 912,011
- --------------------------------------------------------------------------------
Centex Home Equity Co. LLC, Home
Equity Loan Asset-Backed Certificates:
Series 2005-B, Cl. AF1, 4.05%, 3/26/35 46,190 46,030
Series 2005-C, Cl. AF1, 4.196%, 6/25/35 249,454 248,241
Series 2005-D, Cl. AF1, 5.04%, 10/25/35 674,706 669,560
Series 2005-D, Cl. AV2,
5.593%, 10/25/35 4 1,000,000 1,001,166
Series 2006-A, Cl. AV2,
5.423%, 5/16/36 4 850,000 850,513
- --------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust,
Automobile Loan Pass-Through
Certificates, Series 2005-A, Cl. A2,
3.72%, 12/15/07 560,146 558,236
8 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust,
Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15 $ 180,000 $ 169,382
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc.,
CMO Asset-Backed Pass-Through
Certificates, Series 2005-WF2, Cl. AF2,
4.922%, 8/25/35 4 1,029,965 1,017,292
- --------------------------------------------------------------------------------
Consumer Credit Reference Index
Securities Program, Credit Card
Asset-Backed Certificates, Series
2002-B, Cl. FX, 10.421%, 3/22/07 5 1,130,000 1,150,133
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Inc., Home Equity
Asset-Backed Certificates:
Series 2002-4, Cl. A1, 5.693%, 2/25/33 4 18,836 18,864
Series 2005-16, Cl. 2AF2,
5.382%, 5/25/36 4 360,000 356,371
Series 2005-17, Cl. 1AF1,
5.523%, 5/25/36 4 647,313 648,157
Series 2005-17, Cl. 1AF2,
5.363%, 5/25/36 4 240,000 237,509
Series 2005-7, Cl. AF1B,
4.317%, 11/25/35 4 278,976 277,666
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates, Series 2005-A, Cl. A2,
3.17%, 9/8/07 92,310 92,331
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Asset-Backed Certificates, Home
Equity Receivables:
Series 2005-FF10, Cl. A3,
5.533%, 11/25/35 4 1,480,000 1,481,667
Series 2006-FF5, Cl. 2A1,
5.373%, 5/15/36 4 531,237 531,559
Series 2006-FF9, Cl. 2A2, 7/7/36 4,6 330,000 330,000
Series 2006-FF10, Cl. A3,
5.413%, 7/25/36 4 660,000 660,000
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates:
Series 2005-A, Cl. A3, 3.48%, 11/17/08 903,831 894,840
Series 2005-B, Cl. A2, 3.78%, 9/15/07 149,372 149,296
- --------------------------------------------------------------------------------
GS Auto Loan Trust, Automobile Loan
Asset-Backed Securities, Series 2005-1,
Cl. A2, 4.32%, 5/15/08 1,721,522 1,716,085
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust,
Automobile Receivable Obligations,
Series 2005-3, Cl. A2, 3.73%, 10/18/07 3 543,270 541,571
- --------------------------------------------------------------------------------
Household Home Equity Loan Trust,
Home Equity Loan Pass-Through
Certificates, Series 2005-3, Cl. A1,
5.527%, 1/20/35 4 585,686 586,576
- --------------------------------------------------------------------------------
Lehman XS Trust, Home Equity Mtg.
Pass-Through Certificates, Series
2005-2, Cl. 2A1B, 5.18%, 8/25/35 4 841,455 837,005
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust,
Credit Card Receivables, Series
2003-C7, Cl. C7, 6.549%, 3/15/16 4 $ 1,710,000 $ 1,820,439
- --------------------------------------------------------------------------------
Morgan Stanley ABS Capital I, Home
Equity Receivables, Series
2005-WMC6, Cl. A2B, 5.583%, 7/25/35 4 430,000 431,157
- --------------------------------------------------------------------------------
Onyx Acceptance Owner Trust,
Automobile Receivable Obligations,
Series 2005-B, Cl. A2, 4.03%, 4/15/08 312,682 312,209
- --------------------------------------------------------------------------------
Option One Mortgage Loan Trust,
Home Equity Mtg. Obligations,
Series 2006-2, Cl. 2A2, 5.435%, 7/1/36 4 1,100,000 1,100,000
- --------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through
Trust, Home Equity Pass-Through
Certificates:
Series 2004-5, Cl. AF2,
3.735%, 11/10/34 4 340,000 337,390
Series 2005-1, Cl. AF2,
3.914%, 5/25/35 4 260,000 256,791
Series 2005-2, Cl. AF2,
4.415%, 4/25/35 4 420,000 414,535
- --------------------------------------------------------------------------------
Residential Asset Mortgage Products,
Inc., Home Equity Asset-Backed
Pass-Through Certificates:
Series 2004-RS7, Cl. AI3, 4.45%, 7/25/28 750,000 743,136
Series 2006-RS4, Cl. A1, 5.163%,
7/25/36 4 450,000 450,000
- --------------------------------------------------------------------------------
Structured Asset Investment Loan
Trust, Home Equity Asset-Backed
Securities, Series 2006-2, Cl. A1,
5.383%, 4/25/36 4 607,056 607,467
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Home Equity Asset-Backed Securities,
Series 2005-4XS, Cl. 3A1,
5.18%, 3/26/35 1,120,592 1,116,178
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust,
Automobile Lease Asset-Backed
Securities, Series 2005-A, Cl. A2,
3.52%, 4/20/07 271,255 271,074
- --------------------------------------------------------------------------------
Wells Fargo Home Equity Trust,
Home Equity Asset-Backed
Certificates:
Series 2004-2, Cl. AI1B, 2.94%, 9/25/18 4 123,332 122,976
Series 2006-2, Cl. A2, 5.45%, 7/7/36 4 660,000 660,000
--------------
Total Asset-Backed Securities
(Cost $30,072,356) 29,976,208
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--24.8%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--21.1%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--21.0%
Federal Home Loan Mortgage Corp.:
4.50%, 5/1/19-7/1/19 2,282,610 2,158,420
5%, 12/1/32-8/1/33 3,493,101 3,279,058
9 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp.:
Continued
5%, 7/1/36 6 $ 574,000 $ 536,152
6.50%, 4/1/18-4/1/34 2,091,616 2,114,572
7%, 5/1/29-11/1/32 1,709,570 1,752,486
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 2055, Cl. ZM, 6.50%, 5/15/28 443,657 447,972
Series 2075, Cl. D, 6.50%, 8/15/28 1,027,380 1,040,383
Series 2080, Cl. Z, 6.50%, 8/15/28 285,562 287,614
Series 2387, Cl. PD, 6%, 4/15/30 230,722 230,813
Series 2500, Cl. FD, 5.699%, 3/15/32 4 143,116 144,407
Series 2526, Cl. FE, 5.599%, 6/15/29 4 199,860 200,954
Series 2551, Cl. FD, 5.481%, 1/15/33 4 154,760 156,607
Series 2583, Cl. KA, 5.50%, 3/15/22 525,894 524,813
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. IO, 14.501%, 6/1/26 7 283,946 69,086
Series 183, Cl. IO, 11.335%, 4/1/27 7 435,885 109,717
Series 184, Cl. IO, 17.29%, 12/1/26 7 477,272 114,634
Series 192, Cl. IO, 16.047%, 2/1/28 7 129,303 30,695
Series 200, Cl. IO, 14.938%, 1/1/29 7 154,804 38,229
Series 2003-118, Cl. S, 11.815%,
12/25/33 7 2,121,473 205,099
Series 2130, Cl. SC, 0.276%, 3/15/29 7 348,369 19,213
Series 2796, Cl. SD, 3.314%, 7/15/26 7 495,848 28,335
Series 2920, Cl. S, (0.636)%, 1/15/35 7 2,845,142 94,736
Series 3000, Cl. SE, (0.768)%, 7/15/25 7 2,732,230 56,236
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Principal-Only Stripped Mtg.-Backed
Security, Series 176, Cl. PO,
4.281%, 6/1/26 8 124,963 97,813
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
5%, 6/1/18-11/1/33 4,975,733 4,747,690
5%, 11/1/33 2 800,467 752,130
5%, 7/1/36 6 15,757,000 14,732,795
5.50%, 3/1/33-11/1/34 17,915,464 17,283,411
5.50%, 7/1/21-7/1/36 6 16,392,000 15,805,838
6%, 8/1/32-11/1/32 7,018,291 6,936,120
6%, 7/1/21-7/1/36 6 9,120,000 9,129,041
6.50%, 11/1/27-10/1/30 4,372,328 4,419,500
6.50%, 7/1/36 6 4,151,000 4,173,050
7%, 11/1/17-11/1/35 3,687,186 3,781,901
7.50%, 1/1/33 3 503,879 523,032
8.50%, 7/1/32 23,545 25,346
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Grantor Trust, CMO, Trust 2002-T1,
Cl. A2, 7%, 11/25/31 954,916 970,516
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 $ 810,277 $ 824,147
Trust 2001-50, Cl. NE, 6%, 8/25/30 135,100 135,503
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 1,080,187 1,089,910
Trust 2001-70, Cl. LR, 6%, 9/25/30 182,134 182,071
Trust 2001-72, Cl. NH, 6%, 4/25/30 88,124 87,991
Trust 2001-74, Cl. PD, 6%, 5/25/30 37,055 36,944
Trust 2002-77, Cl. WF, 5.652%,
12/18/32 4 232,941 235,090
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,052,000 1,008,156
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,110,000 1,056,462
Trust 2006-24, Cl. DB, 5.50%, 4/25/26 1,000,000 965,751
Trust 2006-50, Cl. KS, 4.684%, 6/25/36 4 856,838 725,377
Trust 2006-50, Cl. SK, 4.684%, 6/25/36 4 839,063 742,719
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 2,435,741 2,417,786
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates, Interest-Only Stripped
Mtg.-Backed Security:
Trust 2002-47, Cl. NS, 1.932%, 4/25/32 7 594,085 47,038
Trust 2002-51, Cl. S, 2.057%, 8/25/32 7 545,511 43,118
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security:
Trust 222, Cl. 2, 15.322%, 6/1/23 7 979,788 221,369
Trust 233, Cl. 2, 13.715%, 8/1/23 7 885,715 187,387
Trust 240, Cl. 2, 18.971%, 9/1/23 7 1,529,332 385,131
Trust 252, Cl. 2, 9.998%, 11/1/23 7 736,479 181,779
Trust 273, Cl. 2, 16.508%, 8/1/26 7 213,978 50,592
Trust 319, Cl. 2, 12.28%, 2/1/32 7 269,572 71,857
Trust 321, Cl. 2, 7.453%, 4/1/32 7 2,791,987 746,408
Trust 329, Cl. 2, 10.679%, 1/1/33 7 730,164 194,287
Trust 331, Cl. 9, 8.06%, 2/1/33 7 784,072 194,474
Trust 334, Cl. 17, 16.688%, 2/1/33 7 448,469 114,061
Trust 344, Cl. 2, 9.169%, 12/1/33 7 1,915,266 508,080
Trust 2001-65, Cl. S, 11.78%, 11/25/31 7 1,233,246 105,582
Trust 2001-81, Cl. S, 5.531%, 1/25/32 7 278,376 20,204
Trust 2002-9, Cl. MS, 2.754%, 3/25/32 7 403,559 32,023
Trust 2002-52, Cl. SD,
(0.691)%, 9/25/32 7 650,664 47,157
Trust 2002-77, Cl. SH, 5.839%,
12/18/32 7 362,236 31,076
Trust 2002-84, Cl. SA, 12.859%,
12/25/32 7 1,066,856 88,830
Trust 2003-4, Cl. S, 12.602%, 2/25/33 7 686,809 66,628
Trust 2003-33, Cl. SP, 14.996%, 5/25/33 7 1,164,412 119,799
Trust 2003-46, Cl. IH, 8.525%, 6/25/33 7 3,943,704 844,124
Trust 2004-54, Cl. DS, (1.633)%,
11/25/30 7 536,147 22,505
Trust 2005-6, Cl. SE, 0.164%, 2/25/35 7 1,922,113 67,569
Trust 2005-19, Cl. SA, (0.572)%,
3/25/35 7 7,468,024 260,953
Trust 2005-40, Cl. SA, (0.408)%,
5/25/35 7 1,617,313 53,268
10 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security: Continued
Trust 2005-71, Cl. SA, 5.83%, 8/25/25 7 $ 1,733,908 $ 66,356
Trust 2006-33, CL. SP, 16.252%,
5/25/36 7 3,457,089 232,273
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M,
5.344%, 9/25/23 8 322,221 250,477
--------------
111,780,726
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage
Assn., 8%, 4/15/23 198,815 210,769
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, (4.709)%,
1/16/27 7 573,059 27,954
Series 2002-15, Cl. SM, (7.383)%,
2/16/32 7 652,454 31,898
Series 2002-76, Cl. SY, (3.751)%,
12/16/26 7 1,334,229 76,309
Series 2004-11, Cl. SM, (6.58)%,
1/17/30 7 479,035 23,065
--------------
369,995
- --------------------------------------------------------------------------------
NON-AGENCY--3.7%
- --------------------------------------------------------------------------------
COMMERCIAL--3.4%
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates, Series
2005-3, Cl. A2, 4.501%, 7/10/43 1,050,000 1,005,958
- --------------------------------------------------------------------------------
Banc of America Funding Corp., CMO
Pass-Through Certificates, Series
2004-2, Cl. 2A1, 6.50%, 7/20/32 860,470 848,538
- --------------------------------------------------------------------------------
Banc of America Mortgage Securities,
Inc., CMO Pass-Through Certificates:
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32 677,333 674,370
Series 2005-E, Cl. 2A2, 4.977%, 6/25/35 4 124,737 124,465
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc.,
CMO, Series 2006-WF1, Cl. A2B,
5.536%, 3/1/36 260,000 257,883
- --------------------------------------------------------------------------------
Deutsche Alt-A Securities, Inc.
Mortgage Loan Trust, CMO, Series
2006-AB2, Cl. A7, 5.961%, 5/1/36 1,594,483 1,589,201
- --------------------------------------------------------------------------------
Deutsche Alt-B Securities, Inc.
Mortgage Loan Trust, CMO, Series
2006-AB3, Cl. A7, 6.36%, 4/25/08 480,000 480,000
- --------------------------------------------------------------------------------
First Chicago/Lennar Trust 1,
Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1,
Cl. D, 7.619%, 4/29/39 4,5 210,384 210,647
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
GE Capital Commercial Mortgage
Corp., Commercial Mtg. Obligations,
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 $ 620,000 $ 602,498
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial Mtg.
Pass-Through Certificates, Series
1997-C1, Cl. A3, 6.869%, 7/15/29 278,036 280,426
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2,
4.305%, 8/10/42 890,000 853,149
Series 2005-GG5, Cl. A2,
5.117%, 4/10/37 680,000 664,682
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates:
Series 2005-LDP2, Cl. A2,
4.575%, 7/15/42 260,000 249,492
Series 2005-LDP4, Cl. A2,
4.79%, 10/15/42 890,000 858,539
- --------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust,
Commercial Mtg. Pass-Through
Certificates, Series 2005-C5, Cl. A2,
4.885%, 9/15/30 740,000 719,392
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO
Pass-Through Certificates:
Series 2004-6, Cl. 10A1, 6%, 7/25/34 1,183,538 1,172,856
Series 2004-9, Cl. A3, 4.70%, 8/25/34 4 1,993,167 1,974,222
- --------------------------------------------------------------------------------
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 1,038,049
- --------------------------------------------------------------------------------
Residential Accredit Loans, Inc., CMO
Asset-Backed Pass-Through Certificates:
Series 2003-QS1, Cl. A2, 5.75%, 1/25/33 560,198 554,194
Series 2006-QS5, Cl. A2, 6%, 4/25/08 1,806,015 1,799,826
- --------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage
Trust, Commercial Mtg. Obligations,
Series 2005-C17, Cl. A2,
4.782%, 3/15/42 1,450,000 1,405,926
- --------------------------------------------------------------------------------
Washington Mutual Mortgage
Securities Corp., CMO Pass-Through
Certificates, Series 2005-AR5, Cl. A1,
4.675%, 5/25/35 4 521,746 520,604
- --------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities
Trust, CMO, Series 2004-DD, Cl. 2A1,
4.513%, 1/25/35 4 340,585 339,104
--------------
18,224,021
11 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
RESIDENTIAL--0.3%
Countrywide Alternative Loan Trust,
CMO, Series 2005-J1, Cl. 3A1,
6.50%, 8/25/32 $ 1,716,897 $ 1,713,142
--------------
Total Mortgage-Backed Obligations
(Cost $134,620,885) 132,087,884
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--4.6%
- --------------------------------------------------------------------------------
Federal Home Loan Bank Unsec. Bonds:
3.125%, 11/15/06 2,150,000 2,132,200
3.50%, 11/15/07 650,000 633,224
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.
Unsec. Nts.:
3.625%, 9/15/06 2 2,535,000 2,525,778
4.125%, 7/12/10 807,000 768,379
5.125%, 4/18/11 870,000 857,316
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts.:
4%, 2/28/07 1,470,000 1,455,519
4.25%, 7/15/07 2 2,015,000 1,989,943
6%, 5/15/11 9 2,500,000 2,556,558
7.25%, 1/15/10 800,000 846,065
- --------------------------------------------------------------------------------
Tennessee Valley Authority Bonds,
Series A, 6.79%, 5/23/12 3,478,000 3,699,653
- --------------------------------------------------------------------------------
U.S. Treasury Bonds:
5.375%, 2/15/31 2 756,000 769,290
8.875%, 8/15/17 2 687,000 896,696
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
4.375%, 1/31/08 2 1,065,000 1,052,062
4.875%, 5/15/09 950,000 943,840
4.875%, 4/30/11-5/31/11 2 3,001,000 2,971,384
5.125%, 5/15/16 2 441,000 440,621
--------------
Total U.S. Government Obligations
(Cost $25,068,308) 24,538,528
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--13.4%
- --------------------------------------------------------------------------------
ABN Amro Bank NV (NY Branch),
7.125% Sub. Nts., Series B, 10/15/93 400,000 428,740
- --------------------------------------------------------------------------------
Ahold Finance USA, Inc., 6.25% Sr.
Unsec. Unsub. Nts., 5/1/09 865,000 858,513
- --------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs.,
5/1/31 2 980,000 888,150
- --------------------------------------------------------------------------------
AT&T Wireless Services, Inc.,
8.125% Sr. Unsec. Nts., 5/1/12 815,000 897,903
- --------------------------------------------------------------------------------
BAE Systems Holdings, Inc.,
4.75% Nts., 8/15/10 5 1,095,000 1,050,160
- --------------------------------------------------------------------------------
Barclays Bank plc, 6.278%
Perpetual Bonds 10 1,450,000 1,265,879
- --------------------------------------------------------------------------------
Beazer Homes USA, Inc., 6.875% Sr.
Unsec. Nts., 7/15/15 2 595,000 544,425
- --------------------------------------------------------------------------------
British Telecommunications plc,
8.875% Bonds, 12/15/30 520,000 640,875
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Caesars Entertainment, Inc.,
7.50% Sr. Unsec. Nts., 9/1/09 $ 1,100,000 $ 1,142,837
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25%
Sr. Nts., Series B, 9/1/10 1,080,000 1,125,440
- --------------------------------------------------------------------------------
Centex Corp., 4.875% Sr. Unsec.
Nts., 8/15/08 660,000 645,237
- --------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr.
Unsec. Nts., 11/1/08 560,000 582,540
- --------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec.
Unsub. Nts., 4/2/12 1,065,000 1,155,837
- --------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec.
Sub. Nts., 6/15/32 2 465,000 480,231
- --------------------------------------------------------------------------------
Clear Channel Communications, Inc.,
6.25% Nts., 3/15/11 710,000 697,929
- --------------------------------------------------------------------------------
Coca-Cola Co. (The), 7.375% Unsec.
Debs., 7/29/93 360,000 416,857
- --------------------------------------------------------------------------------
Cox Communications, Inc., 4.625%
Unsec. Nts., 1/15/10 1,230,000 1,174,178
- --------------------------------------------------------------------------------
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 690,000 645,583
6.125% Nts., 1/15/14 2 525,000 500,057
- --------------------------------------------------------------------------------
DaimlerChrysler North America
Holdings Corp., 7.30% Nts., 1/15/12 1,085,000 1,130,353
- --------------------------------------------------------------------------------
Delhaize America, Inc., 9%
Unsub. Debs., 4/15/31 775,000 853,748
- --------------------------------------------------------------------------------
Dominion Resources, Inc., 8.125%
Sr. Unsub. Nts., 6/15/10 1,060,000 1,138,546
- --------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec.
Nts., 10/1/08 465,000 455,700
- --------------------------------------------------------------------------------
EOP Operating LP, 8.10% Unsec.
Nts., 8/1/10 1,060,000 1,140,838
- --------------------------------------------------------------------------------
Federated Department Stores, Inc.,
6.625% Sr. Unsec. Nts., 9/1/08 760,000 772,526
- --------------------------------------------------------------------------------
FirstEnergy Corp., 7.375% Sr. Unsub.
Nts., Series C, 11/15/31 1,015,000 1,092,178
- --------------------------------------------------------------------------------
Ford Motor Credit Co.:
5.80% Sr. Unsec. Nts., 1/12/09 350,000 319,929
9.75% Sr. Unsec. Nts., 9/15/10 2,5 1,835,000 1,789,496
- --------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts., 9/15/07 685,000 689,392
9.393% Unsub. Nts., 12/15/08 4 141,000 151,727
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.,
8% Bonds, 11/1/31 2 930,000 896,228
- --------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The),
6.345% Sub. Bonds, 2/15/34 1,680,000 1,571,096
- --------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual
Bonds, Series A 5,10 1,400,000 1,257,936
- --------------------------------------------------------------------------------
HCA, Inc., 5.50% Sr. Unsec. Nts.,
12/1/09 880,000 852,418
- --------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr.
Unsec. Nts., 2/15/11 785,000 826,731
12 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
HSBC Finance Capital Trust IX,
5.911% Nts., 11/30/35 4 $ 1,200,000 $ 1,147,201
- --------------------------------------------------------------------------------
Hyatt Equities LLC, 6.875% Nts.,
6/15/07 5 1,045,000 1,051,442
- --------------------------------------------------------------------------------
Hyundai Motor Manufacturing
Alabama LLC, 5.30% Sr. Unsec. Nts.,
12/19/08 5 610,000 597,352
- --------------------------------------------------------------------------------
IPALCO Enterprises, Inc.,
8.375% Sr. Sec. Nts., 11/14/08 4 540,000 557,550
- --------------------------------------------------------------------------------
iStar Financial, Inc., 5.15% Sr.
Unsec. Nts., 3/1/12 1,225,000 1,166,125
- --------------------------------------------------------------------------------
JPMorgan Chase & Co., 5.15%
Sub. Nts., 10/1/15 1,195,000 1,117,418
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.,
6.50% Sr. Nts., 1/15/14 925,000 837,125
- --------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
Escrow Shares, 3/15/10 2,3 250,000 11,510
- --------------------------------------------------------------------------------
KB Home, 5.75% Sr. Unsec. Unsub.
Nts., 2/1/14 2 750,000 663,170
- --------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP,
7.30% Sr. Unsec. Nts., 8/15/33 615,000 631,521
- --------------------------------------------------------------------------------
Kinder Morgan, Inc., 6.50% Sr. Unsec.
Nts., 9/1/12 895,000 851,478
- --------------------------------------------------------------------------------
Kroger Co. (The), 5.50% Unsec.
Unsub. Nts., 2/1/13 1,110,000 1,066,982
- --------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec.
Nts., 3/1/09 810,000 839,618
- --------------------------------------------------------------------------------
Liberty Media Corp.:
5.70% Sr. Unsec. Nts., 5/15/13 615,000 561,576
7.875% Sr. Nts., 7/15/09 290,000 301,680
- --------------------------------------------------------------------------------
Limited Brands, Inc., 6.125% Sr.
Unsec. Nts., 12/1/12 1,090,000 1,071,939
- --------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc.:
5.875% Sr. Unsec. Bonds, 8/1/33 785,000 683,919
7.125% Sr. Unsec. Nts., 6/15/09 590,000 607,521
- --------------------------------------------------------------------------------
May Department Stores Co., 7.90%
Unsec. Debs., 10/15/07 410,000 418,529
- --------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec.
Unsub. Nts., 12/1/34 542,000 481,050
- --------------------------------------------------------------------------------
MeadWestvaco Corp., 6.85%
Unsec. Unsub. Nts., 4/1/12 2 1,030,000 1,049,481
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 5% Sr.
Unsub. Nts., Series C, 2/3/14 615,000 575,949
- --------------------------------------------------------------------------------
MetLife, Inc., 5.70% Sr. Unsec. Nts.,
6/15/35 605,000 541,484
- --------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts.,
10/1/09 925,000 904,188
- --------------------------------------------------------------------------------
Mission Energy Holding Co.,
13.50% Sr. Sec. Nts., 7/15/08 560,000 627,200
- --------------------------------------------------------------------------------
National City Bank, 6.20% Sub. Nts.,
12/15/11 83,000 84,791
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc.:
5.90% Nts., 7/1/12 $ 480,000 $ 480,091
6.25% Sr. Unsec. Nts., 11/15/11 130,000 132,222
- --------------------------------------------------------------------------------
NiSource Finance Corp., 7.875%
Sr. Unsec. Nts., 11/15/10 1,120,000 1,199,308
- --------------------------------------------------------------------------------
Pemex Project Funding Master Trust,
7.875% Unsec. Unsub. Nts., 2/1/09 1,535,000 1,596,400
- --------------------------------------------------------------------------------
Petroleum Export Ltd. Cayman SPV,
4.623% Sr. Nts., Cl. A1, 6/15/10 5 1,598,222 1,563,761
- --------------------------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 5 360,828 333,703
- --------------------------------------------------------------------------------
Popular North America, Inc.,
4.70% Nts., 6/30/09 1,360,000 1,315,382
- --------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695%
Bonds, Series C, 12/18/23 5 1,095,000 1,303,161
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 1,110,000 1,333,790
- --------------------------------------------------------------------------------
PSEG Funding Trust I, 5.381% Nts.,
11/16/07 610,000 605,806
- --------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09 890,000 859,131
- --------------------------------------------------------------------------------
R&B Falcon Corp., 9.50% Sr.
Unsec. Nts., 12/15/08 500,000 542,085
- --------------------------------------------------------------------------------
Reed Elsevier Capital, Inc., 4.625%
Nts., 6/15/12 480,000 445,228
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 7%
Sr. Unsec. Unsub. Nts., 10/15/07 294,000 298,154
- --------------------------------------------------------------------------------
Safeway, Inc., 6.50% Sr. Unsec. Nts.,
3/1/11 1,110,000 1,122,940
- --------------------------------------------------------------------------------
TCI Communications, Inc., 9.80%
Sr. Unsec. Debs., 2/1/12 1,095,000 1,264,573
- --------------------------------------------------------------------------------
Telus Corp., 8% Nts., 6/1/11 135,000 146,340
- --------------------------------------------------------------------------------
Time Warner Entertainment Co. LP,
8.375% Sr. Nts., 7/15/33 1,000,000 1,134,579
- --------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E,
10/6/08 595,000 586,012
- --------------------------------------------------------------------------------
TXU Energy Co., 6.125% Nts., 3/15/08 755,000 756,440
- --------------------------------------------------------------------------------
Tyson Foods, Inc., 7.25%
Sr. Unsec. Nts., 10/1/06 225,000 225,688
- --------------------------------------------------------------------------------
Univision Communications, Inc.,
3.50% Sr. Unsec. Nts., 10/15/07 1,025,000 990,942
- --------------------------------------------------------------------------------
Verizon Global Funding Corp.:
5.85% Nts., 9/15/35 2 600,000 523,653
7.25% Sr. Unsec. Unsub. Nts., 12/1/10 540,000 566,054
- --------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec.
Unsub. Nts., 6/15/07 1,175,000 1,170,286
- --------------------------------------------------------------------------------
Wachovia Bank NA, 5.60%
Sub. Nts., 3/15/16 600,000 582,829
- --------------------------------------------------------------------------------
Xerox Corp., 9.75% Sr. Unsec. Nts.,
1/15/09 750,000 804,375
13 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Yum! Brands, Inc., 7.70% Sr. Nts.,
7/1/12 $ 750,000 $ 807,668
--------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $73,279,642) 71,218,613
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--6.2%
- --------------------------------------------------------------------------------
Undivided interest of 33% in joint repurchase
agreement (Principal Amount/Value $100,411,000,
with a maturity value of $100,447,817) with
Cantor Fitzgerald & Co./Cantor Fitzgerald
Securities, 4.40%, dated 6/30/06, to be
repurchased at $33,144,148 on 7/3/06,
collateralized by U.S. Treasury Bonds,
6.125%-8.75%, 8/15/20-11/15/27,
with a value of $102,610,350
(Cost $33,132,000) 33,132,000 33,132,000
- --------------------------------------------------------------------------------
Total Investments, At Value
(Excluding Investments Purchased
With Cash Collateral From
Securities Loaned) (Cost $536,130,107) 569,923,448
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--19.3%
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--19.3%
Undivided interest of 1.53% in joint repurchase
agreement (Principal Amount/Value $4,500,000,000,
with a maturity value of $4,502,006,250) with
Nomura Securities, 5.35%, dated 6/30/06, to be
repurchased at $68,914,746 on 7/3/06,
collateralized by U.S. Agency Mortgages,
0.00%--8.50%, 3/1/07--3/1/43, with a
value of $4,590,000,000 11,12 68,884,035 68,884,035
- --------------------------------------------------------------------------------
Undivided interest of 3.37% in joint repurchase
agreement (Principal Amount/Value $1,000,000,000,
with a maturity value of $1,000,444,375) with Bank
of America NA, 5.3325%, dated 6/30/06, to be
repurchased at $33,717,565 on 7/3/06,
collateralized by U.S. Agency Mortgages, 5%,
6/1/35, with a value of
$1,020,000,000 11 33,702,588 33,702,588
--------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $102,586,623) 102,586,623
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $638,716,730) 126.2% 672,510,071
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (26.2) (139,616,097)
----------------------------
NET ASSETS 100.0% $ 532,893,974
============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security. See Note 11 of accompanying Notes.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2006 was $1,076,113, which represents 0.20% of the Fund's net assets. See Note
10 of accompanying Notes.
4. Represents the current interest rate for a variable or increasing rate
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 $10,307,791 or 1.93% of the Fund's net
assets as of June 30, 2006.
6. When-issued security or forward commitment to be delivered and settled after
June 30, 2006. See Note 1 of accompanying Notes.
7. 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 $5,929,134 or 1.11% of the Fund's net assets
as of June 30, 2006.
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 $348,290 or 0.07% of the Fund's net assets as of June
30, 2006.
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 $1,329,410. See Note 6 of accompanying Notes.
10. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate 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 11 of accompanying Notes.
12. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -----------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------
Investments, at value (cost $638,716,730)--see accompanying statement
of investments $ 672,510,071
- -----------------------------------------------------------------------------------------------
Cash 1,054,458
- -----------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 22,462
- -----------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $13,553,668 sold on a when-issued basis
or forward commitment) 19,773,791
Interest, dividends and principal paydowns 2,453,437
Futures margins 56,226
Shares of beneficial interest sold 42,147
Other 18,218
--------------
Total assets 695,930,810
- -----------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------
Return of collateral for securities loaned 103,612,036
- -----------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts 11,555
- -----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $58,356,246 purchased on a when-issued basis
or forward commitment) 59,002,884
Shares of beneficial interest redeemed 310,627
Distribution and service plan fees 60,643
Trustees' compensation 15,226
Shareholder communications 9,832
Transfer and shareholder servicing agent fees 1,882
Other 12,151
--------------
Total liabilities 163,036,836
- -----------------------------------------------------------------------------------------------
NET ASSETS $ 532,893,974
==============
- -----------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 33,722
- -----------------------------------------------------------------------------------------------
Additional paid-in capital 457,631,448
- -----------------------------------------------------------------------------------------------
Accumulated net investment income 6,825,785
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 34,306,691
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 34,096,328
--------------
NET ASSETS $ 532,893,974
==============
- -----------------------------------------------------------------------------------------------
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 $434,828,937 and 27,486,343 shares of beneficial
interest outstanding) $ 15.82
- ----------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $98,065,037 and 6,235,592 shares of beneficial
interest outstanding) $ 15.73
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------
Interest $ 7,051,380
- -----------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $94,037) 2,032,733
- -----------------------------------------------------------------------------------------------
Portfolio lending fees 32,195
--------------
Total investment income 9,116,308
- -----------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------
Management fees 2,053,838
- -----------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 117,640
- -----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,112
Service shares 5,022
- -----------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 22,043
Service shares 4,387
- -----------------------------------------------------------------------------------------------
Trustees' compensation 5,303
- -----------------------------------------------------------------------------------------------
Custodian fees and expenses 3,997
- -----------------------------------------------------------------------------------------------
Administration service fees 750
- -----------------------------------------------------------------------------------------------
Other 24,190
--------------
Total expenses 2,242,282
- -----------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,874,026
- -----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------------
Net realized gain on:
Investments 34,224,573
Closing and expiration of option contracts written 43,266
Closing and expiration of futures contracts 429,346
Foreign currency transactions 283,456
Swap contracts 62,388
--------------
Net realized gain 35,043,029
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (44,821,162)
Translation of assets and liabilities denominated in foreign currencies 303,359
Futures contracts 31,551
Swap contracts 936
--------------
Net change in unrealized appreciation (44,485,316)
- -----------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (2,568,261)
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER BALANCED FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- -------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income $ 6,874,026 $ 11,621,499
- -------------------------------------------------------------------------------------------------------
Net realized gain 35,043,029 31,133,140
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (44,485,316) (20,360,340)
-------------------------------
Net increase (decrease) in net assets resulting from operations (2,568,261) 22,394,299
- -------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (10,383,550) (9,339,985)
Service shares (1,826,958) (1,047,623)
- -------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (22,826,230) (19,081,318)
Service shares (4,434,656) (2,361,220)
- -------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (33,985,043) (34,790,673)
Service shares 17,009,618 29,195,366
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
Total decrease (59,015,080) (15,031,154)
- -------------------------------------------------------------------------------------------------------
Beginning of period 591,909,054 606,940,208
-------------------------------
End of period (including accumulated net investment income
of $6,825,785 and $12,162,267, respectively) $ 532,893,974 $ 591,909,054
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17 | OPPENHEIMER BALANCED FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.07 $ 17.35 $ 15.92 $ 13.16 $ 15.40 $ 16.55
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 1 .33 1 .26 1 .27 .50 .53
Net realized and unrealized gain (loss) (.29) .31 1.33 2.90 (2.02) (.19)
-------------------------------------------------------------------------------
Total from investment operations (.09) .64 1.59 3.17 (1.52) .34
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.36) (.30) (.16) (.41) (.51) (.64)
Distributions from net realized gain (.80) (.62) -- -- (.21) (.85)
-------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (1.16) (.92) (.16) (.41) (.72) (1.49)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.82 $ 17.07 $ 17.35 $ 15.92 $ 13.16 $ 15.40
===============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (0.61)% 3.89% 10.10% 24.96% (10.40)% 2.22%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 434,829 $503,753 $547,290 $533,710 $458,848 $ 593,033
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 478,895 $522,754 $528,655 $475,389 $517,516 $ 599,324
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.46% 1.98% 1.59% 1.82% 3.31% 3.42%
Total expenses 0.75% 0.74% 4 0.74% 4 0.76% 4 0.74% 4 0.76% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 5 67% 5 68% 5 248% 42% 30%
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, 2006 $ 363,465,328 $ 398,575,571
Year Ended December 31, 2005 1,224,652,741 1,250,455,539
Year Ended December 31, 2004 1,460,076,994 1,473,590,963
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER BALANCED FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 1
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 16.97 $ 17.26 $ 15.87 $ 13.14 $ 14.51
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .18 2 .29 2 .23 2 .39 .13
Net realized and unrealized gain (loss) (.29) .31 1.31 2.74 (1.50)
-------------------------------------------------------------------
Total from investment operations (.11) .60 1.54 3.13 (1.37)
- ------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.33) (.27) (.15) (.40) --
Distributions from net realized gain (.80) (.62) -- -- --
-------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (1.13) (.89) (.15) (.40) --
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 15.73 $ 16.97 $ 17.26 $ 15.87 $ 13.14
===================================================================
- ------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.75)% 3.67% 9.79% 24.69% (9.44)%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 98,065 $ 88,156 $ 59,650 $ 25,302 $ 2,306
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 94,947 $ 72,977 $ 39,851 $ 9,908 $ 1,037
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.21% 1.74% 1.41% 1.37% 3.30%
Total expenses 1.00% 1.00% 5 1.02% 5 1.01% 5 0.99% 5
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 6 67% 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, 2006 $ 363,465,328 $ 398,575,571
Year Ended December 31, 2005 1,224,652,741 1,250,455,539
Year Ended December 31, 2004 1,460,076,994 1,473,590,963
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Balanced Fund/VA (the Fund), is a separate series of Oppenheimer
Variable Account Funds, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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, 2006, the Fund had purchased
20 | OPPENHEIMER BALANCED FUND/VA
$58,356,246 of securities issued on a when-issued basis or forward commitment
and sold $13,553,668 of securities issued on a when-issued basis or forward
commitment.
- --------------------------------------------------------------------------------
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, 2006, the Fund had no estimated unused capital loss
carryforward available for federal income tax purposes. As of June 30, 2006, it
is estimated that the Fund will utilize $664 of capital loss carryforward to
offset capital gains realized in that fiscal year. During the year ended
December 31, 2005, the Fund did not utilized any capital loss carryforward to
offset capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax
purposes post-October losses of $664.
- --------------------------------------------------------------------------------
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
21 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $1,509 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 482,812 $ 7,959,324 1,776,358 $ 29,867,328
Dividends and/or distributions reinvested 2,069,145 33,209,780 1,726,689 28,421,303
Redeemed (4,573,359) (75,154,147) (5,537,549) (93,079,304)
-------------------------------------------------------------
Net decrease (2,021,402) $ (33,985,043) (2,034,502) $ (34,790,673)
=============================================================
22 | OPPENHEIMER BALANCED FUND/VA
SIX MONTHS ENDED JUNE 30, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 999,021 $ 16,459,910 1,918,395 $ 32,184,682
Dividends and/or distributions reinvested 392,086 6,261,614 207,983 3,408,843
Redeemed (351,819) (5,711,906) (385,436) (6,398,159)
-------------------------------------------------------------
Net increase 1,039,288 $ 17,009,618 1,740,942 $ 29,195,366
=============================================================
- --------------------------------------------------------------------------------
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, 2006, were as
follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $ 208,744,006 $ 248,266,672
U.S. government and government agency obligations 28,342,202 34,535,085
To Be Announced (TBA) mortgage-related securities 363,465,328 398,575,571
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
-------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$10,007 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a
Distribution and Service Plan for Service shares to pay OppenheimerFunds
Distributor, Inc. (the Distributor), for distribution related services, personal
service and account maintenance for the Fund's Service shares. Under the plan,
payments are made periodically 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 BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2006, 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.
As of June 30, 2006, the Fund had outstanding futures contracts as follows:
24 | OPPENHEIMER BALANCED FUND/VA
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2006 APPRECIATION
- -----------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Long Bonds 9/20/06 106 $ 11,305,563 $ 3,927
U.S. Treasury Nts., 10 yr. 9/20/06 64 6,711,000 426
-------------
4,353
-------------
CONTRACTS TO SELL
Euro-Bundesobligation, 10 yr. 9/7/06 62 9,145,006 51,238
U.S. Treasury Nts., 2 yr. 9/29/06 261 52,925,906 173,855
U.S. Treasury Nts., 5 yr. 9/29/06 85 8,789,531 59,485
-------------
284,578
-------------
$ 288,931
=============
- --------------------------------------------------------------------------------
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, 2006 was as follows:
CALL OPTIONS
-------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- ------------------------------------------------------------------------
Options outstanding as of December 31, 2005 539 $ 66,159
Options written 460 43,266
Options closed or expired (999) (109,425)
-------------------------
Options outstanding as of June 30, 2006 -- $ --
=========================
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT 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).
25 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS Continued
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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 is as
follows:
NOTIONAL AMOUNT ANNUAL INTEREST UNREALIZED
RECEIVED BY THE FUND RATE PAID APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION UPON CREDIT EVENT BY THE FUND (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG Weyerhaeuser Co. $ 1,070,000 0.580% $ (85)
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Arrow Electronics, Inc. 1,070,000 0.790 (351)
Arrow Electronics, Inc. 530,000 0.770 462
Belo Corp. 660,000 0.650 2,512
Belo Corp. 365,000 0.670 1,073
Belo Corp. 735,000 0.675 2,001
Federated Department Stores, Inc. 1,070,000 0.445 (1,379)
--------------
$ 4,233
==============
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. The Fund also records an increase or
decrease to unrealized gain (loss) in an amount equal to the daily valuation.
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 default swaps as of June 30, 2006 is as
follows:
NOTIONAL AMOUNT ANNUAL INTEREST UNREALIZED
PAID BY THE FUND RATE RECEIVED APPRECIATION
COUNTERPARTY REFERENCED DEBT OBLIGATION UPON CREDIT EVENT BY THE FUND (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Allied Waste North America, Inc. $ 340,000 2.00% $ (1,442)
Allied Waste North America, Inc. 530,000 2.00 (2,247)
General Motors Acceptance Corp. 200,000 2.30 (440)
General Motors Corp. 340,000 6.40 (44)
General Motors Corp. 200,000 6.40 (26)
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Countrywide Home Loans, Inc. 685,000 0.40 (3,093)
Countrywide Home Loans, Inc. 410,000 0.42 (1,227)
General Motors Acceptance Corp. 730,000 3.15 7,474
Hyundai Motor Manufacturing
Alabama LLC 465,000 0.40 (34)
J.C. Penney Corp., Inc. 1,070,000 0.61 (1,187)
--------------
$ (2,266)
==============
26 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
9. 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 unrealized gain (loss) related to the daily change
in the valuation of the notional amount of the swap, as well as the amount due
to (owed by) the Fund at termination or settlement, is combined and separately
disclosed as an asset (liability). The Fund also records any periodic payments
received from (paid to) the counterparty, including at termination, under such
contracts as realized gain (loss). Total return swaps are subject to risks (if
the counterparty fails to meet its obligations).
As of June 30, 2006, the Fund had entered into the following total return swap
agreements:
SWAP NOTIONAL TERMINATION UNREALIZED
COUNTERPARTY SWAP DESCRIPTION AMOUNT DATES APPRECIATION
- -------------------------------------------------------------------------------------------------------------------------------
Received or paid monthly. The Counterparty pays
the Fund a Floating Payment which is the sum of
the Notional Amount, the Lehman Brothers CMBS
Index Spread and the Financial Spread on the
initial Notional Amount for the Swap Interest
Accrual Period. In addition, the Counterparty,
pays the Fund the Total Return Amount if it is a
positive value for a given Index Period. If it is
a negative, the Fund pays the Counterparty the
absolute value of the Total Return Amount for a
Deutsche Bank AG given Index Period, on each Payment Date. $ 2,090,000 12/1/06 $ 4,266
- -------------------------------------------------------------------------------------------------------------------------------
Received or paid monthly. If the Carry Amount,
plus the Spread Return Amount (Spread Change times
Duration times Notional Amount), is positive, the
Counterparty pays the Fund. The payment is based
on the Carry Amount which is the Spread on the
Lehman Brothers CMBS AAA 8.5+ Index as of the
close of one Business Day prior to the Period End
Day plus 15 basis points times the Notional Amount
times the Day Count Basis.
Lehman Brothers If it is negative, the Fund pays the Counterparty the
Special Financing, Inc. absolute value of the Spread Return Amount. 2,290,000 12/1/06 4,674
-------------
$ 8,940
=============
Abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
10. ILLIQUID SECURITIES
As of June 30, 2006, 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.
- --------------------------------------------------------------------------------
11. 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of June 30, 2006, the Fund
27 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. SECURITIES LENDING Continued
had on loan securities valued at $102,026,207, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Investments sold." Collateral of $103,612,036 was received for
the loans, all of which was received in cash and subsequently invested in
approved investments or held as cash.
- --------------------------------------------------------------------------------
12. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
29 | OPPENHEIMER BALANCED FUND/VA
OPPENHEIMER MONEY FUND/VA
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, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- --------------------------------------------------------------------------------
Actual $1,000.00 $1,021.80 $ 2.45
- --------------------------------------------------------------------------------
Hypothetical 1,000.00 1,022.37 2.45
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, 2006 is as follows:
EXPENSE RATIO
- -------------
0.49%
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--17.7%
- --------------------------------------------------------------------------------
Abbey National Treasury Services,
5.13%, 7/20/06 $ 2,000,000 $ 2,000,000
- --------------------------------------------------------------------------------
Calyon, New York, 5.18%, 8/4/06 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce
NY, 5.22%, 8/14/06 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Citibank NA:
5.09%, 7/27/06 1,000,000 1,000,000
5.295%, 9/13/06 1,000,000 1,000,000
5.415%, 9/22/06 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Lloyds TSB Bank plc, New York:
5.153%, 7/28/06 2,000,000 2,000,000
5.355%, 9/14/06 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Royal Bank of Canada New York Branch:
5.08%, 7/13/06 2,000,000 2,000,000
5.16%, 7/24/06 2,000,000 2,000,000
5.19%, 8/9/06 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Skandinaviska Enskilda Banken, New York,
5.08%, 10/3/06 1 2,000,000 1,999,898
- --------------------------------------------------------------------------------
Societe Generale North America,
4.96%, 7/3/06 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Societe Generale, New York,
5.09%, 7/17/06 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Svenska Handelsbanken NY,
5.11%, 7/20/06 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Toronto Dominion Bank, New York,
5.34%, 9/15/06 1,500,000 1,500,000
- --------------------------------------------------------------------------------
Washington Mutual Bank FA,
5.07%, 7/11/06 2,000,000 2,000,000
--------------
Total Certificates of Deposit (Cost $30,999,898) 30,999,898
- --------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS--20.4%
- --------------------------------------------------------------------------------
AB SPINTAB:
4.915%, 7/6/06 1,000,000 999,317
4.925%, 7/7/06 2,000,000 1,998,358
5.335%, 9/19/06 2,000,000 1,976,289
- --------------------------------------------------------------------------------
Calyon North America, Inc.,
5.15%, 8/7/06 2,500,000 2,486,780
- --------------------------------------------------------------------------------
Danske Corp., 5.39%, 9/25/06 2 2,000,000 1,974,248
- --------------------------------------------------------------------------------
Governor & Co. of the Bank of Ireland:
5.135%, 8/7/06 2 1,000,000 994,722
5.14%, 11/22/06 2 2,000,000 1,958,880
- --------------------------------------------------------------------------------
HBOS Treasury Services:
4.905%, 7/6/06 1,000,000 999,319
5.20%, 9/8/06 2,000,000 1,980,067
5.295%, 9/19/06 2,000,000 1,976,467
- --------------------------------------------------------------------------------
ICICI Bank Ltd., 5.16%, 11/22/06 3,000,000 2,938,080
- --------------------------------------------------------------------------------
Nationwide Building Society:
5.065%, 7/21/06 2 1,500,000 1,495,779
5.315%, 9/20/06 2 2,000,000 1,976,083
- --------------------------------------------------------------------------------
Nordea North America, Inc.,
5.11%, 8/2/06 2,700,000 2,687,736
- --------------------------------------------------------------------------------
St. George Bank Ltd., 5.06%, 7/12/06 2 3,000,000 2,995,362
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Stadshypotek Delaware, Inc.,
5.31%, 8/8/06 2 $ 1,300,000 $ 1,292,714
- --------------------------------------------------------------------------------
Toronto Dominion Holdings (USA), Inc.,
4.91%, 7/5/06 2 1,500,000 1,499,182
- --------------------------------------------------------------------------------
UBS Finance (Delaware) LLC,
4.93%, 7/10/06 1,400,000 1,398,275
- --------------------------------------------------------------------------------
Westpac Banking Corp., 5.13%, 11/27/06 2 2,000,000 1,957,535
--------------
Total Direct Bank Obligations (Cost $35,585,193) 35,585,193
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--62.2%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.2%
Montgomery, AL Industrial Development
Board Revenue Bonds, Bristol Properties
LLC Project, Series B, 5.70%, 8/1/06 1 400,000 400,000
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--22.3%
Amsterdam Funding Corp.,
5.16%, 7/31/06 2 1,500,000 1,493,556
- --------------------------------------------------------------------------------
Barton Capital Corp., 5.16%, 8/3/06 2 4,500,000 4,478,715
- --------------------------------------------------------------------------------
Fairway Finance Corp., 5.34%, 9/18/06 2 2,100,000 2,075,507
- --------------------------------------------------------------------------------
FCAR Owner Trust II:
5.065%, 7/17/06 2,000,000 1,995,498
5.16%, 8/4/06 1,500,000 1,492,690
5.28%, 8/8/06 1,850,000 1,839,689
- --------------------------------------------------------------------------------
Gotham Funding Corp.:
5.07%, 7/3/06 2 1,700,000 1,699,521
5.33%, 8/3/06 2 1,300,000 1,293,648
- --------------------------------------------------------------------------------
GOVCO, Inc., 5.33%, 8/17/06 2 4,000,000 3,972,166
- --------------------------------------------------------------------------------
Legacy Capital Co. LLC, 4.98%, 7/18/06 2,575,000 2,568,944
- --------------------------------------------------------------------------------
Lexington Parker Capital Co. LLC:
5.035%, 7/25/06 2 2,000,000 1,993,287
5.05%, 7/14/06 2 2,000,000 1,996,346
- --------------------------------------------------------------------------------
Neptune Funding Corp.:
5%, 7/12/06 2 2,000,000 1,996,944
5.36%, 9/13/06 2 1,880,000 1,859,287
- --------------------------------------------------------------------------------
Old Line Funding Corp., 5.04%, 7/5/06 2 2,000,000 1,998,880
- --------------------------------------------------------------------------------
Ormond Quay Funding LLC,
5.33%, 7/27/06 2 1,700,000 1,693,456
- --------------------------------------------------------------------------------
Perry Global Funding LLC, Series A:
5.04%, 7/6/06 2 1,000,000 999,300
5.06%, 7/19/06 2 1,000,000 997,470
- --------------------------------------------------------------------------------
Solitaire Funding LLC, 5.35%, 9/20/06 2 2,500,000 2,469,934
--------------
38,914,838
- --------------------------------------------------------------------------------
AUTOMOBILES--1.1%
Ande Chevrolet Olds, Inc.,
5.50%, 7/1/06 1 2,000,000 2,000,000
- --------------------------------------------------------------------------------
CAPITAL MARKETS--6.6%
Banc of America Securities LLC,
5.15%, 7/3/06 1 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc.:
4.95%, 7/12/06 2,000,000 1,996,975
5.35%, 9/21/06 1,500,000 1,481,721
6 | OPPENHEIMER MONEY FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
Goldman Sachs Group, Inc.,
5.19%, 4/6/07 1,3 $ 2,000,000 $ 2,000,000
- --------------------------------------------------------------------------------
Lehman Brothers, Inc., 5.13%, 7/3/06 1 1,000,000 1,000,000
--------------
11,478,696
- --------------------------------------------------------------------------------
CHEMICALS--2.3%
BASF AG:
5.08%, 7/19/06 2 2,000,000 1,994,920
5.095%, 7/26/06 2 2,000,000 1,992,924
--------------
3,987,844
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--3.1%
Bank of America Corp.:
5.04%, 7/10/06 1,500,000 1,498,110
5.37%, 9/14/06 2,000,000 2,000,000
- --------------------------------------------------------------------------------
National City Credit Corp.,
4.96%, 7/13/06 2,000,000 1,996,693
--------------
5,494,803
- --------------------------------------------------------------------------------
COMMERCIAL FINANCE--2.7%
American Express Credit Corp.:
5.05%, 7/11/06 1,000,000 998,597
5.05%, 7/19/06 1,500,000 1,496,213
- --------------------------------------------------------------------------------
Countrywide Financial Corp.,
5.32%, 7/20/06 2,200,000 2,193,823
--------------
4,688,633
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.6%
General Electric Capital Corp.,
5.24%, 8/16/06 2,000,000 1,986,609
- --------------------------------------------------------------------------------
Greenwich Capital Holdings, Inc.,
5.15%, 2/15/07 1 2,000,000 2,000,000
- --------------------------------------------------------------------------------
HSBC Finance Corp.:
4.905%, 7/7/06 2,000,000 1,998,365
5.03%, 7/28/06 1,000,000 996,228
- --------------------------------------------------------------------------------
Prudential Funding LLC, 5.11%, 7/27/06 3 1,000,000 996,309
--------------
7,977,511
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.3%
Alta Mira LLC, Series 2004, 5.45%, 7/1/06 1 2,250,000 2,250,000
- --------------------------------------------------------------------------------
INSURANCE--6.6%
ING America Insurance Holdings, Inc.,
5%, 7/18/06 2,000,000 1,995,278
- --------------------------------------------------------------------------------
Jackson National Life Global Funding,
Series 2004-6, 5.24%, 7/17/06 1,3 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding I,
Series 2003-5, 5.26%, 7/17/06 1,3 4,000,000 4,000,000
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
5.14%, 2/1/07 1,3 3,000,000 3,000,000
--------------
11,495,278
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
LEASING & FACTORING--1.1%
Toyota Motor Credit Corp.,
5.11%, 7/21/06 $ 2,000,000 $ 1,994,322
- --------------------------------------------------------------------------------
MUNICIPAL--0.4%
Hayward, CA Multifamily Housing
Revenue Bonds, Lord Tennyson Apts.,
5.65%, 7/3/06 1 710,000 710,000
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.7%
Sanofi-Aventis:
5.09%, 8/2/06 2 1,000,000 995,480
5.23%, 8/9/06 2 2,000,000 1,988,668
--------------
2,984,148
- --------------------------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL--8.2%
Blue Spice LLC, 5.34%, 9/18/06 2 1,500,000 1,482,423
- --------------------------------------------------------------------------------
Cooperative Assn. of Tractor Dealers, Inc.,
Series B, 5.12%, 8/16/06 1,450,000 1,440,514
- --------------------------------------------------------------------------------
LINKS Finance LLC, 5.32%, 8/11/06 2,000,000 1,987,879
- --------------------------------------------------------------------------------
Parkland (USA) LLC, 5.15%, 12/12/06 1,4 2,000,000 1,999,910
- --------------------------------------------------------------------------------
Premier Asset Collateralized Entity LLC,
5.32%, 8/1/06 2 3,000,000 2,986,257
- --------------------------------------------------------------------------------
RACERS Trust, Series 2004-6-MM,
5.31%, 7/24/06 1 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Union Hamilton Special Purpose Funding
LLC, 5.49%, 9/28/06 1,4 2,000,000 2,000,000
- --------------------------------------------------------------------------------
WIND Master Trust Nts., Series 2005-I-2,
5.08%, 9/25/06 1,3 1,500,000 1,500,000
--------------
14,396,983
--------------
Total Short-Term Notes (Cost $108,773,056) 108,773,056
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $175,358,147) 100.3% 175,358,147
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.3) (565,631)
-------------------------------
NET ASSETS 100.0% $ 174,792,516
===============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
SHORT-TERM NOTES AND DIRECT BANK OBLIGATIONS 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. Represents the current interest rate for a variable or increasing rate
security.
2. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $58,603,194, or 33.53% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2006 was $13,996,309, which represents 8.01% of the Fund's net assets. See Note
4 of accompanying Notes.
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 $3,999,910 or 2.29% of the Fund's net
assets as of June 30, 2006.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- -------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------
Investments, at value (cost $175,358,147)--see accompanying
statement of investments $ 175,358,147
- -------------------------------------------------------------------------------------------
Cash 90,807
- -------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 429,712
Interest 241,696
Other 8,056
----------------
Total assets 176,128,418
- -------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,024,783
Dividends 276,440
Shareholder communications 21,728
Trustees' compensation 4,920
Transfer and shareholder servicing agent fees 900
Other 7,131
----------------
Total liabilities 1,335,902
- -------------------------------------------------------------------------------------------
NET ASSETS $ 174,792,516
================
- -------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 174,764
- -------------------------------------------------------------------------------------------
Additional paid-in capital 174,615,172
- -------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 2,580
----------------
NET ASSETS--applicable to 174,763,848 shares of beneficial
interest outstanding $ 174,792,516
================
- -------------------------------------------------------------------------------------------
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, 2006
- -------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------
Interest $ 3,979,905
- -------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------
Management fees 373,759
- -------------------------------------------------------------------------------------------
Shareholder communications 12,445
- -------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 5,029
- -------------------------------------------------------------------------------------------
Trustees' compensation 1,900
- -------------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------------
Other 12,110
----------------
Total expenses 405,993
- -------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 3,573,912
- -------------------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 3,420
- -------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,577,332
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER MONEY FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 3,573,912 $ 5,228,375
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain 3,420 6,036
----------------------------------
Net increase in net assets resulting from operations 3,577,332 5,234,411
- -------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (3,574,010) (5,228,277)
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (6,674) --
- -------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions 1,634,350 (23,347,439)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 1,630,998 (23,341,305)
- -------------------------------------------------------------------------------------------------------------------------------
Beginning of period 173,161,518 196,502,823
----------------------------------
End of period (including accumulated net investment income of $98 for the year ended
December 31, 2005) $ 174,792,516 $ 173,161,518
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER MONEY FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
(UNAUDITED) 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------------
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 .02 1 .03 1 .01 1 .01 .01 .04
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.03) (.01) (.01) (.01) (.04)
Distributions from net realized gain -- 2 -- -- -- -- 2 --
----------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.02) (.03) (.01) (.01) (.01) (.04)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3 2.18% 2.86% 0.98% 0.79% 1.47% 3.85%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $174,793 $173,162 $196,503 $237,613 $379,969 $370,229
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $167,504 $186,453 $218,243 $316,096 $386,457 $288,106
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 4.30% 2.80% 0.97% 0.80% 1.46% 3.59%
Total expenses 0.49% 0.48% 5 0.48% 5 0.47% 5 0.47% 5 0.52% 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, 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 Fund'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, 2006, the Fund had no estimated capital loss carryforward
available for federal income tax purposes. During the six months ended June 30,
2006, it is estimated that the Fund will utilize $115 of capital loss
carryforward to offset realized capital gains. During the year ended December
31, 2005, the Fund utilized $202 of capital loss carryforward to offset capital
gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax
purposes post-October losses of $115.
- --------------------------------------------------------------------------------
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 redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $36 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.
12 | OPPENHEIMER MONEY FUND/VA
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED JUNE 30, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
Sold 54,129,582 $ 54,129,582 126,305,556 $ 126,305,556
Dividends and/or distributions reinvested 3,537,475 3,537,475 5,103,537 5,103,537
Redeemed (56,032,707) (56,032,707) (154,754,850) (154,756,532)
--------------------------------------------------------------
Net increase (decrease) 1,634,350 $ 1,634,350 (23,345,757) $ (23,347,439)
==============================================================
- --------------------------------------------------------------------------------
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 Fund which provides for a fee at an
average annual rate as shown in the following table:
FEE SCHEDULE
--------------------------------------------
Up to $500 million of net assets 0.450%
Next $500 million of net assets 0.425
Next $500 million of net assets 0.400
Over $1.5 billion of net assets 0.375
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$4,998 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 for assets of $10 million or more. The Fund
is subject to the minimum fee in the event that the per account fee does not
equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
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.
13 | OPPENHEIMER MONEY FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. ILLIQUID SECURITIES
As of June 30, 2006, 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.
- --------------------------------------------------------------------------------
5. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
15 | OPPENHEIMER MONEY FUND/VA
OPPENHEIMER GLOBAL SECURITIES FUND/VA
FUND EXPENSES
- --------------------------------------------------------------------------------
FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include redemption fees, if any; and (2) ongoing
costs, including management fees; distribution and service fees; and other Fund
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended June 30, 2006.
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
(1/1/06) (6/30/06) JUNE 30, 2006
- -----------------------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,038.70 $3.29
- -----------------------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.57 3.26
- -----------------------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,037.30 4.56
- -----------------------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.33 4.52
- -----------------------------------------------------------------------------------------------
Class 3 Actual 1,000.00 1,038.80 3.29
- -----------------------------------------------------------------------------------------------
Class 3 Hypothetical 1,000.00 1,021.57 3.26
- -----------------------------------------------------------------------------------------------
Class 4 Actual 1,000.00 1,037.60 4.61
- -----------------------------------------------------------------------------------------------
Class 4 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, 2006 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------------
Non-Service shares 0.65%
- -----------------------------------------
Service shares 0.90
- -----------------------------------------
Class 3 shares 0.65
- -----------------------------------------
Class 4 shares 0.91
- --------------------------------------------------------------------------------
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS June 30, 2006 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--17.5%
- --------------------------------------------------------------------------------
AUTOMOBILES--2.4%
Bayerische Motoren Werke AG 608,268 $ 30,373,333
- --------------------------------------------------------------------------------
Porsche AG, Preference 18,742 18,163,077
- --------------------------------------------------------------------------------
Toyota Motor Corp. 562,300 29,431,816
--------------
77,968,226
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.5%
Carnival Corp. 955,900 39,899,266
- --------------------------------------------------------------------------------
International Game Technology 640,300 24,292,982
- --------------------------------------------------------------------------------
Starbucks Corp. 1 490,600 18,525,056
--------------
82,717,304
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--2.3%
Koninklijke (Royal) Philips
Electronics NV 1,152,600 36,015,525
- --------------------------------------------------------------------------------
Sony Corp. 950,300 41,934,769
--------------
77,950,294
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.3%
GUS plc 575,348 10,277,681
- --------------------------------------------------------------------------------
MEDIA--4.6%
Getty Images, Inc. 1 114,700 7,284,597
- --------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR 1,632,796 31,529,291
- --------------------------------------------------------------------------------
JC Decaux SA 72,248 1,909,167
- --------------------------------------------------------------------------------
Pearson plc 1,044,058 14,219,515
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 4,082,840 10,627,224
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 6,876,910 32,665,323
- --------------------------------------------------------------------------------
Walt Disney Co. (The) 750,000 22,500,000
- --------------------------------------------------------------------------------
WPP Group plc 886,660 10,731,345
- --------------------------------------------------------------------------------
Zee Telefilms Ltd. 4,345,900 22,706,478
--------------
154,172,940
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--3.0%
Hennes & Mauritz AB, B Shares 1,430,200 55,445,277
- --------------------------------------------------------------------------------
Industria de Diseno Textil SA 648,800 27,368,384
- --------------------------------------------------------------------------------
Tiffany & Co. 488,100 16,117,062
--------------
98,930,723
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--2.4%
Bulgari SpA 1,284,618 14,574,219
- --------------------------------------------------------------------------------
Burberry Group plc 1,299,628 10,334,154
- --------------------------------------------------------------------------------
Coach, Inc. 1 498,900 14,917,110
- --------------------------------------------------------------------------------
LVMH Moet Hennessey
Louis Vuitton 398,690 39,571,702
--------------
79,397,185
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.5%
- --------------------------------------------------------------------------------
BEVERAGES--2.1%
Companhia de Bebidas
das Americas, ADR, Preference 463,515 $ 19,119,994
- --------------------------------------------------------------------------------
Diageo plc 1,055,410 17,750,530
- --------------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 2,415,200 20,230,927
- --------------------------------------------------------------------------------
Grupo Modelo SA de CV, Series C 3,279,000 12,533,420
--------------
69,634,871
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.8%
Tesco plc 3,759,560 23,220,464
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 728,300 35,082,211
--------------
58,302,675
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cadbury Schweppes plc 3,387,574 32,668,599
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.6%
Hindustan Lever Ltd. 3,934,500 19,658,842
- --------------------------------------------------------------------------------
Kao Corp. 458,000 11,986,281
- --------------------------------------------------------------------------------
Reckitt Benckiser plc 1,472,518 55,004,648
--------------
86,649,771
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.0%
Avon Products, Inc. 504,300 15,633,300
- --------------------------------------------------------------------------------
Shiseido Co. Ltd. 920,000 18,110,133
--------------
33,743,433
- --------------------------------------------------------------------------------
ENERGY--6.4%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.2%
GlobalSantaFe Corp. 548,700 31,687,425
- --------------------------------------------------------------------------------
Technip SA 583,560 32,319,236
- --------------------------------------------------------------------------------
Transocean, Inc. 1 505,500 40,601,760
--------------
104,608,421
- --------------------------------------------------------------------------------
OIL & GAS--3.2%
BP plc, ADR 425,969 29,651,702
- --------------------------------------------------------------------------------
Chevron Corp. 345,444 21,438,255
- --------------------------------------------------------------------------------
Husky Energy, Inc. 608,415 38,184,677
- --------------------------------------------------------------------------------
Neste Oil Oyj 105,900 3,730,333
- --------------------------------------------------------------------------------
Total SA 222,240 14,576,366
--------------
107,581,333
- --------------------------------------------------------------------------------
FINANCIALS--14.2%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--3.8%
3i Group plc 916,975 15,286,591
- --------------------------------------------------------------------------------
Credit Suisse Group 725,145 40,570,871
- --------------------------------------------------------------------------------
Morgan Stanley 588,600 37,205,406
- --------------------------------------------------------------------------------
Northern Trust Corp. 584,000 32,295,200
--------------
125,358,068
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--4.3%
HSBC Holdings plc 2,007,683 $ 35,183,505
- --------------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 319,450 7,554,993
- --------------------------------------------------------------------------------
Resona Holdings, Inc. 4,959 15,727,971
- --------------------------------------------------------------------------------
Royal Bank of Scotland
Group plc (The) 1,523,957 50,106,248
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 238,960 35,148,818
--------------
143,721,535
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.6%
Credit Saison Co. Ltd. 395,100 18,784,586
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.1%
Investor AB, B Shares 683,322 12,533,227
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 581,263 24,413,046
--------------
36,946,273
- --------------------------------------------------------------------------------
INSURANCE--4.4%
ACE Ltd. 388,071 19,632,512
- --------------------------------------------------------------------------------
Allianz AG 228,619 36,098,660
- --------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 6,110 18,592,730
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 104,800 9,072,536
- --------------------------------------------------------------------------------
Manulife Financial Corp. 559,426 17,725,430
- --------------------------------------------------------------------------------
Prudential plc 2,504,680 28,299,637
- --------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 255,900 15,686,670
--------------
145,108,175
- --------------------------------------------------------------------------------
HEALTH CARE--12.2%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--2.5%
Affymetrix, Inc. 1 322,800 8,263,680
- --------------------------------------------------------------------------------
Amgen, Inc. 1 367,700 23,985,071
- --------------------------------------------------------------------------------
Genentech, Inc. 1 186,300 15,239,340
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 426,260 25,217,542
- --------------------------------------------------------------------------------
NicOx SA 1 163,560 2,192,432
- --------------------------------------------------------------------------------
Nuvelo, Inc. 1 191,700 3,191,805
- --------------------------------------------------------------------------------
Theravance, Inc. 1 271,000 6,200,480
--------------
84,290,350
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--2.4%
Biomet, Inc. 557,600 17,447,304
- --------------------------------------------------------------------------------
Boston Scientific Corp. 1 1,427,853 24,045,045
- --------------------------------------------------------------------------------
Conor Medsystems, Inc. 1 203,500 5,614,565
- --------------------------------------------------------------------------------
Medtronic, Inc. 257,400 12,077,208
- --------------------------------------------------------------------------------
Nektar Therapeutics 1,2 314,361 4,612,305
- --------------------------------------------------------------------------------
Smith & Nephew plc 1,874,897 14,440,420
--------------
78,236,847
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.9%
Express Scripts, Inc. 1 181,800 13,042,332
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc. 285,800 17,125,136
--------------
30,167,468
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PHARMACEUTICALS--6.4%
AtheroGenics, Inc. 1 541,600 $ 7,067,880
- --------------------------------------------------------------------------------
Chugai Pharmaceutical Co. Ltd. 622,100 12,693,145
- --------------------------------------------------------------------------------
Johnson & Johnson 141,300 8,466,696
- --------------------------------------------------------------------------------
Novartis AG 331,768 17,964,943
- --------------------------------------------------------------------------------
Novo Nordisk AS, Cl. B 139,600 8,892,787
- --------------------------------------------------------------------------------
Roche Holdings AG 261,604 43,245,813
- --------------------------------------------------------------------------------
Sanofi-Aventis SA 611,684 59,695,188
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,273,000 22,692,415
- --------------------------------------------------------------------------------
Takeda Pharmaceutical Co. Ltd. 279,600 17,395,596
- --------------------------------------------------------------------------------
Wyeth 305,500 13,567,255
--------------
211,681,718
- --------------------------------------------------------------------------------
INDUSTRIALS--9.1%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.1%
Boeing Co. 277,900 22,762,789
- --------------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 801,934 29,246,533
- --------------------------------------------------------------------------------
European Aeronautic Defence
& Space Co. 1,198,410 34,427,291
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 222,900 15,990,846
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 248,200 15,899,692
- --------------------------------------------------------------------------------
Raytheon Co. 414,100 18,456,437
--------------
136,783,588
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.5%
Cendant Corp. 1,106,700 18,028,143
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.2%
JGC Corp. 407,000 7,046,806
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.7%
Emerson Electric Co. 264,200 22,142,602
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.7%
3M Co. 447,200 36,120,344
- --------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 1,377,000 12,570,890
- --------------------------------------------------------------------------------
Siemens AG 465,376 40,506,039
--------------
89,197,273
- --------------------------------------------------------------------------------
MACHINERY--0.6%
Fanuc Ltd. 104,500 9,430,940
- --------------------------------------------------------------------------------
Hyundai Heavy Industries Co. Ltd. 89,299 10,024,077
--------------
19,455,017
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.3%
Macquarie Airports 3,801,284 8,671,959
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--25.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--6.4%
Cisco Systems, Inc. 1 923,000 18,026,190
- --------------------------------------------------------------------------------
Corning, Inc. 1 1,485,400 35,931,826
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1 1,436,700 22,972,833
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 414,500 16,609,015
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Tandberg ASA 1,042,850 $ 8,627,733
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson,
B Shares 32,815,700 108,523,106
--------------
210,690,703
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.5%
Hoya Corp. 552,900 19,765,797
- --------------------------------------------------------------------------------
Keyence Corp. 70,840 18,087,599
- --------------------------------------------------------------------------------
Kyocera Corp. 119,500 9,288,107
- --------------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 416,900 27,234,960
- --------------------------------------------------------------------------------
Nidec Corp. 138,200 9,952,212
--------------
84,328,675
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.8%
eBay, Inc. 1 1,766,900 51,752,501
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 250,100 8,253,300
--------------
60,005,801
- --------------------------------------------------------------------------------
IT SERVICES--2.3%
Automatic Data Processing, Inc. 797,100 36,148,485
- --------------------------------------------------------------------------------
Infosys Technologies Ltd. 581,858 39,131,962
--------------
75,280,447
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Canon, Inc. 259,050 12,698,973
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.9%
Advanced Micro Devices, Inc. 1 1,852,500 45,238,050
- --------------------------------------------------------------------------------
Altera Corp. 1 980,800 17,213,040
- --------------------------------------------------------------------------------
Cree, Inc. 1 573,300 13,621,608
- --------------------------------------------------------------------------------
International Rectifier Corp. 1 429,200 16,773,136
- --------------------------------------------------------------------------------
Linear Technology Corp. 205,000 6,865,450
- --------------------------------------------------------------------------------
Maxim Integrated Products, Inc. 483,365 15,520,850
- --------------------------------------------------------------------------------
MediaTek, Inc. 2,117,000 19,615,474
- --------------------------------------------------------------------------------
Samsung Electronics Co. 50,283 32,089,521
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd. 10,977,837 19,800,963
- --------------------------------------------------------------------------------
Xilinx, Inc. 436,600 9,888,990
--------------
196,627,082
- --------------------------------------------------------------------------------
SOFTWARE--5.7%
Adobe Systems, Inc. 1 911,600 27,676,176
- --------------------------------------------------------------------------------
Enix Corp. 605,900 12,600,856
- --------------------------------------------------------------------------------
Intuit, Inc. 1 526,400 31,789,296
- --------------------------------------------------------------------------------
Microsoft Corp. 2,223,800 51,814,540
- --------------------------------------------------------------------------------
Nintendo Co. Ltd. 91,100 15,336,912
- --------------------------------------------------------------------------------
Novell, Inc. 1 2,193,226 14,541,088
- --------------------------------------------------------------------------------
SAP AG 173,160 36,522,114
--------------
190,280,982
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MATERIALS--0.3%
- --------------------------------------------------------------------------------
CHEMICALS--0.3%
Arkema 1 129,175 $ 5,040,903
- --------------------------------------------------------------------------------
Syngenta AG 1 47,067 6,256,094
--------------
11,296,997
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--4.3%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.3%
KDDI Corp. 6,323 39,016,978
- --------------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 1,315,660 30,812,757
- --------------------------------------------------------------------------------
Vodafone Group plc 34,991,660 74,574,936
--------------
144,404,671
- --------------------------------------------------------------------------------
UTILITIES--0.5%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.5%
Fortum Oyj 677,500 17,331,131
--------------
Total Common Stocks
(Cost $2,390,677,603) 3,253,169,326
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.5%
- --------------------------------------------------------------------------------
Undivided interest of 2% in joint repurchase
agreement (Principal Amount/Value $2,439,041,000,
with a maturity value of $2,440,006,454) with
UBS Warburg LLC, 4.75%, dated 6/30/06, to
be repurchased at $48,921,357 on 7/3/06,
collateralized by Federal National
Mortgage Assn., 5%-6%, 10/1/35-3/1/36,
with a value of $2,494,907,407
(Cost $48,902,000) $48,902,000 48,902,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,439,579,603) 99.5% 3,302,071,326
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 17,021,494
------------------------
NET ASSETS 100.0% $3,319,092,820
========================
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2006 was $4,612,305, which represents 0.14%
of the Fund's net assets, all of which is considered restricted. See Note 6 of
accompanying Notes.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- -------------------------------------------------------------------------------
United States $1,277,253,600 38.7%
United Kingdom 421,749,975 12.8
Japan 369,216,852 11.2
France 190,453,812 5.8
Sweden 176,501,610 5.3
Germany 161,663,223 4.9
Switzerland 108,037,721 3.3
India 89,052,275 2.7
Korea, Republic of South 72,926,355 2.2
The Netherlands 70,442,816 2.1
Mexico 64,293,638 1.9
Canada 55,910,107 1.7
Brazil 48,366,527 1.5
Taiwan 39,416,437 1.2
Cayman Islands 35,319,182 1.1
Spain 27,368,384 0.8
Finland 21,061,464 0.6
Italy 14,574,219 0.4
Hong Kong 12,570,890 0.4
Singapore 10,627,224 0.3
Bermuda 9,072,536 0.3
Denmark 8,892,787 0.3
Australia 8,671,959 0.3
Norway 8,627,733 0.2
--------------------------------
Total $3,302,071,326 100.0%
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2006
- ------------------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $2,439,579,603)--see accompanying statement of investments $3,302,071,326
- ------------------------------------------------------------------------------------------------------------------
Cash 503,035
- ------------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $2,092,703) 2,107,666
- ------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 9,290,712
Interest and dividends 6,158,038
Investments sold 1,128,739
Other 62,395
--------------
Total assets 3,321,321,911
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 1,195
- ------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,502,870
Distribution and service plan fees 500,665
Custodian fees 124,672
Trustees' compensation 53,132
Investments purchased 19,745
Transfer and shareholder servicing agent fees 4,023
Shareholder communications 1,598
Other 21,191
--------------
Total liabilities 2,229,091
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $3,319,092,820
==============
- ------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 102,332
- ------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,305,422,789
- ------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 10,583,090
- ------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 140,468,623
- ------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 862,515,986
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $3,319,092,820
==============
- ------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------------
Non-Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $2,133,124,718 and 65,692,884 shares of beneficial interest outstanding) $ 32.47
- ------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $730,479,368 and 22,651,212 shares of beneficial interest outstanding) $ 32.25
- ------------------------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $358,752,301 and 10,988,628 shares of beneficial interest outstanding) $ 32.65
- ------------------------------------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per share
(based on net assets of $96,736,433 and 2,999,745 shares of beneficial interest outstanding) $ 32.25
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2006
- --------------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $2,864,546) $ 34,005,373
- --------------------------------------------------------------------------------------------
Interest 879,760
--------------
Total investment income 34,885,133
- --------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------
Management fees 10,326,211
- --------------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 822,038
Class 4 shares 121,921
- --------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,330
Service shares 5,094
Class 3 shares 5,057
Class 4 shares 5,017
- --------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 93,604
Service shares 28,728
Class 3 shares 15,632
Class 4 shares 4,185
- --------------------------------------------------------------------------------------------
Custodian fees and expenses 219,764
- --------------------------------------------------------------------------------------------
Trustees' compensation 19,561
- --------------------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------------------
Other 66,999
--------------
Total expenses 11,739,891
Less reduction to custodian expenses (5)
--------------
Net expenses 11,739,886
- --------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 23,145,247
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------------------
Net realized gain on:
Investments 138,644,043
Foreign currency transactions 6,074,518
--------------
Net realized gain 144,718,561
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (116,114,045)
Translation of assets and liabilities denominated in foreign currencies 66,763,849
--------------
Net change in unrealized appreciation (49,350,196)
- --------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 118,513,612
==============
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, 2006 DECEMBER 31,
(UNAUDITED) 2005
- ----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 23,145,247 $ 29,782,881
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain 144,718,561 337,263,306
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (49,350,196) (12,913,782)
----------------------------------
Net increase in net assets resulting from operations 118,513,612 354,132,405
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (22,390,271) (25,791,077)
Service shares (5,586,912) (3,177,917)
Class 3 shares (3,732,415) (2,857,511)
Class 4 shares (875,877) (420,976)
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (116,956,054) --
Service shares (34,605,939) --
Class 3 shares (19,539,725) --
Class 4 shares (5,424,732) --
- ----------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares 65,679,702 (607,707,602)
Service shares 194,130,676 152,495,021
Class 3 shares 22,505,154 40,656,196
Class 4 shares 9,010,831 43,339,023
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 200,728,050 (49,332,438)
- ----------------------------------------------------------------------------------------------------------------------------
Beginning of period 3,118,364,770 3,167,697,208
----------------------------------
End of period (including accumulated net investment income of $10,583,090
and $20,023,318, respectively) $3,319,092,820 $3,118,364,770
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 33.38 $ 29.51 $ 25.08 $ 17.70 $ 22.84 $ 30.33
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .24 1 .32 1 .26 1 .19 .16 .17
Net realized and unrealized gain (loss) 1.07 3.85 4.49 7.34 (5.19) (3.85)
-----------------------------------------------------------------------------------------
Total from investment operations 1.31 4.17 4.75 7.53 (5.03) (3.68)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.36) (.30) (.32) (.15) (.11) (.19)
Distributions from net realized gain (1.86) -- -- -- -- (3.62)
-----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (2.22) (.30) (.32) (.15) (.11) (3.81)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.47 $ 33.38 $ 29.51 $ 25.08 $ 17.70 $ 22.84
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.87% 14.31% 19.16% 43.02% (22.13)% (12.04)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,133,125 $2,124,413 $2,518,867 $2,280,752 $1,549,993 $1,905,890
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,201,805 $2,123,523 $2,451,188 $1,751,226 $1,776,289 $1,918,335
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.45% 1.08% 1.01% 0.99% 0.80% 0.70%
Total expenses 0.65% 4 0.67% 4 0.66% 4 0.67% 4 0.67% 4 0.70% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 13% 35% 30% 34% 34% 39%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
JUNE 30, ENDED
2006 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 33.16 $ 29.33 $ 24.96 $ 17.61 $ 22.78 $ 30.30
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .21 1 .24 1 .20 1 .12 .12 .21
Net realized and unrealized gain (loss) 1.04 3.84 4.46 7.36 (5.19) (3.92)
----------------------------------------------------------------------------------------
Total from investment operations 1.25 4.08 4.66 7.48 (5.07) (3.71)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.30) (.25) (.29) (.13) (.10) (.19)
Distributions from net realized gain (1.86) -- -- -- -- (3.62)
----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (2.16) (.25) (.29) (.13) (.10) (3.81)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.25 $ 33.16 $ 29.33 $ 24.96 $ 17.61 $ 22.78
========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.73% 14.06% 18.88% 42.86% (22.37)% (12.17)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $730,479 $557,284 $346,403 $168,739 $ 52,830 $ 20,467
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $664,030 $413,849 $247,490 $ 91,800 $ 34,847 $ 8,502
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.25% 0.79% 0.77% 0.68% 0.51% 0.44%
Total expenses 0.90% 4 0.92% 4 0.91% 4 0.93% 4 0.90% 4 0.85% 4
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 13% 35% 30% 34% 34% 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.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
CLASS 3 SHARES (UNAUDITED) 2005 2004 2003 1
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 33.55 $ 29.65 $ 25.19 $ 17.55
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .24 2 .32 2 .26 2 .07
Net realized and unrealized gain 1.08 3.88 4.52 7.57
-------------------------------------------------------------
Total from investment operations 1.32 4.20 4.78 7.64
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.36) (.30) (.32) --
Distributions from net realized gain (1.86) -- -- --
-------------------------------------------------------------
Total dividends and/or distributions to shareholders (2.22) (.30) (.32) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.65 $ 33.55 $ 29.65 $ 25.19
=============================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 3.88% 14.34% 19.19% 43.53%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $358,752 $346,064 $265,044 $147,576
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $367,489 $296,252 $199,388 $ 80,579
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.45% 1.06% 1.00% 0.73%
Total expenses 0.65% 5 0.67% 5 0.66% 5 0.68% 5
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 13% 35% 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 YEAR
ENDED ENDED
JUNE 30, 2006 DECEMBER 31,
CLASS 4 SHARES (UNAUDITED) 2005 2004 1
- ------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 33.15 $ 29.35 $ 25.21
- ------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .20 .24 .09
Net realized and unrealized gain 1.06 3.84 4.05
-----------------------------------------
Total from investment operations 1.26 4.08 4.14
- ------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.30) (.28) --
Distributions from net realized gain (1.86) -- --
-----------------------------------------
Total dividends and/or distributions to shareholders (2.16) (.28) --
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.25 $ 33.15 $ 29.35
=========================================
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 3.76% 14.05% 16.42%
- ------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $96,737 $90,604 $37,384
- ------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $98,377 $61,380 $19,774
- ------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 1.19% 0.79% 0.53%
Total expenses 0.91% 5 0.93% 5 0.94%
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 13% 35% 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, 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 Fund'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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
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 (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.
17 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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, 2006, the Fund had no estimated capital loss carryforwards
available for federal income tax purposes. During the six months ended June 30,
2006, it is estimated that the Fund will utilize $221,596 of capital loss
carryfor-ward to offset realized capital gains. During the year ended December
31, 2005, the Fund utilized $130,358,556 of capital loss carryforward to offset
capital gains realized in that fiscal year.
As of December 31, 2005, the Fund had available for federal income tax
purposes post-October losses of $221,596.
- --------------------------------------------------------------------------------
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.
18 | OPPENHEIMER GLOBAL SECURITIES 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, to the extent they are not
offset by positive cash balances maintained by the Fund, 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. At June 30, 2006, the Fund had $406 of such earnings on
cash balances available to offset future custodian fees or interest expenses
incurred during the next fiscal year.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
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, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 3,999,272 $ 135,546,402 8,706,521 $ 257,431,509
Dividends and/or distributions reinvested 4,267,881 139,346,325 895,835 25,791,077
Redeemed (6,208,245) (209,213,025) (31,323,712) (890,930,188)
---------------------------------------------------------------------
Net increase (decrease) 2,058,908 $ 65,679,702 (21,721,356) $(607,707,602)
=====================================================================
- -----------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 6,358,712 $ 212,679,157 6,930,473 $ 208,836,898
Dividends and/or distributions reinvested 1,238,609 40,192,851 110,922 3,177,917
Redeemed (1,753,590) (58,741,332) (2,043,354) (59,519,794)
---------------------------------------------------------------------
Net increase 5,843,731 $ 194,130,676 4,998,041 $ 152,495,021
=====================================================================
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JUNE 30, 2006 YEAR ENDED DECEMBER 31, 2005
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 731,352 $ 25,019,558 2,056,580 $ 61,404,566
Dividends and/or distributions reinvested 708,868 23,272,140 98,739 2,857,511
Redeemed (765,514) (25,786,544) (779,132) (23,605,881) 1
--------------------------------------------------------------------
Net increase 674,706 $ 22,505,154 1,376,187 $ 40,656,196
====================================================================
- ---------------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 566,639 $ 19,109,553 1,634,734 $ 48,519,848
Dividends and/or distributions reinvested 194,164 6,300,609 14,694 420,976
Redeemed (494,073) (16,399,331) (189,923) (5,601,801) 1
--------------------------------------------------------------------
Net increase 266,730 $ 9,010,831 1,459,505 $ 43,339,023
====================================================================
1. Net of redemption fees of $29,707 and $6,752 for Class 3 and Class 4 shares,
respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2006, were as
follows:
PURCHASES SALES
------------------------------------------------------------
Investment securities $548,382,907 $438,403,769
- --------------------------------------------------------------------------------
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
average annual rate as shown in the following table:
FEE SCHEDULE
----------------------------------------------
Up to $200 million of net assets 0.75%
Next $200 million of net assets 0.72
Next $200 million of net assets 0.69
Next $200 million of net assets 0.66
Over $800 million of net assets 0.60
----------------------------------------------
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. 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, 2006, the Fund paid
$20,085 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE AND CLASS 4 SHARES. The Fund has
adopted a Distribution and Service Plan for Service share class and Class 4
shares to pay OppenheimerFunds Distributor, Inc. (the Distributor), for
distribution related services and personal service and account maintenance for
the Fund's Service class and Class 4 shares. Under the plan, payments are made
periodically 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
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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.
- --------------------------------------------------------------------------------
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, 2006, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATES (000S) JUNE 30, 2006 DEPRECIATION
- --------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
Euro (EUR) 7/3/06 44EUR $ 56,237 $1,098
Hong Kong Dollar (HKD) 7/3/06 2,446HKD 314,985 97
-------
Total unrealized depreciation $1,195
======
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2006, 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, 2006 APPRECIATION
- -------------------------------------------------------------------------------------------------
Nektar Therapeutics 6/25/03 $3,568,000 $4,612,305 $1,044,305
21 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. LITIGATION
A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds excluding the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.
In response to the defendants' motions to dismiss the suit, seven of the
eight counts in the complaint, including the claims against certain of the
Oppenheimer funds, as nominal defendants, and against certain present and former
Directors, Trustees and Officers of the funds, and the Distributor, as
defendants, were dismissed with prejudice, by court order dated March 10, 2006,
and the remaining count against the Manager and the Transfer Agent was dismissed
with prejudice by court order dated April 5, 2006. The plaintiffs filed an
appeal of those dismissals on May 11, 2006.
The Manager believes that the allegations contained in the complaint are
without merit and that there are substantial grounds to sustain the district
court's rulings. The Manager also believes that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to it, the funds, the
Directors/Trustees or the Officers on the appeal of the decisions of the
district court, 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 30, no later than August 31 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 the 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
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
23 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. 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.
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 FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's 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 06/30/2006, 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 have materially affected, or are 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) Exhibit attached hereto.
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: 08/08/2006
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: 08/08/2006
By: /s/ Brian W. Wixted
----------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2006